Despite what you might read in the Wall Street Journal or see on Fox News (both owned by Rupert Murdoch), capitalism is not an economic system that produces a middle class.
In fact, if left to its own devices, capitalism tends towards vast levels of inequality and monopoly. Wealth accumulates at the very top among the elites, not among everyday working people. Inequality is the default option.
By embracing Reaganomics and cutting taxes on the rich, we decided back in 1980 not to have a middle class within a generation or two. George H.W. Bush saw this, and correctly called it "Voodoo Economics."
When we had heavily regulated and taxed capitalism in the post-war era, the largest employer in America was General Motors, and they paid working people what would be, in today's dollars, about $50 an hour with benefits. Reagan began deregulating and cutting taxes on capitalism in 1981, and today, with more classical "raw capitalism," what we call "Reaganomics," or "supply side economics," our nation's largest employer is WalMart and they pay around $10 an hour.
This is how quickly capitalism reorients itself when the brakes of regulation and taxes are removed - this huge change was done in less than 35 years.
The full article is available here
