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Requiem for the American Dream

October 8, 2013 by White House Chronicle Leave a Comment

There is such a chorus from the punditocracy declaring the American Dream dead that one is scared to lay one's head down at night. A quick Google search reveals that there are at least a dozen books declaring the end to what is the American ethos: a dream in which everyone could graduate to the middle class with a lifetime of dignified employment with a pension, and good educations for their children.
 
Like all declines, there are many threads to the change that is wracking the country. Some of them:
 
  • There has been a dislocation between the growth in productivity and the growth in wages. Hedrick Smith points this out in his excellent and detailed book, “The American Dream and Who Stole It.”
 
  • The years of great national prosperity lasted from the end of World War II until it began to erode savagely toward the end of the last century. Smith dates the rot all the way back to the Carter administration, but most of us were not aware of it until much later.
 
  • If the workers are not sharing in the growth in productivity, we have severely reversed upward social mobility and the enduring belief of an immigrant people that their children would have a better life.
 
The failure of institutions to mobilize against what was patently happening is extraordinary and, in its way, peculiarly American. Our sense of exceptionalism leads us to avoid collective action.
 
Unionism, which has always been a force for incorporating productivity gains into wage packets, has been muted and itself has failed to grasp what is happening. While the world was changing, the unions were lost in old labor-management struggles of an irrelevant past. Management learned they no longer had to sit and take it: They could move to union-free locations like the South, and ultimately Asia. Collectively we watched our own decline in silence.
 
The monied class learned how to buy Congress and turn the watchdog into the enabler of the looter. A powerful new breed of lobbyist — often men and women who had served either in Congress or as congressional aides — threw themselves into the business of making sure that the money people (the corporations and super-rich individuals) got whatever the wanted; subsidies, light regulation, tax breaks and exemptions and, finally, light taxes.
 
As running for office — never easy in the House with its two-year election cycle — became more expensive, elected officials became more vulnerable to campaign contributions. Now it is a giant system of bribery in which neither the bribers nor the bribed feel shame; there are willing buyers and sellers of the U.S. government as farmers buy and sell cattle. This trading money for favors is well documented in Mark Leibovich's book, “This Town.”
 
Everyone who works on Capitol Hill and its lobbies knows what is going on. Money is changing hands for influence, and legislation is being passed favoring big business and big money. You can buy permission to pollute, buy a change in securities laws and buy favorable tax treatment. And you can secure the minimum wage at below poverty levels.
 
It used to be, as one long-term lobbyist explained to me, that if you wanted favors on Capitol Hill you had to assemble a large and transparent coalition of people who would benefit from the change in law that your client wanted. You had to get many interests on board and persuade some newspaper commentators of your high purpose. Now, this veteran said, you just do it with money — in the dark, he might have added.
 
The Chinese did not send an armada of junks to take out jobs; we exported them for short-term gain. We embraced the myth that cheaper goods were better for our people. They are – if we have money to pay for them.
 
The middle class, to use the vernacular of the moment, has been thrown under the bus.
 
The tea party, briefly the hope for middle-class salvation, drank from the horn of myths spread by the monied class. Now, in their folly, they are supporting a destructive shutdown of the government, which will further damage the middle class.
 
Of course it is not just venality that has brought us to our dreamless state: rapid technological change, and the decline in the need for whole classes of work present a serious challenge. But who is taking up the challenge? Not Congress, whose members are mostly millionaires; not the tea party; not the unions.
 
Fancy a double espresso before bed? — For the Hearst-New York Times Syndicate
 
 

Filed Under: King's Commentaries Tagged With: American Dream, Congress, Hedrick Smith, Mark Leibovich, middle class

Crocodile Tears for Small Business

October 16, 2008 by Llewellyn King 1 Comment

 

There has been a death in my neighborhood. I speak of another independent, small business killed by an influx of chain retailers. In this case a grocery store, which opened its doors in 1875, has expired.

No more will I stop there to buy meat, talk to the butcher about the various merits of New Zealand and American lamb. No more will I ask the manager

to see if he can get yellow corn rather than the white corn favored in Northern Virginia.

One could shrug off another small business going to the wall as a sign of life in the age of chain retailing, if it were not for the relentless rhetoric from politicians about the need for and virtue of small business. John McCain lauds it. Barack Obama genuflects to it. And all 535 members of Congress get weepy about it.

Their argument for small business is that it creates jobs. To me, the job creation is a given. My argument is that entrepreneurism and small business define who we are as a nation and how satisfied millions of Americans are with their lives.

Yet small business is under relentless attack, mostly lacking the basic tools to defend itself. Credit is an important ingredient, but it can be overrated. Startup small businesses have never been able to look to banks for seed money. Banks do not do that kind of lending, which is why so many small businesses are started with credit cards, family loans, or out of the earnings of a working spouse.

In my mind, after credit, habitat is the great burden of small business. By habitat, I mean a place to work out of at a rent that is not exorbitant. If there is a new shopping center in your neighborhood, look and see if there is any new small business there. Probably not. It will be as bland and homogeneous as the last shopping center you visited. It will be as dead, as lifeless, as predictable, and as antithetical to small business as its developers could make it. All right, they let in a sandwich franchise. Those are not really small businesses: they are big businesses that have laid off their risk on the unsuspecting franchisee. Franchisees, in my experience, are the most unhappy and exploited people in business, the victims of a pernicious system of sharecropping.

If you want to feel the life and vitality of small business doing its thing, you must seek out the older strip malls–often awaiting demolition–or the crumbling warehouse district. The lucky new entrepreneur is the one who can operate from the kitchen table, the basement, or the garage.

The next great burden comes with the hiring of staff. It is the high cost of health insurance. This should not involve employers, but it does–and it involves the small as brutally as the large.

For 33 years I operated a small publishing company, which I founded. It was a success, but we were sorely tried by insurers who charged a lot and would not fill all of their obligations (a cancer patient had the care paid for, but not the pain killers.) Rents also escalated, based more on our ability to pay. I hope there is a special enclosure in hell for property company managers and health insurers.

Where then are the politicians, those who weep so copiously for small business? They are mostly between the sheets with big business facilitating the destruction of the small entrepreneur. Mom-and-pop operations do not have lobbyists, cannot afford white shoe law firms and do not run political action committees. The ability, upheld by the courts, of local authorities to use eminent domain to condemn areas of low economic activity in favor of new developments is an example of the war by the big against the small. It would be biblical, except in this case, David looses and Goliath triumphs.

The damage to who we are as a people is hard to calculate, but it is there. Who would rather not run their own restaurant than manage a chain outlet? Ditto a bookstore. Ditto a hardware store. Ditto an auto-repair shop. Ditto every line of endeavor from exporting to consulting. I have yet to meet one individual who preferred being employed in a behemoth to being self-employed.

For me, the latest outrage is learning that airlines are charging $25 for tickets bought through travel agents. The airlines, in good times and bad, have had it in for travel agents: the quintessential small business. Shed a tear for the travel agencies, along with every courageous individual who wants to have the real promise of the American Dream: a business of one’s own. With that comes a dignity, a sense of worth that is good both for the nation and the individual. And,yes, small businesses make life richer for the consumer while creating jobs.

Filed Under: King's Commentaries Tagged With: American Dream, small business

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