Book Review: Who Stole the American Dream? by Hedrick Smith

Who Stole the American Dream 004Book club met tonight and we discussed Hedrick Smith’s
new book.    And it was a volatile discussion!  Need a
kickstart in your book club?  Choose this book.

How do I put 557 pages in a nutshell review? A few highlights:

The peak of America’s power and prosperity was in the years
of the 1940s to the 1970s.

–There was a sea change in the 1990s when firing workers was
no longer a mark of shame–that a CEO had messed up his business
–and became a plus.  “The more people a company fires, the more
Wall Street loves it, and the higher its stock price goes.”  (Newsweek
business columnist Allan Sloan in early 1996.)   Smith says these were
“structural layoffs, not temporary layoffs—jobs that would never
come back.”   In the last decade, 59,000 factories were shut down.
These closures affected adjacent industries: suppliers, service companies,

–There was a shift from pensions to 401(K)s.  In 1980, 84 percent
of workers in companies with more than one hundred employees
were in lifetime pension plans financed by their employers.  By 2006,
33 percent. The rest either got nothing or were switched to their
own 401(K) plans with a modest company match.  Jeffrey Immelt,
CEO of General Electric, told his stockholders: ‘(The) pension has
been a drag for a decade.'”

That wasn’t really true.  Wall Street Journal reporter Ellen Schultz
found that pension plans had been reaping golden eggs from stock
market gains: GE had a $25 billion surplus; Verizon had $24 billion;
AT&T had $20 billion; IBM had $7 billion.  But—closing down pension
funds resulted in even more profits for the companies.

–Offshoring jobs.  The myth that there weren’t enough high tech
workers to meet the demand led to the H-1B visa program which
encouraged foreign workers to come to the US and be trained in
computer skills.  Then those trained workers could train others in
the fast growing production lines in China and India.  In the 2000s,
salaries in India’s business model sites paid computer engineers
$7000-10,000 annually, accountants $5000 and project managers
$15,000.   US companies raced overseas to build and move their
operations.    IBM employed more workers at IBM India than at

In the winter of 08-09 when Obama was elected, private employers
were firing 600,000 workers a month!

There is a section about the housing debacle and the mortgages
given by WaMu.  It became a book that was too unsettling to
read at night!

Moving right along, Smith has chapters on military spending and
its effect on squeezing programs that otherwise would help the
middle class.  He points out that a strong economic base is as
strong a defense for our country as strong military power.

He discusses the polarization of the two parties—gridlock—-the
two parties have no center, no moderate voice anymore.

What to do?  The book ends with a ten step program.

But two stand out.  “Buy American” helps American jobs.  And
it’s something anyone can do.

Become involved. Work for two objectives: jobs and fairness.

Eliminating the cap on the payroll tax (at  $106,800)  with everyone
paying a fair share of income, not just the low and middle income
worker (it takes a higher percentage of their pay than a wealthy
person’s) would eliminate the anticipated supposed shortfall in
Social Security funds for the next seventy-five years.

In this book, Smith leans liberal, but gives an even-handed discourse
of went wrong in America.  Hedrick Smith is an admired Pulitzer Prize
winner and frequent contributor to PBS and Frontline.  This book was
published in 2012.

Next month’s book club selection will be a little more soothing: Leonardo
and the Last Supper by Ross King.

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4 Responses to Book Review: Who Stole the American Dream? by Hedrick Smith

  1. Mary Jo says:

    Wow! Talk about a great summary. Thank you for that! I just may even read it — although your summary really says it all! Appreciate the “food for thought”.

    • booksandbuttons says:

      Whoa, Nellie! my summary really doesn’t say it all!
      You don’t know the prolific notes that didn’t get into
      this review of mine. I only skimmed the surface.
      I’ll be interested in hearing your thoughts when
      you’ve finished—thanks for your comment, Mary Jo.

  2. FictionFan says:

    Great review! Sounds like a hugely interesting book and I can imagine it might well have led to some heated debates! There’s a lot of similarities in how the US and UK work economically, so a lot of the points you’ve highlighted could relate to over here as much as on your side of the Atlantic. But having gone down the Welfare State route post-war probably keeps us a bit more to the left even when we have a really right-wing government like in the 80s under Thatcher. Maybe.

    • booksandbuttons says:

      It’s quite a book—I’m kind of glad it’s finished so
      that I can read some fiction! (And keep the blogging
      spirits up!)

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