Welcome Hedrick Smith (HedrickSmith.com)(Frontline/PBS) and Host Ariadne Allan Autor (MSNV-bio)

Who Stole The American Dream?

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]

140 Responses to “FDL Book Salon Welcomes Hedrick Smith, Who Stole The American Dream?”

BevW February 3rd, 2013 at 1:50 pm

Hedrick, Ari, Welcome to the Lake.

Ari, Thank you for Hosting today’s Book Salon.

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anotherquestion February 3rd, 2013 at 1:55 pm

Thank you for your “Chapter 17. The skills gap myth: importing IT workers costs masses of U.S. jobs.”
1) Why did you decide to write about this chapter’s topic?
2) Why is it almost impossible to get anyone else to cover the topic: no journalists, no bloggers on left or right?
The immigration reform debate is mostly concerned with Mexicans who work picking tomatoes or washing dishes. None of these Mexicans use assault guns in schools so border security is a red herring while we give away good middle class jobs in science, technology, engineering, and mathematics through H-1B visas.

Hedrick Smith February 3rd, 2013 at 1:59 pm
In response to BevW @ 1

Hello to Firedog Lake book fans out there across america. Happy to be with you on this SUnday afternoon. Hedrick

dakine01 February 3rd, 2013 at 2:01 pm

Good afternoon Hedrick and Ariadne and welcome to Firedoglake this afternoon as the crowning glory of US consumerism is going on.

Hedrick, I have not had an opportunity to read the book but as one of the long term underemployed, it is a topic that I and many others here have been forced to become knowledgeable about. (I write about economic issues some at my own sucky little blog)

Forgive me if you address this question in the book but do you consider the people who have created these problems to be willfully obtuse, clueless, or purposeful in their seemingly obvious desires to destroy the middle class? For what it is worth, I tend to lean to a mix of willfully obtuse and purposeful – it seems many folks become more stoopid when they become Beltway Village insiders – even if they do not reside anywhere near the Beltway of DeeCee)

Hedrick Smith February 3rd, 2013 at 2:02 pm
In response to anotherquestion @ 2

Well, I was interested in the loss of american jobs to whatever sourcve – offshoring factory jobs, offshoring knowledge jobs and onshjoring foreigners to take jobs for which there were qualified Americans available. And I learned that US industry, mostly the big multi-nationals, were getting a subsidy – even free market economist Milton Friedman called it that. I was shocked to discver that Americans ahve lost almost a million jobs to foreigners working in this country for U.S> firms at lower wages and in some cases, probably against the law, if it were strtictly enforced.
Hard to say why the subject is ignored. Mostly because so much attention goes to the more visible movement of US plants form this country to China, IKorea, India, and elsewhere, mostly iN Asia. But I expect this topic will become part of the coming debage aobut immigrations. Fortunately, some Senators suchj as dick Durbin of Illinois and CHuck Grassley of Iowa, one Democragt and one Repub lican, want to close somed of the gaping lopholes in immigraiton law that are allowing companies to get away with murder on H-1B visa.

Hedrick Smith February 3rd, 2013 at 2:04 pm
In response to dakine01 @ 4

A lot of the decisions have been pretty deliberate, though the intention of the power folks at the top a snot to destroy the middlew class, but rather to fatten their own stock accounts. There’s been a huge shift in the mindset of business leaders. Back in the 60s and 70s, the heads of GM, GE, IBM, and Standard Oil believed it was their job to balance the interests of the stakeholders in the company – all the groups that had a stake in the companyls success – shareholders, workers, managers, suppliers, creditors, customers, and the communities they operated it. Today, the CEOs focus only on Shareholders. That means focusing on profits and the price of their stock on the stock market. Focusing on profits means cutting wages. So the middle class ha slost out. We need to get back toward stakeholder capitalism for the middle class to do better. See New York Times Oped, “When Capitalists Cared,” Sept 3, 2012, and also available under “Opeds and Reviews” at http://www.hedricksmith.com

dakine01 February 3rd, 2013 at 2:07 pm
In response to anotherquestion @ 2

FWIW, there are and have been folks here at the FDL blogiverse who have written about the problems with H1b and the so-called ‘skills gap’ fallacy over the years. Also, Dean Baker at Beat the press and Yves Smith at Naked Capitalism cover the issue and refute the TradMed articles fairly frequently (among other areas where they have to refute TradMed)

Hedrick Smith February 3rd, 2013 at 2:07 pm

To build on the comments form Ari autor about the growing dependency of americans on 401k plans and the shift away from lifetime pensions funded by their employers:
- 401ks have had huge negative impact in middle class in two ways. Companies are saving hundreds of billions of dollars every year by shifting most of cost of retirement from employers to employees. Second, despite the fact that everyone thinks they can beat the market, average Americans are not good at managing their own retirement money. They have a terrible track record. Experts predict that 45 to 50% of Baby Boomer generation will wind up in poverty in retirement. You’ll find lots of material on lifetime pensions and 401ks in “Who Stole the American Dream?”

spocko February 3rd, 2013 at 2:07 pm

I haven’t read your book yet but am looking forward to it

I don’t know if your books are predictive or have an activism bent to them, so forgive me if you have addressed this in the book, but based on your research and meetings, what are these people really afraid of? Specifically what can, “get them in trouble?” I’ve asked this question of Matt Taibbi. He said, “Not journalists.”

I’m sick and tired of hearing that, “Nobody went to jail after the financial crisis.” Or, “the company is too big to fail.” How can we personally help the DOJ do their job? Is their someone else we should be alerting to things we find out? We know what happens to brave whistle-blowers but what can people do from outside the system?

I know that Bill Black has some ideas about looking for “control fraud” at the corporate level, do you have suggestions?

What can we do to make these people’s greatest fears come true? Is it jail? Losing control of the company? Losing their assets? Getting bad PR? Is there a way to bust them they haven’t figured out how to explain or lobby away?

In 2005 I developed a concept and method that helped defund right wing radio and TV hosts by separating them from their sponsors. It wasn’t a boycott, I alerted advertises their brand was being tainted by the hosts. Millions of dollars in revenue were lost, hosts were fired, behavior was modified. Nobody went to jail, but that wasn’t my goal. So I’m not talking idly about action on a plan. Do you have any programs or suggestions we can use to ensure real accountability for the people who Stole the American Dream?

dakine01 February 3rd, 2013 at 2:08 pm
In response to Hedrick Smith @ 6

Does this go to the rise of the folks like Carl Icahn and such in the early/mid ’80s? (at least, that is where I would put the start)

Ariadne Allan Autor February 3rd, 2013 at 2:09 pm

Hedrick Bev and other FireDoglake readers, it’s great to join you.

Hedrick Smith February 3rd, 2013 at 2:09 pm
In response to dakine01 @ 7

Well, there’s no question that economists and labor specialists have focused on the H-1B visa abuses, but the generla media has lagged. One of the most knowledgeable scholars on this top is Ron Hira of Rochester Institute of Technology. He has written a couple of books about it and testified at congressional hearings.

bluedot12 February 3rd, 2013 at 2:10 pm

Thanks Hedrick and Ari for being here. I found your book, Hedrick, to be disturbing. I suppose we knew most of it. But it has a way of slipping past you until someone like you wakes us up..

Ariadne Allan Autor February 3rd, 2013 at 2:11 pm

Hedrick,this book was clearly a long time in the making. You’ve drawn on decades of experience as a reporter for the New York Times and as a documentary producer. What inspired you to write the book?

Teddy Partridge February 3rd, 2013 at 2:11 pm

Thanks for joining us to chat about your book.

Theft is a crime. Stealing is illegal.

If the American Dream was indeed stolen, who shall be held accountable? Who needs to be charged, convicted, and imprisoned? It’s way past time the people who did this to our fellow countrymen took responsibility for it in a court of law.

anotherquestion February 3rd, 2013 at 2:11 pm

I question the claim by Norm Ornstein (Chapter 18 the missing middle) that Congress would better reflect the needs of common people just by having more “centrists.” Bernie Sanders and Ron Paul cooperated to order an audit of the Federal Reserve. Back during the time of Senator Feingold, there was a group called “Green Scissors” that combined Liberals such an environmentalists with Conservatives that wanted to cut the budget; Liberals chose the targets and the coalition pressed to have the targets cut.

TarheelDem February 3rd, 2013 at 2:14 pm

Welcome to FDL, Hedrick. I owe you thanks for the image of the infantile nature of the CEO from a PBS series you did over a decade ago.

There has been a lot of talk about the American Dream lately. Was it indeed a temporary and illusory product of the US’s unique post-World War II situation? Is it still alive? How does the mythology of the American Dream relate to a global society that has definite ecological limits?

Hedrick Smith February 3rd, 2013 at 2:14 pm
In response to spocko @ 9

You;ve got a bunch of questions going there. In terms of finding fraud, specializes like BIll Black at University of Missouri help hjelp the DOJ and FBI, but so can ordinary borrowers who have evidfenvce that they hyave been defrauded. But the larger question is how to get the government to decide to prosecute. Unlike the Saving sand Loan crisis in the 1980s, where hundreds of executives and bankers went to jail, very few have been prosecuted for abuses and fraud in the housing boom and bust. Notice that the settlements between the states attorneys general and the federal government and the banks – for their massive abuses of the foreclosure process – have repeatedly come down to moneh. this is a hard rap on the knuckles but not a real deterrent against future white collar crime and banks’ defrauding their customers.
It is going to take citizens pressure on the government and on the banks. We’re going to ahve to go back to the people power of the 19670s and 70s where ordinary citizens get organized and put the heat ona government. more on that late,r if you want.

Phoenix Woman February 3rd, 2013 at 2:14 pm
In response to Hedrick Smith @ 5

The myth of the skills gap also serves the interests of those who want to privatize and thus destroy public education in the name of “reforming” it.

RachelX February 3rd, 2013 at 2:14 pm
In response to Hedrick Smith @ 6

the intention of the power folks at the top [is] not to destroy the [middle] class, but rather to fatten their own stock accounts.

When bad men combine, the good must associate; else they will fall one by one, an unpitied sacrifice in a contemptible struggle.

– Edmund Burke

I don’t believe the intentions of the “power folk” is so innocuous.

bluedot12 February 3rd, 2013 at 2:15 pm

Have you developed a view that job outsourcing may be partly related to our taxing regime?

Ariadne Allan Autor February 3rd, 2013 at 2:16 pm
In response to Hedrick Smith @ 6

dakine01 and Hedrick, I was also fascinated to read in the book about the role of laissez faire economic policy as well as deregulation. I was interested to read about Alan Greenspan’s contribution in this process. Would you say it was like a perfect storm of factors leading up to our country’s financial woes.

Hedrick Smith February 3rd, 2013 at 2:17 pm
In response to bluedot12 @ 13

Thanks so much. this book is intended to be a wake0-up call, but also to try to tella narrative of events sincve the 1970s so that ordinary people can see the whole story put together. right now, most people are bombarded with bits of information> They know something is wrong. But itps harfd to get historical context, hard to see where the turning points occurred and who was pushing eevents in a bad direction. So I have tried to fill that in. As one editor of mine said to me, :”Before when I looked an=-t the whole sky of American politics, I just saw a whole lot of stars. now that I have read your book, i can see constellations.” So eventgs fit a pattern and made sense to him. Hope the book did that for you and many others, too

Hedrick Smith February 3rd, 2013 at 2:18 pm
In response to dakine01 @ 10

If you want to get a really fast look at how power changed and how the middle class lost out, read the “Stolen Dream Timeline” in my book, “Who Stole the American Dream?” It’s dynamite – cliff notes on the last 30-40 years of U.S. history. It’s at the back of the book. It’s also up on my web page. http://www.hedricksmith.com . Click on the timeline button.

Mauimom February 3rd, 2013 at 2:18 pm
In response to Hedrick Smith @ 8

Welcome, Hedrick & Ari.

Hedrick, I LOVED this book. I’m so grateful for your writing of it. I was especially grateful for your discussion of 401(k)s: how they came into being, how they’ve been used to get corporations out of the duty of caring for their employees’ future, and how those employees [and anyone else with a 401(k)] probably hasn’t saved enough for retirement.

I’d REALLY like to see more, particularly in the “financial press” about how inadequate the resources are, even of those who are patting themselves on the back for piling up a few hundred thousand dollars in their account. That’s not going to translate into much [particularly when it's taxed upon withdrawal].

Hedrick Smith February 3rd, 2013 at 2:20 pm

well, i was disturbed by what I saw in 2008 and 2009. we were losing 600,000 jobs a month and hundreds of thousands of steady middle class borrowers were being forcved out of their homes by foreclosures. Gthe economy was in terrible trouble. so like any good reporter, I started with a bunch of questions. What caused all this? But from earlier rpeorting, I knew the troubles went back much fatther than 2007 and 2008. Mainly what I wanted to figure out was how did we go from a country where the middle class shared in the nation’s economic growth and prosperity, and where we had bipartisan politics that worked…to a country with polarized politics, gridlock, a hyper-concentration of wealth…and a middle class stuck in a rut.

Kelly Canfield February 3rd, 2013 at 2:21 pm

Greetings! Can’t wait to read the book.

I see you already have a lot of questions to get through, so when it’s appropriate I hop you can get to this bit:

…also outlines a ten step program to reclaim the dream, which surely will produce great debate…

dakine01 February 3rd, 2013 at 2:21 pm
In response to Hedrick Smith @ 24

Thank you

Mauimom February 3rd, 2013 at 2:22 pm

Hedrick, could you talk some about how your book has been received in the “traditional press” or general “talking heads” circuit? You challenge “traditional thinking” on so many issues. I’d be interesting in learning how those who’ve usually can be relied upon to comfortably mouth platitudes have reacted.

masaccio February 3rd, 2013 at 2:22 pm

I practiced bankruptcy law in Nashville, which is just up the road from McMinnville. It’s true that 401(k)s have been a real disaster for most people. They are used like a piggy bank, like tax free savings, to be called on when times are tight. In my bankruptcy practice, almost every single debtor used their retirement money to try to stay afloat, explaining that they borrowed so they had a moral obligation to repay.

What amazes me is that these same corporate chieftans who scuttled pension plans at their companies and cut matching contributions to maintain their own salaries (see Hostess Brands) are the people trying to cut Social Security, Medicare and Medicaid.

Yet our fellow citizens continue to worship at the free market altar, and defend these people as just doing their jobs. People feel helpless to stop it as it destroys their lives.

I don’t see how a solution can emerge from our fractured politics and our dominant media frameworks. Do you?

Hedrick Smith February 3rd, 2013 at 2:23 pm

Well, the answer to those questions run through the entire book :”Who Stole the American dream?” there were some big changes – a huge kpower shift in Washington form people power to business power, and a huge shift in the economy form stakeholder capitalism to shareholders capitalism.
People forget – and many never knew – that the prosperity of America’s middle class in the 1950s, 60s and 70s depended on middle class political power. The two go together. Back then, we had a strong consumer movement, women’s movement, labor movement, environmental movement, civil rights movement – all pushing for a fairer democracy and a fairer marketplace and a wider sharing of American democracy. Ordinary Americans believed in the power of direct civic action and they had strong impact on Congress and the White House. Today, we don’t have people power. Washington is dominated by rich special interests and an army of lobbyists, and the middle class loses out both politically and economically. See blogs on :”When Capitalists Cared” and “Lessons form the March on Washington,” available at http://www.hedricksmith.com under “Opeds and Reviews”
So in my opinion we have to get back to the active exercise of people power if we want to correct the gpaing inequalities in both our political and our economic system today.

Peterr February 3rd, 2013 at 2:23 pm

Hedrick, thanks for this book! I’m not done with it, but you have certainly engaged me with it.

You dedicate the book “To Susan, and to a better future for our children and grandchildren and their generations.” As I read, these generations kept rolling through my head.

I just finished reading your section on college education, and it struck me that today’s generation of high school students are probably looking at The American Dream in the same way that my generation looked at World War II: that’s what an earlier generation had.

Today’s college kids get all the up-to-date learning for the work of employment, but are having incredibly tough times finding jobs. To get these skills, many of them are taking incredibly heavy loads of student loans. After graduation, those without a job are generally ineligible for unemployment insurance (not having been employed in an eligible job first), and the 2005 bankruptcy law changes make it impossible to discharge student loans in bankruptcy proceedings.

I can’t imagine why the youngest generation of adults thinks that the American Dream is a thing of the past.

maa8722 February 3rd, 2013 at 2:23 pm

I’ll be 66 in May. So I wonder, to distill this down, who stole what from whom over all those years? And why has it lasted so long?

Maybe it’s not too complicated if history keeps repeating itself, with just new actors playing familiar parts all along. There are soooo many aggrieved victims and perpetrators since the 1950s. It seems to mutate conveniently hither and yon, with so many causes tugging at our shirt tails all the time.

Is this habit peculiar to the US or did we catch the virus from somewhere else?

Mauimom February 3rd, 2013 at 2:25 pm

…also outlines a ten step program to reclaim the dream

When I was reading this portion, I thought I’d discovered a big error: only 8 points!!!

Silly me: the last two were in the next chapter!

Ariadne Allan Autor February 3rd, 2013 at 2:25 pm
In response to Mauimom @ 25

Welcome Mauimom to today’s salon. I too found the discussion of 401k’s important. We’re reading about a pending crisis. Many are underfunded because as Hedrick points out, wages have stagnated for much of the middle class, and it is clear that many dip into these accounts, which leaves them even more precarious. And add to that the risk of the market which can leave a prospective retiree high and dry when the time comes to use the resources.

RevBev February 3rd, 2013 at 2:26 pm
In response to Hedrick Smith @ 23

Have there been reactions other than your Editor who seem to get it?
Just wondering what broader reactions may have been.

Hedrick Smith February 3rd, 2013 at 2:26 pm

Well, for the few cases where yu can cite people form one extreme or another doing positive things in Congress, by and large Congress is stuck in gridlock and one of the main reasons is that the political cengter has been eaten way over the years. Congress has to work by compromise. NEither Rand Paul nor Bernie Sanders are known as compromisers. So while we need a few mavericks at the moment, we are paralyzed by the extremes that have been generated by a ridiculously gerrymander political system out in the country and by the rise of the phantom filibuster in the Senate. I’ve got a couple of chapters in “:Who Stole the American Dream?” about how all this came to pass and what we might do about it tog et our government functioning better once again.

bluedot12 February 3rd, 2013 at 2:27 pm
In response to masaccio @ 30

I too am pessimistic on that front. Too many people are sold on “free” markets and this thing called capitalism. Everyone thinks they can invest as well as the tycoon. But that will be right after they borrow some more money from their 401k to buy that house.

spocko February 3rd, 2013 at 2:27 pm
In response to masaccio @ 30

“Yet our fellow citizens continue to worship at the free market altar, and defend these people as just doing their jobs. People feel helpless to stop it as it destroys their lives.”

I just want to echo what the brilliant Masaccio says here. There is a sense of despair that they are “getting away with it.” That, coupled with Wall Street’s thin skins, (Obama called me a fat cat! Boo hoo) enrages many people.

But directed justified anger or demand for justice is shrugged off by elected officials or marginalized by the media as cries from losers.

emptywheel February 3rd, 2013 at 2:27 pm
In response to Hedrick Smith @ 8

I’ve started reading your book but haven’t gotten to that chapter yet.

How much of the move to 401ks was about making everyone a “stakeholder” and to free up a lot of money to further inflate the financialization of our economy?

Hedrick Smith February 3rd, 2013 at 2:30 pm
In response to TarheelDem @ 17

There are several American dreams, of course. One is the dream of immigrants to come here and live a better life than in the old country. the second is the Horatio a=Alger dream of rags to riches. But the one that affects most Americans is the dream of a good, steady job, rising income of yur work career, health and retirement benefits, enough money to buy a home so that when you retir rie you own it. A surprisingly large number of americans enjoyed that dream , not in the immediate postwar period but well into the 1970s and ealry 1980s. AIn 198, for ecxample, 84% of the workers at companies with 100 or more employees got lifetime pensions form their companies; 70% got fully paid health benefits. those were important underpinnings of middle class prosperity and a sense of economic security. It is those benefits, that security and the soloid middle sharing of tghe antion;s growth and prosperity, which characterized the 1950s, 60d and 70s, that is gone today. Hence :”the Stolen Dream” in my titgle and timeline. If you want to see how it unfolded, cvheck the appendix at the back of the book or my website http://www.hedricksmith.com and click on “Timeline.:”

Ariadne Allan Autor February 3rd, 2013 at 2:31 pm
In response to masaccio @ 30

Masaccio thank you for your comments about your own clients’ experience. I was also interested to read in Hedrick’s book about what they are trying to do in Nebraska to come up with an alternative. It sounded a little like Social Security actually.

Mauimom February 3rd, 2013 at 2:32 pm
In response to Peterr @ 32

I’d like to augment what Peterr said to query why you didn’t include something about the non-dischargeability of student loans in bankruptcy?

I’ve got two recent college graduates that we managed to get through school without their having to take out loans. [I won't say anything about our OWN ratty furniture, lack of vacations and years-old single car.] Each of them faced unemployment, unable to qualify for benefits, and they [and we] were damned lucky they didn’t have student loan payments weighing on them as well.

There’s a lot of working being done, particularly as to loans taken out to pay for law school, re just how onerous these are. For example, why are banks and Sallie Mae charging kids 7% -9% for loans that CAN’T BE DISCHARGED IN BANKRUPTCY??? What on earth is the “risk” of these loans that would justify such a high interest rate?

There’s a ton of work to be done here [see Paul Campos' Inside the Law School Scam blog]. I was just surprised you didn’t touch the non-dischargeability issue.

RevBev February 3rd, 2013 at 2:32 pm

Would you please describe some of your 10 Points?

Peterr February 3rd, 2013 at 2:33 pm
In response to Hedrick Smith @ 41

Hedrick, you may want to include a warning with that timeline: before you look at the timeline, you might want to set down any beverage you might be holding, and put any sharp objects well out of reach.

emptywheel February 3rd, 2013 at 2:33 pm

Hedrick

AS I was reading about CEO salaries and other ways corporations gutted their companies, I kept thinking about an idea I’ve had: why couldn’t Soros and Buffett start a new stock market where participants agreed by certain rules that would ensure long-term, rather than short term thinking?

As it is, companies are so busy responding to Wall Street, they’re not making anything anymore, at least not of value. That’s not giong ot change with the incentives Wall Street gives executives.

bluedot12 February 3rd, 2013 at 2:34 pm

We are likely to see another assault on social security even though it has been funded for the next twenty five years. This may also take the form of turning it over to Wall Street to invest for us. But there there will be no payback for the theft.

Mauimom February 3rd, 2013 at 2:34 pm

I think it would be useful, in any discussion about the inadequacy of 401(k)s as “retirement vehicles,” to point out how much an individual would have to put away in an account to equal what he/she would get from social security or a private pension.

Hedrick Smith February 3rd, 2013 at 2:36 pm
In response to Phoenix Woman @ 19

Education is a tricky issue. One constant refrain from business and political leaders is that Americans have to get better education and be more skilled to beat the global competition. Then what does Congress do when they want to fight the deficit? They cut hundreds of thousands of teachers all across the country and they cut the Pell grant program that helps pay for college education for kids whose families cannot afford college. And what do state legislatures do? They cut the taxes that help fund better schooling.
then, what about this ide aof getting higher education? It gets undercut by companies hr=iring one million foreigners at lower pay to take away the jobs of well-educated Americans. And the multi-nationals along with the wall sTreet banks have moved from 2 to 4 million knowledge economy jobs overseas in the last dec ade or so. IBM, which used to be heavily based in America, now has more employees iN India than the US. So how did a college cegree or even masters degrees protect those people and those jobs?
We need a tough, honest debate on education and then link it to corporate tax rates and other policies that affect whether we keep US jobs at home or move them abroad.

Hedrick Smith February 3rd, 2013 at 2:37 pm
In response to RachelX @ 20

IO did not suggest their intentions were so innocuous. go back and look at the answer. Deliberate decisions to accumulate wealth at the top and cut out the middle class. but read the book. It;ls laid out ther in black and white.

CTuttle February 3rd, 2013 at 2:38 pm

Aloha, Ariadne and Hedrick, welcome to the Lake and mahalo for all your efforts…!

Would you consider the infamous Powell Memo as the starting point for our current malaise, in that it prompted Big Business to organize thru the Chamber of Commerce, ALEC, etc…?

Teddy Partridge February 3rd, 2013 at 2:39 pm
In response to Hedrick Smith @ 31

It sounds like you see money in politics as the root of the problem. Can we convince these wealthy-beyond-measure Owners and their Purchased Politicians to get money out of politics, in order to let people in to do The People’s business?

It doesn’t seem to me that they are going to give up their place at the trough without very hard persuasion.

spocko February 3rd, 2013 at 2:39 pm
In response to Mauimom @ 43

” Sallie Mae charging kids 7% -9% for loans that CAN’T BE DISCHARGED IN BANKRUPTCY???”

Excellent question. They get money at 1 percent loan it out at 7-9 percent. But that isn’t enough profit for them. They must satisfy the all powerful shareholders. That was one of the reasons why they made the student debt non-discharge able, gotta secure the revenue stream. Otherwise students would be getting education all willy nilly.

The pain of underemployment or unemployment isn’t something people like to talk about or read about, but I think of so much wasted potential out there. In addition because of the screwed up health care system the people clinging to crappy just for the “benefits” is terrible.

If we wanted an explosion of growth in the country in areas other than military spending universal health care would have been it. Instead the companies LIKE people fighting for the crappy jobs. “If you don’t like it there are 230 H1B people out their who would happily do your job for 50 percent of your salary.”

Hedrick Smith February 3rd, 2013 at 2:40 pm
In response to bluedot12 @ 21

No question about it. We have a crazy corporate tax system when companies that operate 100% in America, generating American jobs, pay the full 35% corporate tax rate, and multi-nationals pay a far lower rate because they arenot taxed on their overseas profits. We had 78 corporations which had multi billion dollar profits in the terrible years of 2008 to 2010 but paid no US corporate income tax. In facg, General Electric, with $10B in profit sin those years, got a $.4 billion federal tax rebate. doesn’;t make sense. We have to level that corporate tax playing field. again, it’s spelled out in the book.

Ariadne Allan Autor February 3rd, 2013 at 2:41 pm
In response to Mauimom @ 43

Congratulations on your recent college graduates.
And how lucky for them that they are able to launch forward debt free thanks to you. Hedrick wrote about the challenges faced by college grads and high school grads – those who are fortunate enough to get a job – their incomes are not growing any faster. It seems like a Catch 22. In order to get a job young adults have to seek more education or skills, and yet to do that, they need to take on more debt or parents have to dip into savings. Add the changing nature of work due to massive changes in technology, and you see the skills based technological change Hedrick writes about.

Peterr February 3rd, 2013 at 2:42 pm
In response to CTuttle @ 51

Given that it’s on page xiii in the Prologue, I think the answer is “yes”

bluedot12 February 3rd, 2013 at 2:42 pm
In response to Hedrick Smith @ 49

I found that interesting. IBM moving jobs out of the.United States. It puts a point on the issue. In addition to tax policy, lower pay overseas will always tug on jobs here. How does one go about reversing that dynamic?

anotherquestion February 3rd, 2013 at 2:43 pm

My state had a well publicized report about the skills gap (STEM shortage). I attended a meeting when they released a released a draft. Leaders from manufacturing complained that schools and parents no longer encourage high school graduates to see manufacturing as a viable career option.

So, I asked the representative from our Dept. of Workplace Development about what they offered when a large, decades-old General Motors factory closed a few years ago. THE DWD leader said all those employees were unskilled so the best he could do was offer unemployment benefits. He ignored that these laid-off employees knew welding, painting, and at least how to show up on time. These are all skills employers claim are in short supply

Mauimom February 3rd, 2013 at 2:43 pm

Hedrick, I also appreciated your references to what “other countries” do: for instance [in the introduction] how Germany both made different philosophical choices ["we're in this together;" "there's a social contract"] and used different elements to get results that benefitted more in society [strong unions; safety net; belief in social contract].

American’s are always so proud of their “uniqueness,” but I think they’re starting to figure out that this country is really screwed up on the jobs and safety net issues [and health care]. They need to be presented with alternatives to see that having beneficial elements doesn’t = Communist China. Perhaps “American pride” will cause them to think “we can do better” and start doing it!

Hedrick Smith February 3rd, 2013 at 2:43 pm

The perfect storm developed in the late 1970s and 1980s, and reached a crescendo with the housing boom and bust, in which Greendspan played a central role. He love sub-prime loans. pushed them hard. he lvoed variable interest rate mortgages, which he pushed hard and which trapped many responsible steady middle class borrowers. He Loved it when homeowners were sucking equity out of their mortgages to be able to afford the rising cost of living, and in the end homeowners lost $6 trillion in home equity even before the housing boom hit bottom. t hat was the biggest wealth transfer in the history of th e=e country – from middle class Americans to wall street and big investors. And it happened mostly before housing prices fell.

spocko February 3rd, 2013 at 2:44 pm
In response to Hedrick Smith @ 54

I don’t know, if Jack Donaghy is still in charge at GE he’ll be tough to beat.
He’s got a 6 sigma thing going on taxes.

emptywheel February 3rd, 2013 at 2:46 pm

Hedrick

In your Powell memo you emphasize that it was written UNDER Nixon.

I’ve always known when it was written, but never thought so much about that.

That really seems to say something about the corporate view towards democracy. I mean, the response to the memo was served to push BOTH parties to serve the corporate interest. But it also makes it seem all the more audacious, arguing that a Nixon or an Eisenhower wasn’t enough, you had to have a Reagan, a Bush 2.

Hedrick Smith February 3rd, 2013 at 2:46 pm
In response to Mauimom @ 25

Thanks for your kind comments about the book. I hope you spread the word to friends about this book and others like it, Joe stiglitz “The Price of Inequality: and the book “autocrats” and a new book by Princeton Economics alan Blinder, the title of which I forget. More and more people are focusing in on the economic inequality in the U.S> and the terrible damage it is doing to the country. High inequality ias bad for growth. some studies callit destructive. Our best growth came when incomes a=were more nearly equal, or at least less far apart= than today.

Ariadne Allan Autor February 3rd, 2013 at 2:47 pm

Money, power, access and insight make a difference. Here in Washington, DC, I remember watching many a former key Senate or House staff member, mainly Finance or Ways and Means or leadership staff, get snapped up by banks and investment banks as they prepared to leave the Hill.

dakine01 February 3rd, 2013 at 2:48 pm

Hedrick, with the complicity of the political class in all of this, from both “sides” of the aisle, would you care to speculate on how so many people get convinced to vote against their own best interests through the fear mongering and railing against the “other” (whatever form the “other” may take)?

Hedrick Smith February 3rd, 2013 at 2:50 pm
In response to Kelly Canfield @ 27

There;s no short answer, but there are some obvious one….level the corporate tax system, close $1.2 trillion in loopholes; modernize the nation’s transportation system which is really hurting out=r competitiveness as a nation and ipdating it would add hundreds of thousands of job; make the banks bailout the homeowners – that was what TARP was supposed to do all along; one= and one. But we have to do some important politivcal reforms, too – open up party primaries =, fix the gerrymandering system,, and most of all re-engage citizen power. People forget that the middle class prosperity of the 1950s, 60s and 70s, was built on citizen power. YOu really need to take a look at the book, because I have several chapters on that- then and now. You can also see a blog I wrote at http://www.hedricksmith.com, click on “Opeds and reviews” and look for “Lessons from the March on washington.”

Ariadne Allan Autor February 3rd, 2013 at 2:54 pm
In response to Mauimom @ 59

It will be interesting to see if our new healthcare policy will offer any changes.

Hedrick Smith February 3rd, 2013 at 2:54 pm
In response to Mauimom @ 29

If I read your quesiton correclty, you;re relaly asking whether my book is too tough on the system for the mainstream media to embrace it. that’s a good question. I hae the same question in my own mind as well.
My book has gotten some great reviews in the Chjicago Tribune, Seattle Times, WashingtoN Post, Huffington Post, but not a word in the New York Times. I have gotten some great interviews on Face the Nation, PBS NewsHour, Tavis Smiley. Christ Mstthews :Hardball”: on CNn, but not a single interview on national NPR though some good reginal NPR interview or with Charlie Rose or The Daily show. So you tell me how to grade the response.

anotherquestion February 3rd, 2013 at 2:55 pm

Thank you much to Hedrick Smith, both for the book and for participating in this book salon.

Hedrick Smith February 3rd, 2013 at 2:55 pm
In response to masaccio @ 30

The final six words of ”Who Stole the American dream?” are “We the People must take action.” So I was fascinated to see that in his Inaugural Address, President Obama kept saying: “We the People….We the People…We the People…must act now.” So Obama is trying to revive people power – with the same kind of mass movements that we had in the 1960s and 70s. He wants to change the balance of power in Washington. But it’s up to us to respond. See “Lessons from the March on Washington,” blog on Newsweek Daily Beast, August 28, 2012. Also available under “Opeds and Reviews” at http://www.hedricksmith.com

dakine01 February 3rd, 2013 at 2:56 pm

Still has another hour to go…

Hedrick Smith February 3rd, 2013 at 2:59 pm
In response to Peterr @ 32

Well, depends on whom you talk to. if you talk to people form middle class and upper mioddle class professional families, they have a very solid start, get a good college educaiton, but they see the economic insecurity ahead because of all the offshoring and job cutting in the Knowledge Economy.’If you are tlaking about working class people whose kids aspire to move up the eocnomic and social ladder, the burden of college costs is unbelievable. educaiton which used o=to be a great leveler in our society is no longer. It is a divider, that separate econmics classes form each other because the costs are so high – not just for college but for all the educational after-school activities that kids get in upper middle class families and that people right at the middle family income ($50,000 a yea r- which may help yuou tell wher eyou and your family stand ) simplyu cannot afford the bill> So we are no longer THE LAND OF OPPORTUNity where people can move up better anf=d faster than in other countries. now w=several other countrie sin Europe are more socvially and economically mobile than we are. So there’;s good reason for a lot of folks to be worried.

Hedrick Smith February 3rd, 2013 at 3:01 pm
In response to maa8722 @ 33

To answer your last question first, this is our story. we have done it to ourselves. Our history is not repeating itself. It is on a long-gterm trend.= that started back in the 1970s. when things were good for the middle class back in the 1950s-60s and 70s, we saw average Americans exercising strong power in the environmental movement, labort movement, women;s movement, consumer movement, civil righht smovement. They ahd an impact on Washington> But their success caused a backlash.
The very success of middle class political power caused a backlash, what you might call a “revolt of the bosses.” A prominent corporate attorney named Lewis Powell, later named to the supreme Court by President Nixon, wrote a widely circulated memo to the captains of Corporate America, warning them that they were being taken to the cleaner sin Washington and the U.S. free enterprise system was in mortal danger. Powell’s memo was an exaggeration, but it served as a wake-up call to business leaders who got organized and mobilized and started to capture control of our government in the late 1970s. We’ve been stuck with that lopsided power game in Washington ever since. That’s a major story that I tell in “Who Stole the American Dream?” but you can also track some of it in the “Stolen Dream Timeline” at http://www.hedricksmith.com.

Mauimom February 3rd, 2013 at 3:02 pm
In response to dakine01 @ 65

dakine, there’s an incredible quote from Ch. 7 of the book, “The Great Burden Shift,” which I think sums up a big percentage of the problems [the political class, and the "voting against interest"]:

[there are] Two Americas, remarkably out of touch with each other . . . the fortunate living the American Dream but lacking any practical comprehension of how the other half are suffering.

Hedrick, one reason I asked my “how have you been received” question above @ 29 was to hear what you’ve observed, particularly about the “America” that has no idea what the “unfortunate half” is dealing with. I’d include all those folks on the Sunday morning shows, plus most White House staffers [and perhaps the chief resident], plus Congressional staff — hell, just about ANYBODY in the DC metro area!!!

One particularly strong element of your book is your telling of the individual stories: people who did “everything right” but who are screwed. They’re not lazy or drug addicts; they have a long history of productive work, but get laid off [usually by the corporate raiders]; they continue to search for work after being laid off; they attempt to take care of their kids or elderly parents, but they’re SCREWED, and there’s no safety net, or even a hand up for them.

Ariadne Allan Autor February 3rd, 2013 at 3:02 pm
In response to Hedrick Smith @ 66

Your book seems so timely with the anniversary of the March on Washington coming up. You close the last chapter with the line “We the People must take action.” It seemed for a while, with the huge turnouts for the first election of President Obama and later with the Occupy movement, that we were gaining momentum as a nation to head to a tipping point. Do you think U.S. citizens have the strength to pick themselves up, come together, and carry on to create major social change?

Mauimom February 3rd, 2013 at 3:03 pm
In response to Hedrick Smith @ 68

I see my question & your answer “crossed in the mail.”

Hedrick Smith February 3rd, 2013 at 3:04 pm
In response to RevBev @ 36

Great questions. I hae been overwhelmed by the number of people who have emailed me, posted comments on http://www.facebook.com/whostoletheamericandream sayingh how important this book was to them, what a revelation it was, how badly needed it has been and how it put events into focus for them. I have been asked to speak at Boston university, University of Virginia, williams college, University of Missouri, claremont college, UC Berkeley, north carolina sTate University, among others. So there is an appetite on those areas but sadlyu, no invbitaiton yet form the University of Texas or any group in austin. Maybe yoku can fix that.
Cheers

dakine01 February 3rd, 2013 at 3:04 pm
In response to Mauimom @ 74

One particularly strong element of your book is your telling of the individual stories: people who did “everything right” but who are screwed. They’re not lazy or drug addicts; they have a long history of productive work, but get laid off [usually by the corporate raiders]; they continue to search for work after being laid off; they attempt to take care of their kids or elderly parents, but they’re SCREWED, and there’s no safety net, or even a hand up for them.

I resemble this.

Ariadne Allan Autor February 3rd, 2013 at 3:06 pm
In response to Mauimom @ 74

I share your thought about that. Immediately Bre Heller, the insider at Washington Mutual who got taken on her own mortgage, came to mind in the section of the book The New Mortgage Game.

bluedot12 February 3rd, 2013 at 3:06 pm
In response to Hedrick Smith @ 72

But then if you get a good education and go to work for IBM they can also move your job out of the county. And if they do that when you are 53 it could be tough times ahead unless you made that 401k really work for,you.

RevBev February 3rd, 2013 at 3:06 pm
In response to Hedrick Smith @ 73

In addition to “We the People” do you see any leaders with a
plan or call to action?

masaccio February 3rd, 2013 at 3:07 pm

There is another insidious aspect of 401(k)s. You can’t get any real return on debt instruments, and there is a real fear that bonds are going to tank whenever interest rates rise (2014?) That pushes people into stocks.

Return on stocks is riskier and no sane person believes that the stock market is fair to small investors. Even if it were, there is a deep problem. Return on stocks come in the form of capital gains and dividends. CEOs don’t hold much stock, but stand to profit from a rise in the price of the stock. That discourages dividends and encourages steps to increase the price of the stock.

Management’s incentive is to increase stock prices by any means possible, including such wasteful practices as stock buybacks, buying up competitors and small upstarts that threaten the brand; attempting to gain a legislative monopoly; and a host of other legal or not so legal steps.

Retirees and those who hope to retire are dependent on the survival of these dysfunctional practices.

Hedrick Smith February 3rd, 2013 at 3:07 pm
In response to emptywheel @ 40

the 401k actually had accidental begginnings. IT was never intended as a national retirement system. it began as a profit0-sharing plan at about a dozen companies, including Xerox and Eastman Kodak, who wanted to get a tax shelter for their executives, but because of IRS rulings, they had to include average employees as well. Not for several years did the 401k go national, and it took off only after the mutua. fund industry saw a financial bonanza for itself. It was the mutual funds whicvh pointed out to corporate bosses how much money they could save by putting the burden of the cost of retirement on their employees. For a quickie rea,d there’s a good blog on this, check out http://www.forbes.com/sites/kerryhannon/2013/01/13/the-three-surprises-in-401ks/

Peterr February 3rd, 2013 at 3:09 pm
In response to Hedrick Smith @ 72

After reading that, I can’t help but notice that financially speaking, members of Congress are not personally in the groups that are worried about these costs.

RevBev February 3rd, 2013 at 3:10 pm
In response to Hedrick Smith @ 77

You betcha….Our gov should be very receptive;)

Mauimom February 3rd, 2013 at 3:11 pm
In response to Hedrick Smith @ 68

I hope your “booker” is trying to get you onto The Daily Show or The Colbert Report!!!

Actually, I was thinking more of the “movers and shakers” themselves, not just their servants in the media. Of course in the “old days” [I was in Washington 1979-2008], the media would be asking the kinds of questions and making the kinds of observations you do in your book.

It just floors me, as it clearly does you, that we’re in the middle of the greatest economic disaster since the Great Depression, but we have no “Hoovervilles” ["Obamavilles"?], no great outcry, just calls for “reducing the deficit.”

Hedrick Smith February 3rd, 2013 at 3:11 pm
In response to RevBev @ 44

I hit some of those on a prevbious quesiton :
-close loopholes in C0rporate tax system, and stop companies that move jobs and production form obverses form getting a reduction int axes for that.
–rebuild and mdoernize;s Amerioca;’s infrastructure to cfreate jobs and make the antion more competitive
– make the banks rtefginance the loans of ten million or more homeowners who are under wate.r’ 0- open up party primaries so that people can vote in one primary, apulling candidates to the middle.
‘ 0- take the gerrymandering of congressional and elgislative district sout of the hands of politicvians and give the job to neutrla parties or retired federal judges.
_get the middle class activley inbvolve din grass roots direcviton action. See the blog, Lessons form the March on washington on our web page http://www.hedricksmith.com

Hedrick Smith February 3rd, 2013 at 3:12 pm
In response to Peterr @ 45

Either that, or hae a strong drink before you star tto read.

Mauimom February 3rd, 2013 at 3:12 pm
In response to Hedrick Smith @ 77

Sounds like you’d better brush up on the “student debt not dischargeable in bankruptcy” issue!!!

Congrats, and glad to see you spreading your good works among students, and their listening to you.

hackworth1 February 3rd, 2013 at 3:14 pm
In response to Hedrick Smith @ 70

I am pretty convinced (by his deeds) that Obama is not sincere. Coddling Wall SDtreet Banksters, Wars, MIC Spending, Domestic Surveillance, Increases IN Security/Police State, evisceration of civil rifghts, equating Government Spending with a household budgte, Focus on Social Securty/Medicare Cuts.

What gives you thge Audacity Of Hope? IOW, where’s the beef?

Hedrick Smith February 3rd, 2013 at 3:14 pm
In response to emptywheel @ 46

You are dead right about the damaging impact of short-term thinking in Corporate america because of pressures friom Wall Street.TGhe smart companies that resist these pressures are almost all privagtley owned. So they can think long-term. But there are a ew bravce souls like Jim Sinegal, the longtime CEO of Costco, who cares for his emplohyees, provides health and retirement benefits pays them well, takes a relativley low CEO salary. And there are others.
‘Not sure a stock exchange would work because investors are so greedy. they want high returns for themselves, and they donlt care about the US eocnomy as a whole, i fear.

Hedrick Smith February 3rd, 2013 at 3:16 pm
In response to bluedot12 @ 47

Evern since FDR got Congress to pass social security, the Republican right and some business leaders have been out to change it, gut it, or eliminate it. Fortunately so far, millions of Americans are onto that game. Hopefully it wonlt happen.

Hedrick Smith February 3rd, 2013 at 3:17 pm
In response to CTuttle @ 51

My research and reporting led me eventually to the Powell memo. In case people ar eunfamiliar, a prominent corporate attorney named Lewis Powell, later named to the supreme Court by President Nixon, wrote a widely circulated memo to the captains of Corporate America, warning them that they were being taken to the cleaner sin Washington and the U.S. free enterprise system was in mortal danger. Powell’s memo was an exaggeration, but it served as a wake-up call to business leaders who got organized and mobilized and started to capture control of our government in the late 1970s. We’ve been stuck with that lopsided power game in Washington ever since. That’s a major story that I tell in “Who Stole the American Dream?” but you can also track some of it in the “Stolen Dream Timeline” at http://www.hedricksmith.com.

Ariadne Allan Autor February 3rd, 2013 at 3:17 pm
In response to Hedrick Smith @ 77

That reminds me, if you enjoy Who Stole The American Dream, you can certainly spread the word either on Facebook, Twitter or other social media. You can also post your review on Amazon, ask your local library to acquire it either as a print or e-book. This makes a great book club choice too if your local library offers one. Hedrick already referenced the book’s Facebook page above of course. I think it offers a lot of answers and inspiration.

Hedrick Smith February 3rd, 2013 at 3:19 pm

No, reformers and average americans are not going to convince the financial and corporate elite to reduce the influence of money in politics. they like the game being played the way it is now. We have to force them to change. The only answer is organized people power – organized people vs organized money> the people will win IF WE get organized. BUt we keep blaming others and finding excuses not to d=take the intiative ourselvs.
The final six words of ”Who Stole the American dream?” are “We the People must take action.” So I was fascinated to see that in his Inaugural Address, President Obama kept saying: “We the People….We the People…We the People…must act now.” So Obama is trying to revive people power – with the same kind of mass movements that we had in the 1960s and 70s. He wants to change the balance of power in Washington. But it’s up to us to respond. See “Lessons from the March on Washington,” blog on Newsweek Daily Beast, August 28, 2012. Also available under “Opeds and Reviews” at http://www.hedricksmith.com

Mauimom February 3rd, 2013 at 3:20 pm
In response to Hedrick Smith @ 92

It used to be just the Republicans and some of their business-world friends who attacked social security; doing so was thought to be the “third rail.”

But now, under the argument of “deficit reduction,” both Obama and the Democrats are perfectly willing to attack it. As someone on social security & Medicare, I am very, very afraid, and discouraged that, as a lifelong Democrat, I can no longer rely on them to protect my interests.

bluedot12 February 3rd, 2013 at 3:21 pm
In response to Hedrick Smith @ 87

It does seem that most sane people know what ought to done. But we have been overtaken with the austerity bug. Now our political class is taken with the need to reduce the debt/deficit. That way couldn’t be more wrong. Maybe there are just not enough ” sane” people. We all have friends who are convinced reducing the deficit it the deficit is the way to go. We are at odds with ourselves. How can we move ahead? Neoliberalism is alive and well throughout the land, a religion that has us trapped.

Mauimom February 3rd, 2013 at 3:22 pm
In response to Hedrick Smith @ 93

In your research, did you run across the excellent independent film, “Heist: Who Stole the American Dream?” It’s all about the Powell Memorandum.

The film-makers participated in an on-line discussion here at the Lake about a year ago. Good folks.

anotherquestion February 3rd, 2013 at 3:22 pm

Here are some contacts to speak in south Wisconsin.

Fighting Bob Fest (www.fightingbob.com) one of the largest political festivals in the whole country.

University of Wisconsin-Madison now has a book of the year. So far they used: ‘In Defense of Food’ by Michael Pollan, ‘The Immortal Life of Henrietta Lacks’ by Rebecca Skloot. After the students read the book across campus, the lecture’s committee brings the author to speak.

GlenJo February 3rd, 2013 at 3:22 pm
In response to Hedrick Smith @ 95

Thanks for being here, and your book.

I realize that it’s going to take people power to enact change, but the largest lost opportunity in my lifetime is early 2009 when Obama could have let the big banks fail, the political power of the monied elite fail and use FDIC and other agencies to limit losses of the American people.

I suspect it will now have to get much worse before we have another real chance to make things better.

What do you think?

Hedrick Smith February 3rd, 2013 at 3:23 pm
In response to bluedot12 @ 57

1. change the corporate tax laws so that IBM and others have to pay the same tax rate on their foreign profits as they do on their domestic profits.
2. MAtch the subsidies that countries like CHina and India and others payu to lure american companies to set up in their countries. today, the wage differential is not what big-time US CEOs say atracts them to China etc. Craig barrett, fortmer CEO of Intel said, “I can build a chjip fab for $1B less iN China in the US.” he got free or next-to-free-land, all the roads, electrical power, water and other resources installed by the Chines govermment, and a tax abatement for 10-15 years
23. some of that is illegal u,nder WTO rules but no Aemrican Administration has really gone aftgter the CHinese on taht score.’4. keep the presur eon China to stop manipulating its currenchy (whicha ffects 7 other Asian currencies as well) so that it makes their exports to the US cheap and our exports to them, more expensive.
There’ s more. but those are good starter moves.
.

Ariadne Allan Autor February 3rd, 2013 at 3:24 pm
In response to Mauimom @ 98

Thanks Mauimom for that reference, I’ll go back and look at that. What a great resource FireDogLake is. So grateful for the chance to learn and share in this forum today.

RevBev February 3rd, 2013 at 3:25 pm

And Austin has a great independent book store with authors speaking and signing….You would be a great draw and their events get good attendance.
Book People on Lamar.

bluedot12 February 3rd, 2013 at 3:25 pm
In response to Mauimom @ 96

Bill Black has lately been referring to Obama’s plans as the Great Betrayal.

Mauimom February 3rd, 2013 at 3:26 pm

As I depart [sorry, but I AM going to go watch the Super Bowl], I want to reiterate how much I loved your book. I urge everyone here to read it. The timelines and history are most illuminating and will really educate you.

Thank you, Hedrick & Ari for joining us here. All the best of wishes for success with your latest work. I look forward to following on your Facebook page and other resources.

Ariadne Allan Autor February 3rd, 2013 at 3:26 pm

Thank you for that suggestion. You’ve mentioned two other fabulous books and authors I enjoyed so much – great company for Hedrick!

Hedrick Smith February 3rd, 2013 at 3:26 pm

You are running into a closed mindset that simnply writers off people over 50 or so, which is terrible. But one reason is that the money for retrianing programs for workers displacved by foreign competition or shifting technologies is tdrying up> keep an eye oN COngtress. the House, especiallY GTEa Party ‘Republicans, want to elimiante retrianing money entirelhy> Fortunately,. some busdiness leaders are politicvally savvy enough to udnerstand that they cannot get from the Administration what they want without offering token retraining programs for wo=rkers. But we need to go way beyond token retrtaining.”
other countries, sucha s Germany,m invest far more heavily in trianing their workforce than the U.S. does, and then companies retraint and retrain> the result is that Germa ny ahs about 21`% of its workfofce in manufacgturingh, whereas we have only 9% and mfg jobs ar ekey to middle class prosperity. Germany also managed to ahvee export surpluses whjile we ahve deficits. so the answer you got from that guy was short-sighted for america.

Ariadne Allan Autor February 3rd, 2013 at 3:28 pm
In response to Mauimom @ 105

Thank you for joining us and sharing your kind comments.

Hedrick Smith February 3rd, 2013 at 3:30 pm
In response to Mauimom @ 59

We are in serious long-term economic trouble in this country if we do not modernize our infrastructure, our attitudes toward manufacturing and our manufacturing base, and our workforce skills. We need to invest in order to grow. the politids of austerity and budget cvutting is short sighted. It will ruin the country and its prospects for growth. We do need to address long-term financial problems iN medicare and social security, but that is making change snow that will affect the 2030s anmd 204os. But right now, we need to spend to grow – same for the antiona s for companies. the shrinkage in the 4th quarter of 2012 was entyirely do to cuts in governmenty spending. which is not smart policy for a jobless recovery.

GlenJo February 3rd, 2013 at 3:31 pm
In response to Hedrick Smith @ 107

Plus it allows manufacturer to change the mindset of younger workers – lower wages, lower benefits, no pensions, etc.

Older workers are used to better wages and benefits (or as explained by management – more expensive).

Even in companies with strong unions, contracts are proposed/accepted which split workers into the haves and have nots which later allow the owners to make all workers have nots or even strip benefits from the smaller group of haves in a very short period of time.

Hedrick Smith February 3rd, 2013 at 3:32 pm
In response to emptywheel @ 62

One of our problems as we analyzes kpolitical history is that we pay too much attention to party labels. take a look at Nixon;s dometic policies. He was a contimnuation of the long progressive era going back to the New Deal =. He set upE PA< OSHA, all kinds of regualtory boards, pushed the negativ eincome tax, expandewd social security and enacted what today would be claled a liberal tax reform.
' And the turn around came in 1978-79 under Jmmy Carter with the Demcorats in control fo Congress, The conservative trend accelerated under reas=gon and especially GWBush, but Clinton also helped push it alon, especially with the repeal of Glass Steagall and hiis catering to wall street and high tech co;s in CA.
]Our history is more interesting than most people think.

dakine01 February 3rd, 2013 at 3:33 pm
In response to Hedrick Smith @ 110

Of course, even after people have the skills, the corporate rats want to pay wages near minimum wage

Ariadne Allan Autor February 3rd, 2013 at 3:34 pm

Hedrick, your chapter about the ultra-rich really illuminated me. I loved the reference to Richistan. A few comments tonight referenced the two Americas and how one doesn’t know how the other half lives. I was reflecting on the amount of money spent on household staff for example – $2 million -that’s more money than budget of a lot of non-profits or income of small businesses in the United States.

bluedot12 February 3rd, 2013 at 3:35 pm
In response to Hedrick Smith @ 101

I don’t know if it means anything, but GE supposedly brought some manufacturing jobs back from China. (Appliance business in Kentucky.)

The last thing I would like to see is to give the multinationals a free pass on bringing their cash back to the states with no tax liability. Actually, we could do a lot with the tax code by tighter regs on transfer pricing and elimination of carried interest that encourages the asses to disassemble companies and send them overseas. I bet we could tighten regs on that too.

Frankly I think taxing worldwide income may be a bridge too far. But there could be other,incentives.

Hedrick Smith February 3rd, 2013 at 3:37 pm
In response to dakine01 @ 65

Huge and important question. People vote against their own economic self-interests for two main reasons:
‘ 1- they actually think that social issues such as abortion, gay marriage, school prayer and the like ar emore important than economic issues.
2-they do not know the facts of our hjstory and they have been lulled and seduced by constant repetition of the idea that lower taxes and smaller government generate growth (history shows the opposite); that only the private sector creates jobs (what about the pentagon?); that business leaders make good politics leaders (jhow about Herbert Hoover, Robert Mcnamara?); that regulation of wall street and big business is bad because it itnerferees with tghe efficient running of businesses (what aobut the fialure of the Fed and other agencies to curb the excesses of the bank that created the disaster of 2008).
So those of us who think otherwise and study history need to share our knowledge.

Mauimom February 3rd, 2013 at 3:37 pm

Thank you.

Three personal notes: 1) I worked for Dave Obey at the very start of his congressional career, so was delighted to see him quoted at the beginning of Ch. 6. His retirement was a great loss.

2) my daughter works for the American Association of Community Colleges. They are helping individual colleges re “workforce development” — getting graduates ready to join the workforce. I think many folks are starting to realize that community college is a viable option. Sad that the “university” or “traditional 4-year college” experience, and the “broader education” it provided to many of us has just been priced out of reach of all but the wealthy or those on substantial scholarship.

3) I used to live a couple of doors down from what was known for years as “the Hedrick Smith house” in suburban MD. Your fame is long-lived.

Mauimom February 3rd, 2013 at 3:39 pm
In response to Hedrick Smith @ 112

Your description of Nixon & EPA was fascinating. Also Ruckelshouse’s dealing with the corporations’ griping about EPA regs.

Hedrick Smith February 3rd, 2013 at 3:39 pm

that is the jackpot question.
I keep trying to nudge people or provoke them into believing that people power can succeed. My old friend Ernie Cortes, a brilliant field organizer, said once. Not only does power corrupt but powerlessness also corrupts.
It corrupts democracy at the core. We have to believe in ourselves.
I believe we can do it. That is one big reasons why I am working so hard at it.
PLEASE JOIN ME IN THIS EFFORT.

Hedrick Smith February 3rd, 2013 at 3:41 pm
In response to bluedot12 @ 80

YOU ARE RIGHT ON.
that is happening to people in their 50s and 60s with disturbing regulatiryt and they are in terrible shape to cope with it. – The median 401k balance in the U.S. for 2011, the last year for which we have figures, was $18,000, and for people in their 60s, with 20 years in 401k plan, median balance is $85,000. That’s a fraction of what you should have. The experts say your retirement nest egg should be 10-12 times your final salary. For a typical US household which has $50,000 in annual income, the retirement nest egg should be $500,000 to $600,000 and to get to that level, you and your employer have to sock away about 15% of your salary every year.
http://www.forbes.com/sites/kerryhannon/2013/01/13/the-three-surprises-in-401ks/

Ariadne Allan Autor February 3rd, 2013 at 3:41 pm
In response to Mauimom @ 117

Thanks for mentioning your tie to Dave Obey, and your daughter’s work for the American Association of Community Colleges. Interesting,a lot of young people we know in our community seem to do quite well spending time at area community colleges. Hedrick has done some past reporting on their important role in our society for skill building so I’m sure he will appreciate reading this too.

Mauimom February 3rd, 2013 at 3:43 pm

Ari, I don’t think it would be treason to mention on this blog the resources at Naked Capitalism. Yves Smith is an intelligent and wonderful writer, and many of the folks Hedrick referred to are either featured there or regular writers.

It’s often a bit more “weedy” than general articles on the economy, but always worthwhile. Should be on your list of bookmarks.

RevBev February 3rd, 2013 at 3:43 pm

Are there some groups that are doing effective advocacy? Teachers groups, AARP, etc.

Hedrick Smith February 3rd, 2013 at 3:44 pm
In response to RevBev @ 81

Sure, there are lots of people working a many different aspects of our problems.
There is a group called “Fair Elections” that is trying to work on the problem of money in politics, gerrymandering, the fallacies of the electoral College vote vs the popular vote.
two grouspa re work trying to rally grass roots America to restore fairtness to our economic system, one is cllaed Take back the American Dream and the other is called Campaign for America;s Future.
Now Obama has just committed his cvampaign team leedf by jiM messina to a new populist movement :”Organize for Aciton”
You have cvhoice sin your daily life whether to patronize companies like Costco that take good care of their employees and share the wealth of success, vs companies like wal0Masrt which keep cvuttingh back on employee benefits and where the CEo takes ten times the CEO salary at Costco
You can patronzie local banks rather than depositing your money and taking your business to brtanches of wall sTreet banks.
the list goes on.

CTuttle February 3rd, 2013 at 3:45 pm
In response to Hedrick Smith @ 119

…PLEASE JOIN ME IN THIS EFFORT…

What are your thoughts on the Occupy movement, and in particular, Obama’s concerted efforts thru the FBI, DHS, etc., to shut it down…?

Teddy Partridge February 3rd, 2013 at 3:45 pm

Knowing there’s that career path makes it very unlikely said staffers, to Members or committees, will piss off future employer prospects. It’s just human nature.

RevBev February 3rd, 2013 at 3:46 pm

Thank you….You have been a great guest; answered a lot of questions
.
Good luck with the book.

Hedrick Smith February 3rd, 2013 at 3:49 pm
In response to hackworth1 @ 90

Understand, I am not endorsing any one politician or any one administration. Rhere is no question that the power of WalL Sreet and Corporate America and the influence of the military industrial complex, the energy industry, the financial sector etc. have penetrated mnot only the policies but the leadingh personnel of both major parties and all administrations.
I am interested in awakening people to this state of affairs which is so damaging to us as a people and to our country. I want to help people to be clear about what has happened in this country and why it has happened. Then I am interested in helping people think through what solutions make sense. IF I see public figure sin any state, in either major party or some other party pushing in the right direciton, I am for that. But t am not an apologist for anhy political leader or group excep[t when they are promoting what I would call an authentic middle class agenda.

Ariadne Allan Autor February 3rd, 2013 at 3:49 pm
In response to Hedrick Smith @ 120

It’s also worth pointing out that the 401k savings shortcomings, worn safety net and longer life expectancy are like a ticking time bomb. For those who want to read more, today’s New York Times sums it up in this headline In a Hard Economy for All Ages, Older Isn’t Better…It’s Brutal.

http://www.nytimes.com/2013/02/03/business/americans-closest-to-retirement-were-hardest-hit-by-recession.html?_r=0

Hedrick Smith February 3rd, 2013 at 3:50 pm
In response to GlenJo @ 100

I share your worry but I hope you are wrong.
Maybe some issue3e like gun control, immigraiton, bailing out homeowners, stopping the crazy corporate tax system we hae will arouse people. Because we sure do not want to have a worse version of 2008 just to wake us up.
hence, my book

BevW February 3rd, 2013 at 3:51 pm

As we come to the end of this great Book Salon discussion,

Hedrick, Thank you for stopping by the Lake and spending the afternoon with us discussing your new book, and loss of the American Dream.

Ari, Thank you very much for Hosting this great Book Salon.

Everyone, if you would like more information:

Hedrick’s website and books

Ari’s website

Thanks all, Have a great week.

If you would like to contact the FDL Book Salon: FiredoglakeBookSalon@gmail.com

FDL Book Salon has a Facebook page too.

Hedrick Smith February 3rd, 2013 at 3:52 pm
In response to Mauimom @ 117

How nice of you tyo write..
and especially about Community Colleges which are an important anchor for worker retraining and for heoping adults to recareer when their old jobs get wiped out and their old skills seem out of date. So I am a strong beleiver in strengthening the networking and the connecitons between cvommunity colleges and employers – workforce associations aorund the country – and employeesd both young and old.
warmest good wishes to you’

eCAHNomics February 3rd, 2013 at 3:52 pm

Can the 1%ers live without the rest of us? If so, how do they plan to get rid of us?

Hedrick Smith February 3rd, 2013 at 3:57 pm
In response to CTuttle @ 125

Occupy was important in the way that it helped to change our national dialoghue about the 1% and the 99% but it was never a movement in the same way that the civil right smovement, consumer movement, environmental movement and others were. I never could discern and udnerstand an overarching vision or short-term goals. Occupy won strong and widespread popular endorsement in opinion polls. But it deliberately eschewed forming a national eladership that would go recruit supporters and negotiate with the Powers That Be. So while it was suppressed eventually by Mayor Bloomberg and other mayors form NY to Portland, Oregon, It had a short list of achievements because of some of its own shortcomings in my view. I keep wondering whether another gorup will take up the mantle and makr more of a citizens crusade that Challenges the political establishment, takes the risk of arrest and keeps the pressure on. I am influenced by my years of cover the sit-ins, freedom rides, voter demonstrations and the barking dogs and police hoses that tried to stop the emeonstrators in the 12960s, but couldn;t I still think people power can force big changes. I have seen it happen

Hedrick Smith February 3rd, 2013 at 3:58 pm

Hi FiredogLakers,
Thanks for your great questions…..I enjoyed the dialogue. Hope you get a chance to check out some of those blogs, my website, and the book :”Who Stole the American dream?”
You are a great bunch..Let’s do it!!!
Hedrick

Ariadne Allan Autor February 3rd, 2013 at 3:58 pm
In response to BevW @ 131

Thank you Bev for inviting us to share a great conversation this evening at Firedoglake Book Salon, and to Hedrick for Who Stole the American Dream, a book I hope we will continue to hear about for a long time.

dakine01 February 3rd, 2013 at 3:58 pm

Thank you Hedrick for spending this afternoon/evening with us.

CTuttle February 3rd, 2013 at 4:03 pm

Mahalo Nui Loa, Hedrick and Ariadne…! Please don’t be strangers…! *g*

Ariadne Allan Autor February 3rd, 2013 at 4:06 pm
In response to CTuttle @ 138

CTuttle, thank you for joining us. Have a great evening.

Teddy Partridge February 3rd, 2013 at 5:03 pm

Thanks to one and all for another great Book Salon!

I learned a lot. Looking forward to getting this book at Powells this week.

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