Who Stole the American Dream? (3 page)

But in our New Economy, the
dynamic thrust of “the virtuous circle” has been disrupted by job losses and the lid on average pay scales. Flat pay is bad not only for individuals, but for the whole economy. Weak pay leads to weak consumer demand. Companies don’t expand and hire, and as a country, we bog down in long, painful “jobless recoveries.” That has happened several times in the past two decades.

In short, downsizing, offshoring, and wedge economics have backfired. For the economy, they don’t work. For the nation, they don’t work. Individual corporations may profit, especially multinationals that have moved production overseas. But by sharing so little of their gains with their U.S. employees, they have put a crimp on middle-class spending, and without big consumer demand, the nation’s economy can’t move well.

Washington can’t move either—because it is frozen in dysfunctional partisan gridlock.

Certainly, genuine differences divide us as a people. That has always been true. America’s political pendulum has swung back and forth as parties battled over policy. But there was an accepted center of gravity. Work got done. Political rivals like Democrat Lyndon Johnson and Republican Richard Nixon would differ, but there was some consensus. Both expanded Social Security; neither tried to privatize it. Republicans might cut specific government programs or trim the budget more than Democrats, but they were not out to dismantle government and shut down entire cabinet departments.

Today, everything is in dispute. Political Washington has lost the habit of compromise and belief in compromise. No issue is ever settled. One Congress passes a law, the next tries to repeal it. The hallmark of the New Power Game is crisis politics—political ultimatums and a partisan blame game. But the stakes are too high for perpetual brinkmanship. It is time to heed Lincoln: “A house divided … cannot stand.”

It will take a political metamorphosis, a populist renaissance, in America to reverse the political and economic tides of the past three decades and to make our country strong and whole again. The Toynbeean challenge we face requires a response from all of us, a rebirth of civic activism from average people at the grass roots as well as from America’s political and economic leaders. Millions of Americans will have to come off the sidelines and reengage in direct citizen action in order to reestablish “government of the people, by the people, for the people” and to achieve a genuine people’s agenda in Washington.

It is not hard to conceive of the measures needed to restore a fairer, more level economic playing field—action on jobs, homes, taxes, and fairness, plus a reset in long-term economic thinking. It took decades for us to get into our current national predicament; it will take time—and tenacity—to build our way back to a more just, secure, and vibrant society.

To regenerate widely shared prosperity over the long term, we must get “the virtuous circle” working again. That challenge requires our business leadership to share more of their companies’ profits with workers. It requires our political leaders to do more of what past presidents such as Washington, Lincoln, Theodore Roosevelt, and Dwight Eisenhower have done: Use government resources to modernize our aging highways, ports, and airports, to stimulate research and development, to retrain workers who have fallen behind,
and to provide incentives to the private sector in order to make America—and Americans—more globally competitive in the years ahead.

There are some hopeful omens. One problem is that we have become so fearful about our economy and so jaded about government that we overlook the good news in our midst. Business leaders have begun to speak out against the New Economy notion that the United States can survive on a service economy.
What we need now, insists General Electric CEO Jeffrey Immelt, is a renaissance in manufacturing and production jobs.
Make It in America
is the title theme of Dow Chemical CEO Andrew Liveris’s latest book. Other top corporate executives call for
a domestic Marshall Plan—a mix of tax incentives, aid for research, public-private investment pools, and a skills alliance to modernize the training of American workers displaced by foreign trade.

General Motors and Chrysler went to the brink of extinction in 2009, but they have come back. The auto industry bailout was brutal, but it signaled some significant changes: business and government working together,
management and labor doing give-and-take to save companies and jobs. Both GM’s CEO, Dan Akerson, and the United Auto Workers union scrapped their “us vs. them” rhetoric. The union agreed to keep wages steady. GM and Ford pledged to reopen plants in the United States and not to shift production to Mexico as they had planned. By early 2012, the
Big Three carmakers planned to invest several billion dollars to retool multiple plants in the United States.

More broadly,
manufacturing employment edged up in both 2010 and 2011, adding more than three hundred thousand jobs, and U.S. manufacturing exports began to rise. And by 2012, the once irresistible
cost advantages of China were looking less attractive to some U.S. employers. With labor unrest and wage inflation in China and stagnant or falling wages in America,
a few companies such as General Electric, Otis Elevator, and Master Lock of Milwaukee have begun to bring jobs back from China to the United States—and smart government policies could foster that trend.
In all, some
25,000 manufacturing jobs have returned to the United States in the past few years, according to Harry Moser, president of the nonprofit Reshoring Initiative.

But for the long-term effort to level the economic playing field and to reclaim the American Dream, what is needed is a modern political crusade by average Americans on the model of the civil rights and environmental movements of the 1960s and ’70s.

Inevitably, people ask for leadership: Where is the great new Lincoln to heal the fissures of our divided nation and set our nation on an upward path? In the past, civic leaders such as Martin Luther King, Jr., have emerged from below, from mass movements. The starting point is populist civic action. The vital ingredient is personal involvement.

As Toynbee observed, a grave danger arises when many people living
in
a mature civilization no longer feel part
of
that society—that is, no longer feel they matter. Mass alienation and serious schisms emerge when people come to believe that they are
not significant participants
with a role and a voice in determining the nation’s destiny.

“Americans have reason for negative attitudes,” the late John Gardner, head of the public advocacy group Common Cause, observed a few years ago. “But the sad, hard truth is that at this juncture
the American people themselves are part of the problem. Cynicism, alienation and disaffection will not move us forward. We have major tasks ahead.”

The techniques of the Tea Party have shown one way to press a political agenda in Washington. But instead of pushing a middle-class agenda, the Tea Party freshmen in Congress have pushed tax cuts and policies that protect vested corporate and financial interests. Their strategy has been to cut aid to college education for middle-class kids, retirement funds and health care for middle-class seniors, and programs designed to keep middle-class families in their homes.

The Tea Party agenda is not a middle-class agenda. Perhaps not a surprise, since
more than half of the sixty Tea Party members in the House of Representatives are themselves millionaires, with an average net worth of $1.8 million.

But what can be learned from the Tea Party is that a fresh surge of civic energy at the grass roots can change the political debate in Washington—and the balance of power.

Another fresh surge of energy came last fall from Occupy Wall Street demonstrators in New York City and thousands more from Boston to Portland, Oregon, and St. Louis to Los Angeles. They gave voice to a populist protest against concentrated power and wealth in America, and much of the public responded positively to their message. In a few short weeks, the Occupy movement, inchoate as it was, not only changed the public dialogue on economic issues, but implanted in America’s political lexicon a vivid, Twitter-easy slogan—“
We are the 99 percent”—opposing the richest 1 percent—a slogan that frames a central issue for election-year politics and policy makers in Washington.

But lasting change in America will require a broader movement that is more deeply rooted, better organized, and more politically clear about a short list of policy goals. Still, the first shoots of an American political spring have appeared, and our history teaches that, once mobilized, a peaceful but insistent, broad-based grassroots rebellion can regain the power initiative and expand the American Dream.

What’s needed, John Gardner declared, is “a
powerful thrust of energy” from grassroots Americans: “We the People” demanding that Washington carry out an authentic middle-class agenda.

PROLOGUE: THE CHALLENGE FROM WITHIN

LEWIS POWELL WAS
an unlikely Paul Revere to sound an alarm. He personified the Establishment, the aristocracy of post-Reconstruction Virginia, where he had deep family roots.

By the 1960s, practicing law in Richmond, Powell had become one of America’s leading corporate attorneys—in fact, he was president of the American Bar Association from 1964 to 1965. He had been shocked by the Supreme Court’s 1954 school desegregation decision but thoughtfully counseled Virginians against what was then known in the South as hard-line “massive resistance” to school desegregation.

Much later, during his tenure on the Supreme Court from 1972 to 1987, Powell often voted with the conservatives, but he also played a moderating role, gaining a reputation as the balancer, the compromiser, in a Supreme Court buffeted by sharp ideological divisions.

Powell’s personal manner was unassuming. His questions from the bench were often barely more than whispers. As Linda Greenhouse, long the Supreme Court reporter for
The New York Times
, observed, “His courtly demeanor and soft Tidewater drawl made him the image of the classic Southern gentleman.” He would pad around the neoclassical Greek marble temple that houses the high court in crepe-soled shoes, a slender, modest, ascetic figure unrecognized by tourists.

But Powell had a sharp, penetrating mind. He could at times be flinty and assertive, and he had powerful, uncompromising views on the American free enterprise system that gave him enduring influence well into our times.

So perhaps it is not so surprising that Lewis Powell chose to issue a political call to arms to America’s business leaders in August 1971.