Who Stole The American Dream Analysis

Mohamed Awale

Economics of Social Change

Final Paper

The United States is in a state crisis, we live in a nation with harsh economic inequalities. These inequalities are not natural, but rather a structural system to keep those who are wealthy, richer and those who are doing well enough, poorer. The ones causing this, quoting Hedrick Smith writer of “Who Stole the American Dream?”, he states “In Arnold Toynbee’s analysis of the rise and fall of human civilizations, we Americans fall among those, like ancient Greece and Rome, whose most dangerous challenge comes from within-from the rifts and schisms that we have allowed to develop within our economy and our body politic in the decades since the peak of our power and prosperity from the

1940s to the 1970s. “ (Smith 375) The blame resides in us, allowing our political body to taken from us. Quoting Paul Robert writer of the book “The Failure of Lassie Faire Capitalism”, how our economic crisis began. He states “The US government set the crisis in motion with the repeal in 1999 of the Glass-Steagall Act, which had kept commercial and investment banking separated since 1933.” (Roberts 110) The allowed bankers to target ordinary citizens, and trick them into risky investments. The housing crisis came out of the repeal of this act, and many more injustices came about. We live in a state where our political bodies, are efficient and responsive to corporations and wealthy Americans, but dull and slow for the average American. Both Smith and Roberts share similar views on our nations crisis, however give different stories to explain it.
Smith, a liberal story about our economy is that our nation was once in a state where businesses and average people were in a sustainable and jointly profitable state.

However, now Smith argues we have gone a major change, where corporations are now greedier. He argues that our government has all, but abandoned the average American, in order to aid the corporations. The cause of this dis-connect came from an uprising in the business sector. This uprising called for more representation of private interest, in government decision making. Now, Smith argues that our nation’s crisis is caused by over reaching power of private interest. Roberts, a conservative, places his blame fundamentally on our nation’s “new economy”. Which he accuses as being empty world economics. On this he states “In an empty world, man-made capital is scarce and nature’s capital is plentiful. In an empty world, the fish catch is limited by the number of fishing boats, not by the remaining fish population, and petroleum energy is limited by drilling capability, not by geological deposits. Empty-world economics focuses on the sustainability of man-made capital, not on natural capital. Natural capital is treated as a free good. Using it up is not treated as a cost but as an increase in output.” (Roberts 46). On this principle, he talks about globalization and how U.S corporations are moving form nation to nation using up resources and cheap labour. By seeking manufacturing jobs over seas, corporations

are getting wealthier, while Americans are facing uncertain futures. Both argue that losses in the manufacturing sectors and growth in the financial sectors, have ultimately created the U.S economic crisis.
While both writers are fiercely critical of the financial sector, Roberts’ is the most fearsome. Roberts’ and many other economics writers view the financial sector as vampires, due to their predatory methods. Roberts notes the story about how Goldman Sachs had tax payers fund their loses in the housing bubble. Sachs also took the tax payer bail out and used it to fund new exploits. “The repeal of the limits allowed Goldman Sachs to create a new product, index speculation, which brought hundreds of billions of dollars of speculative money into commodities markets, allowing speculators to dominate commodity markets and to manipulate commodity markets as they do equity, debt, and currency markets.(Roberts 111) These manipulative and expletive practices, alongside their vast reach is why one writer Matt Taibbi, called them “Vampiric Squid”. This repeat exploitation of the American tax payer, shows us the vampiric tendencies of the financial sector as a whole. However, it doesn’t have to be this way.
Smith outline a way we can solve the U.S economic crisis. The most important steps I believe Smith outlines are revamp U.S infrastructure, reclaim manufacturing sector and fix the U.S tax code. Roberts noted in his text that the U.S is falling behind other nations in an array of different areas. However, one must note the dial state of U.S infrastructure. We’re one of the few counties where public transportation isn’t the norm. However, the benefits don’t just make the U.S look better, but as Smith writes, “Step 1 is to form a new public-private partnership to modernize America’s outdated transportation networks and create five million jobs-and maybe more-with major investment over the next decade.” (Smith 388) Five million new jobs would really help stop our nations crisis. Most of Smiths suggests stimulate the job market, and no other option would stimulate the market, than boosting our manufacturing sector. Manufacturing was the root of the American economy, now its being curved by the financial sector. After our private sector destroyed our manufacturing sector by off-shoring, our nation’s political bodies sold us the idea of our economy becoming technological knowledge based. However, we’ve seen that those jobs aren’t being taken by Americans, but by workers shipped from over seas. Our nation needs to rebuild the manufacturing industry we once had. The last important solution o our economic crisis as outlined by Smith, is fixing our tax code. Our tax code favors the wealthy and big corporations. Smith suggests that if all of these were enacted our economic crisis, would be gone. However, he notes there must be a change in the political body to enact these changes.
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Our political system doesn’t represent the average American anymore and must be changed. Smith writes“Average Americans have become disenchanted and politically disengaged and, as a consequence, disenfranchised.” (Smith 411) And why shouldn’t they, the middle class is being ignored. As Smith notes here “When Larry Bartels of Princeton University analyzed a host of congressional votes in the 1980s and 1990s, he found that senators were “Vastly more responsive to affluent constituents” than to middle class and poorer voters.” (Smith 412) The rich get their voice heard while the poorer folks are ignored. To fix this injustice, Smith as two major points. First, he suggest we try as hard as we can to reduce the influence of money in politics. Second, he suggests that the primary system must be open to third parties. The two party system, held by the primary system, doesn’t represent the people. Its a congress of stalling and waiting. Smith notes the ugly use of filibusters by congress to stale bills that would help our economy. The most common offender is the Republican party, Smith writes “They put ideological purity ahead of winning short-run victories. Their technique has been to sharpen partisan divisions by exploiting wedge issues that play upon white middle-class religious voters, such as abortion,school prayer, and ERA (women’s rights), and by taking extreme positions and then wagon uncompromising battles on “anti”issues - anti-tax, anti-union, anti-gay anti-Washington

, anti-government.” (Smith 330) This isn’t compromise or debate, but rather just stalling. They do this because they are sponsored by corporations, and thus represent them in congress. By removing money and allowing third parties into primaries we can revitalize the American politic arena. However, Smith notes that this change can not happen without the American peoples attention and action.
We the American people must stand up against our nation and resolve its failures. Smith colluded his text with this passage “If there can be protests and government action against a lopsided division of the economic spoils in Israel, why not American? If there can be an ‘Arab Spring’ among peoples who never known democracy, why not in the homeland of democracy?”(Smith 426) Smith notes the fear of the American people to demand major reform, and believes our fears will undoubtedly be our undoing. The real crisis in the American economy, isn’t exactly just about the economy, but about the unrepresentative government we are under. We need to stand up against them, to fix our economic crisis.