Book Review: The Betrayal of the American Dream. (2012)
By Duane Campbell
The team of Barlett and Steele have produced excellent journalism in the past, and they have done it again with The Betrayal of the American Dream, (2012) an analysis of the pain caused by the economic crisis for everyday people. This is a well written, readable book on the economic crisis and the 30 years of looting by corporate America that led to the crisis.
The writers clearly place blame on the aristocracy saying, “ Only once before in American history, the nineteenth-century era of the robber barons, has the financial aristocracy so dominated policy and finance. Only once before has there been such an astonishing concentration of wealth and power in an American oligarchy. This time it will be much harder to pull the country back from the brink.”
A great benefit of the book is that it is readable. They tell stories and give examples of crises in families and for workers. For example they begin the important description of the outsourcing of jobs with this,
“On the last day on the job Kevin Flanagan, after clearing out a few personal effects and putting them in boxes in the back of his Ford Ranger, left the building where he’d worked for seven years. He settled into the front seat of his pickup truck on the lower level of the company garage, placed a twelve-gauge Remington Shotgun to his head, and pulled the trigger.
He was forty-one years old. He was a computer programmer. He’d been a programmer his entire working life. “ (p.99).Then they go on to describe how Apple computers went from an amazing U.S. corporation to a leading example of how outsourcing jobs destroys communities, lives, and opportunities in the U.S. creating a generation with few well paying jobs.
In a chapter on The Great Tax Heist rather than making only general claims, they provide data for comparison,
“In 1995 the richest Americans- the four hundred households with the highest incomes- paid 51.2 percent of their income in federal taxes.
In 2007, on the eve of the global financial meltdown, the four hundred richest Americans paid 16.6 percent of their income in federal taxes….
When Ronald Reagan took office in 1981, the top tax rate on salaries and wages was 50 per cent; today it is 35 percent. The tax rate on unearned income- dividends and interest for example- was 70 percent. In 2012 it was 15 percent. The maximum tax rate on income from capital gains was 28 percent in 1980; in 2012 it was 15 percent….
Beyond the top 400, a whopping 18,783 individuals and families with incomes of more than $200,000 paid not one cent in federal income tax for 2008. “ After reading this chapter you may have a different view of Carnival Cruises.
The most recent looting of the U.S. economy in the crisis of 2007- present, is an extension of long range directions. One of the major candidates for President thinks that this rational market theory well serves working people.
“Typically, private equity firms ( like Bain Capital) borrow money to take over a company. Then, the institute cutbacks and other “efficiencies” to groom the company for resale to new investors. When the company is taken public, the private equity firm earns substantial fees and passes on the debt it took on when it bought the company. Often the new company has difficulty managing the heavy debt load and reduces expenses by cutting even more jobs.”
A strength of the book are the several descriptions of U.S. policy encouraging outsourcing of jobs to lower wage areas. The authors have an excellent description of the development of Apple computers from a U.S. corporation to a global giant, and their description of the making of steel in China for the government built Bay Bridge in San Francisco (p.224)
While the Obama campaign has been vigorous in its criticism of the Romney time at Bain Capital, and Ryan’s promotion of a unregulated market, there are no major political candidates challenging the Free Trade paradigm. Jeff Faux and Mark Engler, among others, have provided prior work on this topic. Bartlett and Steel are clear, and poignant in their descriptions of the promotion of de industrialization in the U.S. under a series of Free Trade regimes since Clinton signed NAFTA in 1994.
So called Free Trade programs have been another of the several “free market” programs promoted by the corporate elite that are destroying lives in the U.S. Research done by Jeff Faux and by the Economic Policy Institute on NAFTA shows that the 1994 treaty has made the rich in all three countries richer, and the working people in all three countries poorer as well as accelerating the immigration conflicts in the U.S.
Bartlett and Steel contribute to this debate using the example of solar panels, Apple, and Caterpiller to argue,
“But the real winners are America’s multinational corporations. Free trade has given them enormous power and influence- the ability to depress the wages of U.S. workers, to move jobs at will around the glove, to richly reward executives, and to pay handsome dividends to stockholders. “
They continue, “ This is not the result of some inexorable global economic forces. These trade and tax policies were bought and paid for by the major corporations through their investments in congressmen and the lobbyists who know their way around Washington. “ (p.239.)
“The only problem is that no one told working Americans they were going to forfeit their future so that people in China, India, Brazil, and other developing countries could become part of the middle class,” they write. “In theory, this should not be a zero-sum game. But it is because Washington and corporate America have structured the rules that way.”
The authors, excellent investigative journalists, place human faces on the devastation being wrought in our economy, and the pain and suffering imposed on the many by the few. It is a book well worth reading.