Posted: June 23rd, 2021
In this book “The conscious of a Liberal” Paul Krugman talks about the “long gilded age” that started from the 1870’s until the big depression in the 1930’s. He shoes that there was a period of a huge inequality in prosperity and in power, where a supposedly a democratic political system didn’t succeeded to show the economic interests of the majority. He said that the big power of America was all utilized to defend belongings interests and there had been an unsuspecting approval and acceptance of a conservative beliefs that any effort to help the people who have fewer fortune would guide to an economic disaster.
He talked about the distribution of incomes in the 1920’s, where if the capital gains were excluded we would have that the highest 10% in income was receiving 43. 6% from the final income, while the highest 1% in the income was receiving the 17. 3 %. The strange thing is that in 2005, the income allocations facts were so similar to those of the 1920’s.
He also mentioned that the “great Depression” destroyed the gilded age, and he talked about the reforms of “Franklin Roosevelt”, where the most rich of the 0.1% possessed more than 20% of the state’s richness in the 1929, however only 10% in the middle of the 1950’s. Krugman talked about the new deal that taxed away the biggest part of their revenues and earnings adding that the blue collar employees benefits the most from this. Paul Krugman talked also about the new division of richens called “The Great Compression” that picked up a big number of Americans from the urban slum and from the rural deficiency into owning houses and extraordinary comfort.
When Roosevelt took the power, the postwar of the middle class culture and society has arose in a small period of time. The “New Deal” of Roosevelt was accepted by the republican Eisenhower but the rejection during this period of presidency was by some republicans that didn’t accept the liberalism of Eisenhower. Krugman described in his book that when Eisenhower was advocating on the virtues of the toned- down up to date “Republicanism”, there was a latest type of conservative that started to appear. They captured themselves as some strangers facing organizations and institutions.
He added that in the 1964, a union of conservative protestors held control of the “Republican National Convention” and selected Barry Goldwater for presidency. The presidency of the NIXON was from the point of view of Krugman an evolution period instead of a victory for the new conservatism. As mentioned in the book, in the 1980’s, there was a big victory for the New Conservatives, and economics were victories by the new conservatives. These principles maintained without proof that tax cuts would pay for themselves.
Krugman wrote that in the execution of the conservative political authority, the economists started to document a slight increase in inequality but most of the Americans noticed just a little or none of the economic growth. He add that, if growth in productivity had been consistently common across the work force, then the usual worker’s income should be 35% superior now than what it used to be in the beginning of the 70’s. Krugman sum up announcing that for those who they call themselves liberals are in real sense conservatives, whereas those who consider themselves conservatives are mostly in deep radicals.
Finally, he said that liberals wish and desire to return to the middle- class society where he grew up in and for those who call themselves conservative, they desire to go back to the gilded age ruining a century of history. From my point of view, I would like to support Krugman in some major points that what brought the US to here is mostly two big puzzles: the first one is an economic puzzle of why it is that we’ve come to an intra second gilded age, and how is that the inequality has increased as much as it has?; and the second puzzle is a political one where the political system has been largely responsible for the creation of the second gilded age and where people were heart and the most powerful one had benefit on the less powerful.
Also, the thing that made me support mostly Krugman’s point of view was that statistics and numbers showed that typical families aren’t better off now than what they was in the early 1970’s. It’s true that the inflation is now higher a little bit than before but it’s mainly because of the working spouses and because how much people are working harder now.
And from another hand, it was easier in the 1973 to feel that children’s were getting a decent education and the inequality in schools has increased greatly. The economy in the 1973 was very good while there was no computers, no internet, no fax machines etc. so what I want to prove is that now, USA is normally in a more productive and more rich than before but we are not sure the typical family has gained anything.
The reason is that all or nearly all of the gain got to the small group of people who are in the top. Some said that this is all because of education, it is true that people with good education did better than people without but if you think from another side, that all teachers and high class managers have mainly the same type of degrees (minimum masters degrees) but at the end one of the high class managers could have a salary of a bunch of teachers you can understand more the point of view mentioned above.
So mainly, what I would adopt is that the middle class society was a political creation that didn’t just happened gradually and was achieved politically by the “new deal” Last but not least, most of people would tell you that from another hand that disasters of the economy could increase the inequality, but the post war generation had in fact the best 25 years of the US of any economy could ever had and even though all the different advanced countries that faced globalization and technological development, Uniquely Americans faced a second gilded age, so this assure one thing in my opinion and it’s that the gilded age is due to a political creation and system.
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