Written by: C Dallas Menger
Seems impossible, but it’s true. Reich talks about middle-class workers not having an increase in inflation adjusted wages since the ’70s, but completely leaves out the cause of the inflation. He talks about CEO pay, and explains that stock options are part of the pay. He also talks about how the stock market increased significantly over the last 30+ years, but does explain how the 0% interest rate from the Fed chased savings from community banks to Wall Street. Lastly, one of the charts shows that income inequality starts to really separate in the early ’80s. He ignores that that’s because the US went full fiat currency in 1972 after Nixon took eliminated the dollar’s link to gold. I can hear the objections, but Chris if the US went off the gold standard in 1972, how come income inequality didn’t really start for another 10 years? Well, don’t forget that Volcker was the Fed chair and wanted to stamp out inflation through a tight monetary policy consisting of 20% interest rates. Once inflation was “under control” the FED has mostly lowered interest rates and allowed the money supply increase for decades after.