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This is about how far ‘Reagonomics’ actually achieved the ‘trickle down’ and promoted enterprise and social mobility and how far financial measures affected US society. The negative view is that trickle down economic theory was illusory and what tax cuts brought was a considerable increase in social inequality with the 80 000 richest Americans going from owning 1.3% of wealth to 7% in the 1980s without average Americans seeing benefits. The critics point to an increasing gap between the ‘haves and the have nots’ leading to despair among disadvantaged groups. The tax cuts did give 10% more disposable income to middle America but not enough to make an appreciable difference to lifestyle or social mobility. Savings actually declined as pressures for consumption increased. The poor performance of manufacturing industry led to sectional inequalities. More money in wage packets was probably not the cause of rising female employment, one of the changes in the 1980s. The shift to a business-friendly environment led to a decline in union power and influence and there was possibly a ‘hollowing out of the middle class’. The lack of investment in public services fell disproportionately on poorer Americans. Defenders point to a recovery from the problems of the 1970s with greater incentives for innovation and opportunities in growth sectors and the investments made possible by allowing more income to be taken from government to people and a new culture of enterprise and business confidence with less dependence on the state. Statistics show an increase in household debt, little fall in unemployment, a considerable increase in incomed differentials and limited rise in wages. Unemployment and poverty was also not equally spreads in US society with poorly educated African Americans having a 28% unemployment rate compared to the average of around 8%. There was also regional diversity where manufacturing and export industries did not enjoy the boom in services and defence spending.

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