Excerpt
SUMMARY: For Pulitzer Prize-winning journalist Hedrick Smith, the American Dream depends upon the prosperity of middle class. Ray Suarez talks to Smith about his latest book, "Who Stole the American Dream?" for more on what needs to change to restore the American Dream, economically, politically and culturally.
JUDY WOODRUFF (Newshour): Now: the dismantling of middle-class power and prosperity. Ray Suarez has our book conversation.
RAY SUAREZ (Newshour): One aspect of the current national campaigns addressed by both parties is how hard it has been in recent years to get ahead in America, even to stay in place, as economic turmoil destroyed working lives, cratered housing values, and undermined retirement accounts.
In "Who Stole the American Dream?" veteran journalist Hedrick Smith takes us on a tour of the last four decades, of economic globalization, winners, and losers.
Significant excerpts
HEDRICK SMITH, author of "Who Stole the American Dream?": Well, they were living the American dream. They had pretty steady jobs. They had rising pay.
They had benefits, health care; 85 percent of the people who worked for companies of over 100 employees had health care, had retirement payments, a monthly check until you died on top of your Social Security, could afford to buy a home, pay off that mortgage over 30 years, and hope that your kids would do better.
That's a big chunk for an awful lot of people.
It made America the envy of the world. It let Richard Nixon go to Moscow and tell Nikita Khrushchev, the Soviet leader, we have a classless society.
RAY SUAREZ: That is also -- the people living that dream are also numerically the largest part of the United States.
HEDRICK SMITH: Sure.
RAY SUAREZ: How did they become so politically weak?
HEDRICK SMITH: Well, they were very strong back then.
As you know, Ray, the environmental movement was strong, put pressure on Washington.
The labor movement was strong, put pressure on General Motors and General Electric and U.S. Steel and so forth.
The civil rights movement put pressure on Washington to open up the American Dream to blacks and other minorities.
Part of what happened to them was, it was so successful. But part of what happened to them was, there was a power shift. There was a tremendous change of power in Washington. And that had a big effect on the ability of middle-class Americans to achieve the American dream.
And the other thing that happened is what I call wedge economics, the splitting of the American middle class off from the gains of the national economy, so that today you can see the economy improving bit by bit, but middle-class people aren't doing that much better.
People at the top are doing real well. Corporations are reporting profits, but the people in the middle aren't doing that well.
Back in the old days, back in the heyday of the middle class, everybody shared in that prosperity. Today, everybody doesn't share in that prosperity. And that's why so many people feel so much pain.
HEDRICK SMITH: Yes, that's a very good question. Let's just take the facts for a moment.
What happened was, the productivity of the American work force from World War II to the mid-'70s grew almost double, 97 percent. The wage and salaries of average Americans, not just assembly line workers, but plumbers, carpenters, small business people, and so forth, they rose 95 percent, so just about the same increase in wages and salaries as in productivity.
The wealth, the growth, the economy, the prosperity was shared.
Since then, however, those wedge economics came in. And what you have seen is productivity has continued to grow, about 80 percent since 1973. But the average hourly compensation of an average worker has grown only 10 percent.
The CEOs' pay has quadrupled, sextupled. The income of the people at the top 1 percent has grown 600 percent.
The Census Bureau says the average male worker since 1978 is making just the same pay, adjusted for inflation. So it's flat in the middle and it's soaring up at the top, tremendous inequality.
I think you're right. People don't favor expropriation. Americans are more tolerant of economic inequality than, say, Europeans and Asians and so forth.
But you do see in poll after poll people are -- there's too many wealth concentrated at the top. There's too much power in Washington lobbyists. The tax system should be changed to raise taxes on the top brackets. Two-thirds of Americans agree in almost every poll to those numbers.
So there is sentiment to change things. But there's not anger in any kind of rebellious sense of word. In fact, there's not even the same kind of anger that prompted the middle class to protest back in the '60s and '70s.
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