Journalist Asks, 'Who Stole The American Dream?'

Apr 15, 2014

Inequality in the United States is the stuff of headlines these days and has been gaining more attention in the years since the economic collapse of 2008, but the gap between rich and poor in America has been steadily increasing for decades before that crisis occurred.

The statistics are startling, including this: The one family that owns Wal-Mart has as much wealth as the bottom 40 percent of the U.S. population — some 120 million people.

That’s just one of the examples found in a book by journalist Hedrick Smith, called Who Stole the American Dream? And he’ll be discussing the causes of inequality chronicled in the book this week at the University of Vermont

The book discusses the mortgage crisis and predatory lending by banks, but points to the roots of financial inequality, which Smith said can be traced to the early 1970s.

“A lot of people say the middle class is in trouble and there’s high inequality of income because of globalization, because of advancing technology, because of market forces. There’s nothing human beings can do about it, we just all have to turn up our coat collars and live with it. And I kind of believed that when I started working on this book,” Smith explained.

But as he started tracing back the history, he found that two things happened. The first was a power shift in Washington. The second was a change in the mindset of business leaders on who should benefit from the gains and profit of American growth. That led to the growth of business lobbies.

The book discusses the mortgage crisis and predatory lending by banks, but points to the roots of financial inequality, which Smith said can be traced to the early 1970s.

“Business lobbies today outspend labor lobbies 60 to one, they outspend consumer lobbies 100 to one, they outspend environmental lobbies even more than that. There was a belief in the bosses back in the forties, fifties and sixties that they should share the wealth and that was good business, that was smart economics. The country would grow, their companies would profit if they pay their workers well,” Smith said. Now we’re left with a situation where the Walton family heirs own more wealth than 40 percent of the population.

Awareness of wealth inequality is growing, as seen with the Occupy Wall Street movement.

“They actually did achieve something very important. If you say to people today, the 99 percent and the 1 percent, people get it and you can thank Occupy for that,” Smith said. But they didn’t articulate goals and didn’t have leadership.

“Part of what we have to do is have an agenda, and then we need to get active,” Smith said, but he warned that elections aren’t enough.

“Absolutely elections matter, of course they do, but what people need to understand is the day after the elections lobbyists in Washington go to work undoing the elections.” And Smith said the real problem is gerrymandering, which keeps political parties in power in particular districts and leave no incentive for politicians to compromise or deviate from extreme positions that appeal to the base of constituents who can keep returning them to Washington.

"There's a great tendency in this country to feel as though voting and elections are sufficient and after that you can go back to what you were doing and not paying attention. The lesson of our history is that is not the case. You've got to stay engaged." - Hedrick Smith

“We are going to have gridlock regardless of the outcome of these elections until we fix gerrymandering. I’m not saying people shouldn’t vote, I’m not saying they shouldn’t be engaged, of course they should,” Smith said. “But there’s a great tendency in this country to feel as though voting and elections are sufficient and after that you can go back to what you were doing and not paying attention. The lesson of our history is that is not the case. You’ve got to stay engaged, you’ve got to keep pushing for the positions you want. You’ve got to keep pushing for reform, and people need to get organized.”

Smith also is well known for two seminal works on Russia, and says the current crisis in Ukraine needs to be seen in the context of Russia's long historical ties to Ukraine, which go back at least 1,000 years. He says Vladimir Putin has been somewhat boxed in by Western interests, including the U.S., because those interests have for years been pushing for Ukraine to join NATO, which Smith says is essentially an anti-Russian alliance. He says Putin's actions in the region are wrong, but are akin to a bear in a cave lashing out at those "in his backyard."

Hedrick Smith will be speaking at 4:30 p.m. in the Silver Maple Ballroom of the Davis Center, at the University of Vermont. The event is free and open to the public.