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| "Who Stole the American Dream?" by Hedrick Smith, 2012. |
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| Hedrick Smith |
Hedrick Smith’s 2012 book “Who Stole the American Dream?” is
a powerful look at the way things have shifted against the middle class over
the last 40 years in America. It’s an important book that everyone interested
in American politics or economics should read.
Hedrick Smith is a veteran journalist who worked for The New York Times for 26 years. While
he was with the Times Smith was a
part of the team that broke the Pentagon Papers story and won a Pulitzer Prize
in 1971. In 1974 Smith won the Pulitzer Prize for International Reporting for
his stories reporting from the Soviet Union and Eastern Europe. His work in the
Soviet Union was the basis for his 1976 best-seller “The Russians.” Smith’s
other books include “The Power Game,” his seminal study of political power in
Washington, D.C., “The New Russians,” and “Rethinking America.” Since retiring
from The New York Times, Smith has
produced many documentaries for PBS.
I was an intern in Hedrick Smith’s office during the fall of
2001. While I was there I helped work on Smith’s documentary “Rediscovering
Dave Brubeck,” which I would highly recommend to any jazz fan. While I interned
at Hedrick Smith Productions, I saw first-hand Smith’s tireless work ethic and
his dedication to journalism. He’s won two Pulitzer Prizes, but he’s not just
resting on his laurels.
Smith’s reporting for “Who Stole the American Dream?” is
deep and incisive. He weaves the threads of his story together very well,
writing in clear prose that is easy to understand. The book covers a lot of
ground, but Smith excels in presenting the reader with the most relevant points
in each chapter. The book is separated into short sections that make for quick
reading.
Smith does a great job of showing how many government
policies over the last 40 years have favored the rich at the expense of the
middle class and the poor. As Smith writes in the Prologue:
“This book sets out to describe how, over the past four
decades, we came to this point-how we became two such polarized and dissimilar
Americas, how the great economic and political divide affects the lives of
individual Americans, and how we might, through changed policies and a revival
of citizen action, restore our unity and reclaim the American Dream for average
people.” (Prologue, p. xix)
In the first chapter, Smith stresses the influence of the
Powell Memorandum, which was a call by lawyer Lewis Powell in 1971 for
increased activism of business to strength their position and influence within
government. At the time, Powell was a corporate lawyer, but a few months later
he would be named to the Supreme Court by President Richard Nixon. The Powell
Memorandum was written to the U.S. Chamber of Commerce, and it was not meant
for public consumption at the time. The memorandum said, in part, “Business
must learn the lesson…that political power is necessary.” (P.7) During the
1970’s business interests would take Powell’s message to heart as they began to
lobby Congress in much greater numbers than ever before.
Smith then chronicles how the middle class grew and
flourished in the decades following World War II, and how the middle class’s
earnings have stagnated over the last 30 years. As he writes, “…while
productivity was rising close to 3 percent a year, hourly wages of the average worker,
adjusted for inflation, were essentially flat, the same in 2011 as in 1978.
Three decades of getting nowhere.” (P.73)
But while the middle class has been treading water for 30
years, the wealthy have been getting richer and richer, as compensation for CEOs
of companies has skyrocketed over the last 40 years. Smith writes, “In the
1970s, the Federal Reserve reported that chief executives at 102 major
companies were paid $1.2 million on average, adjusted for inflation, or roughly
40 times an average full-time worker’s pay. But by the early 2000s, CEOs at big
companies had enjoyed such a meteoric rise that their average compensation
topped $9 million a year, or 367 times the pay of the average worker.” (P.59) CEOs
certainly have a right to be well compensated for their work, but the way their
pay has skyrocketed is outrageous. CEO stock options have also skyrocketed in
the last few decades. The thought is that CEOs will do a better job of leading
the company if they have more of a stake in that company. Which is rather
ridiculous, as pure self-interest will keep a CEO doing their job as best they
can. The suggestion that CEOs need the extra incentive provided by stock
options to do the best for their company is absurd.
Smith also writes about Congress, and how politicians are more
beholden to special interests than actual voters. The reality of politics today
is that money buys you access to a politician, and access gets you influence. And
since special interests are contributing more to PACs than middle class and
lower class voters, the special interests have more influence than ordinary
voters. Gun control is a recent example of an issue where the majority of
people want action, but Congress was unable and unwilling to do anything
substantive on the issue. The will of a majority was thwarted by a powerful
minority.
Smith details how Congress used to work in the 1950’s and
1960’s, as politicians from both parties would frequently work together to
craft legislation. Compromise was essential, and there were more moderate
politicians in both parties. In contrast, Congress now is extremely
dysfunctional, and is barely able to pass any kind of legislation. Compromise
has become a dirty word. Filibusters, and the threat of them, have become much
more common. Thomas Mann of the Brookings Institution says of the Senate: “In
the 1960s, about 8 percent of significant legislation was subject to delaying
tactics like filibusters or holds. It is now about 70 percent. Obstructionism is
now the hallmark of the Senate.” (P. 322)
While it’s true that
Democrats have become slightly more liberal, it’s also very true that the
Republican Party has shifted steadily to the right since the 1960’s. Moderate
Republicans are now an endangered species. One of the key moments in the
Republican Party’s shift to the right was the 1964 nomination of Barry
Goldwater as the Republican candidate for President. Smith and other authors
have highlighted this turning point as the moment when the right wing started
to take over the party. Even though Goldwater lost to Lyndon Johnson in a
landslide, it was the moment when the right wing first asserted itself. When
moderate Republican Nelson Rockefeller was booed by Goldwater supporters at the
1964 convention, it marked the beginning of a huge change in the Republican Party.
In Part 4 of the book, Smith discusses many of the things
that have caused the middle class to lose their wealth, from the subprime
mortgage crisis, to Wal-Mart and other companies moving good jobs overseas. There
was a time when companies were actually concerned about the welfare of their
employees. Now the focus is often only on the bottom line of the balance sheet.
“Who Stole the American Dream?” is a book that should make
you angry. It should make you think about what’s happened in the country over
the last 40 years, and how the wealth disparity in this country is growing
larger and larger. You should get indignant about the status quo as you read
this book. My high school Social Studies teacher Mr. Anderson would always say
to us “Be indignant!” He wanted us to have a reaction to current events, and
Hedrick Smith wants us to have a similar reaction to his book.
Personally, I think that Hedrick Smith hit the nail on the
head with “Who Stole the American Dream?” He accurately diagnoses many of the
maladies that plague our country today. He describes how we’ve gotten there
over the last 40 years, and what can be done to change it. We would all do well
to listen to him.
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