In her new book “This Fight Is Our Fight,” Sen Elizabeth Warren repeats an assessment that Robert Reich and Jacob Kornbluth made in their 2013 doc, Inequality For All. She explains that economically speaking, the American middle-class was in a steadily improving, much better place from 1935 through 1980, and has been in a gradually worsening condition ever since.
In short, as N.Y. Times columnist Paul Krugman explained in a legendary 5.31.09 column, “Reagan Did It.”
“The more one looks into the origins of the current disaster,” Krugman wrote, “the clearer it becomes that the key wrong turn — the turn that made crisis inevitable — took place in the early 1980s, during the Reagan years.
“Attacks on Reaganomics usually focus on rising inequality and fiscal irresponsibility. Indeed, Reagan ushered in an era in which a small minority grew vastly rich, while working families saw only meager gains. He also broke with longstanding rules of fiscal prudence.
“On the latter point: traditionally, the U.S. government ran significant budget deficits only in times of war or economic emergency. Federal debt as a percentage of G.D.P. fell steadily from the end of World War II until 1980. But indebtedness began rising under Reagan; it fell again in the Clinton years, but resumed its rise under the Bush administration, leaving us ill prepared for the emergency now upon us.
“The increase in public debt was, however, dwarfed by the rise in private debt, made possible by financial deregulation. The change in America’s financial rules was Reagan’s biggest legacy. And it’s the gift that keeps on taking.”