The Difference between a 23YO American in 1980, and a 23YO American in 2025

[Lonestarblue]

9. What happened to this country was the Reagan and Republican embrace of Milton Friedman's economic theories.

Those theories are in essence give all the money to rich people and the benefits will trickle down to everyone else. And today we have probably the most unequal wealth distribution in the world, skewed to the top 1%. Reagan’s war on unions was part of the effort to re-distribute income from workers to top management and shareholders.

I earned an MBA in 1976, and at that time business schools were teaching that corporations and their managers had responsibilities to three groups: their shareholders, their employees, and their workers. During the 1980s that concept was turned on its head and business schools, following Friedman’s economic ideas, started teaching that the primary (and only really) purpose of corporations is to increase its profits for shareholders. Period. No other purpose. Along with that idea came the rise of CEO and top management bonuses tied to the profits generated. Greed raised its ugly head and took over from there. CEOs began managing business operations to increase their bonuses in the short term any way they could, including laying off workers to reduce operating expenses, paying low wages, moving to states without strong unions, and offshoring work and factories.

Also in the 1980s, the SEC changed the rules on stock buybacks, which were once illegal. In 1982 the SEC issued guidelines that allowed companies to buy back their shares without being accused of market manipulation. Share buybacks are almost always done to increase stock prices, which of course benefits shareholders and includes all those CEOs and top managers who were granted stock as part of their bonuses. Republicans always claim that reducing taxes for big corporations and the wealthy results in huge job growth. It does not, and indeed most of the tax savings from their 2017 tax giveaway was spent on stock buybacks, not job creation.

You are so right about how the middle class has been hollowed out by the policies of the 1980s. But greed and predatory capitalism are now ruling, and it will take a Herculean effort to undo its stranglehold on the country.