Reaganomics is what happened to our economy

[badtoworse]

33. IMO, what began happening to our economy around 1980 was inevitable

From the end of WWII until about 1970 or so, manufacturers had few options as to where to locate plants. Europe and Japan were being rebuilt and the countries we now call the Developing World did not have the infrastucture needed to support significant manufacturing. As a practical matter, the United States was the only game in town. After 1970, manufacturing capability in foreign countries was ramping up steadily and US manufacturers had options as to were they manufactured goods. (The awful cars that Detroit was selling in the 70's and 80's did not help matters.) Fast forward to the 90's and free trade agreements, starting with NAFTA, made it easier for foreign manufactured goods to compete with US made products. The net result was that US workers were competing with workers in foreign countries to provide manufacturing labor. Robots on assemby lines were reducing the number of workers needed, so that all workers were competing for pieces of a smaller pie. In effect, the supply of labor increased substantially and the demand for it went down. Economics 101: In that situation, the price for labor should go down and it did.

People at the higher end of the income scale were not and are not exposed to the same competitive pressures in providing their services. Their incomes also tend to be more closely tied to the performance of their companies (bonuses, stock options, etc.). The macroeconomic forces that worked to the detriment of labor favored management as business boomed and profitability increased.

It's easy to say that Reaganomics was responsible for the economic situation we are in today, but I don't see that. The forces that drove the world economy were already happening when Reagan was elected and would have continued even if Reagan lost. Had Carter won the 1980 election, what could he have done to change things? At best, he might have slowed things down for a few years. Could he have shielded the US labor market from foreign competition? For a few years, possibly, but no way he or anyone else could have done so indefinitely.