This link, for the full source article yielding this extended excerpt:
No booster rocket can work unless consumers are able, at some point, to keep the economy moving on their own. But consumers no longer have the purchasing power to buy the goods and services they produce as workers; for some time now, their means haven’t kept up with what the growing economy could and should have been able to provide them.
This crisis began decades ago when a new wave of technology — things like satellite communications, container ships, computers and eventually the Internet — made it cheaper for American employers to use low-wage labor abroad or labor-replacing software here at home than to continue paying the typical worker a middle-class wage. Even though the American economy kept growing, hourly wages flattened. The median male worker earns less today, adjusted for inflation, than he did 30 years ago.
But for years American families kept spending as if their incomes were keeping pace with overall economic growth. And their spending fueled continued growth. How did families manage this trick? First, women streamed into the paid work force. By the late 1990s, more than 60 percent of mothers with young children worked outside the home (in 1966, only 24 percent did).
Second, everyone put in more hours. What families didn’t receive in wage increases they made up for in work increases. By the mid-2000s, the typical male worker was putting in roughly 100 hours more each year than two decades before, and the typical female worker about 200 hours more.
When American families couldn’t squeeze any more income out of these two coping mechanisms, they embarked on a third: going ever deeper into debt. This seemed painless — as long as home prices were soaring. From 2002 to 2007, American households extracted $2.3 trillion from their homes.
Eventually, of course, the debt bubble burst — and with it, the last coping mechanism. Now we’re left to deal with the underlying problem that we’ve avoided for decades. Even if nearly everyone was employed, the vast middle class still wouldn’t have enough money to buy what the economy is capable of producing.
Where have all the economic gains gone? Mostly to the top. The economists Emmanuel Saez and Thomas Piketty examined tax returns from 1913 to 2008. They discovered an interesting pattern. In the late 1970s, the richest 1 percent of American families took in about 9 percent of the nation’s total income; by 2007, the top 1 percent took in 23.5 percent of total income.
It’s no coincidence that the last time income was this concentrated was in 1928. I do not mean to suggest that such astonishing consolidations of income at the top directly cause sharp economic declines. The connection is more subtle.
The rich spend a much smaller proportion of their incomes than the rest of us. So when they get a disproportionate share of total income, the economy is robbed of the demand it needs to keep growing and creating jobs.
What’s more, the rich don’t necessarily invest their earnings and savings in the American economy; they send them anywhere around the globe where they’ll summon the highest returns — sometimes that’s here, but often it’s the Cayman Islands, China or elsewhere. The rich also put their money into assets most likely to attract other big investors (commodities, stocks, dot-coms or real estate), which can become wildly inflated as a result.
And that concisely is why trickle down is a fiction that does not work but that bought and paid for politicians are always in abundance to huckster about to gullible voters - voters without a clue. That is why Reagan sold the story, and sold the bulk of us down the river to appease the wealthy who loved the old Gipper.
And that is why Dayton's sensible "Tax the Rich" policy will work.
I have to qualify that. It will work but only if voters are not deluded by the likes of the economic charletan, "Trickle-Down Tom," aka Mr. Emmer. Dayton needs to win the election first before he can demonstrate how simple, really, the solution to things really is.
Besides being effective policy, taxing the rich is fairer than the BS we have today; things like the Helmsleys of UnitedHealth, the Lord looting of Sallie Mae before it was folded and buried.
Since the 1980's the rich have prospered greatly in our nation, and as such, they have earned the responsibility to pay their fair share to keep things going, to restore the prosperity they, (through their politicians and the MSM coverage lies), stole from the rest of us. They owe it. They should be made to pay.
Making the looters pay is not rocket science. It simply requires a will to not be decieved when being lied to ineptly about what will be helpful to the economy vs. what will only maintain a status quo the rich find comfortable.