The Second Gilded Age In The United States
As the leader of the western countries that bisected the world after World War II against the Soviet Union, the United States experienced phenomenal economic growth. The Cold War prompted the reinstatement of prosperity, and underpins the worldwide dominance of the United States. Historians locate the focal point upon technological innovations, new conglomerates and sophisticatedly appealing advertisements, and discover the question of whether American society has once again entered a Gilded Age era. “History doesn’t repeat itself,” Mark Twain noted, “but it often rhymes.” The rise of industrialization and the progress have camouflaged financial instability and poverty of the country. Along with the economic expansion, cuts in both taxes and social program, and mortgage meltdown during the late twentieth century, inequality skyrockets since the closure of the Great Depression and the New Deal. A series of political reforms since Ronald Reagan’s presidency occasions an enormous economic commotion, and the statistics regarding income and social mobility indicate an ongoing household debt crisis and the imbalance wealth between filthy riches and working poor today since post-war.
Reaganomics signify higher levels of productivity and economic growth but, even so, destroyed the middle class and those beneath the poverty line. The nation was mired in an awful recession and Mr. Reagan proposed a reduction of tax responsibilities for all in promoting an unrestricted free-market in American economy. During his two terms in the White House, he broadened the interval between top one percent rich and the rest of the country. In accordance with his speech, “Ronald Reagan’s Inaugural Address, 1981” highlights inflation, the tax burden, and public spending. He was committed to cut government spending, federal regulation, and taxes, especially, for the richest in the country. Wealth would flow toward the other classes and benefit the whole nation if the richest Americans retain more assets and have larger capacity to consume and invest. However, the reality proved that the plan did not function as it was introduced, in fact, the plan deteriorated the situation for the majority. In Source 3A, “CEO Pay as a Multiple of Workers' Pay, 1960-2007” reveals that a CEO income used to be fifty times of an average worker. When 1995 unfolded, CEO income has a rapid magnification. By 2000, CEO pay has come to a crescendo that is around five-hundred and ten times of an average worker. After a decade of Reaganomics, the wages and salary of bottom ninety percent has barely increased. As well as shown in the lecture of Bethany Moreton, “The Deindustrialization and the Rise of the Service Economy,” presents that family income of the richest one percent of Americans ascended by seventy-three percent; the poorest saw their income shrink by seven percent.
The solution to the shrinking wage brewed up the wave of household debt and recessions in economy. On one hand, Reaganomics has benefitted the rich and created huge tax loopholes for corporations. On the other hand, working people must bear even heavier tax burden with their flat income. Before Mr. Reagan, one earner of a family was enough to sustain the house expenses, Moreton stated, after the policies has been issued, two earners were quite enough. In order to make up the deficits, people borrow money. As the time goes by, it is time to return the mortgage with the interest rate. People take out new loans, so that can make payment on the previous ones. Working class suffers in a vicious circle of paying and borrowing loans. In Source 10B, “Personal savings rate in the USA, 1929-2009” indicates a constant decline since the year of 1980. Also, due to the government drastically lowered the amount of tax revenue it collected, not only families are in debt also the nation is facing the huge deficits. The nation could not persuade those entrepreneurs and investors to be willing to rise the wages nor provide more job opportunities without offering even more bonus or taxes reduction. The United States seems to be trapped in a fast knot. Presenting in Source 1C of “Three Charts on Decline in Social Mobility,” few percent of change in individual’s social status in general social stratification. South-East Region of the nation is even worse in comparison with North areas. The chart might imply the unresolved racial issue between the South and the North. Nationwide debt situation triggered the major corporations of the United States to seek lower international workers and factories to content the appointed productivity. Therefore, the productivity maintained in a stable upgrowing slope, but the workers had no choice but to extend their work hours in order to obtain the same amount of payment.
The compromise of George H. W. Bush to national deficits resulted secondary economic damage. “Read my lips: no new taxes” pledge by H. W. Bush was merely a tenuous proposition. According to Julian Zelizer’s “New Taxes, 1990,” unoptimistic national deficit compelled the nation to either cut spending or increase taxes. In fact, Mr. Bush cut $324 billion in spending and raised $159 billion in taxes. The post-war depression of the early 1900s was a hardship for all citizens. Increased printing money cut down the purchase of US dollars. As a consequence, commodities have become more expensive. Ms. Wallace was a mother and worked multiple nanny jobs during the period of 1990s. “It was difficult to keep one nanny job and the job was never sufficient to maintain a family, since mothers and children became unqualified for the welfare rolls,” she said. Inflation occurred and inflow of low-cost imports stimulated major US companies to set up factories overseas which tied up with high unemployment and recession. Losing jobs came to the fact that individuals required to obtain more financial aids from the government. Stagflation, introduced in Moreton’s article, places the United States in another dilemma. Therefore, the decision of New Taxes worsened the recession and national debt has still been increased. Although the average income indicated as positive in Source 7B to 9B, most of the wealth went to the riches’ pocket and the rest of individuals shared a few percentages or nothing.
In the final analysis, economist Robert Reich is correct that the United States has entered a Second Gilded Age. Inflation, recession, and Reaganomics disappointed many working-class Americans, but the policies were made to abandon them and to satisfy the richest in the country. The trickle-down effect, the belief that additional wealth gained by the richest in society would benefit the rest of the country, did not occur when Mr. Reagan chose to cut taxes for the major corporations. Since the election of Ronald Reagan in 1980, Americans workers have seen their income and social mobility fall dramatically. People cannot expect to get more pay and the prices of necessities are not returning neither. Today, the richest consciously manipulates and limits the wealth in their upper-class area while rest of the society and nation suffer in an endless debt crisis. One day, the cycle of US debt system may collapse and implicate the entire world. That will be when the gold-plated exterior cannot even conceal its inner poverty.
- CEO Pay as a Multiple of Workers' Pay, 1960-2007. Accessed May 11, 2019. https://glpro.s3.amazonaws.com/ah/14/prb/h14b12-30.png
- Personal savings rate in the USA, 1929-2009. Accessed May 11, 2019. https://glpro.s3-us-west-1.amazonaws.com/ah/14/prb/savings1929-2009.jpg
- Reagan, Ronald. “Ronald Reagan’s Inaugural Address.” January 20, 1981. Accessed May 11, 2019. https://www.globalyceum.com/student/student_course_page/4116
- Moreton, Bethany. The Deindustrialization and the Rise of the Service Economy. Retrieved from https://www.globalyceum.com/ajax/get_item_content_url?item_id=263483
- Wallace, N (worker during the period between 1980-2008), interviewed by Yu-Hsuan Hsu at Long Beach, CA, May 11, 2019.
- “Source 7B.” Ten Additional Charts on Average Income and Savings. Accessed May 11, 2019. https://glpro.s3.amazonaws.com/ah/14/prb/1980-1992.jpg
- “Source 8B.” Ten Additional Charts on Average Income and Savings. Accessed May 11, 2019. https://glpro.s3.amazonaws.com/ah/14/prb/1992-2000.jpg
- “Source 9B.” Ten Additional Charts on Average Income and Savings. Accessed May 11, 2019. https://glpro.s3.amazonaws.com/ah/14/prb/2002-2008.jpg
- “Source 1C.” Three Charts on Decline in Social Mobility. Accessed May 11, 2019. https://glpro.s3.amazonaws.com/ah/14/prb/h14b12-40.png
- Zelizer, Julian. “New Taxes, 1990.” Accessed May 11, 2019. https://www.globalyceum.com/ajax/get_item_content_url?item_id=263476