This article is reprinted from an August 2012 post by John Sharp on yorkdems.com
Donald L. Bartlett and James B. Steele in The Betrayal of the American Dream (published July 31, 2012, Amazon.com link) describes how the American middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite. Its findings will leave you astonished and angry.
Barlett and Steele are contributing editors at Vanity Fair magazine. They have worked together for four decades, first at The Philadelphia Inquirer (1971-1997), where they won two Pulitzer Prizes and scores of other national journalism awards, then at Time magazine (1997-2006), where they earned two National Magazine Awards, and since 2006 at Vanity Fair.
The book describes the techniques and processes that the economic elites and political parties have used to reduce the power of the middle classes and in the process enrich themselves and acquire the best fellow supporters they can afford. [For an overview see the transcript and video from Democracy Now from July 30, 2012. The original published link no longer exists.]
“The Betrayal of the American Dream” is the story of how a small number of people in power have deliberately put in place policies that have enriched themselves while cutting the ground out from underneath America’s greatest asset — its middle class.
Their actions, going back more than three decades, have relegated untold numbers of American men and women to the economic scrap heap — to lives of reduced earnings, chronic job insecurity and a retirement with fewer and fewer benefits. Millions have lost their jobs. Others have lost their homes. Nearly all face an uncertain future.
Astonishingly, this has been carried out in what is considered the world’s greatest democracy, where the will of the people is supposed to prevail. It no longer does. America is now ruled by the few — the wealthy and the powerful who have become this country’s ruling class.
This book tells how this has happened, who engineered the policies that are crippling the middle class, what the consequences will be if we fail to reverse course and what must be done to restore the promise of the American dream.
So where did the textile jobs in South Carolina go? Overseas? And changes in the global economy made it happen? Well, not so much!
Bartlett and Steele claim nothing was inevitable about the loss of manufacturing jobs, that South Carolina textile jobs could have been saved, but to do so would not have worked to the advantage of our economic and political elite. High-sounding ivory-tower free-trade rhetoric and Congressional actions left the United States middle class naked to more alert foreign governments who used trade policies to protect their citizens and promote their exports. Quoting Bartlett and Steele (from an online excerpt of the book titled Phantom Jobs):
The [American] ruling class sold the idea of opening the country to an unrestricted flow of imports on the basis that American society as a whole would benefit: we would buy from other countries, and they would buy from us. But from the start there has never been a balance. No safeguards were ever put in place to prevent other nations from taking advantage of our open-door policy to sell us goods produced under conditions that made their cost artificially low…
For the ruling class, this was just fine. Everything was proceeding along the lines of their free market theories. They wanted no restrictions on trade policy, and Congress obliged. They wanted complete freedom to close plants in the United States, set up plants offshore, and outsource work to anywhere in the world without any tax penalty, and Congress obliged. They wanted to stonewall the wage demands of workers back home by hinting that their jobs might be ticketed for the next offshore shuttle if they asked for too much, and Congress went along…
While free-traders in the United States have been busy honking their horns against any form of government intervention in the market, they have turned a blind eye to what has been going on in the globalized world they are so proud of having created. Many foreign governments ignore such theories and subsidize industries that they believe will help their people…
While it’s clear that free trade, as practiced by the United States, is driving down the income of millions of working Americans, the economically elite are sticking to their message that America is on the right track…
Remember the arguments that only the rule of law and the sanctity of contracts could maintain a civilized and law-abiding society, and that the United States is such a society? Do you have a nagging suspicion that corporate leaders get to play by different rules, and that contracts are only honored for the rich? Consider this excerpt from an online section of the book The End of Retirement.
Of all the statistics that show how the rules are changing for middle-class Americans, here is one of the most alarming: since 1985, corporations have killed 84,350 pension plans — each of which promised secure retirement benefits to dozens or hundreds or even thousands of men and women… Congress went along and even compounded the betrayal by pretending that the change was in employees’ best interest.
What this means is that fewer and fewer Americans will have enough money to take care of themselves in their later years. As with taxes and trade, Congress has been pivotal in granting favors to the most powerful corporations. Lawmakers have written pension rules that encourage businesses to underfund their retirement plans or switch to plans less favorable to employees. These rules deny workers the right to sue to enforce retirement promises. Lawmakers have also written bankruptcy regulations to allow corporations to scrap the health insurance coverage they promised to employees who retired early — including workers who were forced into early retirement. Congress has enacted legislation that adds to the cost of retirement. One by one, policies that once afforded at least the possibility of a secure retirement to many seniors have been undermined or destroyed, while at the same time Congress has allowed corporations to repudiate lifetime-benefit agreements.
So the rule of law applies only to those who have the pull to keep Congress from changing the rules?
Do Bartlett and Steele offer any possible solutions? Check out the online section Restoring the American Dream..
- … we first must acknowledge that the trade policies we have followed for half a century have failed. Under them, dozens of U.S. industries have been gutted by imports, and new industries that could offset some of the job losses in our older industries haven’t been given the support they need to export their products to foreign markets.
- Trade laws must be enforced and tariffs imposed to level the playing field. Other nations have not truly embraced free trade. As a result, many goods and services that the United States would like to export to other countries and create jobs at home are blocked from entering those economies.
- We can’t control China. But we can control our own economy by regulating what we permit to enter the country. Yet we have consistently refused to exercise that right.
- Taxes must again be made progressive, so the rich pay more. If you were one of the richest Americans in 1955, you paid on average about 51.2 percent of your income in federal taxes. If you were one of the richest Americans in 2007, your tax rate had plummeted to an average of 16.6 percent.
- A reformed federal tax code could create an individual tax return that could be filed on a single sheet of paper. It would include all your income and the sources of that income — wages, interest, dividends, rental income and what’s now referred to as capital gains and royalties. In short, every dollar of gross income from whatever source derived.
- The sum of all that income then would be multiplied by your tax rate. No deductions for any purpose. No tax credits. No personal exemptions. There would be multiple rates, possibly as many as a dozen, running up to a top rate of 70 percent, which would be applied to all income over, say, $10 million. Multiple rates would make certain that people in totally different economic circumstances would not be grouped in the same tax bracket, as is now the case.
- The sum of all that income then would be multiplied by your tax rate. No deductions for any purpose. No tax credits. No personal exemptions. There would be multiple rates, possibly as many as a dozen, running up to a top rate of 70 percent, which would be applied to all income over, say, $10 million. Multiple rates would make certain that people in totally different economic circumstances would not be grouped in the same tax bracket, as is now the case.
- But right now, investing in infrastructure, technology or some other promising field, would be a plus for job creation. Only when we start taking positive steps to help the middle class, and only when we recreate a political zone where politicians of both parties work together again, will we be able to get this country moving again.
- These issues are already running through the [2012 Presidential] campaign because they are the story of America in 2012. Both candidates are talking about the middle class, but neither is very specific on what he would do. Both are talking about taxes, though in much different ways. Mitt Romney’s proposals on taxes would be deadly for the middle class, lead to even more income inequality and do nothing to create additional jobs. Both have talked about China, but neither has faced the obvious need to fashion a more realistic policy on trade with all our trading partners.
For a view of the authors see the long interview on Democracy Now with Amy Goodman with Bartlett and Steele (starting about 15 minutes into the show).
Clearly a congressional campaign could be built around the themes of this book, although one must be prepared to be charged with being unconventional, for both political parties have played a role in getting us into this situation. And big business has many vocal supporters of the status quo, who preach that free trade and naked capitalism is the only way to have a prosperous society. This book reminds us that current prosperity is limited to a minority and cannot be sustained, and that restoring the power of the middle class will not be easy.