Monday, January 31, 2011

The American Dream

Historian James Truslow Adams coined that phrase “the American dream.” He defined it as “a better, richer, and happier life for all our citizens of every rank.”

On a day like today, when the Florida Court voted to throw out Healthcare Reform as unconstitutional, I wonder what has happened to the American Dream. As far back as the Civil War, we have been fighting with each other over whether the American dream is for all Americans or for something less than everybody. It could be said that for first Americans the dream was primarily for white male-Americans. Constitutional law and male voting rights made it that way.

Abolition and women’s suffrage (white women) later pushed their way into being included in that dream. In the early 1900s that dream was primarily for the economic barons and men of wealth and social standing. Still later, economic and social-political pressures gradually expanded that dream to first one minority then another, until today we think of it including everybody who is an American citizen.

In his book Aftershock, Robert Reich describes how “Public support for government’s new role had been founded in the Great Depression and World War II, in whose wake Americans shared a larger sense of common purpose. We were all in it together, rising or falling together, connected to one another in ways we had barely noticed before the Depression. None of us could prosper unless prosperity was widely shared.

Today, most of us recognize that a society governed by purely capitalistic greed (the profit margin, the bottom line) cannot not survive except by force because of its major concern for the welfare of the minority (in this case the wealthy). America is neither purely socialistic nor purely capitalistic. Socialism and Capitalism, in their purest forms, are the extreme limits going either way.

To return to the capitalism of earlier generations degenerates too easily into that monarchial mindset (divine right of kings) that we threw off with the Magna Charta in 1215. It was later expressed in the corporate feudalism (as with the Vanderbilts, DuPonts, Rockefellers, et al at the beginning of the 20th century).During this period of our history, the wealthy lived in mansions and Main Street lived mostly impoverished. Otherwise, it conforms to some form of fascist control (dictatorship) where the minority manipulates and rules the majority (as in Communist China today).

I find Robert Reich helpful in thinking through what he calls A NEW DEAL FOR THE MIDDLE CLASS, or what I consider A BETTER DEAL FOR EVERYBODY. Reich writes, “I could have grounded my argument in morality: It is simply unfair for a handful of Americans to take home such a large share of total income when so many others are struggling to make ends meet. Or I could have based it on traditional American values. Such a lopsided distribution is at odds with the nation’s history and its ideal of equal opportunity--especially when the deck seems stacked in favor of those at the top. I could have talked about how this degree of inequality undermines the nation’s moral authority and its standing in the world.

“I have chosen,” Reich continues, “instead to base my argument on two tangible threats that such inequality poses to everyone--including even the wealthiest and most influential among us. One is economic: Unless America’s middle class receives a fair share, it cannot consume nearly what the nation is capable of producing, at least without going deeply into debt. And debt on this scale is unsustainable, as we have seen. The inevitable result is slower economic growth and an economy increasingly susceptible to great booms and terrible busts.

“The other threat” says Reich, “is political: Widening inequality coupled with a growing perception that big business and Wall Street are in cahoots with big government for the purpose of making the rich even richer, gives fodder to demagogues on the extreme right and the extreme left. They gain power by turning the public’s economic anxieties into resentments against particular people and groups. Isolationist and nativist, often racist, and willing to sacrifice overall prosperity for the sake of achieving their ends, such demagogues and the movements they inspire can cause great harm.

“As I’ve shown, the Great Recession has accelerated both troubling trends. With the bursting of the housing bubble, many middle-class homeowners who can no longer use their homes as piggy banks must face the reality of flat or declining wages. The downturn also has forced--or given a ready excuse for--firms to increase profits by shrinking their payrolls, laying off millions of workers and reducing the pay of millions more. It has simultaneously induced firms to ratchet up the pay of their “talent”--the executives and traders who drive the profits. At the same time, the Great Recession has starkly revealed the political power of big business and of Wall Street. Both have been able to enhance their profits by exacting money and other favors from government--even from one under the nominal control of the Democratic Party.

“Unless these trends are reversed, the financially stressed middle class will not have the purchasing power to keep the economy growing (italics added). This will hurt even those who are well-off. A political backlash could generate a similar result, or worse. Margaret Jones and her Independence Party are fictional, but the anger on which she bases her appeal is not (127-28 Aftershock/Alfred Knopf/NY/2010/Robert Reich).

However you respond to his argument, Reich provides a very readable book. It is well documented and worthy of more serious and thoughtful dialogue, on both sides of the political aisle.

The one thing I take away from the book, more than any other thought is this: Those who own industry and mass production will not profit long unless they see to it that the worker is able to buy the product s/he makes. In general, the better the economic condition enjoyed by the middle-class, the more profitable it will be for the upper economic echelons. One cannot survive without the other.

From Warner’s World,
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