Liberals' biggest myth: Unions and high taxes caused the post WWII economic boom

Rasselas

Former Staff
Feb 2010
70,516
46,983
USA
#25
You're kind of prattling here, but it sounds like you're disputing my assertion that this unions-and-taxes correlation with the post-war economic boom is not something the institutional left wing points to constantly. That's pretty strange to deny that.

Paul Krugman is probably the most prolific mouthpiece of the partisan narrative I'm talking about that exists out there in the economic community. For example, in this video, he says,

"the Roosevelt Administration through a whole set of policies, all of them equalizing, much higher tax rates on the wealthy, higher corporate tax rates, a pro-union organizing environment, so you had an explosion in union membership, tripling of the workforce, the minimum wage, Social Security, unemployment insurance. All of these things, and then the process accelerated because during WWII, there were extensive government controls on the economy that were used in a way that tended to equalize incomes. All of this created a middle class society in a period of not more than about 7 or 8 years...

...so the income distribution, relatively equal middle class society that was created by the New Deal that persisted for more than a generation after WWII.

THEN, it started to come apart. And you see this dramatic increase in inequality, not quite as fast as the Great Depression but this dramatic increase, starting around 1980, which itself is kind of an interesting date because Reagan comes to the White House. And it turns out that the increase in inequality is unique to the United States... the closest thing you can see to the U.S. to this unequalization that's taken place in the United States is in Britain during the Thatcher years, which again is itself a little bit... revealing."

That's the narrative.
Cool evidence, but it reveals how your argument is specious. You say that the left says unions and taxes CREATED the boom. That's not what your quotes from Krugman say. Krugman is touting the "middle class society" and "relatively equal...income distribution." It's clear we can have economic boom while the benefits of that boom go to a startlingly few people--it's happened several times in our history. It's also clear that the post-war boom militates against the RIGHT'S argument, which his that unions and higher taxes on the rich destroy prosperity.
 
Nov 2010
23,156
14,834
#26
I cintinue to be amazed at what more conservative citizens believe liberal viewpoints are. it just never ceases to surprise me.
It's what happens when you only get your information from Fox news that makes up what liberals stand for. Also, doesn't help when they don't have facts on their side, they have to make up fictitious positions to argue against
 
Feb 2011
16,843
5,999
Boise, ID
#27
Cool evidence, but it reveals how your argument is specious. You say that the left says unions and taxes CREATED the boom. That's not what your quotes from Krugman say. Krugman is touting the "middle class society" and "relatively equal...income distribution." It's clear we can have economic boom while the benefits of that boom go to a startlingly few people--it's happened several times in our history. It's also clear that the post-war boom militates against the RIGHT'S argument, which his that unions and higher taxes on the rich destroy prosperity.
It may or may not undermine the right's argument, but that doesn't make the left's narrative on point. The post-WWII economic boom is understood as a broadly prosperous time. Everyone was prospering. There's hardly any argument about that. "The post-WWII boom" is the same as the "creation of the middle class" that Krugman and others repeatedly reference. How many times have you heard or read the phrase "unions created the middle class?" To say that unions created the middle class is a very direct, causal, deterministic claim. It directly suggests that if hypothetically there had not been unions, then the middle class would not have been created, and so if there were no middle class, there couldn't have been the economic boom.

I've seen numerous liberals enter this thread to dispute that the left wing (Senate Democrats, labor unions, Economic Policy Institute, ThinkProgress, Center for American Progress, et al.) uses this narrative, where the start and end dates are precisely chosen to weave a partisan story. Why is 1980 selected as the end-date of this period of prosperity? No reason to deny it. From Democrats' newest platform concerning unions:

"Over a broader 34-year period from 1980 through 2014, incomes for the top 1 percent rose by 204 percent while incomes for the bottom 50 percent rose by just 1 percent. In stark contrast, over the preceding 34-year period from 1946 through 1980, incomes for the top 1 percent rose by 47 percent, while incomes for the bottom 50 percent rose by more than twice that: 102 percent."

So that's the union piece. Repeatedly we see this claim (including in that link) that "unions created the middle class" with reference to the post-war period, and yet when I call it out here, liberals rush to deny that any such causal claim is made.

As for the taxes thing, the clamor to raise income taxes is almost always directly out of unrest about inequality in economic well-being. Inequality is seen as a problem and so the immediate assumption is that high income taxes reduce that problem. What is the basis for thinking that will solve the problem? The basis is pointing back to the post-war period. Look there! See? High income taxes, low inequality! Post hoc ergo propter hoc!
 
Nov 2006
54,624
20,473
#29
The narrative from the institutional left wing is that high marginal taxes on the rich coupled with strong unions "created America's middle class" and was the cause of the U.S. economic prosperity between 1945 and 1980. The starting point is credited to FDR's liberalism and the New Deal, high top marginal tax rates, and "strong unions," and the end of it is pinned exclusively on the inaugurations of Ronald Reagan and Margaret Thatcher.

That is the left wing gospel. It shall not be questioned or challenged. No other explanation is valid or welcome. And this narrative is continuous from the left wing. It is referenced constantly.

The narrative is a lie. A myth.

If High Taxes In The '50s And '60s Produced Good Growth, Then Let's Have High Taxes Again
I would not say it's unions and high tax rates that caused the prosperity. I would say unions had nothing to fucking do with it and since we were prosperous AND had high tax rates AND we are deeply in debt there is no earthly reason to be cutting taxes. Certainly not on those making gazillions.
 

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