2015-02-01 US: Robert Reich - former Labor Secretary - Why did America become more equal in the first three decades after World War II, and less equal during the last three decades?

2015-02-01 US: Robert Reich - former Labor Secretary - Why did America become more equal in the first three decades after World War II, and less equal during the last three decades?
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Robert Reich

Why did America become more equal in the first three decades after World War II, and less equal during the last three decades? Because in the earlier period we (1) increased public investment in education and infrastructure (hugely expanded K-12 and public higher education, created the interstate highways system); (2) financed by a high tax on the top dollars of the wealthy (never below 70%, 91% under Eisenhower); (3) created strong unions (in the 1950s, 35% of all private-sector workers belonged to one), and (4) made banking boring (with laws against interstate banking, mixing commercial and investment banking, and investment banks going public).

Over the last three decades, we went into reverse. We (1) diminished public investment as share of GDP; (2) lowered tax rates on top dollars of wealthy (to 28% under Reagan, now 36.9%); (3) busted unions (now 6% of private sector workers unionized); and (4) deregulated banking, allowing Wall Street to run the economy.

We also grew faster, on average, during the first period than the second.

So why did we make this giant U-turn?