From 1947 to 1979, the postwar economic boom more than doubled median family income to $58,573 in 2013 dollars. Had earnings growth kept that pace through the careers of baby boomers, median family income would have topped $124,000 by 2013. Instead, it was $63,815.Quite likely the postwar boom was a unique event driven by one-time changes in technology and society, so to compare it to more recent times is misleading. Still, it is clear that we are not doing very well by ordinary families.
John Harwood follows this up with a description of the plans various Democrats and Republicans have put forward to get the median income rising again. Some of them strike me as good ideas, viz., Larry Summers wants us to borrow $200 billion a year while interest rates are really low and invest it in infrastructure; other Democrats want big investments in education. The main Republican idea is still tax "simplification," that is, closing "loopholes" so we can reduce overall tax rates, and I think this is a sham. On the other hand I am not sure cutting corporate taxes is a bad idea. If reducing our corporate tax rates would get more companies to locate in America, that would presumably help a little. So I would support that, and in fact I would support eliminating corporate income taxes altogether, provided we make up the shortfall by raising income taxes on the rich.
But none of this will transform our economic situation. I think we are stuck with slow growth for another generation, which to me means we should focus on distributing what we have more equitably (by high taxes on the rich, a higher minimum wage and support for unions) and using it more productively (building trains instead of fighter planes).