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Books

Katharine Whittemore

Six books examine the decline of the American middle class

A crowd listens during a “Join the Action” press conference on the “fiscal cliff” at Capitol Hill this past December.

Photo by Drew Angerer/Getty Images)

A crowd listens during a “Join the Action” press conference on the “fiscal cliff” at Capitol Hill this past December.

I ate lots of Tums for this one. As a lifelong member of the middle class and a victim of two layoffs , these books on the freefall of the middle class burned me up. Here, have your own Tums: In 1980, CEOs earned 42 times the average factory worker’s wage. Now it’s 325 times as much. Have another: In the mid-2000s, Pfizer, like many corporations, got a huge tax break from the US government. To show their thanks, Pfizer’s CEO got a 72 percent raise and later a $200 million severance package — as the company axed 11,700 jobs. And to top off your agita: Since 1985, corporations have killed off 84,350 pension plans.

But you think I’m angry? You should read Donald L. Barlett and James B. Steele. They’re the only reporting team to have won two Pulitzers and two National Magazine Awards; they’re masterful investigators, and they’re unafraid to throw stones. The stats above, and plenty more like them, slash through their “The Betrayal of the American Dream” (PublicAffairs, 2012).

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Barlett and Steele think we live in a “plutocracy.” And that the ruling class “is defined by its ability to move money beyond the reach of government supervision.” Those privileged few have, through pushing hands-off government, managed to nudge us toward a tax system that favors them (not just through Mitt Romney’s 17 percent rate, but by letting the well-heeled cache profits overseas to avoid paying taxes here). The Have-It-Alls have further gutted the middle class through deregulation of industries (which prompted massive American job losses), outsourcing (ditto), and wild speculation (a twofer of job loss and home loss!).

Hold on. Doesn’t this sound a bit unhinged? Isn’t it more accurate to blame the fall of the American middle class on less conspiratorial forces? The standard diagnosis includes these Four Horsemen of the Apocalypse: globalization, skill shifts, technological transformation, and economic change.

Political scientists Jacob S. Hacker (Yale) and Paul Pierson (Berkeley) don’t buy it. They devastatingly explain why in “Winner-Take-All Politics: How Washington Made the Rich Richer and Turned Its Back on the Middle Class” (Simon & Schuster, 2010). It’s not the economy; it’s the government. If it were the global economy, then other developed countries would also have decimated middle classes — but (OK, except for Greece) they don’t.

Hacker and Pierson want to “strip away the aura of economic destiny surrounding runaway inequality.” And to that end, they show us how a steady political drip-drip, over a generation, got us here. I assumed they’d start with the Reagan era, but they think the roots begin in the 1970s.

Democrats thought they’d be in the catbird seat after Watergate and so rejected earlier compromises with Presidents Nixon and later Ford on a bunch of issues (minimum wage, taxes, welfare reform). After the 1976 election, the Carter Democrats didn’t bank on the growing strength of the right-wing, taxpayer-revolt movement. And so began a run of, in hindsight, terrible timing and pivotal Democratic defeats: on tax reform, a new consumer protection agency, the minimum wage, and labor law reform. Meanwhile, the tax revolters managed to pass bills featuring deep cuts in the capital-gains tax and steep rises in the payroll tax, boosting those who make money off investments at the expense of wage earners.

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Hacker and Pierson frog-march us through the decades after — and hand out plenty of bipartisan blame. Get ready to revisit not only Texas Republican S enator Phil Gramm (who once dubbed Wall Street a “holy place”) but also New York Democrat Senator Charles Schumer, who dug in to protect the 15 percent maximum tax rate for hedge-fund billionaires.

“Winner-Take-All Politics” points out that each generation must decide where it stands in the eternal tension between American democracy and American capitalism. Which way will we go? What are the tradeoffs?

Joseph E. Stiglitz, winner of the Nobel Prize in economics, hounds that story in “The Price of Inequality: How Today’s Divided Society Endangers Our Future” (Norton, 2012). Stiglitz is an Occupy Wall Street-sympathizer who grew up in Gary, Ind., where he was saw first hand the Rust Belt’s class division, unemployment, and recession. It’s personal for him.

But inequality also affronts his pragmatic side. The economic elite have rigged a system that works for them, but “it’s neither efficient nor fair,” he says. Indeed, such imbalance produces lower growth and lower GDP. One measure of inequality (the “Gini coefficient,” named for an Italian sociologist) rates America as worse than all the countries in the European Union — and even slightly more unfair than Iran and Turkey.

What to do? Stiglitz floats a raft of proposals, from passing bankruptcy laws that hold the lender more accountable (thus discouraging bad loans) to stopping tax giveways (remember what Pfizer did with theirs?) to taxing speculators at the same rate as salaried employees (ending special treatment for a group mostly made up of the monied), to doing away with derivatives (which he calls “financial weapons of mass destruction”).

All these books are ticked off in tone, but this next one is downright bellicose. No surprise, since the author is Lou Dobbs, the fire-breathing newsman of CNN and then Fox. His book is called “War on the Middle Class: How the Government, Big Business, and Special Interest Groups Are Waging War on the American Dream and How to Fight Back” (Viking Penguin, 2006).

Galvanized by his CNN series “The Middle-Class Squeeze” Dobbs came to think that the middle class, though the largest segment of our society, is the least well-served. His book offers many of the same tutorials as the others. But the good stuff comes at the end, when he coaches us how to get out of this mess. His ideas are thoughtful; we should snap the money-drives-politics stranglehold by requiring ex-pols to wait five years, not the current one, to become lobbyists.His ideas are cheerfully out-there: Every single voter should register as independent, so the parties can’t boss us around.

Which brings me to “It’s the Middle Class, Stupid!” (Blue Rider, 2012) by James Carville and Stan Greenberg, two ragin’ Clinton war-room guys who wrote this tirade as if standing around a kegger. It’s a garrulous read. They think the Republicans are “so far out in the weeds” on the issue, that Democrats must jump in with a vengeance. Protecting the “shrinking, beleaguered, shafted, and squeezed middle class,” they say, “should be the number-one priority of the country.” Wreck the middle class, and you wreck America itself.

This middle-class-is-everything mentality also informs “The Servant Economy: Where America’s Elite Is Sending the Middle Class” (Wiley, 2012). Author Jeff Faux, founding president of the Economic Policy Institute and frequent contributor to The Nation, paints what lies ahead: underemployed twentysomethings turning into fortysomethings with dead-end jobs, retirement indefinitely postponed, most of us permanently earning lower wages even if the economy bounces back.

We are deluding ourselves, Faux says, if we think tax cuts or stock surges or elections will bring back the prosperity of the postwar generation. It’s gone, baby, gone. The only hope is to attack the core source of our failed democracy: moneyed interests controlling politics. Dobbs may want us all to be independents. Faux wants to unite citizens to overturn the landmark Citizens United decision or even add a constitutional amendment that forces tough limits on campaign spending. Do we have the heart for this? We certainly have the heartburn.

Katharine Whittemore is a freelance writer based in Northampton. She can be reached at katharine.whittemore@comcast.net.

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