> Americans surprised when their economic and political system worked exactly in line with historical trends.
But that's not accurate. Post WWII up until the mid 70s saw an explosion of middle class earnings and relative wealth, and a large shrinking of wealth inequality in the US.
So we just need a nice all encompassing global conflict again that largely leaves the American industrial base alone and then when it is the only one standing there can be another growth in the American middle class.
In all of these cases real incomes grew enormously. Yes, a big part of that was starting from a low base after the destruction of WWII. But I'd argue it was also a strong consequence of the technology of the time: the was an explosion in consumer goods enabled by new tech, but companies still needed lots of employees to create these products. In the past ~25 years I believe tech has instead allowed more wealth to accrue to a smaller and smaller subset of people.
Yes, all fueled by ridiculously abundant/cheap oil. This is something that might not happen in Earth's history ever again, not to mention the climate change issues (which at least weren't clear until much later, 80s rather than 50s for oil depletion issues).
Yeah, I'm personally of the opinion that the 50s-60s economical benefits are not generally sustainable. Similar to China's rise up until now, it's the result of a one time boom often as a zero-sum game with other parts of the world. The humans on the planet are definitely getting a more comfortable life over time, but any individual state with our current political systems I don't feel ever leads to that 50s-60s level of purchasing power for a long time.
I'm not sure about that. Very little was digital back then. It was far easier to claim lack of earnings back then than it is now, even with the high rates
The political philosophy guided by neoclassical economics; the political economic philosophy that has governed most public discourse since the early 80s.
Investopedia seems to agree with you: "Neoclassical economics theories underlie modern-day economics, along with the tenets of Keynesian economics. Although the neoclassical approach is the most widely taught theory of economics, it has its detractors."
According to https://www.reddit.com/r/AskEconomics/comments/5wdup7/are_ec..., however: "The vast majority of all economists today work in the New neoclassical synthesis. This paradigm is essentially a combination of the best ideas from the New Keynesian and neoclassical trains of thought. The idea of separate schools isn't nearly as relevant as it used to be - these days ideas that work get added to the synthesis regardless of where they come from."
There's not much in so called "New Keynesianism" that Keynes would acknowledge as being consistent with his theories.
Be very wary of anything you read on /r/AskEconomics; contributors are regularly banned for asking challenging questions that point out deficiencies with the orthodoxy. It's essentially an echo chamber with the top level replies carefully vetted. What it highlights through that is the deep (and justified) insecurity that permeates the economic orthodoxy.
The Neoclassical school is laughably simplistic in its model of the world. To reduce an entire economy, with all its diversity and irrationality, to a handful of variables connected by simple relationships is frankly absurd [1], and really a reflection of economics' physics envy. They make strong claims about how the models are built robustly from micro-foundations whilst ignoring fundamentals such as irrational agents and missing variables, and blithely ignoring important problems such as the SMD result [2] which basically means only a single representative agent and a single representative commodity can be considered (I've seen models that claim much more than this, but practically the higher dimensions are immediately integrated out). That St. Louis fed model is considered advanced because they have 2 representative agents!
Moreover, the models don't maintain important invariants, such as stock-flow consistency, that absolutely must be true as a matter of accounting.
One might give some allowances for all these theoretical problems if the models validated and made reliable predictions, but when it comes to anything of importance, they're little better than a first order Markov model. It's frankly absurd, and a testament to the power of rhetoric and vested interests, that we've built so much of our political economics on such shaky foundations.
There's basically no alternative being seriously entertained in mainstream politics, even on the left, to what amounts to an academic justification for inequality, and that is why we are in the mess we are in, Trump and all.
But that's not accurate. Post WWII up until the mid 70s saw an explosion of middle class earnings and relative wealth, and a large shrinking of wealth inequality in the US.