On November 18th, the Albers School and the Matteo Ricci College co-sponsored an appearance by Hedrick Smith, author of Who Stole the American Dream? Smith is a Pulitzer Prize winning reporter, Emmy Award winning producer, and bestselling author. Prior to publishing Who Stole the American Dream?, he wrote The Russians and The Power Game, two critically acclaimed books. He has won Pulitzer Prizes for his work on the Pentagon Papers and for reporting from Russia in the early 1970's. He has also produced several Emmy award winning specials for the PBS Frontline program. Smith has won the Columbia-Dupont Gold Baton for the year's best public affairs program on U.S. television twice, and also received the George Polk, George Peabody, and Sidney Hillman awards for his excellence in reporting.
In his latest book, Smith explores the demise of the middle class in the US. He started off his lecture by saying some societies succumb to threats from the outside, while others are threatened from within. He said the US is threatened from within due to increasing income and wealth inequality.
According to Smith, this decline can be traced to policy in DC. Decades ago the middle class was able influence policy via a strong union movement, the women's movement, the consumer movement, and the environmental movement. Then, a "Revolt of the Bosses" took place, where the business sector organized and fought back, creating such entities as the Business Roundtable to lobby for its interests. He traced this movement back to the writings of Supreme Court Justice Louis Powell and said it launched the expansion of increasingly successful corporate lobbying and PR in our nation's capital.
Smith cited such legislation as the creation of 401k plans, modifications in the corporate bankruptcy code, the end of usury laws, and more favorable capital gains tax treatment as rising from the growth of corporate power and at the same time undermining the middle class.
In the decades since, as the economy continued to progress, productivity gains were scoped up by the upper class and family incomes stagnated. At the same time, the cost of key goods such as health care, education, and home ownership rose significantly, forcing families to borrow if they wanted to acquire these goods. It's no wonder that families overcommitted in real estate, argues Smith.
There is no denying that the distribution of income and wealth is deteriorating in the US, and we cannot take comfort in the idea that all are being lifted up by a rising tide. This rising tide is definitely not lifting all boats. Policy changes in Washington have definitely contributed to this unfortunate trend, but policy alone is not the culprit. Globalization, an inconsistent education system, and technology access are part of the explanation as well. Add to that list the polarization of politics in the US, which will prevent us from addressing this trend for the foreseeable future.
Smith's presentation was an interesting contrast to one that took place on campus later that evening by Chris Matthews of MSNBC fame. Matthews also has a new book out - Tip and the Gipper -- and was co-hosted by Town Hall and Seattle University. Some of the things Smith condemned for undermining the middle class, such as a lower capital gains tax rates, Matthews was hailing as bi-partisan accomplishments. Matthews did not take on corporate lobbyists, but instead chose to focus on unrestrained campaign contributions, arguing the key was to keep electing Democratic presidents so that the Supreme Court could be changed out and free speech redefined as speech and not campaign contributions.
Interesting evening on campus!!