The Economic Illusion: False Choices Between Prosperity and Social Justice

Kuttner presented a well-developed argment for embracing Keynesian full employment policies which, according to Kuttner, would not require a trade-off between equality and efficiency. Kuttner develops his argument with the most thorough and understandable discussion of the difference in ideologies betwen supply and demand economic theories I've ever read.Utilizing the foundational principles of supply and demand theories Kuttner goes on to analyze the historic development, practices and effects of differing economic policies in the U.S. Kuttner's analysis describes the descent of Keynesian policies and the ascent of supply-side policies, pinpointing 1978 as the year business interests "...mounted an extensive campaign to convine public opinion that low taxes on the wealthy are the key to broad prosperity." (53) As a result of the effectiveness of this campaign Kuttner contended Ronald Reagan's election and a return to supply-side economic policies were essentially foregone conclusions.Providing an analysis of supply-side fallacies of capital, savings, debt, housing, taxes and welfare which promote efficiency over equality, Kuttner further contended conservative reliance upon low-wage competition strategies resulted in an aggregate loss of purchasing power in the U.S., further exacerbating the chasm between the rich and poor.Comparing the economic standing of several countries in the late 1970s and 1980s, Kuttner provided convincing evidence that countries which had national economic policies managing trade, strong labor unions, and progressive tax policies were faring better than the U.S. in the changing economic order.