Dean Baker on How We Can Make the 'Free Market' Work for the 99%

By Joshua Holland, AlterNet
Posted on October 13, 2011, Printed on October 15, 2011

In the post-War era, as a large American middle class emerged, the top 1 percent of households took in 10.02 percent of the nation's pre-tax income. In only eight of the years between 1946 and 1980 did they grab 11 percent or more, and only in one year -- 1946 -- did they consume more than 13 percent of the pie.

After Ronald Reagan arrived on the scene, things began to change. In his final year in office, those in the top 1 percent grabbed 15.5 percent of our pre-tax income.  And in the 10 years before the Great Recession hit, households at the top of the pile grabbed 20.3 percent -- twice as large a share as they'd enjoyed when the "Greatest Generation" were making their mark on the world.

So the reality is that the "other 99 percent" have been sharing an ever smaller piece of our economic output. Was this shift an accident? Did the wealthy get smarter or start working harder? Was it an act of God?