From American Dream to American Nightmare
from David Ruccio
Many people believe the American Dream ended in the mid-1970s. That’s because wage earnings for the median full-time American male worker stagnated from then on.
But that’s wrong. It wasn’t just the end of the American Dream. It was the beginning of the American Nightmare. That’s because median wage earnings for men actually declined over that period.
Michael Greenstone and Adam Looney explain that, when we compare apples to apples—taking into account the decline in full-time employment rates for men, and thus looking at the experience of all men, not just those with full-time work—
earnings have not stagnated but have declined sharply. The median wage of the American male has declined by almost $13,000 after accounting for inflation in the four decades since 1969. This is a reduction of 28 percent!
Kevin Drum, in turn, discusses the implications for the current crises:
incomes [of men] began stagnating in the early 70s, and the first response was for women to enter the workforce in order to contribute more to household income. After that dynamic had mostly run its course, the only way to keep incomes rising was to start borrowing more. And that’s what happened. The rich, whose earnings have skyrocketed during this entire period, basically loaned money to the middle class to buy bigger houses and better TV sets, and eventually it all came crashing down.
That’s how the end of the American Dream in the mid-1970s became the American Nightmare of the past few years.
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—– look inside —– $5.94 / $20.00
—– look inside —– $4.90 / $8.00
—– look inside —– $15.99
—– look inside —– $5.99 / 12.99
—– look inside —– $5.93 / $12.99
—– look inside —– $4.97 / $9.90
—— Ugarteche, Puyana and Madi ——
Gerson Lima / Maria Alejandra Madi
Edward Fullbrook and Jamie Morgan
————— Michael Hudson ————–
Maria Alejandra Madi / Jack Reardon
————- Edward Fullbrook ————-
—————— Steve Keen —————–
————— Richard Smith —————
————– Gustavo Marques————
– Victor Beker and Beniamino Moro –
————– Lars Pålsson Syll ————-
—————– Stuart Birks —————-
Edward Fullbrook and Jamie Morgan
———— Armando Ochangco ———-
Shimshon Bichler / Jonathan Nitzan
————— Mauro Gallegati ————–
————— Herman Daly —————-
————— Asad Zaman —————
—————– C. T. Kurien —————
————— Robert Locke —————-
Real-World Economics Review Blog 
The stagnation is shocking. The response even more so. The consequence for society is still to be felt. If this isn’t our primary concern, what possibly could be?
What role did economics play?
Economics aided, abetted and promoted policies that resulted in this dreadful fall in real income for the great mass of people over three decades. Plenty of those who called themselves economists (but in fact are charlatans) and reached the highest positions in the land appear incapable of admitting the true outcome of their experiments.
Stagnation is all it is.
The current complexity of the system in place, which allows lobbying money and lawmaker incompetence, to defeat the potential of rational government to address problems, may have gone too far for any effective change.
We need tons of cheap money and millions of restructured loans to swap equity for debt; and then we will still need radical reform to prevent future crises.
Let’s admit we cannot recover from where the Republican party has led us after Reagan sold us the idea of electing self-hating governance.
Take gas. Or go to the UMKC and Forstater and Wray for guidance to implement functional finance and work our way out of trouble.
“What role did economics play?”
Textbooks are supposed to contain the ‘received wisdom’ of a science. I do have to saya that, generally, the macro textbooks I’ve seen do a better job than the micro textbooks when it comes to metrics – but graphs like these do not seem to be interesting enough to include them in the books. “It’s just the way people make a living”. But I do have to say that there quite some textbooks and I only saw a minority of them – I might have missed the something. Does anybody know a micro/macro textbook which includes such information?
(By the way – textbooks on consumer research do include such data, as these are concerned with selling real stuff to real people in the real world)
So to translate, 5%-10% of the US population has done very well since 1969 both in terms of wealth and political effectiveness while 90%-95% of the US population has done poorly, some very poorly since 1969 in terms of wealth and political effectiveness. Sounds like feudalism to me. Interesting note here is that at its end in 1901 Victorian England, the England of Dickens was less stratified in terms of wealth and potential for wealth than the US currently is.