Bill Knight - November 1
12:53 pm
Wed October 31, 2012

The Betrayal of the American Dream

Bill Knight
Bill Knight

The new book by Pulitzer Prize-winning journalists Donald Barlett and James Steele is, they say, “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.

“The economic system that once attempted to help the majority of its citizens has become one that favors the few,” they continue in their book, The Betrayal of the American Dream. “America is now ruled by the few – the wealthy and the powerful who have become this country’s ruling class. Lacking a civic or moral compass, it’s a peer group … with no mission except to wall in the money within its ranks to an ever-greater extent. This group consolidates its power via political spending – an old story, made worse by the super-PAC phenomenon.

“We have become a plutocracy,” they add, “in which the few enact programs that promote their narrow interest at the expense of the many.”

An investigative team that won two Pulitzers, Barlett and Steele aren’t radicals or partisans. Their eighth book shows that journalists can still report facts and reach conclusions. Here, they methodically look at issues and policies, from the future of retirement and federal taxes to health care and the effects of deregulation. They ask questions everyday people wonder: “Is this system working?” “Who’s benefiting – and who’s sacrificing?”

A recurring problem stems from overlapping woes: globalization and so-called free trade. Policymakers duped Americans with the promise that trade pacts like the North American Free Trade Agreement (NAFTA) would result in poor countries with cheap labor taking dirty, unskilled jobs, leaving the “smart” jobs to countries with loads of educated people with an entrepreneurial spirit. Instead, the United States lost both.

Illinois-based Caterpillar is a good example, they show. Cat in 2009 opened the Wuxi R&D Center, a modern, 10,000-square-foot facility not far from Shanghai, part of Cat’s “major investment in manufacturing plants in China,” the book says, adding. “The flight of more and more high-value jobs to facilities such as the Caterpillar laboratory wasn’t supposed to happen.”

Such betrayals have been bipartisan, they note. Government is too driven by politics, which depends on campaign contributions and is beholden to lobbyists.

However, the situation is not hopeless, they add, advocating a six-point Way Out:

1. Address trade. Because of offshoring jobs, imports now overwhelm exports – a trade deficit – which kills more jobs. Meanwhile, foreign governments – some our biggest trading partners – block U.S. products (China, the European Union, Japan).

2. Improve TAA training. The Trade Adjustment Assistance program to help workers who lose jobs due to offshoring is ineffective.

3. Change the tax code. In 1955, rich Americans paid an average of 51.2 percent of their income in federal taxes. Now, that figure is 16.6 percent.

“U.S. Congressman [and GOP Vice Presidential nominee] Paul Ryan, submitted a proposed budget that he claimed would ‘simplify’ the top [tax] rate on the wealthy,” they write. “Nothing could be more catastrophic for working people. And the rest of America.”

4. Invest in America. The American Society of Civil Engineers’ recent reports on the condition of the nation’s infrastructure (roads, bridges, dams, etc.) said that most “are in such bad shape that they get no better than a D grade.”

5. Uphold laws. “The triumph of the ruling class is so complete that there’s no longer serious prosecution for violations of fraud and other statutes.”

6. The majority should rule. Americans must put their own economic interests above partisan loyalties.

Others echo such conclusions. For instance, another Pulitzer Prize winner, reporter Hedrick Smith, in his new book “Who Stole the American Dream?” documents what he calls “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.”

However, an optimistic Illinois man reminded Barlett and Steele <quote>, “Our market power is now so diminished, and our indebtedness so exorbitant, that we may have few levers left. But it is never too late to reorient our thinking and to correct a sustained injustice to our citizens.”

The book ends with the inspiring warning from the 20th century’s great U.S. Supreme Court Justice Louis Brandeis, who said, “We can have concentrated wealthy in the hands of a few or we can have democracy. But we cannot have both.”

Bill.Knight is a freelance writer. His newspaper columns are archived at billknightcolumn.blogspot.com The opinions expressed in this commentary are not necessarily those of Tri States Public Radio or
Western Illinois University.