Here's how Reagan's tax cuts in the 1980s favored corporations and the wealthy, setting the stage for 'trickle-down economics' as we know it today.

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In this episode of A Thread, we delve into the long term consequences of Reaganomics. Ronald Reagan's approach in the 1980s aimed to spur economic growth by deregulating corporations, implementing tax cuts, and altering antitrust laws during his presidency.

At the outset of Reagan's presidency, a changing global landscape prompted the U.S. to adapt. In response, Reagan enacted tax cuts primarily benefiting corporations and the wealthy, introducing the concept of 'trickle-down economics.' Despite promises of job creation and increased wages, the actual outcome differed.

Reagan's alterations to antitrust laws in 1981, specifically in regards to Section 2 of the Sherman Antitrust Act, marked a significant shift. Although some people believed this would help businesses on a global scale, it eventually led to unprecedented market concentration. The Reagan era also saw the legalization of share repurchases by corporations in 1982, diverting profits away from workers and towards investors.

Contrary to the impression that Reaganomics created opportunities, the wealth gap evidently in the U.S. surged. The Pew Research Center graph reveals a divergence in wealth distribution since 1980. Income inequality increased by roughly 20% from 1980 to 2016, resulting in the highest wealth gap among developed countries.

Furthermore, the racial wealth gap, particularly between Black and white households, widened during the Reagan era and has continued to persist ever since. Despite the promises of Reaganomics, the idea that wealth would 'trickle down' has eventually been proven false.

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How Reaganomics Changed The Economic Landscape

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