Sutherland: Deja Vu All Over Again

american_dream1

The American Dream

The scene was exactly the same for both events—the former bank lobby that is the first floor of the downtown Kansas City Public Library at 10th and Baltimore.

Somewhere between eight hundred and a thousand people were crowded into its space. The attendees were overwhelmingly of late middle age or older.  The concentration of grey ponytails, sandals, and back-packs reached danger levels.

The first of the two appearances (August 18, 2012) was by KC native James Steele, who was discussing his new book “The Betrayal of The American Dream.”  The second (March 12, 2013) was by Hedrick Smith, who was discussing his new book, “Who Stole The American Dream?”

Both authors have distinguished journalistic backgrounds (Steele with the Philadelphia Inquirer, Smith with the New York Times, with the latter entitled to the ultimate form of journalistic street cred., i.e. recipient of a Pulitzer Prize for his book “The Russians,” dating from his days as a foreign correspondent.).

As if the similarity of titles was not confusing enough, both speakers said exactly the same thing, making many of the same arguments.  Things get even more confusing when you consider other titles listed on Amazon currently, all with the same theme:

The Price of Inequality:  How Today’s Divided Society Endangers Our Future—by Joseph Stiglitz

Plutocrats:  The Rise of The New Global-Super Rich and The Fall of Everyone Else—by Chrystia Freeland

The Party is Over:  How Republicans Went Crazy, Democrats Became Useless, and the Middle Class Got Shafted—by Mike Lofgren

Citizens Disunited-Passive Investors, Drone CEO’s, and the Corporate Capture of the American Dream—by Robert A G Monks

Beyond Outrage:  What has Gone Wrong with Our Economy and How to Fix It—by Robert Reich.

How Washington Made The Rich-Richer-and Turned Its Back on The Middle Class,by Jacob Hacker

Blade_003It suddenly dawned on me after I attended these events that screeds on income inequality have become what vampires were to the 90’s and zombies were to the first decade of the millennium:  a way to scare and titillate the ignorant and credulous.  Like horror fans, repetitiveness is a good thing to this audience—they want to hear variations of the same story over and over again.

Steve Kraske

Steve Kraske

Not only did Steele and Smith draw the same audience by delivering the same message, but they received identical puff pieces in the KC Star from political commissar Steve Kraske.  (See 8/18/12 column “American Dream Is Now Fast Asleep” and 3/18/13 column “Concentration of Wealth Is Too Profound to Ignore”).

The kind of sophistry put forth by these two latter day Lincoln Steffens is familiar.  More and more wealth is being concentrated at the top of the economic scale and the middle class is getting screwed.  It is all the fault of the business and financial elite, who have rigged the political system to their advantage.  The resulting disparity in wealth is not only unfair but represents a profound threat to our democracy.  The obvious (and only) solution is draconian tax hikes and massive increases in social spending.  (We need a “Domestic Marshall Plan!” In the 70’s he would have said “A Marshall Plan for The Cities,” which shows Smith has grown as a person.) Corporations need to return to the era of granting generous benefits to workers, like the GM/UAW contracts from the 50’s and 60’s.  (One wonders if either author has been to Detroit recently.)

Koch-Brothers-ExposedAs far as I can tell, all these authors, but particularly Steele and Smith, have not only identical solutions but identical scape-goats to blame for the situation.  Charles and David Koch are to blame, as is the Supreme Court’s Citizens United decision.  Hedrick Smith goes the other Jeremiahs one better, i.e. he reaches back forty plus years and finds the evil genius behind this dark conspiracy.  It is a secretive but powerful organization whose tentacles reach into every corner of American life, whose ways are so fiendishly clever that it has remained undiscovered until courageously uncovered by journalist/patriot Smith.  I’m referring of course, to the Chamber of Commerce.

95df09cbd610a4e5ab1e4e2e9227f871I’m not kidding!  Smith held the audience spellbound as he described how future Supreme Court Justice Lewis Powell wrote a memo in 1971 urging the US Chamber of Commerce to become proactive to protect its interests in the face of activism by liberal groups like consumer advocates, organized labor, and environmentalists.  Apparently there is something inherently sinister about businesses lobbying against burdensome regulation and taxation.

Another striking similarity between these authors is their point-blank refusal to admit the disparity between rich and poor is growing world-wide and may be the result of forces that are not just confined to the United States.  Both Steele and Smith insist that technology and globalization are not factors driving these trends.

“If technological change and globalization were the primary causes of America’s problems today, then we would see the same yawning inequalities and middle class losses in the other advanced countries.  But we don’t.” — “Who Stole The American Dream?”

As I wrote this, it was announced that average unemployment in the Euro-Zone rose to 12%, hitting 27% in Spain and Greece.  Another source disclosed that home prices in Ireland had declined 80% and that every bank in the country had failed.  It’s easier to blame everything on your domestic political opponents than to think seriously about the more intractable causes of the worldwide recession.

Nor did either speaker ever explain how someone who founds a very successful business (Cerner, Garmin) and creates wealth necessarily does so at the expense of the middle class.  All Smith would say was that “when so much wealth was concentrated in so few hands, it has to come at someone else’s expense.”

Both Smith and Steele resorted to demagogic calls for “forcing our trading partners to let in our goods” (Senator Smoot, call your office!)  In a particularly nasty bit of xenophobia, Smith said 1-HB Visas (for foreigners with particular technical skills) should be abolished.  (“An Indian Has your Job!”)  Let’s keep those Indian soft-ware designers out of Silicon Valley!  How are they helping our economy?

guillotineProbably the most disappointing aspect of the occasions was that when I raised the foregoing points during the question and answer period, I was shouted down and threatened by the rest of the audience.  (One wag suggested that the quickest way to deal with people like me was to “bring back the guillotine,” to which Smith laughingly assented.  Check the audio at KClibrary.com to confirm that this was said and that I was prevented from asking any follow up questions, so great was the clamor from the crowd.)  Smith and Steele brushed aside my questions.  Who can blame them when playing on people’s fears and resentment pays so well?  In closing, I should note that I was amused that Smith wrote a similar book to his current one twenty-five years ago, called “The Power Game.”  Steele wrote a book in 1992 called “America:  What Went Wrong.”  And he came out with “America:Who Stole The Dream” in 1996. I hadn’t realized that it was possible to plagiarize your own work, but these gentlemen are ahead of the curve in a number of ways.

That is not to say these books don’t deal with serious questions.  It just means they do so in profoundly unserious ways that are ugly and intellectually dishonest.  I’m just sorry they found such a receptive audience for their poisonous message here in Kansas City.

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12 Responses to Sutherland: Deja Vu All Over Again

  1. the dude says:

    Corporations and leeches like the Kock Brothers have corrupted and poisoned our government to the point that is cannot be saved or rehabilitated. Tear it down and start fresh, if that means we have to drag a razor or two out, so be it. The government used to bust up corporations and monopolies when they got too big but in this day and age they are ‘too big to fail’.

    What is your solution to this problem Mr. Sutherland? Please do not drone on about free market bullcrap and laizzez fare hooey, we need real solutions to this crippling problem.

  2. paulwilsonkc says:

    “I hadn’t realized that it was possible to plagiarize your own work, but these gentlemen are ahead of the curve in a number of ways.”

    Agree or disagree with your point of view, the above line is one of many reasons why I look forward to reading whatever you write!

    A really great addition to the KCC team and associated content.

  3. Stephen says:

    I listened to the KC Library audio. The audience at those events always gets cranky when someone is aggressive and hijacks the Q&A times for several minutes on the soapbox — Smith saying: “if that was a question”; “you want to have an argument, I want to have a discussion”; and “I don’t have enough facts on that” don’t paint him in a negative light. The fact he praises Klaus Kleinfeld as a positive actor shows Smith does not simplify the argument to wealth = bad.

    Coincidentally, I’ve also worked for both Alcoa & Cerner, generally good companies. But you challenge the statement that the wealth concentration “has to come at someone else’s expense” — how about the huge tax break Cerner got for expanding into Kansas? That use of the interstate rivalry enriches shareholders of an extremely successful company that would have expanded the same amount in absence of any incentive while depriving taxpayers of social services that would otherwise be funded.

    • Dwight Sutherland,Jr. says:

      Thank you for taking the time to listen to the audio. I don’t think I meant to convey that Smith’s tone was excessively snarky.What bothered me was his bemused tolerance towards the cretin who made a joke about political murder.i.e.”Isn’t the easiest solution just to bring back the guillotine?”Smith’s response that “People are playing with fire!”,seems to excuse people turning to violence if their opponents don’t change their ways.The other point that I was trying to make was that if adding to income disparity,the gap between rich and poor,and the concentration of wealth in the hands of a few is per se bad;anyone who amasses wealth is guilty,no matter how enlightened or progressive their attitude or track record. Your point on Cerner is an excellent one.I have no patience with crony capitalism,corporate welfare,rent seeking,whatever you want to term them. The problem you cite is deplorable and is largely a product of the beggar-your-neighbor policies that our Border Wars,economic variety,tend to produce. It’s like colleges or pro sports franchises bidding up talent to ridiculous heights. Unfortunately,rational self-interest does not always prevail.Thank you again for a thought provoking and informative response.

  4. chuck says:

    The problem, in my opinion, with arguments on the disparity of wealth, is the actual ability of some every day schmuck like me, to actually understand who has what and what the “what” is.

    Many of my friends really didn’t understand why Mitt payed only 15% on invested income while they pay around 30% on their paychecks. That is not complicated to me, but folks who are lunch boxing their azzes to work every day are not conversant with the nuances of economics writ large when the they are sweating the electric bill and paying 4.00 a gallon for gas.

    I read that when George Bush came into office, 10% of Americans, controlled 22% of the wealth and another 20% controlled another 40%. Now, there are videos and sppread sheets all over the web that illustrate this breakdown of wealth distribution.

    http://neweconomicsinstitute.org/content/wealth-inequality-america

    THAT is a hell of a powerful video and represents what I think is the catalyst for folks marching in the streets in those stupid V for Victory masks.

    No one knows for sure, what to believe about wealth, who has it, how they got it and if it will EVER trickle down. No matter what the truth is, the disparity between rich and poor, for whatever reason you fancy, is dramatic and probably unsustainable if we are envisioning any continuation of an America as we now know it.

    The real time breakdown of actual wealth and what type of wealth it is along with an extrapolation of where that wealth will or will not be spent, simplified for the average guy, is probably not in the best interests of the top 20%, certainly not for the top 1%.

    The video I posted above, puzzles me and I don’t know if I believe it.

    I don’t believe that most folks in America know what to belive about the disparity of American welath.

    If in fact, the video above is correct, then what is the solution to what is not only a problem for the poor (Me), but a hell of a big problem for the 1%, or the 10% (Like I said, what should we beleive?)

    The current distribution of wealth, if that video and the many other stats I see are correct, is the penultimate pause, prior to the destablization and destruction of the political, social and economic piers this country was built on.

    Redistribution of wealth is Commie, Socialist anathema to guys like me, but the concentration of wealth into plutocratic hands does not bode well for our future.

    I don’t have any answers, but I would like some.

  5. Dwight Sutherland,Jr. says:

    The problems that lead to economic inequality are largely structural. One, capital can be shifted anywhere in the world where it can earn the highest return. Virtually all forms of economic activity can be sent offshore. Two,society has moved towards a winner-take-all model.This is as true for sports,entertainment,and the professions as it is for investment banking and managing hedge-funds.Simply put,those at the top of any field reap the lion’s share of the financial rewards. Three,technology has rendered whole industries obsolete. It also means that those without training and skills are falling further and further behind. This is largely why the returns on labor are shrinking but the returns on capital have soared. The good news is that our world is increasingly meritocratic but the bad news is that competition at all levels of society is ruthless and unforgiving. There are no obvious answers,e.g. if the problem is that the elite is receiving a larger and larger share of national income,pre-tax,raising taxes by definition will not change things.Spending ever increasing sums on education will be of little use if the underlying culture is deficient,viz.KC Missouri public schools.(If you really want to get depressed,read a Jersey City,New Jersey High School graduation exam from 1910,with sections on differential calculus,ancient Greek,etc.)One thing that is obvious is the need is to start talking about this as a society with a minimum of ideological name calling such we heard from these two authors,particularly since they are just recycling arguments that were already stale when they first made them a generation ago in a very different era.

    • chuck says:

      “The problems that lead to economic inequality are largely structural. One, capital can be shifted anywhere in the world where it can earn the highest return. Virtually all forms of economic activity can be sent offshore. Two,society has moved towards a winner-take-all model.”

      While I am able to parse the nomenclature and understand superficially what you are saying, the actual comprehension of the more specific variables implied are out of my pay grade.

      “There are no easy answers.”

      Ok.

      Let me please ask you this, is the video I posted an accurate depiction, for the most part, of the distribution of wealth in America?

      How static, with relation to GDP, is that same wealth?

      In other words, does available American wealth increase at 2% a year, which would in turn, make available for those in the “meritocracy” a 1.12 trillion dollar (around $4000.00 per person) possibility.

      My impression, from your answer, is that the shrinking labor market and changing world markets make (If it is even available) that 4k impossible to reach for every day Joes.

      Again, my apologies for these grade school questions and expecially for me pressing you on the video.

      Is the video, an accurate depiction of American wealth as it now exists?

      • Dwight Sutherland,Jr. says:

        I saw the video.It is clearcut and compelling butI need to know how they define “wealth”? Is it based on assets or income? Both? Other factors that need to be taken into account are unique to the U.S. For instance we have somewhere between 10 and 20 million illegal immigrants from Mexico and other third world countries.We have tens of millions of African-Americans still struggling with the legacy of racism. These are factors that other developed countries don’t have. Even an affluent country like Switzerland is struggling with these issues,however.Recently Swiss voters passed a referendum limiting CEO pay. This show that concern over income inequality is not limited to the U.S.

  6. Stomper says:

    First off, I agree with Paul. The addition of Dwight Sutherland has substantially raised the bar for KCC. While I don’t subscribe to Dwight’s political perspective, I have known him for years and there are not many sharper minds out there. Nice coup, Hearne.

    That said, I am distressed by those that think the Federal Government is evil and the cause of all the problems in America today. Get the government out of my life, out of the way, and let the free market run unobstructed they say and that will solve all of America’s problems.

    I’m a free market, capitalist myself that thinks the private sector should always have the first shot. However, it is not the responsibility of the private sector to address the problems faced by the population in general. The private sector’s job is profits; to maximize shareholder value and I’m fine with that. Heck, my retirement depends on that perspective.

    We have a long list of serious issues in this country (lack of jobs, cost and access to healthcare, unequal public education across the states, Wall Street malfeasance, etc. etc.) and that’s where the government has a responsibility to act. Government is not the enemy and I expect our government to be an active player where there is a need. 20% of our economy is spent on healthcare and it’s killing us. If the private insurance carriers can’t fix that, how is that NOT the job of government?

    When our economy is running on all cylinders, the private sector is spending about 70% of the total. When that dries up, either the government must replace some of that spending or we go into an all-out depression. That’s Economics 101. Is there waste and inefficiency in government? Absolutely !! Is the current partisanship in Congress destructive? Absolutely !! Yep, the bath water is pretty dirty but let’s not throw out the baby.

  7. chuck says:

    I have looked and the video seems to be, at least, in the ballpark.

    This quote from you, Mr. Sutherland –

    “Two,society has moved towards a winner-take-all model.This is as true for sports,entertainment,and the professions as it is for investment banking and managing hedge-funds.Simply put,those at the top of any field reap the lion’s share of the financial rewards.”

    reminded me of an old song.

    “And the men who hold high places
    Must be the ones who start
    To mould a new reality
    Closer to the Heart ”

    It’s either financial Kumbaya, or, Cite Soleil for America, complete with Tin Pot Dictators and a last roll of the dice with Robert Redford before Fidel invades Havana.

    The Bill Gates Foundation that I saw depicted on 60 Minutes, did not impress me.

    I think he should give all his cash to Ted Nugent and let him distribute it accordingly.

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