{"id":131740,"date":"2012-09-16T10:00:28","date_gmt":"2012-09-16T14:00:28","guid":{"rendered":"http:\/\/www.prosebeforehos.com\/?p=131740"},"modified":"2012-12-26T16:03:39","modified_gmt":"2012-12-26T21:03:39","slug":"betraying-the-american-dream","status":"publish","type":"post","link":"https:\/\/www.prosebeforehos.com\/article-of-the-day\/09\/16\/betraying-the-american-dream\/","title":{"rendered":"Betraying The American Dream"},"content":{"rendered":"

The Article:<\/strong> The Betrayal of the American Dream — A Once Vibrant Middle Class Is Now on the Brink<\/a> by Amy Goodman, Don Bartlett and James Steele in AlterNet.<\/p>\n

The Text:<\/strong> AMY GOODMAN: Democrats and Republican lawmakers are in a deadlock over whether to extend the politically decisive Bush-era tax cuts. The Republican-controlled House of Representatives is planning to vote this week to extend all the cuts, but Obama says those Americans making above $250,000 a year should return to the tax levels they paid before Bush took office. Pointing to the Senate\u2019s passage of the White House-backed proposal, Obama called on House Republicans to support the bill in his weekly address on Saturday.<\/p>\n

PRESIDENT BARACK OBAMA: This week, the Senate passed a plan that I proposed a few weeks ago to protect middle-class Americans and virtually every small business owner from getting hit with a big tax hike next year\u2014a tax hike of $2,200 for the typical family. Now it comes down to this. If 218 members of the House vote the right way, 98 percent of American families and 97 percent of small business owners will have the certainty of knowing that their income taxes will not go up next year. That certainly means something to a middle-class family who has already stretched the budget as far as it can go.<\/p>\n

AMY GOODMAN: In an interview on Fox News, Republican House Speaker John Boehner countered that Obama\u2019s tax plan would destroy hundreds of thousands of jobs.<\/p>\n

<\/p>\n

SPEAKER JOHN BOEHNER: President\u2019s plan would cost about 700,000 new jobs that wouldn\u2019t be created or could be lost by taxing small businesses. The House will not do that. The House will extend all of the existing tax rates. We\u2019ve got 8 percent unemployment; we\u2019ve got 41 months of it. This is not to be time\u2014the time to be raising taxes on American small businesses.<\/p>\n

AMY GOODMAN: As Republicans and Democrats continue disputing who should bare the brunt of the tax burden, our next guests argue America\u2019s middle class has been decimated over the years due to policies governing not only taxes but also bank regulations, trade deficits and pension funds. Their new book chronicles how the American middle class has been systematically impoverished and its prospects thwarted in favor of a new ruling elite.<\/p>\n

We\u2019re joined now for the hour by Don Barlett and James Steele, the award-winning investigative reporters. They have worked together for over 40 years, first at thePhiladelphia Inquirer, then at Time magazine, most recently at Vanity Fair. They\u2019ve also written seven books. Their first book, America: What Went Wrong?, was a New York Times bestseller. They share two Pulitzer Prizes, two National Magazine Awards. Their new book is called The Betrayal of the American Dream.<\/p>\n

Jim Steele, Don Barlett, we welcome you both to Democracy Now! Start off by laying out your thesis, Don. Start off by talking about the betrayal of the American dream.<\/p>\n

DONALD BARLETT: It really goes back to when we did America: What Went Wrong?, which was in ’91. And at that time, people were upset around the country. They knew something was happening, but they didn’t know what. And what made that book so successful was that we pulled everything together in terms of pensions and pay and union membership\u2014and just everything economics. And you could see that there was a systematic attack going on on the middle class.<\/p>\n

At that time, it was still kind of\u2014you know, could have gone either way if there had been a political response, which there should have been, but there wasn\u2019t. And as a result, when\u2014we received just literally hundreds and hundreds and hundreds of letters of emails over the last several years saying, “Would you go back and look at this in terms of what you wrote the first time?” And if we made one mistake the first time, it was we grossly underestimated how fast this country was going to go down the tubes. And we really did.<\/p>\n

Back then, there were still defined benefit pensions, and people still had a hope of getting them. They\u2019re gone. There was one wage structure. Now there are two-tiered wage systems all over the country. The one wage is gone. Income has been flat, for the most part, since then. You go down the list, and everything has gotten incredibly worse than it was then.<\/p>\n

And one of the arguments that was raised by critics back then was because this\u2014that series ran right at the tail end of one of the recessions, and people said, “Well, what\u2019s happening now is really related to the recession, and once we\u2019re out of the recession, everything will be fine.” And we made the point this was not true, that what was happening was totally unrelated to the recession. It was the result of structural defects in the American economy, and it was going to continue unless they were dealt with. Well, they weren\u2019t dealt with, and now everything is\u2014you couldn\u2019t even go back now to the 2000 level and give people what they had then. It would be impossible, given the attitudes in Congress, the hardening lines in Washington.<\/p>\n

AMY GOODMAN: I wanted to talk about specifics and also go general. Jim Steele, the story of corporations tell a very major story about the United States, corporations like Apple and Boeing. Apple doesn\u2019t manufacture one product in the United States?<\/p>\n

JAMES STEELE: That\u2019s correct. That\u2019s correct. I think some of the parts\u2014some of the parts are made here, but basically the essential products aren\u2019t. And we made the point in the book\u2014we actually wrote about this before a lot of the news surfaced this year\u2014that what was significant about what Apple has done is not just their working conditions in China, which were horrendous by the subcontractors over there, but what they did, they completely closed down manufacturing in this country after really less than a generation. The historic pattern in this country was a product would be invented here, a company would go into business, they would start making it. Up and down the line, you had a broad-based workforce for that product, from folks on the factory floor to the designers, to the salesmen, so on, to the stockholders who might be part of that company. But ultimately, you had this broad-based situation. Apple originally had some manufacturing in this country but very quickly, in less than a generation, just closed that down and shipped most things to China and other countries. And it\u2019s just part of that pattern where jobs that once middle-class people had in this country are now gone.<\/p>\n

You see a similar kind of thing now going on with Boeing. Boeing has outsourced all kinds of parts of the new Dreamliner, its great new aircraft, which of course has recently run into some problems with parts of their engines falling off, apparently. But Boeing, as part of getting into the Chinese market, which everybody agrees will be a huge market, has manufactured all sorts of things over there. Basically, what Boeing is doing, which a lot of companies are doing, they are basically showing the Chinese how to make airplanes. And what have the Chinese done? They\u2019re creating their own civilian aircraft industry, where we were told, I think, in this country the idea was have some presence there so we can sell them airplanes. But where is that going to lead down the line if we are turning over to them some of the technology that will let them build airplanes that are our principal export in this country?<\/p>\n

AMY GOODMAN: And how much of that information, that knowledge, is taxpayer-financed?<\/p>\n

JAMES STEELE: Boeing has of course been a major defense contractor over time, and many of those contracts have led to all sorts of technology that have worked their way into both civilian and military planes. Taxpayers have supported that. So now you have a situation where some of the technology that taxpayers have paid for\u2014through Boeing and of course other contractors, as well, not just them\u2014is now going to be handed over to the Chinese to build airplanes to compete against us. And civil aircraft is the only significant export this country has.<\/p>\n

AMY GOODMAN: And the number of jobs Boeing has moved to China?<\/p>\n

JAMES STEELE: The number of jobs is, I think, 20,000 to 30,000 by Boeing\u2019s own statement. I should correct one thing: we have other exports, but in civilian aircraft is the only thing where we have a surplus of exports. We export a lot of things, but\u2014and most of those products, like auto parts and things of that sort, the imports vastly overwhelm our exports.<\/p>\n

AMY GOODMAN: Back on Apple, earlier this year Democracy Now! spoke toCharles Duhigg [4], a staff reporter for the New York Times. I asked him about President Obama\u2019s meeting with the late Steve Jobs of Apple in February of 2011 to see what it would take to make iPhones in the United States. This is what Charles Duhigg said.<\/p>\n

CHARLES DUHIGG: One of the things that President Obama asked was, is it ever possible to bring back those jobs to the United States, to make iPhones in the U.S.? And what Steve Jobs said was\u2014I think accurately\u2014those jobs are never coming back. And the reason why isn\u2019t just because workers are cheaper in China, although that\u2014they are cheaper in China; it\u2019s because China has established a huge competitive advantage over the U.S. There are supply chains that exist in China and Asia now which the U.S. simply can\u2019t replicate.<\/p>\n

AMY GOODMAN: I also asked the New York Times reporter, Charles Duhigg, about the human costs of Apple products for workers in China.<\/p>\n

CHARLES DUHIGG: What Apple says\u2014and you have to take Apple at their word, because this is a major corporation, they usually don\u2019t lie about stuff like this\u2014is that they say every single time they find a violation inside a supplier, that they mandate that a change is made and a management system is put in place in order to prevent that from occurring again. The difficulty is, when you look at the aggregate statistics that Apple publishes every year, we see the same violations occurring again and again and again.<\/p>\n

AMY GOODMAN: New York Times reporter Charles Duhigg about the human costs of Apple products. James Steele?<\/p>\n

JAMES STEELE: I think he\u2019s right that these Apple products are not going to be coming back here. But the issue isn\u2019t that they\u2019d be coming back here; the issue is what happened that let them go over there, to begin with. And I think the point could easily have been made, Apple could still certainly have kept some manufacturing in this country\u2014doesn\u2019t mean you couldn\u2019t also have some manufacturing elsewhere. Nobody has said that. But the point is, they made a conscious decision to go over there.<\/p>\n

And the reason a lot of companies do that, it\u2019s not just the cheap labor. The Chinese have a system in place that subsidizes companies\u2014land, low-interest loans, a whole range of things\u2014the kinds of things that a company in this country cannot compete with. So it goes way beyond the labor. We talk about free trade in this country, but other countries don\u2019t really practice free trade. And China is a perfect example of that. I mean, how is a company over here expected to compete with a company that has that kind of support, that can then bring its product back here duty-free? I mean, it\u2019s almost impossible. And this is true of dozens of products, not just computers and iPhones.<\/p>\n

AMY GOODMAN: Why couldn\u2019t Apple build factories here now?<\/p>\n

JAMES STEELE: Well, I mean, they could if they wanted to, but I\u2019m just saying it\u2019s just not going to happen, because they don\u2019t want to. And the problem was\u2014<\/p>\n

AMY GOODMAN: But consumers can also make a statement.<\/p>\n

JAMES STEELE: Absolutely.<\/p>\n

AMY GOODMAN: And make demands.<\/p>\n

JAMES STEELE: And make demands, exactly. And maybe enough heat will be exerted on them. And we got so much mail after our piece on Apple last year. People who thought Apple products were more expensive because they were built in this country, that was one of the most common themes we heard from people. And people were astonished to find out, no, they\u2019re not. And yet they still cost you more than things that might be made here.<\/p>\n

AMY GOODMAN: Don Barlett?<\/p>\n

DONALD BARLETT: Well, the only thing to add to that is if\u2014you need to put controls on corporations. Somewhere along the line, we\u2019ve reached this point where there can be no\u2014you know, no tariffs, no\u2014nothing on corporations. They are free to do whatever they want. And look no further than fracking everywhere, but especially in Pennsylvania, where we\u2019re both from. I mean, you grew up in Pennsylvania, you remember what it was like\u2014well, I do. I\u2019m a lot older than Jim. You went out of the house in the morning, it was covered with orange dust from the blast furnaces. That was a way of life. Was that healthy? No. Should it have been allowed? No. But now, that kind of behavior is tolerated\u2014not only tolerated, encouraged, because nothing is done to prevent it.<\/p>\n

I mean, there\u2019s\u2014you have all of this talk on the far right about the regulations that are, you know, stifling creativity and all this. That\u2019s utter and complete nonsense. When it\u2019s put in historical terms, it is just mind-numbing that we\u2019ve allowed this, because\u2014Jim made the distinction: we\u2019re talking about civilian aircraft now. The Chinese have just been given the keys to the U.S. attack helicopter. What does this say? I mean, back\u2014as an old Cold Warrior, in which I spent a few years in counterintelligence, security clearances would have been killed then automatically for the corporation. And this is just mind-numbing that nobody says anything in Washington. They like to pretend they\u2019re in charge of something. They\u2019re not. They are just there to do whatever the corporations want them to do.<\/p>\n

AMY GOODMAN: Interesting, on that\u2014<\/p>\n

DONALD BARLETT: And let me qualify this. This is\u2014and this is my mistake more often, when I say “corporations.” We need to distinguish between global corporations and domestic corporations, which truly are being screwed in Washington. The domestic companies, who\u2014the ones that employ the people in this country, have really taken it in the ear, and only because Washington is\u2014gives a free pass to the international, the global corporations.<\/p>\n

AMY GOODMAN: And, Jim Steele, the statement on Apple products, “designed by Apple in California”?<\/p>\n

JAMES STEELE: Right, but manufactured elsewhere. And in the past\u2014I mean, this is the point I was trying to make earlier. In the past, you had a whole chain of people: you had the inventors, you had the designers, you had the people who manufactured, you had the people who sold it, and then, of course, at the end of that you had the consumers that bought that product. And this doesn\u2019t mean that you can\u2019t have factories elsewhere, but the idea that we do not have the capability of building these products in this country, that we do not have all the engineers to do that, I mean, we just totally reject that. I mean, too many people have told us\u2014too many people in manufacturing in this country are very\u2014who are very upset by this whole trend, because they say separating the design from the actual manufacturing floor is a huge mistake. That\u2019s the way so many great things were done in the past.<\/p>\n

DONALD BARLETT: That\u2019s where you got your new products from. That\u2019s where you got your innovations from. And if you\u2019re not making it on the floor, doesn\u2019t come.<\/p>\n

AMY GOODMAN: We\u2019re going to come back to this discussion. Don Barlett and Jim Steele are our guests, the authors of The Betrayal of the American Dream, the Pulitzer Prize-winning dynamic duo.<\/p>\n

And just before break, a clarification for an earlier headline: police in Burlington, Vermont, are being accused of firing rubber bullets at activists protesting a meeting of New England governors and eastern Canadian premiers. Police said pellets were fired but have denied firing rubber bullets. This is Democracy Now!We\u2019ll be back with Jim Steele and Don Barlett in a minute.<\/p>\n

[break]<\/p>\n

AMY GOODMAN: We are joined by Don Barlett and Jim Steele. They are the authors of the new book, The Betrayal of the American Dream. I want to go to the issue of the Olympics since they\u2019re happening in London right now. In 2001, you wrote a story [5] called “Snow Job” about the 2002 Olympics in Salt Lake City, headed by none other than the Republican presidential candidate, Mitt Romney. In your investigation, “Snow Job,” about these Olympics, which you published inSports Illustrated, you reported, quote, “The $1.5 billion in taxpayer [dollars] that Congress is pouring into Utah is 1.5 times the amount spent by lawmakers to support all seven Olympic Games held in the U.S. since 1904\u2014combined.” Jim Steele?<\/p>\n

JAMES STEELE: Well, it\u2019s an interesting position for somebody who\u2019s against new taxes and wants to cut the deficit, that here you had somebody heading an Olympic committee where that entire operation raided the federal Treasury like no other Olympics in history. And they got everything: Salt Lake\u2014infrastructure around Salt Lake, sewer lines, land exchanges that transformed the average snow resort, ski resorts into world-class resorts. All of these things happened one way or another under Romney\u2019s watch. And that\u2019s what astonished us about this comment he made where he was dissing the London Olympics, I mean, because\u2014that they\u2019re not operating right, they\u2019re not doing this right. I mean, the whole\u2014I think he\u2019s so vulnerable on that issue, and everybody who had anything to do with the Salt Lake Olympics is very vulnerable on that. The thing that struck us so much\u2014and here was Utah, a state famously with a great antipathy to paying any kind of taxes, but they had absolutely no qualms whatsoever about raiding the federal Treasury to take care of all of their needs for really the next generation. So, the fact that he would make this point in London just, frankly, astonished us.<\/p>\n

DONALD BARLETT: Jim\u2019s right. I mean, Utah got out of this anything they wanted. The states\u2014other states would have had to have paid for on their own, Utah got from the federal government. And so, it\u2019s\u2014the other thing is this hypocrisy of people like Romney who want everyone in the middle and the bottom to pay their own way, but they themselves have no trouble grabbing as much money as they can get out of Washington. And they do it all the time. And it\u2019s just\u2014it\u2019s just astonishing. But people generally don\u2019t know it. The news media does not do what it should do on this area\u2014never has. And so, there\u2014part of the problem here is because most people today get their news from TV, and it\u2019s not public TV, as you well know, it\u2019s commercial TV. And commercial TV is not about to do this kind of work. It just isn\u2019t.<\/p>\n

AMY GOODMAN: It\u2019s interesting, with NBC covering the Olympics around the clock, we\u2019re not seeing any of the protests that are taking place and the increasing anger of the small businessmen in East London who are getting wiped out, the whole issue of not criticizing the corporate sponsors, the corporate sponsors\u2014<\/p>\n

DONALD BARLETT: Right, right.<\/p>\n

AMY GOODMAN: \u2014getting huge numbers of seats, yet they don\u2019t fill them. These arenas are now empty, and so the British government is trying to get soldiers in there, their families, school kids\u2014someone.<\/p>\n

JAMES STEELE: Right.<\/p>\n

AMY GOODMAN: But it shows that these seats\u2014and these arenas, these stadiums were sold out years in advance, and now no one\u2019s there, because the corporations aren\u2019t people.<\/p>\n

JAMES STEELE: Yeah, the Olympics, like so many\u2014<\/p>\n

DONALD BARLETT: Oh, well, yeah. Yeah, wait a minute.<\/p>\n

JAMES STEELE: Like so many of these other issues. I mean, like Don said, I mean, Romney and so many of the policies that he advocates will benefit very few. I mean, his tax structure, the tax structure of the wealthy in this country\u2014the tax structure of the whole country is now geared just solely to benefiting the wealthy. I mean, some of the statistics are amazing. I mean, the wealth of the top 1 percent in this country is greater than the wealth of the bottom 90 percent. That is a staggering figure.<\/p>\n

And one of the things that has made that possible has been a whole series of tax changes over a long period of time, mainly in the last 10 years. I mean, one of the things they\u2019ve done in the last 10 years that we just cannot get over was in 2003 when they made dividend income taxable at 15 percent. This was the first time ever that dividend income was treated differently than somebody earning a wage or salary. And the idea that that somehow should be more favored than somebody working in the sweat of their brow is absolutely ridiculous and appalling.<\/p>\n

DONALD BARLETT: There\u2019s going to be, you know, in the coming weeks\u2014you know better than anyone\u2014just a constant, you know\u2014I don\u2019t know what you call it. But out of Washington on taxes and how we\u2019re penalizing entrepreneurs and all of that garbage\u2014and I say “garbage” for this reason: if people focus on two numbers\u2014that\u2019s all you need to do\u2014in 1955, the top 400 households in this country, they paid 51.2 percent of their income in taxes. That\u2019s 1955. In 2007, they paid 16.6. And everybody\u2019s talking about a deficit. Of course there\u2019s a deficit, and there\u2019s going to always be a deficit until they impose the tax system that had existed in this country in the \u201940s, the \u201950s, the \u201960s and the \u201970s, in which people at the top who had money paid serious taxes. No one\u2014but no one at the top pays serious taxes today remotely close to what their, you know, peers would have paid back in the \u201960s and \u201970s.<\/p>\n

AMY GOODMAN: Journalist Nick Shaxson of your magazine, of Vanity Fair ,wrote [6] about Mitt Romney\u2019s fortune, called “Where the Money Lives.” We spoke toNick Shaxson [7] about how someone as wealthy as Romney has an average personal tax rate, as you were saying, of less than 15 percent.<\/p>\n

NICHOLAS SHAXSON: This is about the U.S. tax code. This is the way that privileged people like Mitt Romney and other\u2014and hedge fund managers and private equity titans receive their income. They receive it as a thing called carried interest, where\u2014which many people would argue is just like ordinary income. It\u2019s just like a salary earned by anybody else and should earn, you know, the top tax rate, but instead, for historical reasons and reasons of lobbying, it is taxed at a very low rate of 15 percent. Mitt Romney\u2019s tax rate is a little bit lower than that. He has\u2014for various other reasons, he has deductions and earns other kinds of income, as well. But it\u2019s not too far off 15 percent. But carried interest is\u2014the tax treatment of carried interest is the sort of central reason why his tax rate is so much lower than many Americans.<\/p>\n

AMY GOODMAN: I want to go to his role\u2014oh, go ahead, Don.<\/p>\n

DONALD BARLETT: Well, just, we need to point out, you know, all these pleas for him to release the rest of his tax returns, which every candidate has always done. And he\u2019s, “That\u2019s it. You\u2019re not getting any more from me.” And people wondering\u2014<\/p>\n

AMY GOODMAN: And his father, George Romney, set the precedent by doing it for 12 years when he ran for president.<\/p>\n

DONALD BARLETT: Yeah, yeah, 12 years, exactly. Well, his father was kind of a straight arrow compared to Mitt. I mean, but we wondered, in the back of our minds\u2014there may not be anything in those returns, but he may be amending them furiously. And this is what candidates do once they reach a point where, “Oh, my god, this is going to become public. We\u2019ve got to go back and clean up the returns.”<\/p>\n

AMY GOODMAN: How do you clean it up?<\/p>\n

DONALD BARLETT: Well, you file an amended return. And that\u2019s not uncommon. “Aw, gee, we had a mistake here. We need to correct that.”<\/p>\n

AMY GOODMAN: And so it completely replaces the one that was there.<\/p>\n

DONALD BARLETT: Exactly, exactly. And in our minds, we think, you know, that\u2019s the more likely thing that\u2019s going on here. It\u2019s not that they\u2019re afraid of something in those returns; it\u2019s that they are being sanitized.<\/p>\n

AMY GOODMAN: Earlier this month, Mitt Romney gave a series of television interviews defending his role at Bain Capital. This is Romney speaking to CNN\u2019s Jim Acosta.<\/p>\n

MITT ROMNEY: There\u2019s nothing wrong with being associated with Bain Capital, of course, but the truth is that I left any role at Bain Capital in February of ’99. And that’s known and said by the people at the firm. It\u2019s said by the documents, offering documents that the firm made subsequently about people investing in the firm. And I think anybody who knows that I was out full-time running the Olympics would understand that\u2019s where I was. I spent three years running the Olympic Games. And after that was over, we worked out our retirement program, our departure official program from Bain Capital and handed over the shares I had. But there\u2019s a difference between being a shareholder, an owner, if you will, and being a person who\u2019s running an entity. And I had no role whatsoever in managing Bain Capital after February of 1999.<\/p>\n

AMY GOODMAN: That\u2019s Mitt Romney speaking on CNN. James Steele?<\/p>\n

JAMES STEELE: I think that that whole story is still probably evolving and developing, exactly where he was at that time. It\u2019s just one of the reasons it would be nice to see the tax returns, to see exactly what some of that material said at the time. But I think the most significant thing about Bain isn\u2019t just that period of time. Bain, like every one of the private hedge funds, the private equity funds, very much involved in basically killing jobs one way or another, and\u2014because when they take over a company, people are jettisoned, let loose, streamed down. Sometimes the work is sent offshore. And that\u2019s just the way they work, and they\u2019ve always worked that way, whether it was when he was there or after. It\u2019s just the common way all those private equity funds function.<\/p>\n

And I think that\u2019s why so much of a furor has built up about this, because people know this. I mean, that\u2019s the thing we found out when we went around the country and we talked to people here and there. People know what\u2019s going on in this country. They know a lot of the deck is being stacked against them. They know that they\u2019re almost powerless when one of those companies buys a company. I mean, some very famous companies, like Birds Eye, were bought by another private equity firm, Blackstone\u2014all kinds of people let go, the company is supposedly streamlined. You see that sort of thing across industries\u2014food, computers, technology, so forth. That\u2019s just the way that process works, and that\u2019s just how the deck is so stacked against the average person and in favor of the equity companies.<\/p>\n

Nick was talking about the carried interest. We have a whole section in the book about carried interest. And it\u2019s a complex concept that people sometimes have trouble getting their mind around.<\/p>\n

AMY GOODMAN: And if you could explain it simply.<\/p>\n

JAMES STEELE: But it is just an outrageous thing. The idea is, if you are heading one of those private equity funds, you take a portion of the interest of one of these companies that you are theoretically managing. Part of your salary comes in a\u2014part of your money comes in a salary, a direct salary, which is paid in normal rates. But part of it is supposedly an interest in this company. But you haven\u2019t bought that interest. You\u2019ve just been given it as the manager. And then, when you cash out on that, because it\u2019s supposedly you were an investor, you pay the 15 percent. And that, as much as anything, as Nick was talking about, is why somebody like Romney and other private equity moguls pay 15 percent.<\/p>\n

Now, there was a big boomlet to try to get rid of this a few years ago. And there were hearings in the Senate and the House. And a lot of people thought, “Oh, boy, this thing is going to change.” But once again, people do not seem to realize how powerful those interests are in Washington. And they trotted out all kinds of people to lobby against it, mainly the private equity funds. I mean, Henry Kravis on down the line, all of those people actually paid visits to Capitol Hill.<\/p>\n

AMY GOODMAN: It\u2019s called “vampire capitalism”?<\/p>\n

JAMES STEELE: “Vampire capitalism,” that\u2019s\u2014excellent word. That\u2019s exactly what it is. And they defeated the effort to try to change that. I mean, this Congress, you couldn\u2019t do it at all, but back then there was a little bit more common sense that some people had. But even then, they couldn\u2019t get that thing changed. And it, as much as anything, illustrates how this system is totally geared against the average person. There is no defensible\u2014no defense for that tax break. And it\u2019s something that was not basically used years ago, but it\u2019s typical how folks in power figure out a way to bring the code to their advantage. And when it happens, Congress should amend it and change it. But because of that interest and that lobbying, that\u2019s frustrated.<\/p>\n

AMY GOODMAN: I want to turn to President Obama\u2019s recent attack on Mitt Romney\u2019s record at Bain Capital.<\/p>\n

PRESIDENT BARACK OBAMA: I have said, let\u2019s stop giving tax breaks to companies that are shipping jobs overseas, let\u2019s give tax breaks to companies that are investing right here in the United States of America and investing in American workers, so we can make American products stamped with those three proud words: “Made in America.” That\u2019s how we build an economy that lasts, and that\u2019s why I\u2019m running for a second term as president. Now, Mr. Romney has got a different idea. You know, he invested in companies that have been called pioneers of outsourcing. I don\u2019t want to pioneer in outsourcing. I want some insourcing. I want to bring companies back.<\/p>\n

AMY GOODMAN: That\u2019s President Obama. By the way, he is in New York tonight at the NoMad Hotel at a fundraising dinner, 60 guests spending $40,000 each at a hotel near the Gramercy Park.<\/p>\n

JAMES STEELE: We won\u2019t be there.<\/p>\n

AMY GOODMAN: But his idea?<\/p>\n

JAMES STEELE: Well, his idea, I mean, is a very valid idea, because one of the things that\u2019s been happening with the multinationals is a lot of the money they earn offshore, they keep offshore. The estimates of the amount of money that companies like Apple, the technology companies, the pharmaceutical companies, some of the big manufacturing companies\u2014their estimates are $2 trillion is sitting in foreign accounts that they will not bring back to this country. And the reason they will not bring it back, they say, is because of this onerous U.S. tax rate.<\/p>\n

But the fact of the matter is, once, a few years ago, Congress waived that and let a number of them bring money back\u2014and my memory is they brought back $3.3 billion in some of the assets that were there\u2014with the understanding that they would create jobs here. But you know what they did? Those same\u2014the leading companies that brought their money back actually killed 20-some thousand jobs, did not create jobs. I mean, it just gets back to what Don was saying earlier in terms of the power of these multinational corporations. They\u2019re beyond our control theoretically. And even when they get a right like that, it\u2019s not enforced. And as a result of that, no jobs are created.<\/p>\n

AMY GOODMAN: I want to talk about breaking up the mega banks with you, pensions, what\u2019s happening to them, retirement and more. Don Barlett and Jim Steele, authors of the new book, The Betrayal of the American Dream. Twenty years ago, they wrote America: What Went Wrong? While they were accused of exaggerating, they now say they didn\u2019t go far enough. Stay with us.<\/p>\n

[break]<\/p>\n

AMY GOODMAN: Our guests for the hour are Don Barlett and Jim Steele. They are the Pulitzer Prize-winning dynamic writing duo, who are writing most recently for Vanity Fair. Their latest book, out tomorrow, The Betrayal of the American Dream.<\/p>\n

The former CEO of the banking giant Citigroup is drawing headlines for publicly calling for the breaking up of the nation\u2019s largest banks and for restoring the separation of commercial and investment banking. Sandy Weill made the comments last week in an interview on CNBC.<\/p>\n

SANFORD WEILL: What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, and have banks do something that\u2019s not going to risk the taxpayer dollars, that\u2019s not going to be too big to fail.<\/p>\n

BECKY QUICK: That\u2019s a pretty radical idea, though, the idea of breaking up the investment banks and the banks. Are you suggesting going back and really breaking these companies up?<\/p>\n

SANFORD WEILL: That\u2019s exactly what I\u2019m suggesting. I want to see the United States be the leader. I mean, and I really believe in our country. And we\u2019re not going to be a leader if we keep on trashing our institutions.<\/p>\n

AMY GOODMAN: Former head of Citigroup, Sandy Weill, very significant, because he was a major lobbying force\u2014<\/p>\n

JAMES STEELE: Right.<\/p>\n

AMY GOODMAN: \u2014to end Glass-Steagall. Of course, President Clinton signed off on it. And now this is what he\u2019s saying. Don Barlett, Jim Steele?<\/p>\n

DONALD BARLETT: Well, we\u2019ll both take a shot at this. But there was a reason that this law went into\u2014Glass-Steagall went into place after the Great Depression. There was no reason whatsoever to change it. And everybody who recommended that was flat wrong. Now, I don\u2019t know where Weill is coming from now\u2014has some terminal disease and he wants to clear his conscience or what. It never should have been repealed. That served to benefit only one tiny slice of the population: the people at the top. And it did enormous harm to broad middle-class America. It\u2019s one reason, in part, why people lost their homes.<\/p>\n

JAMES STEELE: I mean, one of the things that happened after the removal of that firewall is it then became\u2014the whole mortgage industry\u2014<\/p>\n

AMY GOODMAN: The commercial banks and the investment banks.<\/p>\n

JAMES STEELE: Commercial banks and investment banks\u2014the whole mortgage industry was transformed by this. If you go back a few years and you were buying a house or a co-op or a condo or whatever it was, you almost had to mortgage your first-born child in order to get a mortgage. I mean, you had to go through a very dramatic process. But because selling the mortgages, the fees and so forth, was more important than whether\u2014the person\u2019s ability to pay and so forth, led to all kinds of abuses. It wasn\u2019t just they put people in houses who shouldn\u2019t have been there. They actually tricked an awful lot of people who had been in their house but who had been misled about the provisions of those instruments, because the fees up front were so important and so significant.<\/p>\n

So, if he\u2019s now\u2014if Weill is now finally getting religion, that\u2019s wonderful. It\u2019s hard to imagine what has provoked this. But the fact is, he\u2019s absolutely right, and it never should have happened. The fact that\u2014I think Clinton signed it because it was part of the whole deregulatory mindset that has gripped this country for really the last two or three decades. Before that, it was true in airlines, it was true in the trucking industry\u2014two industries where the wages have been driven down, the earnings driven down tremendously for the people who are in those fields. And the profits of many of the companies in those fields have not been borne out. Both those industries have just been in total chaos for 20 to 30 years. And they extended that. Even with that record in 1999, they further repealed Glass-Steagall, which then further added to that chaos in financial services.<\/p>\n

DONALD BARLETT: The other thing that runs along with this is that the jobs\u2014everybody talks about creating jobs. Nobody looks at the kind of jobs that are being created. They at the bottom end of the wage scale, which also, you know, fuels this ripple effect, really, on tax revenue and Social Security revenue, because under the old system in which people had jobs that paid solid middle-class wages, now you\u2019ve got jobs in which people pay little or no taxes because they don\u2019t make enough money to pay the taxes. And that, in turn, impacts the deficit. And so, people who are talking about, “Well, we\u2019re going to\u2014we\u2019ve got to fix this deficit overnight,” are just people who want to take care of the tiny 1 percent at the top. There is no other reason to do that.<\/p>\n

AMY GOODMAN: You write, “Deregulation is one of the greatest triumphs of America\u2019s ruling class, but [for] middle-class workers and their families the fallout has been devastating.” What about retirement and pensions?<\/p>\n

JAMES STEELE: One of the most astonishing statistics that we think we have in the book, because we were not aware of this statistic: since 1985, almost 85,000 pension plans have been killed. In the ’50s, the \u201960s, the \u201970s, even into the early \u201980s, more and more people were eligible for pensions, defined benefit plans where you got a specific benefit when you did retire. But since the mid-’80s, corporations, with the great assistance of Congress, have been shifting people out of pensions into 401(k) plans. Now, there\u2019s nothing wrong with 401(k) plans, but originally they were viewed just as a supplement to a pension. They were not viewed as a pension. But corporations saw this would be a lot cheaper for them. It would shift the responsibility totally to the employees and the workers. But it would also not contribute enough to really take care of their retirement needs.<\/p>\n

So, what\u2019s happened in\u2014this is one of the greatest title shifts in the country, because we were going in a certain direction for decades, middle-class people\u2014I mean, not everybody had a pension. We know that. But more and more did over time. But since the ’80s, this has now been totally reversed. And it raises all kinds of questions about what retirement is going to be like for people. The main question is, people are going to have to work forever, and yet what are those jobs going to be? What are they going to pay? And it also puts pressure then on people coming into the workforce. How are they going to get a job if people are having to work between 65 and 75 years old? That’s going to put even more pressure on the jobs that are left.<\/p>\n

DONALD BARLETT: And the other irony of this is\u2014this is almost another Sandy Weill incident. You have the current head of AIG, who was not there during the collapse. He had nothing to do with it. He worked for another global insurance company. He was brought in after AIG collapsed, and the taxpayers bailed them out, and they still haven\u2019t paid everything back yet. He was quoted as saying earlier this year that people are just going to have to get used to the idea of working until they are 70 or 80. Now, he made that pronouncement from his villa in Dubrovnik in Croatia.<\/p>\n

You\u2019re going to work ’til you’re 80? We have a friend down who, you know, is a job recruiter, basically. And she said, “Look,” she said, “if you\u2019re over 50 now, you\u2019re going to have trouble getting a job.” She said, “I hate to say it, but I tell people, ‘You can’t look your age anymore. You really can\u2019t.\u2019” And she\u2019s talking about somebody in their fifties and maybe 60. Eighty? You\u2019ve got to be kidding me. I mean, we have Betty.<\/p>\n

JAMES STEELE: Yeah, there\u2019s a woman in the book\u2014<\/p>\n

DONALD BARLETT: A woman in the book.<\/p>\n

JAMES STEELE: \u2014who is solely dependent on Social Security, as millions of Americans are, who had to continue to work well beyond 65. She actually for a long time delivered meals, Meals on Wheels, to people in some cases younger than herself. She worked for a tax preparation company for another 20 years until she was laid off in her late eighties. Still looking for work at this point. That\u2019s very true of many people. So, even if you get a job, though, you\u2019re going to be putting pressure on the other end of the workforce.<\/p>\n

AMY GOODMAN: Very quickly\u2014<\/p>\n

DONALD BARLETT: And the one job I was counting on was being a greeter at Walmart. Now Wal-Mart has killed their greeter program. I mean, so, what are you going to do?<\/p>\n

AMY GOODMAN: Veterans, what they used to face, what they face today?<\/p>\n

JAMES STEELE: One of the places we visited was a veterans center outside of Fort Myers, Florida. And this is what brought the mortgage crisis home to really us. It isn\u2019t the story of people who just are buying a house who maybe should not own a house. Many of the veterans in that center had owned houses for many years. But some of them had been tricked by the circumstances of their mortgage. Some had lost their home. Some were on the verge of losing their home. These are after people\u2014some of these people, their service went back, a couple of them to World War II, many to the Korean War, Vietnam, and so forth. Beyond that, the young veterans coming into this center, some of whom have done all the right things\u2014they had served multiple tours of duty. One, in particular, had gone back to college, gotten his degree, but then began to look at what was available out there and was thinking about re-enlisting, then in his mid-thirties, because he saw no real job opportunities.<\/p>\n

This is one of the underlying things of the book. We make the point, yeah, manufacturing got hammered and continues to be get hammered over time, but our jobs are supposed to be these knowledge-based jobs, the smart jobs, the service jobs. These are now\u2014the whole process that began eliminating the blue-collar jobs has now moved into the white-collar field, with a real vengeance. Even the Labor Department is finally sensing this. And they had a study a couple years ago. It said 160 service occupations, 25 percent of the entire service workforce, is susceptible to offshore.<\/p>\n

AMY GOODMAN: We only have a few minutes. You have a whole chapter, the last chapter, “Restoring the American Dream,” which is devoted to solutions. Lay them out.<\/p>\n

JAMES STEELE: Well, one of what\u2014the most obvious thing to us and the thing we put first is the tax code. The tax code needs to be amended. The folks who can afford to pay more should. Almost every poll out there shows widespread American support for this. I mean, this is what\u2019s so bizarre about Boehner\u2019s comment about raising taxes on people who make money. It\u2019s just totally ridiculous. People can afford\u2014in fact, many rich people say that and have come forth to say that, so\u2014and putting in multiple brackets. And brackets mean the more you pay\u2014the more you earn, the more you pay. That\u2019s the way things used to be, and the country thrived under that system, and it didn\u2019t penalize anybody and didn\u2019t create class warfare, had actually created a very broad-based society.<\/p>\n

Trade policy is another that needs to be amended. Don\u2019t just have our door open, let everybody send their stuff in, unless they\u2019re going to do the same with us, which has never happened. We\u2019ve never had the guts to enforce the proper trade policy.<\/p>\n

A significant thing we also talk about is, we really need to invest in the country, because corporations aren\u2019t. So many of them are going abroad. A true broad-based investment infrastructure and many other things. The largest peacetime infrastructure investment program in this country was under Dwight Eisenhower in the ’50s: the interstate highway program. And that was with broad, bipartisan support. I mean, that’s what we need to get back to in this country. Obama\u2019s rather anemic stimulus program was roundly condemned by conservatives, when in fact it\u2019s things like that that are part of the solution to the problem.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Article: The Betrayal of the American Dream — A Once Vibrant Middle Class Is Now on the Brink by Amy Goodman, Don Bartlett and James Steele in AlterNet. The Text: AMY GOODMAN: Democrats and Republican lawmakers are in a deadlock over whether to extend the politically decisive Bush-era tax cuts. The Republican-controlled House of […]<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[259],"tags":[],"yoast_head":"\nBetraying The American Dream<\/title>\n<meta name=\"description\" content=\"How the American middle class has been impoverished and its prospects thwarted in favor of a new ruling elite.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.prosebeforehos.com\/article-of-the-day\/09\/16\/betraying-the-american-dream\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Betraying The American Dream\" \/>\n<meta property=\"og:description\" content=\"How the American middle class has been impoverished and its prospects 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