The Well-Being of Working Class Americans Hit a Downturn in 1980

In mathematics, a “point of inflection” is the point at which a function stops falling and starts growing or stops growing and starts falling. In the language of calculus, we say that a point of inflection is where the second derivative of the function transitions from positive to negative or vice versa.

The well-being of the common American hit an inflection point with the 1980 election of Ronald Reagan as president of the United States.  After decades in growth following WW2, instantaneously, we had huge tax breaks for billionaires on the basis of “trickle-down economics,” i.e., the idea that rich people, if they were made even richer, would hire more people.

For some reason, this idea was widely accepted, certainly not by economists, but by the working class, who couldn’t put together the notion that no one hires people except when they’re hit by market forces.

Where do you get pizza?  Do you think for a second that the owner of a pizzeria wants more employees to make and deliver your pizza than is absolutely required to keep his customers happy?  No, and guess what.  That applies to everyone, from the local mom-and-pop shop to the Fortune 500.