Who Stole The American Dream
America is in a perilous state. That is what Hedrick Smith, author of “Who Stole The American Dream”, has taught me. This literary work takes it’s readers through America’s economic and political past, present and future with deep analysis. It questions our country’s fundamental roots and how they have gone astray. This book also comes from a very Democratic point of view. In most of his arguments, Smith’s theories and ideas will bash Republican actions. “Who Stole The American Dream” is an extremely detailed account of our country’s faults and figures.
I would first like to start my essay off by relating my previous knowledge of the subject. I, like many other Americans, am not a political enthusiast. I have never felt particularly close to our Government, and I have let their control soundly slide over my ideals (maybe this is because of my young age). If you asked me what bipartisan meant or how to explain a 401(k) or who the current Speaker of the House is, I would stutter before replying. Even more important, I feel, before this book I would have even had trouble giving you a complete explanation on the differences between a Democrat and Republican.
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However, as this book has taught me, I am a part of the 99%. The middle class. The backbone of our great nation. This book has allowed me to gain interest and knowledge of all our country has to offer, and all that it has to lose. Throughout this essay, I will attempt to navigate through Smith’s opinion and fact, while also giving my interpretations and beliefs on the given subject.
“Today, the gravest challenge and the most corrosive fault line in our society is the gross inequality of income and wealth in America.” To begin, as did Smith, I will discuss the actions, attitude, and relations of Industry and Washington over the last 40 years. In the past, the idea has been whats good for the company, is whats good for it’s employees. That was one of the attitudes that led to the Great Compression, a time (1940-1970) in our country where the wealth was spread most evenly – and the economy was flourishing. Through time, though, this saying has lost its meaning. This
has led to the gradual downfall of the average American employee. In 1971, Lewis Powell wrote “the Powell Memorandum”. Powell was one of America’s most influential corporate attorneys and he wrote this memo unknowing that it would spark a “business and corporate rebellion that would forever change the landscape of power in Washington”. CEO’s had become increasingly greedy and conservative minded. They took the interest of investors, shareholders, and themselves first.
One of the ways to increase profit is called Globalization. This is the act of creating factories in off-shore countries, at the cost of shutting down an American factory. Reasons a CEO would do this include lower production and labor costs. Globalization gives millions of jobs to foreigners who will work for pennies, while putting millions of Americans out of work. Companies would call this “down-sizing”, a relative plan to cut-down employment and change the company’s direction. This was entirely a fabrication, everything was for the purpose of putting more money in the pockets of high-ranking personnel and stockholders.
The second way to increase profit is to literally control the game. That is, Washington. In 1971, 175 companies had offices set up in Capitol Hill, but only a decade later that number had jumped to 2,445. This leap was led by an interest from each company to “generate policy analysis from a business perspective”. And analyze they did. What arrived was the Roundtable, a collection of the top 180 CEO’s from corporate America – each of which had the power to influence a change in huge issues such as labor laws, taxes, antitrust regulation and banking. Power by corporations in Washington had become so overwhelming that there were approximately 130 lobbyists and advocates for every 1 congress member.
With this new and extensive repertoire in Washington, corporations had their eyes’ on expansion. Through the bribery, out-maneuvering and handling of corporate’s best and brightest, Congress and the House had begun a long-term stalemate in which bipartisanship was void. In decades to follow, a new right-wing approach had Democratic ambitions burning to the ground. Countless bills, ones that would help the middle class grow, did not stand a
fighting chance as nearly every seat in the House filled by a Republican – voted Republican. This style of confrontational politics proved unproductive and costly to the American middle class, while it continued to stretch the inequality of the 1%.
In further discussion, I demonstrate the 58th Speaker of the United States House of Representatives, Newt Gingrich. He was a believer of polarizing politics. A no- quit attitude and a strong dissatisfaction for Democratic gain made him a massive part of the triumphant victory to takeover majority of the House in 1994. “He was out to destroy the Congress as a working institution, in order to capture control of it”. In 1993, as the newly appointed House Republican Leader, Newt had plans to block an ardent Clinton initiative. President Clinton proposed a 5-year tax increase to aid in closing the budget deficit left behind by the Reagan and Bush Sr. administrations. With forceful opposition, Gingrich led each and every Republican seat holder (175) to vote against the economic plan. Yet, because majority was with the Democratic party, the last vote from Vice President Al Gore settled a Democratic victory. “This was the first time since World War II that a major piece of legislation had passed without a single yes vote from the opposition party”. Although victorious, this is just one of many examples of Newt’s and Republican’s attempts to squander Democratic ambition and zeal. Again, Republican’s confrontational politics discourages progress and leads to the demise of America’s middle class.
Smith brings another claim to why political control has become overbearing. It can be attributed to the dormancy of civic action. In the past, Rosa Parks sat in the front of a bus until she was arrested, a civic rights initiative that led to major boycotting and protests. The Kent State massacre was a protest of college students in disapproval of the American invasion of Cambodia, among many other exhaustions the American people had to endure during the Vietnam War. This unfortunately and horridly became a tragic event when rallying turned violent and Ohio State National Guard shot and killed 4 and injured 9. In one of the most memorable events in U.S History, Martin Luther King Jr. issued his famous “I Have A Dream” speech to over 200,000 political activists in search or inspiration. Many occasions
alike, even at the costs of lives, citizens in America had felt obligated to bring change and have their opinion heard. This political action is no longer practiced by our society. Americans are not motivated to bring change to the detrimental effects brought upon them by their conservatively minded politicians. Or maybe, the 99% have been so segregated from political influence that they have simply given up. We have reformed to acceptance of the victimization done by our country’s 1%.
Another ingenious scheme to the GOP’s affinity was the 401(k) plan. Originally introduced for corporate executives as a tax cut for deferred compensation, it soon became a haven for corporations to disburden hundreds of billions of dollars in pension expenditures onto their employees. This strategy greatly increased company profits and CEO bonuses. General interest in the 401(k) comes from advantages such as free money from one’s employer, lower taxable income and accumulating savings and earnings. If all pans out, an employee would be able to retire after 2 or 3 decades of solid work (and budgeting), having an average of 1 to 2 million dollars saved. Unfortunately and predictably, the plan did not effectively secure most of America’s middle class retirements. With structural flaws, unreliable long-term investments, complex tax implications and ho-hum record keeping the middle class was and is inadequate and incapable of the proper budgeting and investing needed to succeed. In result, many middle and lower class Americans have lost all of their retirement funds. Is it their fault? Or was the Republican initiative that found the loophole to bring the 401(k) plan to the middle class just a crafty plan to scam millions of Americans billions of dollars.
The last detriment to the U.S middle class I will discuss is the further involvement of foreign influence. This is the act of onshoring, bringing in newly college-educated men and women to replace Americans. Reasons for wanting foreign workers include higher profit through lower labor costs and, what may surprise you, higher production. As of the 1980’s, the U.S has showed a second-string performance in major STEM fields- science, technology, engineering and mathematics. With that, U.S corporations saw an opportunity to capitalize on profit possibilities. Enter the H-1B Visa
program. In summary, the new program “would permit an annual quota of 65,000 temporary three-year visas to be issued to college graduates to work in the United States in specialty occupations”. This new bill made no provisions protecting American jobs. There had been no mandates by Washington for corporations to have special interest in hiring or keeping American workers. In fact, this program led directly to thousands of lost American jobs, while the money that can be fueled into American’s pockets and ultimately our economy, got put into foreigners pockets and foreign staffing companies such as NASSCOM.
These examples show with clarity how the American Dream has been tampered with. The inequality of wealth in our economy has made it extremely difficult for the lower class to climb into the middle, and relatively unthinkable for the middle class to see the top. Author Hedrick Smith offers his own list of ideas to save our country’s well being:
1.) Create infrastructure jobs to repair our out-dated transportation networks such as ports, bridges, highways, railroads. This will create jobs and income for millions of Americans.
2.) Begin to push innovation, high-tech research and science knowledge. Our citizens have become inferior to foreign countries. We must regain the knowledge and commitment to out-invent and out-innovate the world.
3.) In continuation, our country must go back to being a manufacturing giant. We have become a consumer-economy, buying billions more products from foreign countries than they buy from us. To help bring back profits to our economy, we must get out of our cubicles and begin moving and producing. Another step to helping our economy is to buy American. Instead of throwing your money to foreign companies, look for the American manufacturer, your purchase price will trickle through your fellow countrymen. This can only help the cause.
4.) Next is to make the U.S Tax Code fairer. The middle class is being drawn through unreasonable taxes that far out-weigh that on the 1%. Through the
power surge of Corporate America in Washington, this is highly unlikely; their only interest is to make more profit which will further the gap between the super-rich and the middle class.
5.) The Corporate Tax Code makes it easy for companies to promote globalization. We must fix it by lowering the rate and closing all the loopholes that leave average Americans blind of the dangers they risk. Over the past decade, these loopholes have allowed Corporations to save approximately 1.2 trillion dollars that could have been put to other programs and benefits.
6.) Push China to promote fair labor laws. Without this, we will forever fall victim to Chinese low-cost labor production. Companies will always choose to hire reliable foreign companies to maximize profits. American jobs will likely increase by 4 million if this is accomplished.
7.) Stop wasting money on War and Weapons. The war in Afghanistan and Iraq alone costed trillions of dollars. The opportunity cost of this is astronomical.
8.) “Fix the housing crisis by arranging massive refinancing of millions of homes now under water to get the economy moving and to strengthen the nation’s safety net programs, especially Social Security and Medicare”. Billions of dollars must be provided by the Government to stimulate banks and mortgage companies while providing homeowners with the proper security to own homes and stay afloat. To help Social Security and Medicare, suggestions include “readjusting the formula for the annual cost-of-living increases in Social Security payments so as not to exaggerate inflation”. Another possibility is to remove the income cap on the payroll tax. Without these and many other propositions, the lower class who need help with student-loans, Medicaid, food stamps, housing, child care support, will have little chance of moving to the middle class.
9.) Rebuild the political center. America must go back to a centralized and beneficial plan of action by “rejecting extremist candidates in both parties
and by opening up our political process in every state to give more influence to moderate and independent voters”. It’s simple, Vote.
10.) America must get American citizens back into the game. Back to caring about what goes on and by fulfilling the duties of a society “of the people, by the people, for the people”. Get back to political activism, feel proud of your part in Government and achieve what you believe must be done. Have your word heard.
Our society is at a state in time where we must decide if we are to continue in our destructive path, or regain a hold of what our Founding Father’s first preached. A land of democratic capitalism, a place where opportunity has no boundaries. A country of equal rights, dependent on “life, liberty and the pursuit of happiness”. In this essay i have demonstrated how Republican conservatism has put a halt political and economic gain. Through their greed and rising riches, the 99% has suffered greatly. Sharing of the total wealth in this country has proven to be all-important to it’s overall growth. We must get back to a liberal minded Government to save what we still have.
Smith, Hedrick. Who Stole the American Dream? New York: Random House, 2012. Print.
Wikipedia. Wikimedia Foundation, n.d. Web. 13 Dec. 2012.