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Yet the National Employment Law Project, an advocacy group that favors increasing the minimum wage, has compiled statistics suggesting that the biggest employers of minimum-wage workers are not predominantly small businesses that might struggle under an increased minimum wage, but rather some of the nation’s biggest employers: Companies such as Wal-Mart (WMT); Yum Brands (YUM), the owner of Taco Bell and Kentucky Fried Chicken, among others; McDonald’s (MCD); and Target (TGT).

NELP also points out that many of those employers are among the corporations with high executive compensation packages.

“What myths would a good alternative economic history debunk?” Madrick asks.

“The first might be that America owed its rapid economic growth in the nineteenth century to the small size of its federal government.” Secondly, “misinterpretations and distortions” promoted by academics like the “respected conservative economics professor” and New York Times columnist Tyler Cowen have encouraged readers to misattribute the postwar boom to “plentiful natural resources … technological advances, and an increasingly educated population.”

Another is the view that “debilitating inflation [in] the 1970s was caused by … the Federal Reserve’s creating too much money through the imposition of very low interest rates.” And the last—and this one’s a doozy—is that Ronald Reagan’s tax cut and deregulation program in the early 1980s revitalized the economy.

As with many issues of public misunderstanding, the treatment involves a full reckoning of the available empirical evidence. As the liberal historian Howard Zinn wrote, the “chief problem in historical honesty isn’t outright lying” but the “omission or de-emphasis of important data.” Fortunately for us, Madrick—unlike many of his lauded and well-compensated peers—is a good student of Zinn’s.

First, Madrick tells us that growth in the country’s early history was helped by “the many regulatory and legal reforms that went into effect in those years … guaranteeing fair competition in business and the right of ordinary people to buy land.” With revenue collected from high taxes, the state financed investments in canals and railroads, developed free primary education, built sewers and water sanitation systems, and spurred the development of manufacturing. And the economic benefits of slave labor would not have been possible without able government enforcement.

Second, postwar “diplomatic machinations” and the persistent threat of American aggression kept oil prices artificially low during an era in which petroleum consumption tripled. Technological advances were spurred by deficit spending recommended to American presidents in previous decades by British economist John Maynard Keynes. Education, vital to the occupation and performance of complex jobs, was funded by government as well.

In effect, minimum-wage workers today are taking home almost $7,000 less a year than minimum-wage workers took home in 1968.

Figures like these don’t particularly upset many of our nation’s most powerful, in either industry or government. We live in tough times, the argument goes. The small businesses that drive our economy simply can’t afford to pay their help any more than they already do.

But the vast majority of our nation’s minimum-wage workers don’t labor for Main Street mom-and-pops. They’re employed by businesses that no average American would ever call small. Two-thirds of America’s low-wage workers, the National Employment Law Project documented in July, work for companies that have at least 100 employees.

The 50 largest of these low-wage employers are doing just fine these days. Over the last five years, these 50 corporations — outfits that range from Walmart to Office Depot — have together returned $175 billion to shareholders in dividends or share buybacks.

And the CEOs at these companies last year averaged $9.4 million in personal compensation. A minimum-wage worker would have to labor 623 years to bring in that much money.

So what can we do to bring some semblance of fairness back into our workplaces? For starters, we obviously need to raise the minimum wage. But some close observers of America’s economic landscape believe we need to do more. A great deal more.

Count Larry Hanley among these more ambitious change agents. Hanley, the president of the Amalgamated Transit Union, sits on the AFL-CIO’s executive council, the labor movement’s top decision-making body. He recently called for a “maximum wage,” a cap on the compensation that goes to the corporate execs who profit so hugely off low-wage labor.

Hanley wants to see this maximum defined as a multiple of the pay that goes to a company’s lowest-paid worker. If we had a “maximum wage” set at 100 times that lowest wage, the CEO of a company that paid some workers as low as $16,000 a year could waltz off with annual pay no higher than $1.6 million.

During World War II, labor leader Hanley points out, President Franklin D. Roosevelt called for what amounted to a maximum wage. FDR urged Congress to place a 100-percent tax on income over $25,000 a year, a sum that would now equal, after inflation, just over $350,000.

Congress didn’t go along. But FDR did end up winning a 94-percent top tax rate on income over $200,000, a move that would help usher in the greatest years of middle-class prosperity the United States has ever known.

An executive at the American Beverage Association has dismissed the plan, saying that “150 years of research finds that people consume what they want.” Actually, the research shows that what people “want” has a lot to do with how choices are framed. In one well-known study, researchers put a bowl of M&M’s on the concierge desk of an apartment building, with a scoop attached and a sign below that said “Eat Your Fill.” On alternating days, the experimenters changed the size of the scoop—from a tablespoon to a quarter-cup scoop, which was four times as big. If people really ate just “what they want,” the amount they ate should have remained roughly the same. But scoop size turned out to matter a lot: people consumed much more when the scoop was big. This suggests that most of us don’t have a fixed idea of how much we want; instead, we look to outside cues—like the size of a package or cup—to instruct us. And since the nineteen-seventies the portion sizes offered by food companies and restaurants have grown significantly larger. In 1974, the biggest drink McDonald’s offered was twenty-one ounces. Today, that’s roughly the size of a “small” drink at Burger King. In effect, the scoops have got bigger, and consumption has risen accordingly.

Of course, if you don’t want the large soda, you needn’t order it. Yet the mere existence of the supersize can change your idea of how much you want to drink. In a classic experiment by Itamar Simonson and Amos Tversky, people asked to choose between a cheap camera and a pricier one with more features were divided more or less equally between the two options. But when a third option—a fancy, very expensive camera—was added to the mix most people went for the mid-range camera. The very expensive camera made the middle one seem less extravagant. In the same way, the fact that a large soda is now forty ounces makes a twenty-ounce soda feel sensible. Bloomberg’s ban is designed to flip this effect on its head: if the largest soda you can order is sixteen ounces, a can of Coke may start to seem like more than enough. Some food researchers doubt that this will work, since so many of us are used to the idea of large servings. But even our experience of feeling satiated is highly malleable. In one experiment, people ate meals of dramatically different sizes in the dark, and those who were given much less food did not feel hungrier than the others or rate their meals as much smaller. So once people have a few sixteen-ounce drinks they may find that sixteen ounces is plenty.

Many economists would say that, if we want to discourage soda consumption, taxing it—the way we do alcohol and tobacco—would be more efficient than a ban. Some European countries do have such taxes, but the idea has been a political non-starter in New York. In any case, perhaps the most cunning aspect of Bloomberg’s proposed ban is that it would function as a kind of stealth tax on consumption, while leaving average-sized sodas untouched. Currently, on a per-ounce basis, large drinks are much cheaper than smaller ones—which encourages people to supersize. The soda ban should shift this. Two sixteen-ounce servings are bound to be more expensive than one thirty-two-ounce serving, which creates another disincentive to drink more.

The five fastest years of economic growth all took place under a Democratic president. His name was Franklin Delano Roosevelt. In fact, the 11 fastest years of economic growth all took place under Roosevelt or Truman. Democrats presided over 16 of the 20 fastest-growing years, 22 of the fastest-growing 30 years, and 28 of the fastest-growing 40 years. There have only been 36 years in which growth has actually topped four per cent, and Democrats were in charge during 26 of them.

George W Bush was in charge during zero of them. His best year clocked in at 3.5 per cent growth - in 41st place.

Republicans love to idolise Ronald Reagan - even though they’d never nominate him if he were running today. His record of raising taxes more often than he lowered them would immediately disqualify him, even though the cuts far outweighed the increases, and tilted heavily in favour of the super-rich. So how did Reagan do on the growth front? Relatively well for a Republican. He topped four per cent growth in four out of eight years - 50 per cent exactly.

Bill Clinton did it five times out of eight. And Clinton produced that better record while turning massive federal deficits into a surplus, while Reagan almost tripled the federal deficit during his two terms.

In fact, since Reagan took office in 1980, Republican presidents have only produced four per cent growth or better 20 per cent of the time, compared with 45.5 per cent of the time under Democrats.

Republicans like to argue that they are the party of business and therefore the party of economic growth. Democrats are the party of economic redistribution. Republicans grow the pie, Democrats cut it up. This is what Republicans argue, and the so-called “liberal media” largely echoes their message. But the facts simply don’t add up.

Rome is burning while Congress fiddles. The president is out on the road trying to secure a second term, while the economy once again teeters on the brink of bad possibilities. The governors of the Federal Reserve Board seem to understand this better than most of Washington’s power hitters. But what can the Fed do? The central bank has already dispensed trillions to the financial system and pulled interest rates down to rock-bottom levels. Yet the economy doesn’t respond. Banks won’t lend, businesses won’t hire. Anxious consumers stopped buying, the order books are bare. The Fed has supplied trillions in cheap loans to the country’s largest banks, so why can’t it offer the same deal to struggling consumers?

Miles Kimball, an imaginative economics professor at the University of Michigan, has stepped forward to propose an ingenious solution for the Fed’s dilemma. The government should create a “federal credit card” and send one to every adult in the nation, enabling each person to borrow $2,000 at a very low interest rate and not pay back any of the money until after the economy has fully recovered. The provocative kicker in Kimball’s proposal is that the Federal Reserve would itself provide the financing, not Congress or the president through the federal budget. And he argues that the central bank can do this with its unique power to create money.

A federal line of credit, Kimball suggests, could become a new, fast-acting channel for economic stimulus—more potent than the usual methods like tax rebates, and far less costly. That’s because consumers would not get any benefit from this government assistance unless they use the card—that is, borrow and spend—and do so before the government’s offer expires. After all, this is exactly what the economy needs. Why give the money in tax breaks for banks or businesses, which may not use it for the intended purpose? Why not deliver the aid to consumers, who will?

Kimball argues that this novel approach could deliver a strong, quick jolt to the stagnant economy, $400 billion or more. Yet it would add very little to the federal budget deficit, because the Federal Reserve operates under its own, independent balance sheet. Further, it’s not free money but a temporary loan, like the trillions in short-term loans the Federal Reserve gave the banking system at the height of the crisis. The low-priced credit would immediately help pressed families scrambling to pay the rent, young people without jobs and especially the desperately poor, who are “unbanked” and victimized by predatory lenders charging usurious interest rates for “payday” loans. “A big advantage of national lines of credit,” Kimball explained, “is that, once triggered, the details of spending are worked out through the household decision-making process, which is relatively nimble compared to corporate and government decision-making processes.”

Call it the “Machinebrain” picture of the world: markets are perfectly efficient, humans perfectly rational, incentives perfectly clear and outcomes perfectly appropriate. From this a series of other truths necessarily follows: regulation and taxes are inherently regrettable because they impede the machine’s optimal workings. Government fiscal stimulus is wasteful. The rich by definition deserve to be so and the poor as well.

This self-enclosed metaphor is the gospel of market fundamentalists. But there is simply no evidence for it. Empirically, trickle-down economics has failed. Tax cuts for the rich have never once yielded more net revenue for the country. The 2008 crash and the Great Recession prove irrefutably how inefficient and irrational markets truly are.