Aftershock: The Next Economy and America's Future (19 page)

6
More than half of all the money: See Lawrence Bebchuk, “The Growth of Executive Pay,”
Oxford Review of Economic Policy
21, no. 2 (2005): 283–303.

7
By 2007, financial and insurance companies: See Bureau of Economic Analysis, National Income and Product Accounts (NIPA) Tables, Section I: Domestic Product and Incomes, “Real Gross Value Added by Industry,” 2009.

8
In 2009, the twenty-five best-paid hedge-fund managers: See
AR: Absolute Return + Alpha
, annual survey, 2009.

9
in 2007, Ford’s financial division: Securities and Exchange Commission Filings.

10
according to presidential candidate Ronald Reagan: Ronald Reagan campaign address, “A Vital Economy: Jobs, Growth, and Progress for Americans,” October 24, 1980.

11
Moreover, they had no clear memory: See
Technology Triumphs, Morality Falters
, Section 5: “America’s Collective Memory,” the Pew Research Center for the People and the Press, January 3, 1999.

1
Coping mechanism #1: See U.S. Department of Labor Women’s Bureau, “Labor Force Participation of Women and Mothers,” Historical Data Tables, October 9, 2009 (
http://www.bls.gov/opub/ted/2009/ted_20091009.htm
).

2
Coping mechanism #2: See U.S. Bureau of Labor Statistics, 2008 American Time Use Survey, “Working and Work Related Activities Tables,” 2008 (
http://www.bls.gov/tus/current/work.htm
).

3
Coping mechanism #3: See Bureau of Economic Analysis, National Income and Product Accounts Table 2.1, “Personal Income and Its Distribution,” January 29, 2010 (
http://www.bea.gov/national/nipaweb/TableView.asp?SelectedTable=58&Freq=Qtr&FirstYear=2007&LastYear=2009
).

4
in 1980 the average home: See U.S. Census Bureau, “Median and Average Home Sales Prices, Annual Historical Data,” December 2, 2004.

1
In 2009, some 50 million workers: See A. Munnell, J. P. Aubrey, and D. Muldoon,
The Financial Crisis and Private Defined Benefit Plans
, Center for Retirement Research at Boston College, November 8, 2008.

2
“should have enough spending power”: See Bank of America Merrill Lynch,
The Myth of the Overleveraged Consumer
, August 14, 2009.

1
“We cannot go back”: Barack Obama, “G-20 Summit in Pittsburgh: Obama’s First UN Address, HIV Vaccine in the Works,” transcript provided by CNN, September 24, 2009.

2
By 2009, China was second only to the United States: See Bank of America Merrill Lynch,
US Economics Weekly
, Merrill Lynch Global Research, Products and Reports, October 2009.

3
But the benefits of China’s growth: See Barry Ritholtz, “China Consumer Spending vs. Saving,” May 8, 2009 (
http://www.ritholtz.com/blog/2009/05/china-consumer-spending-vs-savings/
). Data sources: Bank of America Merrill Lynch, “United States Economics, 2009.”

4
In 2009, other American firms: See General Motors, Evergreen Solar, and General Electric press releases, 2008 to 2010.

1
Just before the Great Recession: See Bureau of Economic Analysis, National Income and Product Accounts Tables, Table 1.5.5: Gross Domestic Product, Expanded Detail. Last revised: January 29, 2010.

2
Personal consumption did not always constitute 70 percent: See Bureau of Economic Analysis, National Income and Product Accounts Tables, Table 1.5.5.

1
“Many of the so-called comforts of life”: Henry David Thoreau,
Walden; or, Life in the Woods
(Boston: Ticknor and Fields, 1854), p. 15.

2
“The people of this country need”: John S. Ellsworth, Jr., “The Depression Generation,”
The North American Review
234 (October 1932).

3
University of Michigan researcher Ronald Inglehart: See Ronald Inglehart, Christian Welzel, and Roberto Foa,
World Values Survey: Happiness Trends in 24 Countries, 1946–2006
, January 2008.

4
In 1943, behavioral scientist Abraham Maslow: The original article appeared in
Psychological Review
50, no. 4 (1943): 370–96. See also Janet Simons, Donald Irwin, and Beverly Drinnien,
Psychology: The Search for Understanding
(New York: West Publishing Company, 1987).

5
Before the Great Recession: See press release:
Annals of Internal Medicine
, University of Chicago Medical School Press, December 6, 2004.

6
In 2007, Americans spent a whopping $23.9 billion: J. LaRosa, “U.S. Sleep Aids Market Now Worth $23 Billion as Americans Battle Insomnia, Sleep Disorders,” Marketdata Enterprises press release, June 2008.

7
In mid-2009, the
Archives of General Psychiatry:
See Mark Olfson and Steven C. Marcus, “National Patterns in Antidepressant Medication Treatment,”
Archives of General Psychiatry
, 66, no. 8 (August 2009): 848–56.

8
“through the whole of his life”: Adam Smith,
Theory of Moral Sentiments
(London: A. Millar Publishing, 1790), pp. 261–63.

9
Almost 10 percent fewer people were killed: See National Highway Traffic Safety Administration Fatality Analysis Reporting System Encyclopedia (
http://www-fars.nhtsa.dot.gov/Main/index.aspx
).

10
deaths and serious injuries dropped: See U.S. Bureau of Labor Statistics, economic news release: “Workplace Injury and Illness Summary,” October 29, 2009.

1
Princeton psychologist Daniel Kahneman: See D. Kahneman, J. L. Knetch, and R. H. Thaler, “Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias,”
Journal of Economic Perspectives
, 5, no. 1 (Winter 1991): 193–206.

2
Societies whose living standards drop: Ibid.

3
Behavioral economist Christopher Ruhm: See C. J. Ruhm,
Are Recessions Good for Your Health?
, National Bureau of Economic Research, March 2006.

4
The stock market crash of 1929: See Leonardo Tondo and Ross J. Baldessarini,
Suicides: Causes and Clinical Management
, Medscape Medical News (
http://cme.medscape.com/viewarticle/413195_2
).

5
“the crisis quality of a serious illness”: Robert S. Lynd and Helen Merrell Lynd,
Middletown in Transition: A Study in Cultural Conflicts
(New York: Harcourt Brace, 1937), p. 489.

1
The median pay of CEOs: See American Federation of Labor and Congress of Industrial Organizations, Executive Paywatch Database, “CEO Pay Rates,” 2008.

2
According to
The New York Times:
See Graham Bowley, “Strong Year for Goldman as It Trims Bonus Pool,”
New York Times
, January 21, 2010.

3
“In a poor society a man proves”: See R. Layard, “Human Satisfactions and Public Policy,”
Economic Journal
90, no. 360 (December 1980): 737–50.

4
Adam Smith defined necessities: See Adam Smith,
An Enquiry into the Nature and Causes of Wealth and Nations
(London: Methuen, 1776), Book 5, Chapter 2.

5
In 1899, the economist-sociologist Thorstein Veblen: Thorstein Veblen,
The Theory of the Leisure Class
(New York: Macmillan, 1899). See Ken McCormick, “Veblen and Duesenberry: The Demonstration Effect Revisited,”
Journal of Economic Issues
17, no. 4 (December 1983): 1125–29.

6
More than a half century later: James Duesenberry,
Income, Saving and
the Theory of Consumer Behavior
, Harvard Economic Studies, 1967. For a highly pertinent and thoughtful treatment of this subject, see Robert H. Frank,
Falling Behind: How Rising Inequality Harms the Middle Class
(Berkeley: University of California Press, 2007).

7
“Wealth … is any income at least $100 more a year”: H. L. Mencken,
A Book of Burlesques
, (New York: Alfred A. Knopf, 1916), p. 310.

8
the typical new home built in the United States in 2007: See Gopal Ahluwahlia,
National Association of Home Builders: Consumer Preferences
, February 14, 2008.

9
The Daily Beast
reported that Kathleen Fuld: See “What the Rich Don’t Want You to Know About the Way They Spend Their Money,”
Daily Beast
, December 5, 2008.

10
Prestigious universities have only a limited number: Pell Grants, available only to students whose families are relatively poor, offer one measure. In 2006 (the most recent year for which data is available), just one in ten Harvard students received a Pell Grant. Other of America’s elite universities have similar percentages. See
http://www.jbhe.com/features/57_pellgrants.html
. By way of comparison, at most campuses of the University of California, a public institution, approximately 30 percent of students are eligible for Pell Grants.

11
economists Roberto Perotti and Alberto Alesina have found: A. Alesina and R. Perotti, “Income Distribution, Political Instability, and Investment,”
European Economic Review
40 (June, 1996): 1202–29.

1
But when the
San Francisco Chronicle
reported: Nanette Asimov, “Execs Still Get Raises as UC Cuts Staffing Pay,”
San Francisco Chronicle
, August 7, 2009.

2
in a poll taken by Hart Associates: Hart Associates poll of 802 voters taken September 21–23, 2009,
http://epi.3cdn.net/e5566d3b8ac34f6079_yym6bxts7.pdf
).

3
The inspector general concluded: “Factors Affecting Efforts to Limit Payments to AIG Counterparties,” Office of the Special Inspector General for the Troubled Asset Relief Program, November 17, 2009 (
http://www.sigtarp.gov/reports/audit/2009/Factors_Affecting_Efforts
_to_Limit_Payments_to_AIG_Counterparties.pdf
).

4
“If banks had cut mortgage rates”: Peter Eavis, “U.S. Aids Benefits Banks, Not Homeowners,”
Wall Street Journal
, January 19, 2010.

5
During the 2008 elections: Data on lobbying expenditures and campaign contributions are available at the industry-specific level from OpenSecrets.org. The data for “Finance/Insurance/Real Estate,” for
example, is available at
http://www.opensecrets.org/industries/indus.php?ind=F
.

6
According to the Center for Public Integrity: “More Than 2,000 Spin Through Revolving Door,” LobbyWatch, Center for Public Integrity, May 2, 2006 (
http://projects.publicintegrity.org/lobby/report.aspx?aid=678
).

7
When Dick Gephardt ran for president in 1988: Sebastian Jones, “Dick Gephardt’s Spectacular Sellout,”
The Nation
, September 30, 2009 (
http://www.thenation.com/doc/20091019/jones
).

8
Between 2012 and 2021: “The Estate Tax: Myths and Realities,” Center on Budget and Policy Priorities, February 23, 2009 (
http://www.cbpp.org/files/estatetaxmyths.pdf
).

1
One, nicknamed “Jackpot Jimmy”: James Barron and Russ Buettner, “Scorn Trails A.I.G. Executives, Even in Their Driveways,”
New York Times
, March 19, 2009.

2
In a poll taken in December 2009: “U.S. Seen as Less Important, China as More Powerful,” Survey Reports, Pew Research Center for the People and the Press, December 3, 2009.

3
Tom Tancredo, a former congressman: Adam Nagourney, “Conservatives Get a Look at Possible Candidates,
New York Times
, February 20, 2010.

4
Governor Tim Pawlenty: Quoted in “Scenes from a Counter-Revolution,”
The Economist
, February 13, 2010, p. 31.

5
“get rid of the power people”: Kate Zernike, “Paul Vows to Remain True to the Tea Party,”
New York Times
, May 18, 2010.

6
when asked by Fox News: Quoted by Scott Lehigh, “How Is Brown Doing?”
Boston Globe
, February 24, 2010.

7
“The wizards in Washington”: Chuck Baldwin, “Anger with Government Not Enough,” Independent Political Report, December 18, 2009 (
http://www.independentpoliticalreport.com/2009/12/chuck-baldwin-anger-with-federal-government-not-enough/
).

8
It was the bailout of Wall Street: Quoted in Gerald Seib, “No Seat for Wall Street at Tea Party,
Wall Street Journal
, January 12, 2010.

9
Historian Richard Hofstadter: Richard Hofstadter, “The Paranoid Style in American Politics,”
Harper’s Magazine
, November 1964, pp. 77–86.

10
Father Charles Coughlin of Detroit: A collection of Father Coughlin’s speeches, including the one quoted here, can be found on the Social Security Administration’s Web site:
http://www.ssa.gov/history/fcspeech.html
.

11
Senator Huey “the Kingfish” Long of Louisiana: Information about Huey Long and his populist politics is also available on the Social Security Administration’s Web site:
http://www.ssa.gov/history/hlong1.html
.

12
A classic sociological study of thirty-five dictatorships: J. O. Hertzler, “Crises and Dictatorships,”
American Sociological Review
5 (1940): 157–69.