Summary: Reading Time: 3 minutesThe great divergence is mapped out in most graphs and charts about economic inequality as beginning in the 1980s. It is credited as an effect of Reaganomics, the economic policies of US President Ronald Reagan. When historians and economists look to the end of the great compression and what caused the great divergence and rising inequality in the US, they usually look to the 1980s and President Reagan.<br> As discussed in the last podcast episode in this series, I do not believe that is what the data and history really demonstrate. Sometimes we have to look beyond politics to find the real facts.<br> <br> The 1970s brought an end the post war economic growth in the US economy. The government financed boom to the economy in the 1950s and 60s proved it could work – but it could not work indefinitely. The era of the great divergence in the 1980s was brought about by policies and objectives to end the stagnation of the 1970s. Something had to change. Those changes, known as Reaganomics, meant an end to the economy’s death spiral of the 1970s but it also meant a rising inequality in the US economic and social systems.<br> The most famous aspect of Reaganomics was a complete philosophical reversal to what the baby boomers and the greatest generation believed. Government could not fix the problems of the American economy because government was the problem in the American economy. With the significant exception of defense spending, throughout the 1980s the hand of government was withdrawn from the American economy and social system. This created significant deregulation within industries that were previously tightly managed by the government.<br> <br> <br> There were positive benefits to this. It worked! Innovation, entrepreneurship, new technology, all of these things were incentivized to push to the forefront. America’s economy, by the middle of the 1980s was growing and producing once again.<br> There were also significant negatives to this. The lack of regulation and government oversight led to a heightened level of corruption and excess within the American business and economic sectors. The 1980s became known as the Decade of Decadence. Corruption and excess thrived and the great divergence began. The modern phenomenon of rising inequality in the US can be traced to this specific time period.<br> This shift in economic and governing philosophy was not isolated to the United States. The shift was global, largely as a result of US leadership and inspired the rising inequality in the US to be reflected throughout the world. The great divergence was a global trend.<br> Economists say that the great divergence was the event where two significant things happened within the global economy. First, globalization began. Massive economic growth took shape for all of those nations and economies who participated in the deregulation trends. The second event was that the benefits of this growth was experienced almost exclusively at the top end of the income and wealth spectrums. The poor were being left behind not only in the US but throughout the world.<br> <br> <br> <a href="http://feeds.feedburner.com/~r/theendofhistory/PHVq/~6/1" target="_blank" rel="noopener"></a><br> <a href="https://feedburner.google.com/fb/a/headlineanimator/install?id=nb64uri41haerm5fvtnnavfgjo&w=1" target="_blank" rel="noopener">↑ Grab this Headline Animator</a><br> <br> This is part of my <a href="https://wp.me/p2iDfo-1su">Complete Guide to Understanding Inequality in America</a>. Check it out for more podcast episodes, infographics and articles and on this topic. Check out all of my<a href="http://www.theendofhistory.net/essential-guides-to-gain-a-better-understanding-of-the-world/"> expert topic guides</a> on other topics as well. <br>
