A Collapse in Demand

I have a beard, the mark of an expert economist, so although I know nothing about economics, I sit here eager to explain how our economy got dry rot.  Here goes. After World War Two ended, a small group of rightwing economists began to argue that our markets were too constrained to be efficient. Only much freer markets would do--and, they agreed, this would end up concentrating wealth among the 1% and increasing the gap between the rich and the poor. They liked that. It would, they maintained, help mold a more flexible and cheaper work force. Now at first this bleak view of the economy gained little ground, but under Reagan and Thatcher, the theory got put into practice, and much of the center bought into it. In the end the result was a collapse in demand. That is, as the great bulk of the population grew poorer, they stopped buying things. The process was gradual, propped up for a decade by easy credit. The poor finally maxed out their credit cards. Today not enough people make enough money to buy enough goods and services to improve the economy. Wealth and power, as predicted by the theorists, have shifted in vivid ways to the 1%. Attempts by centrists and the left to change the situation have so far amounted to tinkering on the far edges of the problem. What we need is a big paradigm shift. 





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