Friday, November 23, 2012

Will economic decline stop with the middle class?

Posted By on Fri, Nov 23, 2012 at 11:36 AM

Even before the Great Recession hit in 2007, the middle class was getting squeezed. Business and political leaders have been portraying globalization as the Grim Reaper of US manufacturing jobs for years. And job losses that couldn’t be attributed to globalization were blamed on advances in technology.

But Hedrick Smith says that globalization and technology are not responsible for America’s shrinking middle class. The decline was caused by a change in political forces, the Pulitzer Prize-winning reporter writes in his new book, “Who Stole the American Dream?”

Smith says businesses organized a rebellion against the Nixon administration’s intense regulatory climate in the late 1970’s. Arming themselves with battalions of lawyers, accountants, and lobbyists, corporations launched an assault on Washington law makers. And over time their strategy graduated from peddling influence to authoring key provisions of laws that go before Congress.

Some of Smith’s main points are familiar themes: stagnating worker wages as CEO salaries have skyrocketed, the tilt of power in Washington to K Street lobbyists, and a tax structure that benefits the rich and corporations.

But what Smith does well is expose how the US economy has gone through less of a downturn and more of a planned shift. The economy is not at the mercy of unpredictable forces, says Smith, but the result of decisions made at the highest levels of government in collaboration with corporate leaders.

We already know that many companies have shed any pretense of concern for the welfare of their workers. But what’s most troubling to Smith is the increasing indifference to what’s good for the country.

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