“Capital gains taxes were slashed. President Ronald Reagan and UK prime minister Margaret Thatcher took on air traffic controllers and coal miners. The power of unions faded and that of corporations grew. Some people got very rich. But inequality rose, and eventually, overall trend growth slowed.”
I suspect that one justification for reducing capital gains taxes was to promote investment in new business ventures to create more jobs. However, in recent years start ups in America have decreased and many corporations are buying back their stock. The justification for reduced capital gains taxes may no longer be valid.
The growth of global commerce probably had a significant impact on unions. American manufacturers established factories in countries with vastly reduced employee benefits (sweat shops). Service related businesses (restaurants, hotels, gas stations, laundries, grocery stores, etc.) became the only employers immune to outsourcing. Unions were weak or nonexistent in many of these business types.
“The signs of this new post-supply side era are all around us. Witness the rise of the B-corporations, which balance purpose and profit, and the growth of investing based on environmental, social and governance factors.”
I’m an advocate of alternatives to max-profit motivated businesses such as: philanthropic corporations (e.g. Newman’s Own); non-profit corporations; benefit corporations; employee owned corporations (e.g. Publix); and worker cooperatives.
“Another battle will be between capital and labour. Rising wages are taking a bite out of US corporate profit margins and, frankly, they should.”
I agree. If the number of workers whose cost of living exceeds their earnings continues to increase eventually there will be civil unrest that can lead to violence.
“But it has taken trillions of dollars in unconventional monetary policy to cook up relatively small wage increases. And for many Americans the gains are immediately eaten up by increases in healthcare premiums or prescription drug prices, two other hot topics on the campaign trail.”
The typical government response for social issues is welfare — funded with deficit spending. Consequently, the people look to the government to solve their problems. Instead of Congress increasing the federal minimum wage, it may be more appropriate for the people to form strong unions that can negotiate fair employee benefits at the local level.
