Where did all the money go

Starting with the Kennedy tax cuts money was bled from American business into the CEO class. That is not the investors, who were increasingly as screwed as the workers (as many were the workers, Pension plans etc. ). Small businesses have always struggled, but high taxes forced them to reinvest or pay the taxes. Most reinvested.

The high taxes were not high as long as the money removed was small so the differences in salary from top to bottom was as low as seven fold with the big boss making $35,000 and the janitor making $5,000, and most of the value went into increased production, better quality etc. I recall reading there was a new record breaking wage (after the Kennedy tax cut) of $800k and the race was on.

Since most giant businesses were managed by a tight ole boy network at the top salary was a matter of power, and CEO salaries leap ever skyward, with top management close behind. The stockholders were either in Mutual funds with infinitely diluted control, or if they were investing individually, had neither the clout or the ability to investigate adequately, and in nearly every business the rules were crafted to lessen the power of investors.

As smaller businesses tried to keep up there was a perception that their own leadership was slipping into second class status, and having the power to do so they also began to siphon off needed investment moneys. Never put in such stark terms (mostly), still there was an orgy of "consolidation" where good businesses were mined for their assets (worker pension funds among them) and the husk tossed away.

Many Billionaires were thus created, but it was the wealth of the thief not the hard worker. Many folk owned bonds with AAA rating one day and junk status the next, and as most of those moneys were hidden, so were the losses. Everywhere where folk did not have power, on the job, in a pension, or mutual fund, even many small businesses, they were robbed.

Even in the Government, when Reagan took office, the government was the largest landlord, mostly in public housing with trillions in assets. In one of the most under reported stories of the time, the man in charge had had a fire sale to all his friends at pennies on the dollar, in theft unmatched till the current administration. Then even that was defaulted (with much more theft) as these same friends cratered most American Banks.

With all that theft, how did Americans manage? Savings were eliminated, most American middle class had a lot of savings, today they don't. Real wages were cut in half, where there had been only the father working, now both father and mother had to work to keep the same lifestyle. Benefits like pensions and health care were "HMO'd" "down sized" or eliminated altogether (vacation times and rules included).

Many former or "would have been" workers spent their life savings to "buy themselves a job" and became "small businessmen" but that did not solve the problem and in many cases made it worse, providing intermittent services that used to be full time jobs, and competing on price, did the job ever cheaper, and even if they employed others and made money from them it only spread the pain.
Europe and Japan did not, at first, get this disease. Low top salaries and heavy reinvestment cratered American market share, and high taxes meant that wealth was shared as shorter work hours and longer vacations. I met with a German executive about some shared technical issues that we needed to work out, and he was aghast at what Americans put up with. The very idea that an 8 hour day did not include the lunch hour and a couple of breaks was the ultimate in management chiseling.

If today Europe is sickening from slow business it is not just that workers are well treated (and ever less so) but that in the global economy the kleptocrats at the top are ever less satisfied with salaries first at seven times average, then the next I heard 27 times, now hundreds of times the salaries of the folk on the shop floor. The investors aren't getting the money, stock prices and dividends have risen slowly if at all.

It is kleptocracy that is ruining the world.