There are books about Washington and books about business. Rarely do these worlds collide so dramatically than in Hedrick Smith’s Who Stole The American Dream. He explores pivotal decisions and their relative impacts in these two seemingly disparate worlds with keen insight and analysis. The relationships and connections he traces can be described as a “mash-up” of some of his best reporting. Longtime fans will remember his classic bestseller The Power Game, a book still featured on college syllabi years later, for its revealing examination of how Washington plays behind the scenes. Then came Rethinking America, focusing on America at the crossroads of globalization.
In recent years Hedrick has applied his reportorial skills to demystifying the economy, from Wall Street to Main Street. As part of his producer team for PBS, I traveled with him on this journey. Along the way we met American icons in the fields of finance and business, as well as workers who built their worlds.
When boardroom decisions left small town employees stunned and jobless and Wall Street apparently flush with cash, Rick took to the spreadsheets. Amidst the annual reports and analysts opinions, Rick literally unraveled the so-called success story. He began asking tough questions about the dismantling of corporate America and the price paid for stellar stock growth. The tale of two worlds was emerging.
Fast forward a few years. Hedrick, fresh from a string of important PBS projects on Enron, Wal-Mart, and the mortgage crisis, mentioned he was eager to return to writing. He wanted to write about what happened to the American Dream – the promise of an affordable home, an assured standard of living for the middle class, and the expectation of a comfortable retirement after decades of hard work.
His notion seemed almost charmingly old-fashioned at first, not unlike the tableau he recounts in the book from McMinnville, Tennessee during a traditional Fourth of July celebration. As the parade passed by this factory town’s Norman Rockwell-like Main Street bearing patriotic bunting and the Stars and Stripes, victims of “Chainsaw Al Dunlap,” were left jobless and hopeless in his wake as he sent their Sunbeam hair clipper assembly line to Mexico.
It was when the Occupy movement began to take on momentum in 2011, first in New York City and then in Washington, DC, when Hedrick’s larger vision became clear. As angry citizens organized in encampments just miles from our homes, as well as around the world, the extent of the damage to the middle class grew increasingly evident.
It was against this dramatic backdrop that his book emerged from the ashes of American expectations. And having read Who Stole The American Dream, I now better understand the vitriolic response to the increasing concentration of wealth he documents so well. From his description of U.S. tax law as “the most political law in the world” to the seismic shift in executive compensation, he lays out how the gap between ordinary Americans and the ultra wealthy grew through the past few decades, even before taking an additional hit from the Great Recession.
Hedrick recounts how the living standards of middle class Americans have fallen behind a dozen European countries, which given the headlines about Europe in crisis, should give all of us pause. With Americans working longer hours for lower pay and benefits, he reports, we make up the difference as best we can. The U.S. now sports the highest ratio of two income households than any other advanced country. He offers a glimpse into the lives of the “hyper rich”, inhabitants of Robert Frank’s eponymous book Richistan.
Hedrick also describes the origins of the 401k plans so many Americans have come to depend upon for retirement planning as traditional defined benefit pensions disappear. Interestingly the rise of do-it-yourself retirement planning dovetails with the rise of the skills based technological change. With wages for the mere college and high school grads stagnating compared to those with other academic credentials and enhanced skills, so grows the wealth gap.
Accordingly, he observes, the initial push to invest has not appeared to bear fruit for most Americans. As times grew darker for companies during the Great Recession, several hundred firms cut their 401k matching contributions. Employees reduced their contributions as well. Even worse, many Americans have raided their retirement for expenses such as tuition, new vehicles medical bills, or even to pay the mortgage after a job loss. Ultimately some skeptics say that the 401k plan turns into a game of roulette, even in the best of times, randomly creating winners and losers depending upon the whim of timing. Those who may have diligently planned and saved for years are still gambling on their nest egg. Some may end up empty handed when it is actually time to retire due to fluctuations of the market.
Perhaps the most striking is his chapter on executive compensation. In child rearing, debates go on about the merit of offering rewards, say for chores well done or a successful report card. As Hedrick points out, CEO’s may lead their company to failure; decimate divisions, lives, and stock prices, only to emerge disproportionately, handsomely compensated for their questionable performance.
If you have already read Hedrick’s book, you probably noticed he has organized his content into mini chapters, each section brief enough for reading on the run. He makes this epic tale that spans coasts and continents quite digestible, even if unsettling. In keeping with the spirit of the question behind the book, he also outlines a ten step program to reclaim the dream, which surely will produce great debate, the first step to social change.
It is a pleasure to join Hedrick today and welcome readers to our online discussion about Who Stole The American Dream. As I was preparing for today’s salon, I could not help but wonder what Aristotle, with his vision for the balancing role of the middle class in society, would think of our current state of affairs. Please enjoy this chance to ask what is on your mind as we share the next two hours.
Ariadne Allan Autor - Worked as a producer with Hedrick Smith on Critical Condition for PBS, they received a national Emmy Nomination for outstanding investigative documentary journalism, this is in addition to the Emmy Ms. Autor received with Mike Wallace at CBS News/60 Minutes. Mr. Smith and Ms. Autor worked together on Seeking Solutions (PBS), and received the 1999 Sigma Delta Chi (national journalism society) national public service award for a TV network production. They worked on Surviving the Bottom Line, “Running With the Bulls” another PBS documentary (and from which some of the reporting for Who Stole The American Dream was based). Today Ms. Autor handles development and alumni relations for an independent Montessori school as well as some freelance writing for arts, education, and non-profits.
[As a courtesy to our guests, please keep comments to the book and be respectful of dissenting opinions. Please take other conversations to a previous thread. - bev]