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Our new book: The Betrayal of the American Dream

More than three years in the research and writing, our new book is the distillation of our work chronicling the plight of the American middle class for more than three decades.

The Betrayal of the American Dream is available in bookstores and can be ordered in hardcover and as an e-book from Amazon.com, BarnesandNoble.com, and Indiebound.org.

Twenty years ago, we warned in America: What Went Wrong? that federal policies were dismantling the middle class. But as we describe in The Betrayal, we vastly underestimated how quickly the nation’s economic elite would consolidate their power and undermine the economic lives of virtually everyone else.

This book tells how it happened:

* How trade policies bought and paid for by major corporations have wiped out millions of good-paying jobs;

* How Congress allowed companies to kill 85,000 pension plans in the last generation; and

*How the rich went from paying 51 percent of their income in federal taxes in the 1950s to 16 percent in our time.

And we tell what else is in store for most Americans if the economic elite continue to have their way.

We tell this story in raw numbers and through the lives of Americans: those who have been victimized by these policies as well as those who have perpetrated this assault on the middle class.

Our book is a call for a return to a balance in policies so that everyone may have an opportunity to realize the American dream.

The Betrayal is receiving a strong response. One Amazon reviewer called it “extremely thought-provoking,” a “powerful, extraordinary book that will make every American ponder long after we close it.”

The Columbia Journalism Review said “the dedication reveals the emotional heart of their enterprise: Not merely number-crunching chroniclers of middle-class decline, the authors are invested in the fate of the people who exemplify it.”

Leonard Downie Jr., former executive editor of the Washington Post, wrote that its publication “. . .during the home stretch of the national political campaign injects a provocative populist imperative into an increasingly intense and perhaps decisive partisan debate over the fate of the American middle class.”

By Don and Jim on 7.31.12 | Comments [23]

Our New Book on Eve of Publication

Later this month, our new book — The Betrayal of the American Dream — will be published by Public Affairs. This has been a multi-year project that documents how the livelihoods, benefits and economic future of millions of middle class Americans are being effectively terminated by the nation’s economic elite.

This book is in part a response to emails we have received over the years from followers who urged us to return to the story we first spelled out in America: What Went Wrong?, the 1992 bestseller on Washington and Wall Street’s actions that were systematically shipping jobs to low-wage countries, turning once vibrant manufacturing communities into vast wastelands and dismantling the middle class.

We warned at the time that barring a massive reversal in federal policies, the onslaught eventually would lead to the destruction of the middle class, the end of pensions and good-paying jobs. Much of Middle America responded favorably to the book, which began as a series of articles in The Philadelphia Inquirer – a series republished in scores of newspapers across the country. Critics in the news media and right-wing think tanks dismissed us as alarmists and worse. As it turns out, we grossly underestimated the long-term consequences for most Americans.

Our new book is sure to be even more controversial, even though events have long since confirmed the warnings we sounded in 1992. It shows how America has been hijacked by the nation’s economic ruling class, which has turned democracy on its ear and blocked the will of the majority. The book pulls no punches and will be immensely unpopular with those who believe government regulations and taxes are the root of America’s ills.

Here is the publisher’s page on the book:

http://www.publicaffairsbooks.com/publicaffairsbooks-cgi-bin/display?book=9781586489694

You can pre-order the book at any one of the following sites:

http://www.amazon.com/Betrayal-American-Dream-Donald-Barlett/dp/1586489690/ref=sr_1_1?s=books&ie=UTF8&qid=1340810137&sr=1-1&keywords=the+betrayal+of+the+american+dream

http://www.barnesandnoble.com/w/the-betrayal-of-the-american-dream-donald-l-barlett/1108581539?ean=9781586489694

http://www.indiebound.org/book/9781586489694

We will be listing upcoming speaking engagements and media appearances on Jim’s twitter account @JBSphilly

Our first talk will be at 7:30pm on Thursday, August 2, at the Free Library of Philadelphia.

Booklist, one of the most respected book review journals, has given the book a starred review:

“Billionaire Warren Buffet famously observed that class warfare has been going on for decades, “and my class is winning.” Pulitzer Prize and National Magazine Award winners Barlett and Steele scored a bestseller decrying such class warfare with America: What Went Wrong? (1992). Betrayal carries their powerful critique forward into the present. For Barlett and Steele, “middle class” working households earned $35,000–85,000 in 2009; that’s 34 million households, with 58 million earning less and 24 million more. The “ruling class” betraying middle Americans is a mix of politicians and special interests who’ve gamed the system on behalf of the richest Americans. The authors trace the process of that betrayal from early deregulation fever (airlines and trucking) in the 1970s through today’s warnings of debt infernos, “unaffordable” entitlements, and the need for “austerity.” Working in collaboration with American University’s Investigation Reporting Workshop, Barlett and Steele address key elements of this betrayal (globalization, outsourcing, taxes, pensions, financial-sector dominance), then offer suggestions for reversing it, including progressive tax reform, fair trade, infrastructure investment, focused retraining, and criminal prosecution of white-collar criminals. Expect demand.”

By Don and Jim on 7.2.12 | Comments [3]

The Betrayal of the Middle Class: What Went Wrong in America

“If we don’t wake up soon,  middle America will again end up paying the lion’s share to get us out of our economic fix and the wealthy will sail through with little of the heavy lifting.”

That message is typical of what we’ve been hearing from our readers since we began writing about the ongoing economic assault on the middle class by Washington and Wall Street.

As we announced earlier on this blog, we’ve launched a project to show how public and private policies are hurting millions of hard-working Americans, a subject we first wrote about  in our series called America: What Went

Wrong? in 1991. Our new work, and our partnership with American University’s Investigative Reporting Workshop, is described at

http://americawhatwentwrong.org/story/How-banks-government-fail/

At the end of this post you’ll find links to recent articles we’ve published about the causes of job loss, why U.S. manufacturing is in such dire straits, how corporations rig the tax code in their favor, and other subjects. Many of these stories will be told in more detail in a new book we’re writing, The Betrayal: How the American Dream Was Destroyed, to be published by Public Affairs.

Some say that Americans are apathetic and disinterested in the nation’s direction, but we’re finding the opposite – men and women across the country tell us that they’re deeply worried about the direction of our country and frustrated by Washington’s failure to grasp the seriousness of the economic problems that affect most Americans.  People understand what’s happening, but they can’t understand why Washington is turning  a blind eye.

The reason, of course, is all too obvious: Washington is owned by Wall Street and those with the money to buy what they want and block reforms that would bolster the middle class and more than 90 percent of the population. The result is a series of public policies specifically created over the last three decades to bolster the fortunes of the wealthy at the expense of the middle class.

We’ve been heartened by reader response to our recent articles and would like to share with you a few of the comments we’re receiving:

“None of our politicians seem to either understand or maybe simply care about what is happening. Neither political party seems to understand what is really wrong. Their proposed solutions will only make matters worse.”

” the definition of insanity is selling out the country over and over again and expecting different results.”

“ The irony is that our market power is now so diminished, and our indebtedness so exorbitant, that we may have few levers left.  But it is never too late to reorient our thinking and to correct a sustained injustice to our citizens.”“I am a retiree who was well paid, was never laid off, and saved for a comfortable retirement.  I am one of the people who could and should pay a little more in a more just world.”

“This country is a complete mess, and only a (non-violent) revolution by the middle class can save it.”

We’ve also heard from many readers about their personal situations — their frustration over finding a job, how they send multiple resumes that are never answered, how their education and training are going to waste as the country ships more and more jobs offshore, and how difficult it is to make ends meet with their savings being depleted by medical emergencies and everyday living expenses.

In the months ahead we will continue to explore these issues–what is happening and why. As we did 20 years ago in America: What Went Wrong? we will look at the economy from the bottom up rather than the traditional top-down approach used by politicians, their advisers, economists and some of the news media.

Each new article will be posted on www.americawhatwentwrong.org and simultaneously published by the Philadelphia Inquirer, which first published America: What Went Wrong?”

The stories to date:

“Tax Time: Are American Corporations Paying Their Share?
http://americawhatwentwrong.org/story/taxes-and-corporations/

“Programming Jobs Fall, Despite Labor Department’s Outlook.”
http://americawhatwentwrong.org/story/programming-jobs-fall/

“Lost Jobs: Why Fixing The Trade Deficit Matters Most.”
http://americawhatwentwrong.org/story/lost-jobs-why-fixing-trade-deficit-matters/

“Vets Hit Hard By Foreclosure in Florida.”
http://americawhatwentwrong.org/story/vets-hit-hard-by-foreclosure-in-florida/

“American Steal: How U.S. Steelworkers Lost to China.”
http://americawhatwentwrong.org/story/american-steal-how-us-steelworkers-lost-china/

“As Apple Grew, American Workers Left Behind.”

http://americawhatwentwrong.org/story/as-apple-grew-american-workers-left-behind/

You can post a comment here if you like. If you would prefer to communicate with us directly or confidentially, please write us at one of the addresses below:

To send an e-mail to both of us:

info@barlettandsteele.com
Or individually:
don@barlettandsteele.com
jim@barlettandsteele.com

Or by mail to:
Barlett-Steele
What Went Wrong
Investigative Reporting Workshop
American University
3201 New Mexico Ave. NW # 249
Washington, DC 20016-2723

We will keep you informed as the work goes forward.
Don Barlett  Jim Steele

By Don and Jim on 12.9.11 | Comments [1]

WHAT WENT WRONG - THE BETRAYAL OF THE AMERICAN DREAM

Over the last year we’ve received some remarkable e-mails and letters about something we wrote nearly 20 years ago.

“Your story,” wrote a man from Springfield, IL, “is still going on, but unfortunately few people are aware of the causes, only the dire consequences.”

Our story was a newspaper series and then a bestselling book, America: What Went Wrong? that caused a sensation in the early 1990s by explaining to millions of  middle-class Americans why they were losing ground, and why it wasn’t their fault. A:WWW pinned the blame squarely on an alliance between Washington and Wall Street that was implementing policies that were destroying good-paying jobs and eroding hard-earned benefits.

America: What Went Wrong? was controversial.  We took plenty of heat from some economists and others who claimed that the agony millions were experiencing had nothing to do with policy, but was just one of those rough patches America had to go through as our economy reinvented itself.

But to thousands of Americans who wrote to us, America: What Went Wrong? explained what  had happened to them — and why things might get even worse. And in the last year we’ve been hearing again from many distressed Americans, with comments like these:

“(You) outlined the problems and predicted this . . . No one listened and now we are paying.”
”If everyone had read your book, today’s economy would not be a shock.”
“It is ironic how we face many of the same issues nearly two decades later.”
“Maybe it is time to write a sequel to your great book.”

Some of those who wrote had read America: What Went Wrong? when it was first published; others have recently discovered it. But the message was the same: tell the nation what has created the crisis that is hurting so many people today.

Your messages arrived as we were thinking of doing just that.
We’ve been frustrated by the superficial nature of news accounts describing the current economic meltdown. Most stories focus on immediate causes such as the housing bubble. While that has certainly been a major factor, it overlooks the underlying cause: a series of public and private policies over the last 40 years that are dismantling the American middle class. The current recession is just the latest stage in this progression..

Barring wholesale changes in policies that are undermining the future of all but a few Americans — and definitely not the policies of deficit-crazed politicians and their patrons — even when the economy starts to rebound, the relentless erosion of Middle America will continue unchecked. The once open door that allowed at least some on the bottom to move up the economic ladder in times past is slamming shut. It already has been replaced by a new door that allows those above to more easily sink to the bottom. For the first time in U.S. history, a current generation of Americans no longer believes its children will enjoy a better life. It’s a sea change without parallel. And it’s just the first.

To tell this story, we have partnered with the Investigative Reporting Workshop (IRW) at American University in Washington, D.C. The workshop is headed  by Charles Lewis, the preeminent figure in the burgeoning field of nonprofit investigative journalism, who  previously founded and directed the nonpartisan Center for Public Integrity in Washington.

Together with the Workshop, we are launching a broad effort to research, write and bring to the public the full story of America’s betrayal. The project will include a multimedia Web site to be launched by the Workshop, a book to be published by Public Affairs Press, and a documentary that will bring the story to the screen.

We will tell this story through new research, including statistical data on earnings, wealth and taxes. But only through personal accounts can the story of what is happening to most Americans be truly told.

We will approach this from the same unique statistical perspective we used in America: What Went Wrong? That is, unlike the traditional media and economists, we will look at what’s happening from the bottom up – not the top down, which too often distorts and misreads the events of the day.

We need your help. Tell us how you are coping with a layoff or a job change, how you and your family manage expenses for health care, how have your plans for retirement changed, how you are trying to make ends meet, and how you envision the future you will leave to your children.

You can post a comment here if you like. If you would prefer to communicate with us directly or confidentially, please write us at one of the addresses below:

To send an e-mail to both of us:

info@barlettandsteele.com

Or  individually:
don@barlettandsteele.com
jim@barlettandsteele.com

Or by mail to:

Barlett-Steele
What Went Wrong
Investigative Reporting Workshop
American University
3201 New Mexico Ave. NW # 249
Washington, DC 20016-2723

We will keep you informed as the work goes forward.

Don Barlett                Jim Steele

By Don and Jim on 12.27.10 | Comments [7]

A FEDERAL RESERVE SYSTEM FOR HEALTH CARE — IT’S ABOUT TIME

It’s encouraging to see that one of the proposals being advanced by the Obama Administration to deal with health care is an idea we proposed four years ago – an independent agency modeled on the Federal Reserve System to oversee health policy and expenditures.

We suggested this solution in our 2004 book, CRITICAL CONDITION: How Health Care in America Became Big Business — and Bad Medicine, which also described why our present fundamentally flawed system is in such desperate need of reform.

In researching the current system and the havoc it is wreaking on millions of American families, we concluded that the only way the nation can break the political gridlock over health care is to create a quasi-independent agency modeled along the lines of the Fed.

Our book sketches out the broad concept of such an agency and explains why it is so desperately needed. The response to our proposal from citizens groups, health professionals and average Americans across the country with whom we have talked has been strikingly positive.

Here is the excerpt from Critical Condition  calling for creation of a Federal Reserve like board to set overall policy on health care and control expenditures:

Americans are the most over-treated, under-treated, and mistreated health care patients on earth.

It need not be this way.

The simplest and most cost-effective remedy would be to provide universal coverage and to create one agency to collect medical fees and pay claims. This would eliminate the staggering overlap, duplication, bureaucracy, and waste created by thousands of individual plans, the hidden costs that continue to drive health care out of reach for a steadily growing number of Americans.

Under single-payer, all health care providers –- doctors, hospitals, clinics — would bill one agency for their services and would be reimbursed by the same agency. Every American would receive basic comprehensive health care, including essential prescription drugs and rehabilitative care. Anyone who needed to be treated or hospitalized could receive medical care without having to wrestle with referrals and without fear of financial ruin. Complex billing procedures and ambiguities over what is covered by insurance would be eliminated.

Radical? We already have a universal health care and single-payer system for everybody aged sixty-five and over: It’s called Medicare. For years, researchers, think tanks, citizens’ groups, and health care professionals have advocated a similar plan for the rest of the population. Study after study has concluded the most practical and cost-effective way to provide quality health care and to restrain costs is a single-payer system, but no plan ever has come close to adoption because of fierce opposition by the powerful health care lobby.

To discredit the single-payer idea, insurers, HMOs, for-profit hospitals, and other private interests play on Americans’ long-standing fears of big government. This view was summed up by Susan Pisano, a vice-president of the American Association of Health Plans, who contended in 2002 that a single-payer “would lead to the creation of a large federal bureaucracy that would be less responsive and actually raise issues of cost, access and quality more than it would solve them.”

In truth, it is the private market that has created the largest army of clerks in health care, a free-market bureaucracy that dwarfs the size and costs of Medicare. Because there are so many different plans and payers, each with its own requirements, computer systems, call centers, reimbursement formulas, and red tape, health care is strangling in paperwork and duplicative processes that have pushed the cost of administering the profit-driven system to stratospheric heights.

By contrast, notwithstanding worries over government waste, the federal Medicare program is the most efficiently run health insurance program in America. Medicare’s administrative costs average about 2 percent a year. In a 2002 study for Maine, a Princeton-based firm, Mathematica Inc., concluded that administrative costs of private insurers in the state ranged from 12 percent to more than 30 percent. Studies of private carriers in other areas have reached similar conclusions. This isn’t surprising, because Medicare relies on economies of scale and standardized universal coverage. Private insurance is built on bewilderingly complex layers of plans and providers that require a costly bureaucracy to administer, much of which is geared toward denying claims.

Some studies have put the price tag for administering the current system at one out of every three health care dollars, much higher than any nation with single-payer health care. There is no way of knowing how much the United States could save by adopting such a system, but even with one that covered 100 percent of the population, the savings would still be substantial.

What kind of an agency would administer it?

The idea of a single payer plan run by the U.S. government carries with it far too much political baggage to ever get off the ground. Hence the need for a totally fresh approach, establishment of an organization that is independent and free from politics, one that can focus with laser-like precision on what needs to be done to further the health interests of everyone in a fair and evenhanded manner. For in addition to covering the basic costs of all Americans, a new system needs to institute the programs that will improve American health generally, that will be as concerned with preventing illness and disease as with treatment, and do so without breaking the bank.

How does the United States come up with such a mechanism?

One possible answer: Loosely copy and then amend and expand on what already exists in another setting: The Federal Reserve System, a quasi-governmental organization that oversees the nation’s money and banking policies. The Fed is one of the nation’s most ingenious creations, a public agency that is largely independent of politics. The Fed’s Board members are appointed to staggered, fourteen-year terms by the President with the consent of the Senate, meaning that no one in the White House or Congress can substantively influence the Fed’s policies while they are in office.

Call this independent agency the U.S. Council on Health Care (USCHC). Like the Federal Reserve, the USCHC would set an overall policy for health care and influence its direction by controlling federal spending –- from managing research grants to providing basic and catastrophic medical coverage for all citizens. Unlike the Federal Reserve, it would be entirely taxpayer funded. The money could come from just two taxes, a gross receipts levy on businesses and a flat tax, similar to the current Medicare tax, on all individual income, not just wages. This would not represent an additional cost to society, but rather replace existing taxes. It would cut costs for corporations and raise taxes slightly on individuals at the top of the income ladder. Members of the USCHC board would include both professionals, drawn from the health care field, and ordinary citizens from all walks of life. Its mission: Implement policies that improve health care for everyone, not just those suffering from a particular disease. In short, make the unpopular decisions that the market cannot make.

The Council could establish regions similar to the Federal Reserve System, which is divided into twelve areas. Whatever their number, the geographic subdivisions could take into account cultural and regional differences among Americans. They would allow for health care delivery to be fine tuned at the local level, and to assure that rules and regulations could take into account the differences between metropolitan and small town community hospitals. Although the USCHC could be set up to keep partisan politics out of hospitals and doctors’ office, health care politics, which can be every bit as divisive as the mainstream variety, would still present a challenge. If you have any doubt, just assemble surgeons, radiologists, and internists in a room to discuss the merits of their particular approaches to treatment of a specific disease. But those members of a USCHC board drawn from outside the health care community would at least introduce a moderating influence.

By Don and Jim on 1.8.09 | Comments [11]

A Question of Fairness

Welcome to the new Barlett and Steele Web site. In addition to a greatly expanded archive of our work, including video and audio material, it will also be the home of our Blog. From time to time, we will offer our observations on a range of subjects, especially those we have written about over the years: Health care; local, state and federal taxes; globalization; corporate welfare; illegal immigration; Social Security; government policies that serve moneyed interests rather than working people; the inequities growing out of those policies; government contractors, and, of course, the world of Washington politics. We also hope to explore new topics with the hope that you will help educate us. We look forward to your ideas.

*

Some years ago, the historian, David McCullough, delivered a commencement address at the University of Connecticut whose message was the importance of reading books throughout life. In an aside tailored for his young audience, he offered a critical observation on the Internet age and the speed with which information is transmitted today:

“Everything moves faster and our notions of time and space adjust of necessity, whether we realize it or not. Information is available as never before and at the touch of a finger. Information has become an industry, a commodity to be packaged, promoted, and marketed incessantly. The tools for ‘accessing’ data grow ever more wondrous and ubiquitous and essential if we’re to keep in step, we’ve come to believe. All hail the Web, the Internet, the Information Highway.

“We’re being sold the idea that information is learning and we’re being sold a bill of goods. Information isn’t learning. Information isn’t wisdom. It isn’t common sense necessarily. It isn’t kindness. Or trustworthiness. Or good judgment. Or imagination. Or a sense of humor. Or courage. It doesn’t tell us right from wrong.”

Indeed not. Today, more than ever, we need to learn to think critically. With so much information flying by, we all must stop and ask questions, probe slick phrases, study analogies closely, weigh alternative explanations for often bad ideas packaged in rhetoric that seems quite logical at first. This will be one of the missions on this Blog: To encourage critical thinking. This is especially important in a presidential election year marked by endless campaign speeches devoid of specific solutions, passionate one-liners, attack ads, spin sessions, glib comments by television news personalities — all at a time when, depending upon your economist of choice, the nation is moving toward, or already mired in, a recession.

In recent months, for example, special interests and their spokespersons have criticized the idea that the federal government should retrain workers who have lost their jobs as a result of unfettered trade policies. Such was the tack taken by a University of Rochester economics professor, Steven E. Landsburg, in an opinion page article in The New York Times. The potential readership of Landsburg’s column grew exponentially as it passed from blog to blog on the Internet.

Landsburg posed the question of whether there is “a moral mandate for the taxpayer-subsidized retraining programs” proposed by Republican presidential candidates John McCain and Mitt Romney?” He offered this unequivocal answer:

“Um, no. Even if you’ve just lost your job, there’s something fundamentally churlish about blaming the very phenomenon that’s elevated you above the subsistence level since the day you were born. If the world owes you compensation for enduring the downside of trade, what do you owe the world for enjoying the upside?”

“. . .One way to think about that is to ask what your moral instincts tell you in analogous situations. Suppose, after years of buying shampoo at your local pharmacy, you discover you can order the same shampoo for less money on the Web. Do you have an obligation to compensate your pharmacist? If you move to a cheaper apartment, should you compensate your landlord? When you eat at McDonald’s, should you compensate the owners of the diner next door?”

The analogy is seriously flawed. The loss of a single shampoo order is hardly equal to the loss of a job. But there’s something else to think about. Anyone who has entered the workforce in the last decade knows, or certainly should know, that his or her employment is transient. Those who went to work two decades or more ago did so with the expectation that loyalty to a single company would be repaid with a lifetime job.

Then Congress changed the rules of the game. As a result, corporations were encouraged to move their plants to other countries where workers could be paid far less. American workers, in turn, were dumped on the street.

The real question becomes: Is it right, or fair, to change the rules of the game in the middle? Think about that when you watch the next Super Bowl. As one team holds an eight point lead and the opposing team scores a touchdown with seconds to play, even with the extra point that team will come up short. But what if the referees decided to make the extra point worth three points? Not fair, you say? Couldn’t happen? Certainly not in sports. But it happens every day in the work world when Congress changes the rules to benefit powerful special interests. Lest you think Washington doesn’t really work that way, then ask why Congress has imposed a stiff tax on much cheaper imported ethanol from Brazil so that it cannot compete with higher-priced U.S. ethanol?

Lastly, think about this: While Landsburg, the economics professor, feels it’s unfair to ask society to pay the retraining costs for displaced workers, a few years back he was arguing that university professors should have tenure to improve the quality of education. In other words, college professors should be guaranteed employment for life, but other workers are disposable.

He put it this way in an Internet article talking about the need for colleges to combat grade inflation, a truly serious problem:

“. . .Easy graders are more popular on campus. The costs of leniency — measured in lost reputation — are spread over the entire school, while the benefits are concentrated in the professor’s own classroom. Therefore the professor is biased toward leniency. The problem, then, is in the gap between the professor’s interests and the college’s. Any solution must involve narrowing that gap. That’s where tenure comes in. An untenured professor is like a corporate bondholder — as long as the institution stays above water in the short run he’s happy. A tenured professor is like a corporate stockholder — he has a permanent stake in the fortunes of the institution. Professors should have job security for the same reason Alan Greenspan should have job security: It instills a healthy respect for the long run.”

By Don and Jim on 2.5.08 | Comments [10]