by Hedrick Smith
(Random House, $18)
By Chris Richcreek
If you believe that things haven’t been quite right with the American economy for some time, but you’re not exactly sure why, then “Who Stole the American Dream?” will serve as an informative and eye-opening source.
Hedrick Smith defines the American Dream as having a decent-paying, steady job and health benefits, owning a home and saving enough for retirement. He then explains why the dream, and a large chunk of the middle class, has been eviscerated over time.
Some of the reasons are well-known, like the subprime-mortgage mess or the failure of politicians to protect the middle class.
Others are more obscure. Take, for example, future Supreme Court Justice Lewis Powell’s call to arms in 1971 that challenged corporate America to embrace more political power, a call that was heeded. Or the passing of two key legislative pieces in 1978 that brought changes in bankruptcy laws and creation of the 401(k), a good idea that had the unexpected consequence of leading many companies to eliminate their regular retirement plans.
Some of the statements and decisions of former Federal Reserve chairman Alan Greenspan, especially related to the subprime mortgage crisis, come under fire, dimming the image of the man once deemed a financial wizard.
The chapter on Wal-Mart, which details the mammoth retailer getting 80 percent of its items from China-based production while squeezing U.S. suppliers for painfully low prices, is informative, if not infuriating.
In contrast to America, Smith points out the success of countries like Germany, which weathered financial challenges in part because of a trade surplus (unlike the U.S.) and a solid manufacturing base.
In closing, Smith offers a number of solutions for Americans’ economic woes. At a time when the economy may be improving but the positive effects have yet to be felt by most people, his recommendations certainly are worth considering.