Pulitzer Prize winner Hedrick Smith’s new book is an extraordinary achievement, an eye-opening account of how, over the past four decades, the American Dream has been dismantled and we became two Americas. In his best-selling The Russians, Smith took millions of readers inside the Soviet Union. In The Power Game, he took us inside Washington’s corridors of power. Now Smith takes us across America to show how seismic changes, sparked by a sequence of landmark political and economic decisions, have transformed America. As only a veteran reporter can, Smith fits the puzzle together, starting with Lewis Powell’s provocative memo that triggered a political rebellion that dramatically altered the landscape of power from then until today. This is a book full of surprises and revelations - the accidental beginnings of the 401(k) plan, with disastrous economic consequences for many; the major policy changes that began under Jimmy Carter; how the New Economy disrupted America’s engine of shared prosperity, the "virtuous circle" of growth, and how America lost the title of "Land of Opportunity". Smith documents the transfer of $6 trillion in middle-class wealth from homeowners to banks even before the housing boom went bust, and how the U.S. policy tilt favoring the rich is stunting America’s economic growth. This book is essential reading for all of us who want to understand America today, or why average Americans are struggling to keep afloat. Smith reveals how pivotal laws and policies were altered while the public wasn’t looking, how Congress often ignores public opinion, why moderate politicians got shoved to the sidelines, and how Wall Street often wins politically by hiring over 1,400 former government officials as lobbyists.
"Remarkably comprehensive and coherent analysis of and prescriptions for America's contemporary economic malaise by Pulitzer Prize-winning journalist Smith.... Smith sets out on a mission to trace the history of these strategies and policies, which transformed America from a roughly fair society to its current status as a plutocracy. He leaves few stones unturned.... [F]ascinating detail...brilliant analyses." (Kirkus Reviews) "Hedrick Smith is a clear thinker and a great writer who has done a terrific job chronicling the increasing disarray in the once powerful social compact between America's middle class and our business and political leadership. Smith also presents an American 'Marshall Plan' which is a solid road map for recovery from the results of failed business, media, and political leadership of the last 30 years." (Howard Dean, former Governor of Vermont, former DNC Chairman) "Here now is the terrible story of how the so-called New Economy destroyed the many credos and practices that once pushed and prodded the American way of life. Hedrick Smith gives names, dates, and actions behind the transformation from a corporate and financial culture driven by shared wealth to one of CEO/ownership greed. Read it and weep with profound sadness and then scream with red-faced anger. It seems almost too tame to call it simply a book. It is an indictment that is as stinging, stunning and important as any ever handed down by a grand jury." (Jim Lehrer)
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I have been looking for this book for a long time. I have read many books looking for the answer to how we got here (in this economical mess) and why are we stuck. Each book seemed only to deal with a small part of the problem. Hedrick Smith puts the puzzle together for us. He explains the legislation, motivation behind it, and the players responsible for it. He deals with each sector of the economy, because there is no one culprit. He debunks many of the "sound bite" reasons given by our politicians for our lack of progress out of the woods. Read it before you step into the voter booth!
"Who Stole the American Dream" filled me with a torrent of emotions. Outrage. Fear. Disgust. Despair. Anguish. Disbelief. Helplessness. And above all, pure, roiling, righteous anger.
Not that most of what Smith reports is so surprising; one has the feeling that one has "known" all of this all along. But Smith pulls together so many disparate pieces of the puzzle, coupled with so much indisputable factual evidence, and presents it so logically and forcefully, that I felt as though someone had suddenly turned the lights on in a room grown murky in the twilight.
Seeking insightful analysis of the current sad state of the American economy and the elements comprising the elusive "American Dream", I've found that most such books have a decidedly leftward tilt. As a staunch moderate, committed to seeing the rhyme and reason (as well as the lunacies) on both sides, I always carry a large lump of salt with me when embarking on a read (or listen) of any such tome.
While Smith clearly leans left, he doesn't do so radically. And certainly not enough, in my centrist opinion, to detract from the pure forcefulness of the facts he brings to bear. America in 2012 faces a perfect storm of factors that combine to threaten the existence of the middle class and the American Dream: Globalization, the technology revolution, and a combination of malfeasance, corruption, and incompetence in government, big business, and the financial sector that truly boggle the mind.
Smith deftly dissects the "hollowing out" of the middle class and the sheer avarice and ruthlessness of the new breed of capitalist that controls not only American business, but our government as well. He paints a clear picture of the stark differences between post-WWII America up to the 1970's, vs. the America that has evolved from the 1970's to today. Smith pinpoints the mid-1970s as the time when American business woke up to its ability to influence (read: buy) political power, thereby steering government in directions favorable to itself.
A reader from the right at this juncture would surely roll his eyes and cry, "Typical leftist scapegoating of big business." Well, perhaps. But it's hard to ignore the facts that Smith brings to bear to support his position. As Smith tells it (and as seems pretty hard to argue), there was a great deal more economic equality in the post-WWII years, government actually functioned well in an atmosphere of give-and-take and reasonable compromises, and average Americans felt that they could actually have an impact on government. Contrast that with today, and you can easily see that we've gone way off course.
I learned a tremendous amount from the book. Who knew that the Environmental Protection Agency and the Office of Consumer Affairs were established under Nixon's presidency?? But that was an era when Republicans and Democrats worked across the aisle, and politicians actually responded to public sentiment. I'm also grateful to Smith for helping me finally understand just why banks actually WANTED to give bad loans to people who obviously couldn't afford them (that never made any sort of sense to me, but thanks to Smith I finally get it). And heck, it's no wonder companies want to move to China when, in addition to cheap labor, they get free land and a complete absence of the environmental and labor regulations that are so troublesome here in the U.S. (where they make life actually worth living for the average working stiff).
Smith's analysis of the issues contributing to our current malaise is breathtaking in its scope and force. And downright sickening when it comes to the greed, corruption, and iron-fisted dominance of the power brokers with money and political influence. This new Gilded Age has left America so out of balance, it's hardly surprising that we now find ourselves teetering on the brink of the appropriately labelled "fiscal cliff".
All that being said, the centrist in me cries out for a bit of perspective from "the other side". While I find Smith's facts, figures, and arguments entirely reasonable and persuasive, that lump of salt rubs at me. Smith paints quite a picture; but are there pieces missing? What would the rebuttals from the Right be? I can readily imagine several:
- On the topic of the mortgage crisis: How much responsibility for the crisis lies with individuals who failed to exercise personal responsibility in taking on mortgages that they HAD to have known were beyond their means? Were they *forced* to take on those loans? Certainly the banks were irresponsible in actively pushing products they knew were thoroughly flawed, and failing to exercise any sort of caution in vetting the credentials of the borrowers. But how much responsibility lies with individual borrowers who failed to do their homework? And what about those who chose to treat their homes like piggy banks, taking out home equity loans in order to live beyond their true means?
- On the topic of pensions: Yes, in many cases pension funds were mishandled, as was the switch to 401(k) plans. But was it ever realistic to expect business to take on responsibility for supporting workers in retirement? Smith explains that initially, when pensions were first introduced, businesses liked the idea because it allowed them to defer payment of a portion of employees' salaries, directing it instead to the company pension fund. But when companies switched en masse to 401(k) plans, a large percentage of employees were overwhelmed by the responsibility of having to make investment choices on their own. The Left interprets this as business shirking its responsibility to employees; the right would argue that employees were free to make responsible choices to ensure a comfortable retirement, and this should never have been any employer's duty. I'd have liked to have seen Smith take on this argument proactively.
- Social issues: It's hard to fault Smith for failing to address this topic, but given his otherwise complete picture, it does seem to be a bit of a glaring hole. While the Left may deny its importance, the Right does have a point to make about changes in American social structure that have had a significant impact on the poverty rate and lack of mobility we see today. The soaring number of out-of-wedlock births is an enormous problem. Children born to single mothers are exponentially more likely to be poor and to suffer a host of other serious economic and social problems, including failure to finish school, likelihood of criminal behavior, and probability of ending up on welfare.
This significant underclass places an enormous burden on our economy, although I'm not at all sure how that burden compares with the other macro-factors that Smith addresses. That being said, it's an argument the Right would pose in the discussion of "Who Stole the American Dream?", so I feel it would have made the book a little more complete if Smith had at least addressed it.
Even with the imagined arguments I can hear coming from the Right, I honestly cannot see any of them doing much to seriously dent the larger vision of a monstrously bloated elite power structure strangling the life out of the American middle class. For all the small flaws one might be able to point out in Smith's position, the facts remain of serious abuses of power at the top that disenfranchise the majority of Americans.
I would ardently love to find a thoughtful analysis of the "American Dream" question that takes the middle ground and presents reasoned arguments from both ends of the political spectrum. I'm not sure any such book exists. But until one is written, I have found "Who Stole the American Dream" informative, thought-provoking... and sobering. It's possible to ignore its somewhat liberal bias and just take in the facts as an education.
I generally listen to audiobooks while running. Numerous times while out on the road or trail and listening to WSTAD, I found myself hollering expletives and harrumphing aloud in disbelief and disgust. This book will definitely stir you. Regardless of your political persuasion, there is much to be learned here. I highly recommend it.