Hedrick Smith

Pulitzer Prize-winning investigative journalist Hedrick Smith argues that over the past 40 years, aggressive deregulation, pro-business tax policy and the demise of corporate responsibility have undermined the American dream. Smith discusses what he sees as the growing concentration of wealth in the hands of a few, its implications for the middle class and what it would take to restore shared prosperity in the U.S.

Hedrick Smith, author, former reporter and editor for The New York Times and Emmy Award-winning producer and correspondent for PBS "Frontline"

  • Beth Grant DeRoos

    No one has stolen my dream or my goals.

    The big problem is way to many people from the late 80’s into 2008 lived beyond their means and played wannabe rich when they should have lived below their means, bought smaller homes, saved more in savings, and been debt free.

    And in the end they would have had a wonderful lifestyle that was more satisfying and sustainable.

    • thucy

      That’s great. I hope (sincerely) you’ll chime in when you have time with your thoughts on the narrative Mr. Smith is putting forward on air.

    • aa aa

      I agree that some people lived beyond their means, but your assumption that most Americans are paid enough to have a “smaller” home or even save at all is mistaken. Many workers here are not paid enough to have any savings even if they don’t go into debt. (I paid off my only debt (student loan) while getting welfare to supplement my meager wages, but I still have no savings and will never have any house because my wages are simply too low). The biggest problem with those in the bottom half going into debt is that it masked how low real wages had become for them. They did not realize that the real problem is stagnating or declining real wages, caused by a labor glut for those occupations in the bottom half.

  • Gary Kay

    They didn’t steal the dream, they stole the money and shipped the jobs overseas. Now the remaining jobs, in most instances, don’t begin to pay enough to save for the future. Try saving out of $8.00 per hour; especially if you are on your own. Acccording to measuringworth.com, the 2010 dollar, compared to the 1933 dollar (the worst year of the Great Depression), is worth somewhere between zero and seven cents. That’s quite accurate. I can remember that when I was six years old in 1955, you could buy a small bottled Coke out of a vending machine for seven cents. The approximately same size now costs about 90 cents locally. Factor this through the economy and you see that the “dream” is fading. Add to this the fact that the world population is constantly rising as the number of available jobs is decreasing, and you have a prescription for disaster. Of course there are those who will hoot at all this. I can only say “hoot away”. As the saying goes “there are none so blind as those who will not see.”

    • aa aa

      I agree completely that most US workers (certainly those in the bottom third or so) are not paid enough to save anything, I have no savings for that reason (never paid more than between $6000-12,000/year). But your example of Coke is not a good one. Basic groceries, especially sweetened food, are the one thing that Americans actually pay LESS for compared to the 1950s. Keep it real: the biggest real increase in costs relative to inflation has been, hands down: housing, higher education and health care. Increases in rental housing costs are particularly dire for those in the bottom third of the income ladder (those who could never afford their own house) since it’s such a large chunk of their budget (way over a third), and it is largely caused by population increase, which since the 1980s has been caused almost entirely by our non-enforcement of any meaningful limits on immigration. Low-skilled immigration is particularly bad for us low-income workers because those immigrants compete most with those already here, for rental housing and jobs. New land for housing is not easily created, thus housing prices are particularly sensitive to population increases.

  • Gary Kay

    I’ve read some of Smith before. He wrote “The Russians” back in the seventies, where he noted that Russia was becoming a very corrupt society. I believe that corruption was more of a factor for the downfall of Communism than was anything we might have done to cause it. Look at corruption; it’s destroying our nation right before our eyes. The same thing that happened to Russia.

  • Kurt thialfad

    I believe the American Dream is only available to Americans. But often you will hear of some foreign person, and that he is only pursiung the American Dream, as an excuse for his somewhat illegal behavior.

    One also hears of Dreamers, foreign students in America, who somehow should be afforded certain benefits just because they are pursuing the American Dream.

    Well, the American Dream is only for Americans. Mexicans pursue the Mexican Dream, Irish, the Irish Dream . Etc, etc.

  • Lee Thé

    I know a lot of conservatives, as luck would have it. None rich. And what worries me most is that the radical concentration of wealth in America over the last 40 years is a total non-issue for them.

    They blame all of America’s problems on liberals in general and President Obama in particular. They don’t just object to the President’s policies and actions. They loathe him personally.

    If I bring up the richs’ class war on the rest of us they won’t even argue the point–they just give me the “there he goes with his liberal nonsense” look, snort and turn away.

    Yet another data point showing that the Republican Party has morphed from a political insitution into a tribe, rather like South Africa’s Afrikaaners, complete with that “circle the wagons” mentality.

    • thucy

      I know quite a few conservatives (and libertarians). To be frank, I don’t see among them the narrow stereotypical outlook you describe.
      And there’s good reason to criticize Obama on policy – how on earth did he refuse to allow the Bush tax cuts to expire? Which financial group was the largest donor to his campaigns?
      Blaming conservatives (and the GOP) is delusional when Obama’s policies so closely mirror those of Bush.

      • Ilya Katsnelson

        I actually second Lee’s point. I also see exactly same story with conservatives I know.

        • thucy

          I see a circle-the-wagons mentality from some, but on both sides, as any casual review of unnecessarily derogatory, blindly partisan comments from Lee would indicate.

          I think circling the wagons is pretty human behavior. That said… when you separate Obama from the color of his skin, and you focus solely on his actions and policies, I think, by any rational measure, and as everyone from Chris Hedges to Tavis Smiley to Glenn Greenwald has detailed, what we’ve got here is just “BushCo” in a darker tone of pancake makeup.

          We need to look at the policies, not the skin color.

    • Beth Grant DeRoos

      Define conservative.

      All the ones I know and call friends are folks who live below their means, have small homes, smaller cars, aren’t big on shopping, but are big on having savings, they homeschool, and refuse government aid/help when ever possible. Thus they are walk the talk conservative/conservation/conserve folks. They are the first to help do stuff folks expect the town/county to do. And they are major volunteers with time and money locally.

      Many are Libertarian, but many are also detest what Republicans have become in the past decades where big business has been given a pass and even tax breaks for moving jobs overseas. Or have butted into peoples bodies and bedrooms. Read the book CrunchyCons which is about folks who are conservative minded, but also big on the environment and have a motto that the Zero Waste Home blog woman has which is Refuse Reduce Reuse Recycle Rot.

      Wonder if these folks you know aren’t simply apathetic folks who are more akin to talking out of both sides of their mouth. Like denouncing government programs unless its government programs they like and use. I call those folks hypocrites!

  • larrygothberg@att.net

    How can we compete with six cents an hour and why can’t we charge a tariff on companies that are paying six cents an hour so as to level out the playing field?

  • Bill_Woods

    ‘We shouldn’t borrow money to fight wars.’ (paraphrase)

    This is entirely wrong. Wars are exactly the sort of large-but-finite expense for which borrowing money can be justified. Imagine trying to fight WW2 on a pay-as-you-go basis, spending only the government’s tax revenues of 1939-45.

    • thucy

      It’s interesting you bring that up – Adam Smith was appalled by use of credit to fight wars. He thought if the English didn’t have to sacrifice on a personal level to fight a war (including the pinch of a war-time economy) then they would forget that war involves cost, and thereby go willy-nilly into all sorts of stupid, immoral, unnecessary conflicts. Which sounds a lot like what we did.

    • menloman

      Better still, avoid all wars and never borrow for anything.

  • Guest

    What about education? My high school was a hotbed of activity in 1970, but there is now a collective amnesia. People are paralyzed. Media is splintered, people are distracted by the Busby Berkeleys of today: reality TV and violent dramas. You said media has not done a good job, but there is more scholarship than ever. If they are going to learn about the subtleties of German productivity, it will have to be on the Simpsons or the Daily Show.

  • Guest

    In regards to Smith’s comment regarding High School education with additional two year training being a reasonable education for many lower-end technical positions: I believe this is true in theory however, I do not believe that is still true in areas of highly educated people like the Bay Area, Boston or New York.

    As a person who used to make technical drawings for Architectural firms, I have a three year masters degree from a top school. The firm that I worked for would never hire anyone without a minimum of a four year degree and in reality a masters degree. A High School degree with technical training does not get you very far in an educated market like the Bay Area, even if the applicants are more than capable of getting the job done.

    The American dream is an outdated idea. It is a story told to baby boomers as children. The younger generations are facing a completely different economic environment. Everything including, education, housing, heath care, and everyday items cost more now, often triple or quadruple the price including inflation. The baby boomers had opportunities that younger generations will never have like pension plans or the ability to dismiss your student loans with bankruptcy. The American Dream feels like an unsustainable form of nationalism. I though will admit, I would want everything it advertises but understand it is unrealistic.

    • thucy

      There’s an enormous amount of infrastructure repair that desperately needs to be done in this country, and that doesn’t require more than a high school degree.

      And if education is the answer, why are so many broke, indebted college grads doing unpaid internships? Your former job (tech drawing for arch) was never well-paid to begin with and has probably already been outsourced or is now done by autocad.

    • aa aa

      The problem of community college-degreed not getting well-paid jobs in places like the Bay Area, New York & Boston because there are plenty of college grads, and the problem of college grads not getting well-paid jobs, even taking unpaid internships in the hopes of getting any middle-class job in the future are related: it shows that there is an overall glut of labor in most occupational groups even among college educated. That’s why our immigration policy of the last twenty five years has been so irrationali: it’s based on the fantasy that the US can take have essentially open borders, taking anyone who wants to immigrate here, and that this will not lower the wages and worsen the labor options of those who are already here. The facts simply do not support this fantasy:we have had stagnant or declining wages for those in the bottom half for thirty years now. Failing to impose any meaningful limits on low- and medium skill workers entering the US job market just makes the situation worse. But Hecker won’t touch that issue because it reveals Democrats to be as complicit as Republicans in destroying the large American middle class that was created from 1942-75, when immigration was as its lowest level.

      Hecker does not understand the basics of labor supply and demand. It’s not true as he claims that manufacturing jobs are always well-paid. In Bangladesh garment workers are poorly paid and tolerate unsafe conditions because there’s still such a glut of labor (due to historically high fertility and transition from an agricultural economy) that laborers have little choice. Same thing in England during the 19th century. When we had essentially open borders before 1924 US manufacturing laborers, including those in heavy industry (read what Carnegie paid his steel-workers!) were NOT very well-paid. The real growth of a well-paid blue-collar workforce began during the 1940s when the government HAD to hire (gasp!) Americans–even poorly educated black Americans from the South–in war industries because it would not have been patriotic to import unlimited numbers of foreigners on the grounds that our own working class demanded too much in wages. Our large middle class lasted until the so-called “left” started promoting the erroneous idea to its supposed constituents that unlimited immigration does not hurt low and medium-skilled workers already here. In-person service workers whose jobs can never be exported (you have to clean houses, cut hair & teach children in person) could be much better paid if we limited low- and medium-skill immigrants. But that would be too politically costly for Hecker and those on the self-styled “left” to acknowledge. It’s far easier to simply blame evil bankers and Republicans.

      One reason why Germany has a higher wages, and cheaper education and training programs than the US: it is does not believe in the open borders ideology promoted nowadays by both the American “right” (Chamber of Commerce, libertarians) and the American “left” (ACLU, unions).

  • cooper29

    I disagree with Mr Smith, MONEY is at the core of our political problems. Our government has been bought by Wallstreet, the too big to fail banks, mega corporations, and military/security industrial complex. If we want a government by and for the people then the PEOPLE must buy it back. This will require limiting political contributions to just US citizens (No corporate donors) with congressionally mandated campaign limits, and probably some publicly funded contribution. Yes, this will require amending the constitution, but until then we will have a government for and by the one percent.

    Google “Lawrence Lessig Hacking at the Roots of Evil” for a thurough explanation of the problem and viable solutions.

  • victoria

    Can you give us a bit more information on the seminar at Berkeley on Tuesday? Thanks in advance.

  • D. Paul Stanford

    me of George Carlin’s line, ‘You know why they call it the American
    Dream don’t you? Because you’ve gotta be asleep to believe it.”

  • Curious

    Obama has turned the American dream into a nightmare.

    • Name

      The problems in this country politically and financially existed before his presidency. Giving him the blame for all our current problems is ludicrous. Congress (both sides) is the real albatross. Many of our congressmen and women have been in office for decades. That’s the problem. People need to elect new leadership in the legislative branch just like we elect new govenors and presidents.

  • menloman

    Anyone who heard David Stockman on Forum knows that Hedrick Smith doesn’t know what he’s talking about. Stockman fought Reagan’s budget policies and lost. That’s why he left.

    • thucy

      On Stockman, Hedrick was wrong. But that error doesn’t automatically discount everything Hedrick said.

  • I read through most of the comments and a lot of the chatter is sort of peripheral to the author’s main point that big money has had an outsized influence on our government at the expense of the rest of the country – to a shocking extent if you read the book. It is a great read but don’t read it before going to bed because it is disturbing. It should be disturbing no matter what your political party that you have to feel you are aligned with. If you are in the 1% category you should be ashamed of the political legacy. The 1% crowd should be concerned because if the political influence continues American society will breakdown to the point of total failure and possibly revolution which might jeopardize your wealth. I read somewhere recently that societies where there is a huge gap between a tiny super wealthy class and the rest of society that is usually a precursor to the collapse of the society. Before the veins start bulging in your neck because you think I or the author is advocating taxing the super wealthy to give cash directly to the poor you should read the book. We are talking about jobs senselessly lost and pensions robed etc We are talking about hard working Americans getting screwed by big money that owns the federal government. America like it or hire your own damn lobbyist or congressman.

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