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Wednesday, April 11, 2007
How Good Was the Post-WW II era?
Craig excerpts an interesting article below that reminds us that there was once a time when the median wage tracked productivity- or, as I like to think, a time when people were paid what they earned.
It was the post-WW II era, from 1945 to 1973, the time modern liberals want to return the economy to. Society was more equal. CEOs were paid a fraction of what they're paid now, the minimum wage was higher, and strong unions extracted fair wages from stingy employers. What's more, productivity rate and GDP growth was high, despite (or maybe because?!?) high tax rates on the wealthy. Everything was gravy.
But this paper (via TAPPED) shows that all wasn't right in one important area: fiscal policy. The U.S. still spent about half as much of its GDP as European countries did on education, health, unemployment, family benefits, and other non-military types of spending. Take a look at this chart
As best I can tell, this chart doesn't take into account corporate or charitable spending on similar things. However, it seems unlikely that these actors could make up the wide gulf between US and European spending levels. It'd be worth checking out, regardless.
The point is that better labor market policies are necessary but insufficient remedies to inequality. Good redistributive fiscal policy has to be a part of the solution, too.
Posted by Matt Lewis
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