Hazardous to Our Wealth: Economic Policies in the 1980's

Hazardous to Our Wealth: Economic Policies in the 1980's

Hazardous to Our Wealth: Economic Policies in the 1980's

Hazardous to Our Wealth: Economic Policies in the 1980's

Synopsis

This clear, readable primer on the economic debates of the 1980s is an invaluable tool for those seeking to understand the supply-side, military Keynesian, and monetary policies of the Reagan era and their continuing influence today. Its call for putting "people before profits" is a compelling rejoinder to the neo-Reaganism of the Clinton administration.

Excerpt

Whenever there are great strains or changes in the economic system, it tends to generate crackpot theories, which then find their way into the legislative channels.

--David Stockman

The conservative answer to the problem of stagflation, as to so many other problems, is to use the incentive of higher profits to coax corporations into better behavior. Any limits on private enterprise, whether caused by unions, taxes, government programs or environmental regulations, are simply social debris that must be swept away to clear the broad path to prosperity.

Cruel as it is in human terms, this position has a certain inner logic. Profits are the difference between a firm's selling price and its costs. So to boost profits and hold down prices at the same time, costs must be slashed. Two categories of cost dominate business balance sheets: wages, salaries and fringe benefits absorb two-thirds of all income produced in the corporate sector, and taxes of all types take almost one-sixth. Thus labor costs and corporate taxes, in particular, must be reduced in order to make it profitable to fight inflation.

There are only two ways to cut labor costs: by increasing productivity, the amount a worker produces per hour; or by lowering the amount a worker is paid per hour. Some neo-liberal and economic democracy proposals (see Chapters 10 and 11) . . .

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