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Rise and Fall of the American Middle Class

Rise and Fall of the American Middle Class: The Genesis of Prosperity (1900-1950)

Rise and Fall of the American Middle Class

The rise and fall of the American middle class is a story of greed and entitlement. Not of the middle class, but rather of the neo-Robber Barons that control American and multinational corporations. It is through the practice of enriching shareholders at the expense of those of us who produce goods and services. Furthermore, it is the story of the deliberate destruction of labor unions that gave the working class access to the halls of power. It is a story of late-stage capitalism that introduces substantial stress on the vast majority of citizens working for a living with the odds stacked firmly against them.

Make no mistake, for the past 40 years, since the imposition of Reaganomics, the shifting of production from American factories to low-income factories overseas where goods are produced without regard to the safety of workers or quality of products contributes to the current state of unbalanced economic conditions in the United States. Let’s take a brief walk through the economic history of the United States over the past 40 years…

In 1900, the average household income, meager at $4,497, left many in poverty. Farms provided a buffer for 40%, unlike city dwellers. Post-World War II, FDR’s policies propelled the bottom 90% into prosperity. By 1950, yearly income reached $10,000, cultivating a thriving middle class.

Rise and Fall of the American Middle Class: The Era of Economic Harmony (1950-1970)

Productivity and wages doubled between 1950 and 1970. Workers enjoyed good jobs, benefits, homeownership, and vacations. Corporate profits grew, but they were shared. Wages tracked productivity, creating economic stability.

Rise and Fall of the American Middle Class: The Turning Point: 1970s and 1980s

Trade liberalization and Reagan’s tax cuts altered the landscape. Productivity surged 146%, yet wages stagnated. Corporate profits soared; Reaganomics encouraged money-draining practices. Monopolies rose, reshaping industries. Income concentration intensified since Reagan, affecting the middle class.

Monopolies and Income Inequality (1980s-Present)

Reaganomics welcomed monopolies, shattering local diversity. Industries like banking, food, and healthcare became concentrated. Income and wealth disparities expanded; the top 1% captured 58% of income growth. Reagan’s era marked a shift towards income concentration and economic imbalance.

Rise and Fall of the American Middle Class: Impact on Democracy (1980s-Present)

Monopoly-driven wealth concentration jeopardizes democracy. Political power, tied to money, shapes rules favoring the wealthy. Reaganomics tilted the game, akin to Franklin Roosevelt’s warnings of sliding into fascism. Democracy faces a threat as economic inequality rises.

Urgent Need for Reform

To revive the vibrant, localized economy of mid-20th-century America, we must tackle income inequality and curb monopolies. Shifting rules back to favoring small businesses and the middle class is crucial for economic stability and preserving democracy.

Rise and Fall of the American Middle Class: Struggling Middle Class: A Disturbing Reality (1980s-Present)

Since Reagan’s presidency, the middle class has faced a relentless struggle. Average household income, once at its peak in 1970, dropped to $57,600 in 2016. Reaganomics tilted the scales, making it necessary for multiple household members to sustain the standard of living one worker maintained before the 1980s. The dream of a single full-time job supporting a family slipped away.

Monopoly’s Chokehold on Industries (1980s-Present)

Monopolies now dominate key sectors. Banking, with 20 major banks holding 84% of the GDP, stands vulnerable. In agriculture, just four companies control 90% of the grain trade. Telecom and internet markets face concentration, limiting choices, and inflating prices. This monopolistic grip not only hinders fair competition but also leaves consumers at the mercy of a select few.

Rise and Fall of the American Middle Class: Democracy at Risk: A Consequence of Economic Inequality (1980s-Present)

Economic power translates to political influence—the concentration of wealth in the top 1% since Reagan’s era endangers democracy. As corporations gain control, they reshape laws to favor the elite, mirroring Franklin Roosevelt’s warnings of sliding into fascism. A democratic republic must grapple with the alarming reality that financial inequality erodes the foundation of fair governance.

The Urgency of Rebalancing Economic Rules

To restore the vigor of mid-20th-century America, a shift in economic policies is imperative. Rebalancing rules to favor small businesses and the middle class is not just an economic necessity but a vital step to safeguard democracy. Income and wealth concentration, fostered by Reaganomics, must be addressed to ensure a future where economic prosperity is inclusive and democracy resilient.

Rise and Fall of the American Middle Class: The Devastating Impact on Small Businesses

Small businesses, once the backbone of American prosperity, now face staggering difficulties. Reaganomics, with its deregulation spree, allowed the concentration of wealth and power in the hands of a few corporations. This shift not only stifles competition but also creates an environment where the economic playing field is decidedly uneven. To revive the entrepreneurial spirit that defined mid-20th-century America, a reassessment of regulatory frameworks is essential.

The Pervasive Influence of Monopolies

Monopolies extend their tentacles into every facet of American life. From the food we eat to the services we use, a handful of giants dictate the market. The consequences are dire: reduced choices, inflated prices, and a loss of innovation. Adam Smith’s vision of capitalism benefiting the average person and small businesses is lost when a select few control entire industries. Breaking the monopolistic grip is the key to fostering a more dynamic and competitive economic landscape.

Rise and Fall of the American Middle Class: Telecommunications and Internet: A Telling Tale of Monopoly

The telecommunications and internet sectors vividly illustrate the monopolistic trend. While other nations enjoy superior services at a fraction of the cost, Americans grapple with limited options and exorbitant fees. The stranglehold of a single corporation, such as Comcast dominating over half of the internet market, curtails the essence of competition. Dismantling such monopolies is paramount to ensure affordable, high-quality services for all citizens.

Financial Sector: A House of Cards Built on Monopoly

The financial sector, with a few colossal banks holding the nation’s economic fate, faces fragility. If these banking whales falter, the entire system teeters on the brink of collapse. The perilous reliance on a handful of institutions demands a reevaluation of the regulatory landscape. Reintroducing measures to prevent undue concentration is crucial to avert a repeat of past economic crises.

Rise and Fall of the American Middle Class: A Call for Reform: Restoring the Balance

To rejuvenate the American middle class and fortify democracy, urgent reforms are imperative. Redressing income inequality and dismantling monopolies are not mere economic fixes but keystones to safeguarding the democratic republic. It requires a collective commitment to reshape economic policies, ensuring that the benefits of prosperity are shared widely, reviving the essence of a vibrant, inclusive economy that characterized mid-20th-century America.

The Social Fabric Unraveling: Healthcare and Insurance

Monopolies extend their grip on critical sectors like healthcare and insurance. A mere handful of health insurance giants control three-quarters of the market. In some states, a single insurer commands 60%, leaving consumers with limited choices and soaring premiums. The consequences are felt not just economically but also socially, as access to quality healthcare becomes a privilege rather than a right. Breaking these monopolies is a prerequisite to establishing a healthcare system that prioritizes affordability and inclusivity.

Rise and Fall of the American Middle Class: Retail Monoliths: Squeezing Local Businesses

Retail, once diverse and decentralized, now bows to the dominance of giants like Walmart. A quarter of the entire US grocery market is under its control, squeezing out local competitors. The homogenization of consumer choices and the erosion of local entrepreneurship pose a threat to the cultural and economic vibrancy that defines America’s middle class. It’s time to reevaluate antitrust measures to restore diversity and vitality to the retail landscape.

The Urgent Need for Antitrust Enforcement

The distorted economic landscape demands a revival of robust antitrust measures. Past success stories, like the breakup of Bell Telephone, underscore the efficacy of dismantling monopolies. A reinvigorated commitment to enforcing antitrust laws is the linchpin for fostering fair competition, empowering small businesses, and revitalizing the middle class.

Rise and Fall of the American Middle Class: The Political Influence of Monied Interests

Reaganomics unleashed a dangerous synergy between wealth and political power. Lobbying and campaign contributions from powerful corporations reshape laws to favor the elite, tipping the scales against the average citizen. The distortion of democracy through financial influence demands a comprehensive campaign finance reform. Only by severing this link between wealth and political power can we restore the democratic ideals upon which this nation was founded.

A Path Forward: Rebuilding the American Dream

Rebuilding the American middle class requires a multifaceted approach. It demands reining in monopolies, crafting equitable economic policies, and fortifying democratic institutions against undue financial influence. By restoring the balance between prosperity and inclusivity, we can reconstruct the American dream. In this dream, economic success is not the privilege of a few but a shared reality for all citizens.

By Politics-as-Usual

Roger is a retired Professor of language and literacy. Over the past 15 years since his retirement, Roger has kept busy with reading, writing, and creating landscape photographs. In this time of National crisis, as Fascist ideas and policies are being introduced to the American people and ignored by the Mainstream Press, he decided to stand up and be counted as a Progressive American with some ideas that should be shared with as many people who care to read and/or participate in discusssions of these issues. He doesn't ask anyone to agree with his point of view, but if entering the conversation he demands civility. No conspiracy theories, no wild accusations, no threats, no disrespect will be tolerated. Roger monitors all comments and email communication. That is the only rule for entering the conversation. One may persuade, argue for a different point of view, or toss out something that has not been discussed so long as the tone remains part of a civil discussion. Only then can we find common ground and meaningful democratic change.

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