WHAT WENT WRONG

Blame it all on Ronald Reagan—every damn bit of misery and immiseration that has befallen the middle and lower classes in the past three decades. That’s the thunder-stealing takeaway of former Treasury Department assistant secretary and World Bank executive Tyler’s book.

The author charts how a period of unprecedented growth, prosperity and widespread wealth-sharing was derailed under the Reagan administration and continues to careen off the track all these years later. So profound were the changes wrought by privatization and the looting of the public sector that Tyler calls the entire period after 1980 the “Reagan Era”—and he does not mean it as a compliment. According to the author, drawing on thorough economic analysis, “only 5 percent of earners enjoyed income gains exceeding inflation during the Reagan Era, and most of that was concentrated in the earnings of the top 1 percent.” Throughout, Tyler explodes numerous myths, though readers will have to know the depth of those myths in order to appreciate his efforts. He observes, for instance, that von Hayek and Keynes, who should be presumed to be mortal enemies, admired each other greatly (and “both men would have been dismayed by the behavior of Ronald Reagan overtly crafting routine, large structural deficits merely to lower taxes on the wealthy”). Demolishing a libertarian plank, the author argues persuasively that there is no real relationship between the minimum wage and unemployment—no reason, in other words, not to pay American workers a living wage. Yet so American workers are paid, with the result that they are ever poorer—and, Tyler argues, “poverty is understated.” He recommends a radical overhaul of tax and fiscal systems to follow the model of such nations as Switzerland and Australia.

Controversial, of course, but well-grounded in data and fact. Anyone with an interest in economic policy ought to have a look.