The Betrayal of the American Dream

'American Dream,' Betrayed By Bad Economic Policy
by Donald L. Barlett and James B. Steele
by NPR Staff - Morning Edition
August 6, 2012

A lot is at stake in the current election, but no matter who wins, the victor will stay committed to policies that cripple the middle class. That's according to Pulitzer Prize-winning reporters Donald Barlett and James Steele, who've been covering the middle class for decades.

In their new book, The Betrayal of the American Dream, Barlett and Steele criticize a government obsessed with free trade and indifferent toward companies that outsource jobs.

"Everyone loves Apple. Apple makes nothing in this country anymore," Bartlett tells NPR's Steve Inskeep as an example. "But then, look over here on the other side and you have Intel, and their plants are massive, and they are good-paying jobs. They continue to invest in this country. And what we need in this country now are more Intels and fewer Apples."

For models of how to boost manufacturing and job growth in the U.S., Barlett and Steele look abroad. "Germany has had a fairly good record in recent years," Steele says. When the global financial meltdown happened, Germany adopted a policy that subsidized companies in order to help them keep employees on the rolls. "It's one of the reasons the German unemployment rate is much lower than in this country," he says.

But are those German jobs good ones? The New York Times reported last year that German wages are relatively low, leaving many people unable to pay their bills. "There's no doubt that this is true with some parts of the German workforce," Steele says. But he points out that German factory workers do considerably better than their American counterpoints in terms of wages and benefits.

Barlett and Steele write that they'd like German-style government support for American companies that preserve jobs. They also recommend tariffs on countries that do business differently than the U.S. "One of the real ironies in this time in history is that we will go to a shooting war at the drop of a hat," Barlett says. "But suggest a trade policy that might result in a trade war and everybody runs screaming. That's nonsense."

"We're not suggesting putting up walls around the United States," Steele adds. "But when an industry is threatened, when there's some bit of unfair competition, we need to respond, and we have never done that in any kind of systematic way. Every other country out there knows that, and as a result of that, they can continue to thumb their nose at our attempts to open those markets."

Donald L. Barlett and James B. Steele are the authors of America: What Went Wrong?

U.S. exports have been rising in recent years, but that hasn't had a big impact on our trade deficit; they're still outpaced by imports. Barlett and Steele say the media is responsible for incorrect perceptions that the trade deficit is shrinking. "What you have to look at, though, is what the trend is," Steele says. "And the trend is, year in and year out, that the trade deficit — in other words, how imports overwhelm exports — that trend has been going on now for three decades."

Steele says most Americans don't realize that other countries don't have the kind of trade deficit that the U.S. does, and he links that deficit to the unemployment situation. "That has led to the elimination of all kinds of jobs, and they've not been replaced by jobs paying commensurate pay."

But what about people who say that it's too late; good manufacturing jobs are gone and they'll never come back? "We're realists," Steele says. "We don't think the likelihood of bringing many of those jobs back is possible. We think the best hope is to try to deal with the manufacturing we have left ... that will ultimately be very good for working Americans everywhere."

Excerpt: The Betrayal Of The American Dream

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.

We have been reporting and writing about middle-class America for many years. In our 1992 book America: What Went Wrong? we told the stories of people who were victims of an epidemic of corporate takeovers and buyouts in the 1980s. We warned that by squeezing the middle class, the nation was heading toward a two-class society dramatically imbalanced in favor of the wealthy. At the time, the plight of middle-class Americans victimized by corporate excess was dismissed by economists as nothing more than the result of a dynamic market economy in which some people lose jobs while others move into new jobs — "creative destruction," it was called. Soon, they said, the economy would create new opportunities and new jobs. We said, Don't believe it. What happened to the middle class in the 1980s and early 1990s wasn't just a blip, but part of a disturbing pattern: a shift by Washington away from policies that had built the American middle class and enabled successive generations to do better than their parents, in favor of policies that catered to Wall Street, corporate chieftains, and America's wealthiest citizens. We wrote:

Popular wisdom has it that the worst has passed, that it was all an aberration called the 1980s. Popular wisdom is wrong. The declining fortunes of the middle class that began with the restructuring craze will continue through this decade and beyond.

Because of statements like that, we were accused of being alarmists. But in fact we grossly underestimated how much more difficult life would become for most Americans. The workers we wrote about in the 1990s were pioneers of a sort never before seen in the United States. Unlike middle-class Americans for more than three generations before them, for whom life progressively got better, they were heading down the economic ladder. They were the first substantial wave of what will be tens of millions of casualties — most likely well over 100 million — as Wall Street and the moneyed interests proceed unchecked to dismantle the structure that has sustained America's middle class, all with the assistance and blessing of Congress. The country that once offered so much to its people — like the GI Bill, which put millions of Americans through college — has begun to eat its own.

Barring wholesale changes in public policy, the coming years will be grim for millions of American men and women. To be sure, there will be ups and downs in the economy, enabling the mainstream news media and cable television to proclaim from time to time that all is well, just as they did in the early 1990s. But the dismal fact is that for tens of millions of middle-class Americans, as well as for the working poor who hope to achieve that status, the American dream is over. As for the mantra heard ever since the 1950s — that children can expect to enjoy a better life than their parents — only the delusional believe it today.

This is a sea change in American life without modern parallel. Where once we were told, over and over, that anyone could move up the economic ladder, now that movement is, with some exceptions, down. If existing policies remain in place, all that will be left will be the upper end of what once was a thriving, broad-based middle class. Everyone else will be toiling on a treadmill. "Retirement" will join "pension" as an archaic term in the dictionary. And if those who write the economic rules continue to have their way, those terms will be joined by some others too. Having dismantled the economic support network that underpinned the world's largest middle class, the members of the ruling class have set their sights on another goal that, if achieved, would put the middle class in an even deeper hole: they are promoting "austerity" in government budgets and policies — cuts in programs such as Social Security and Medicare — for everyone but themselves.

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.

What is happening to America's middle class is not inevitable. It's the direct result of government policy, and it can be changed by government action. Look no further than at what the governments of our trading partners do to protect their people and advance the interests of their country. We could do the same.

But the United States has taken a totally different route.

"Running the country like a business means everyone is expendable," says Christine Wright-Isak, a former advertising executive who teaches marketing at Florida Gulf Coast University. "Is that the kind of country we want?"

In the forty years that we have been researching and writing about issues that affect all of us, we have never been so concerned for the future of our country. The forces that are dismantling the American middle class are relentless.

America must stop sacrificing its greatest asset. Because, without a middle class, there isn't really an America.

Excerpted from The Betrayal of the American Dream by Donald L. Barlett and James B. Steele. Copyright 2012 by Donald L. Barlett and James B. Steele. Excerpted by permission of PublicAffairs.