BOOK REVIEW: ‘The Betrayal of the American Dream’: Plundering America, Destroying Lives

  • Reviewed by David M. Kinchen 


BOOK REVIEW: 'The Betrayal of the American Dream': Plundering America, Destroying Lives
“We can have concentrated wealth in the hands of a few or we can have democracy. But we cannot have both.” — Supreme Court Justice Louis Brandeis, quoted in “The Betrayal of the American Dream”

I don’t know if it would do any good, but instead of following the doctrine of BOHICA (Bend Over, Here It Comes Again) Americans might better serve the cause of democracy by taking to the streets like the Greeks and the Spaniards in today’s European Union. Talk about lambs led to slaughter!


I’ve long wondered about the passivity of Americans as our country is devoured by what I call the Plundocracy (my coinage), the globalization by multinational companies — now considered to be living, breathing people thanks to a misguided beyond belief Supreme Court decision — the exporting of not only our manufacturing jobs in the name of “free trade” but the skilled, high-tech jobs that were supposed to replace making things.


We’re not only exporting jobs, we’re giving the Chinese and others our inventions and technology, as the authors of “The Betrayal of the American Dream” discuss the outsourcing of much of Boeing’s 787 Dreamliner passenger jet to China, Italy, Sweden and South Korea. The Chinese especially are taking our seed corn and creating an aviation industry that in the opinion of the authors — and me, for that matter — bids fair to do to Boeing what China and India did to our steel industry.


James B.Steele

James B.Steele


In a wide-ranging, fact- and anecdote-filled book, Donald L. Barlett and James B. Steele examine this race to the bottom in “The Betrayal of the American Dream” (PublicAffairs, 320 pages, notes, index), an exposé of the causes of the self-inflicted decline of a a country that, in the words of a sign in Trenton, NJ manufactured quality goods that everyone in the world wanted: “Trenton Makes, The World Takes.” If you take Amtrak to New York City you can still see that now ironic lighted sign on a bridge over the Delaware River, not far from Philadelphia where the two investigative journalists who’ve written this book live.

Barlett and Steele pull no punches in their description of their ongoing mission to debunk conventional wisdom from people as varied as Tom “The Earth is Flat” Friedman of the New York Times, former California Gov. Arnold Schwarzenegger, who ignored protests from American steelworkers and gave the job of rebuilding the earthquake-damaged San Francisco Bay Bridge to China, and political leaders of both parties who take their cue from academic economists who ignore reality and preach “Free Trade” as other industrialized countries limit imports from the U.S., unless it’s scrap paper.


In a memorable vignette, Barlett and Steele tell how recyclers bring their scrap paper and cardboard boxes to a gigantic facility near the Los Angeles-Long Beach Harbor, where the paper is bundled up and shipped in containers to China. The paper is recycled by the Chinese for use by exporters of electronics consumer goods — many of which arrive in the same harbor on their way to Costco and Walmart.

Here are Barlett and Steele in their own words:


Donald L. Barlett

Donald L. Barlett

Twenty years ago, we wrote a book that explained to millions of Americans caught up in a painful economic upheaval of the time why they were losing ground and why it wasn’t their fault. We were accused of gross exaggerations, but the book’s major conclusions—that the middle class was shrinking, that guaranteed pensions would soon be a thing of the past, and that millions would have to go without health insurance—are now widely accepted and don’t seem all that rash today when viewed against the current backdrop that is relegating millions of hard working Americans to the economic scrap heap.

In the 1990s economists tried to reassure Americans that the downturn was only temporary, but we felt it refl ected a more disturbing pattern: a shift by Washington away from policies that had built the American middle class and enabled successive generations to do better than their parents, in favor of policies that catered to corporate chieftains and America’s wealthiest citizens.

We erred on only one issue. We grossly underestimated how fast the economic ruling class would pull the rug out from under everyone else. Once almost anyone could move up the economic ladder; now the movement is mostly down. Barring a fundamental change in policies in Washington, that trend will continue until all that’s left is the upper end of what once was a thriving, broad-based middle class.

The talking heads on television don’t speak of this, but people do, as we are finding in our talks with Americans across the land. This is why we have returned to this subject, to trace these trends since our initial investigation and to tell the story in the larger context of the nation’s betrayal of its greatest asset—our middle class. Because without a middle class, there really isn’t an America.


More strong stuff is available on their interactive website, which gives people a chance to share their plundocracy stories:


OK, I can hear the cries of critics of the two prize-winning journalists, that much of the book consists of anecdotes of people and communities that have seen their jobs and factories disappear, never to return. “Anecdotal” is a dirty word to people like Tom Friedman and academic economists. Barlett and Steele tell the story of the decline and fall of the once iconic Vise-Grip pliers, which I’ve used in many a do-it-yourself project. For more than two decades, Vise-Grip locking pliers have been made in China, instead of DeWitt, Nebraska, where the invention of a Danish immigrant blacksmith was made for many decades, providing good paying jobs for generations of residents of the small town. The workers took pride in their work and were productive beyond belief. Now — in my own DIY race to the bottom — if I need a new Vise-Grip — they come in many styles and sizes — I buy a knockoff, since there is no difference in quality.


Here’s a story about the end of Vise-Grip as we tool nuts know it, to supplement the account on pages 74-83 in the book:


Deregulation is a major subject in the book. Deregulation of the airline and trucking industries — applauded by presidents of both parties and many in Congress — has contributed to the decline and fall of the U.S., according to Barlett and Steele. They write (on Page 6) that the move by members of the “economic elite to consolidate their control of the American economy has killed jobs or lowered wages for employees across entire industries such as airlines and trucking.”


Should we blame the “Great Communicator” — President Ronald Reagan…Whoa! Nellie, Barlett and Steele write (on Page 197): “The popular perception is that Ronald Reagan was the great deregulator, but airline and trucking deregulation was pushed through Congress by his Democratic predecessor, Jimmy Carter. Many other prominent Democrats who professed concern for working people, including the late senator Edward Kennedy, bought into deregulation and jumped on the bandwagon.”


Carter spoke for politicians of both parties, the authors write, when he signed the airline deregulation bill in 1978, saying: “It will also mean less government interference in the regulation of an increasingly prosperous airline industry.” So prosperous that once iconic carriers like Pan American, Braniff, TWA and Eastern Airlines are now history, O sage of Plains, Georgia!


Financial deregulation, in the form of the Gramm-Leach-Bliley legislation — formally known as the Financial Services Modernization Act of 1999 — nearly brought down the global economy in 2008, the authors state (Page 208). They write on the following page that Gramm-Leach-Bliley repealed parts of the Glass-Steagall Act (retained was FDIC) passed in 1933 “to rein in the financial industry excesses that helped cause the Great Depression.


Glass-Steagall had worked just fine for decades, but banks hated it because it barred them from selling stocks and mutual funds. [Texas Republican Sen. Phil] Gramm hated it because he said it interfered with the free market. “Government is not the answer,” he said after Glass-Steagall was repealed. “We have learned that freedom and competition are the answers….” Sure, that worked out great. In my opinion, and in that of some prominent economists (they can’t be wrong all the time, even a stopped clock is right twice a day) financial deregulation — including the repeal of G-S in 1999 during the Clinton Administration — contributed mightily to the housing meltdown and foreclosure crisis.


Rep. Marcy Kaptur, D-Ohio, wants a return to Glass-Steagall and has introduced legislation to that effect, H.R. 1489. In an article in U.S. News, she makes her case:


When it comes to unrestrained “free trade”, the authors say the executive branch is as much at fault as Congress. They write (Page 57): “To be fair the fault lies not just with Congress. Every occupant of the White House, regardless of party, has been equally zealous in selling out workers on trade. For decades, every president has been an ardent advocate of unrestrained free trade and has resisted any significant step that might be interpreted as protectionist, even though our trading partners have been doing the opposite.”



Among the back-of-the-book suggestions on how to fix the U.S. — reforming the tax code to make rich people pay their fair share, and rethinking job training for jobs that aren’t there — the authors say we should uphold the law. They note that under the Obama Administration, which pledged to fix the crimes of the previous one, “not one corporate or Wall Street titan has been charged with a crime. Any reasonably curious prosecutor…could start at the bottom and work his or her way up the food chain, beginning with all the statements attesting to the value of a mortgage applicant’s assets. It would have been rather easy since the paper work was known laughingly across government, the banking industry, Wall Street and the mortgage industry as ‘liar loans’. The people who arranged the mortgages were rewarded with oversize bonuses. So, too, their bosses. The phony loans then were packaged into securities sold by Wall Street, which started the process all over by attesting that they were of prime quality.”


I’ve got another suggestion. Instead of outsourcing jobs to China or India, why don’t we outsource the overpaid CEO’s who’ve done such a great job running companies to the ground. Keep the employees and get rid of the glorified pencil pushers. Wait, Fiat has already done this, exporting ultra capable auto executive Sergio Marchionne, 60, an Italian with Italian and Canadian citizenship to turn around Chrysler. “60 Minutes” did a wonderful piece on him in September. (Link:;storyMediaBox). Under his guidance Chrysler has paid back its government loan and introduced cars that people want to buy, like the new Dodge Dart, built in Belvidere, IL, east of Rockford. Chrysler sells many of its American-made cars in foreign markets. My Dodge Caliber, the predecessor of the new Dart, was sold in export markets and the company’s Jeep line is also popular. The “60 Minutes” episode tells how, beginning in 2009, Fiat and Marchionne saw the value of Chrysler’s trucks, vans and Jeeps and used their small car expertise to revive the company.


“The Betrayal of the American Dream” is an outstanding explanation of what we’ve done wrong, with suggestions on how we can stem the flow of our nation’s life blood and bring back good paying jobs that are the foundation of a rapidly disappearing middle class.



About the authors


Donald L. Barlett and James B.Steele are the nation’s most honored investigative reporting team, and authors of the New York Times bestseller America: What Went Wrong. They have worked together for more than thirty-eight years, first at The Philadelphia Inquirer (1971-1997), then at Time magazine (1997–2006) and now at Vanity Fair since 2006. They have also written seven books. They are the only reporting team ever to have received two Pulitzer Prizes for newspaper reporting and two National Magazine Awards for magazine work. They live in Philadelphia.



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