The Hidden History of The American Dream, Thomas Hartmann
The “Hidden” is no hype. Hartmann delivers.
History is highly filtered so that the policies and decisions creating the present wealth gap are omitted, proving the old adage that: a half truth is the most dangerous of lies.
Hartmann begins by showing how:
* The reforms of FDR put the US economy on a path that created a prosperous middle class that was unique in history.
* Gave the financial system stability for nearly 80 years until the 2008 financial crisis.
* The ideas and policies beginning in the 1980s with Reagan and neoliberalism began transferring the prosperity of the middle-class to the super rich.
I will add this chart of the measure of inequality (the Gini Coefficient by economist Thomas Piketty) that supports Hartmann’s contentions in graphic form. You will see how economic inequality reduced after FDR’s reforms in 1933 and began to trickle up in 1980.
Hartmann packs his short 19 chapters with critical facts that should not be forgotten.
Examples:
Republican President Warren Harding, elected 1920, set the stage for the Great Depression. His motto was, “less government in business and more business in government”. He reduced the income tax rate from 74% to 24%. He privatized and deregulated businesses wherever he could.
The result was the explosion of wealth for the upper class in the roaring 20s followed by the implosion of the Great Depression.
That crisis was brought on by undoing two of FDR’s reforms: separating the investment banks from commercial banks and prohibiting commercial banks from using depositor money to speculate in investments for banker pay.
FDR also restored the upper income tax bracket to 91%, which was reduced to 74% after the Second World War. When the tax rate was high, the middle and working classes prospered.
Hartmann quotes a study by the University of Leicester in the United Kingdom that rated Denmark the happiest nation on earth. Its median tax rate is 52% -and the workers are quite happy with that tax rate. But for that they get free medical care, free college education, a higher hourly rate and guaranteed four weeks paid vacation every year.
Yet somehow the American public have been mesmerized into believing that a low tax rate for the rich would result in prosperity for the salaried classes- despite the evidence that Hartmann shows to the contrary — but which the salaried classes never see.
FDR also initiated several other programs to help the transfer of wealth from the taxes collected from the wealthy, to the middle and working classes, and it also improved the country’s infrastructure such as:
* Works Progress Administration (WPA) building bridges and roads
* Civil Conservation Core (CCC) that planted billions of trees to restore the environment after the dust bowl.
These efforts along with other such efforts as Social Security are decried by modern conservatives as ‘socialism’. (Yet, Republicans like Ike Eisenhower expanded Social Security and kept the high tax rate.)
But somehow much of the American public seems so Pavlovian conditioned that at the mere mention of ‘socialism’ an image arises in their consciousness that if this is done, the next day they will be living three families to a three-bedroom apartment like in communist Russia in the 1950s. And that reaction, despite, as Hartman points out, all other developed nations have had these terrible ‘socialistic’ measures such as medicare- for-all and with significant financial support for education for over 100 years- and, I will add, are not one inch closer to communism.
His chapter titled, “Make Congress Wear NASCAR Patches” reminds me of a brilliant internet meme. It showed a young boy standing on the street corner looking up at a man in a suit covered with corporate logo patches. He was replying to the boy, “No, I’m not a NASCAR driver, I’m a politician.”
Hartman relates a sting conducted by the British Sunday Times. It approached 20 former members of Parliament with a lobbying proposal. Eighteen rejected it outright but two agreed. That became a national headline scandal. The British people were outraged that as many as two former members of Parliament would be disloyal to their country.
Why the difference in America? Are many Americans so conditioned that they believe capitalism requires that members of Congress be allowed to use their experience and contacts gained serving the public later in the service of mega corporations and banks? Or perhaps they feel there’s just nothing can be done about it.
Regarding which party is better for business, Hartman points out that the economy performed better under Democratic presidents than Republican. Between 1933 and 2020 they were 14 presidents, seven from each party. The economy grew 4.6% under the Democratic presidents and 2.4% under the GOP.
That is just a taste from a few chapters. Hartmann has 19 chapters all with valuable information and insights about the hidden side of policies that have created the present economic inequality.
What comes to mind when reading a book like this is why no college or university has a program on the causes of economic inequality.
In any event, don’t just buy a copy of this book for yourself, buy one to pass on.
The Hidden History of The American Dream, Thomas Hartmann, Brett -Koehler, 2024
Originally published at https://jandweir.substack.com.
