The Betrayal of the American Dream (29 page)

2. Will you support U.S. manufacturing and other sectors of the economy by working for a more balanced trade policy?

3. Will you support government investment in essential infrastructure that helps business and creates jobs?

4. Will you help keep the benefits of U.S. innovation within the United States and work to prevent those benefits from being outsourced?

The choices we make in the candidates we elect and the programs and policies we support will set the direction of the country.

Many Americans are determined to restore rule by the majority. Last year, after we published some of our preliminary findings about the economic state of the middle class, many citizens wrote to us to offer their views. One man called for a “nonviolent revolution by the middle class.” Another proposed a movement to turn everyone in Congress out of office. Still others, while acknowledging the gravity of the situation, also expressed hope, like this man from Illinois:

Our market power is now so diminished, and our indebtedness so exorbitant, that we may have few levers left. But it is never too late to reorient our thinking and to correct a sustained injustice to our citizens.

What’s at stake is not only the middle class, but the country itself. As the late U.S. Supreme Court justice Louis Brandeis once put it: “We can have concentrated wealth in the hands of a few or we can have democracy. But we cannot have both.”

APPENDIX

Richest Pay Less

Effective Federal Tax Rate for Top 400 Families, 1955–2007

Sources: Top 400, 1955 and 1961: Janet McCubbin/Fritz Scheuren, Individual Income Tax Shares and Average Tax Rates, IRS, 1988 and 1989; 1995–2007: IRS, Statistics of Income, “The 400 Individual Income Tax Returns Reporting the Highest Adjusted Gross Incomes Each Year, 1992–2007.” Research by Monica Arpino, Michael Lawson, Investigative Reporting Workshop

Graphic by Alissa Scheller, Investigative Reporting Workshop

The Real Deficit

U.S. global trade policies have wiped out millions of jobs and created a staggering trade deficit —the world’s largest. Our main trading partners all run trade surpluses.

Source: World Trade Organization Research by Monica Arpino, Michael Lawson, Investigative Reporting Workshop Graphic by Alissa Scheller, Investigative Reporting Workshop

Corporations’ Declining Share
of the Tax Bill

Source: The President’s Budget for Fiscal Year 2012 Research by Monica Arpino, Michael Lawson, Investigative Reporting Workshop Graphic by Lisa Snider, Investigative Reporting Workshop

The Loss of
Manufacturing Jobs

Manufacturing, once a path to the middle class for American families, made up only 9 percent of the workforce in 2011, an all-time low.

Source: Bureau of Labor Statistics Research by Monica Arpino, Michael Lawson, Investigative Reporting Workshop Graphic by Alissa Scheller, Investigative Reporting Workshop

ACKNOWLEDGMENTS

We owe a deep debt of gratitude to all the men and women we interviewed who gave so willingly of their time. They welcomed us into their lives, invited us to sit with them around their kitchen tables, allowed us to visit them at their places of work, or talked to us for hours by phone to tell us their stories. They are the heart of this book, and their resilience and fortitude have reaffirmed our faith in the American people. To each one, we extend our heartfelt thanks.

This book would not have come to pass in its present form without the support, encouragement, and research assistance provided by the Investigative Reporting Workshop at the American University School of Communication in Washington, D.C. The Workshop is the creation of Charles Lewis, the preeminent figure in the ever-evolving world of nonprofit investigative journalism. We have known Chuck for many years, dating back to his days as founder and director of the Center for Public Integrity in Washington, and admire his courage, principles, and achievements. When we first discussed the idea of revisiting the story of what is happening to the American middle class, Chuck not only encouraged us to do so but suggested that we collaborate with the Workshop which could assist with research and provide a platform for our findings as well as for the work of others on the subject. Under Chuck’s direction, the Workshop launched a multimedia research and reporting project called “What Went Wrong.” It quickly became a research hub for information about the middle class and its website served as an invaluable vehicle for us and other writers to post the stories about working Americans. This fruitful collaboration with the researchers, writers, and producers at the Workshop produced a rich volume of journalism—more than forty multimedia stories alone in 2011—including work by us that ultimately became an important part of this book.

Many others at the Workshop deserve our thanks. Kat Aaron, the project manager for “What Went Wrong,” helped to direct the research and brought her own deep knowledge, compassion, and expertise to the subjects we researched. Her professionalism, commitment, and exceptional contributions to the entire venture are deeply appreciated. Lynne Perri, the Workshop’s managing editor, is as able, expert, and delightful a manager of a newsroom as you are likely to find—a wonderfully incisive editor and steadying influence. We would also like to thank senior editor Margaret Ebrahim for her excellent preliminary work in chiseling out from the vast themes we all followed a coherent story line that we hope will be the basis of a documentary based on this work. Senior editor Wendell Cochran, a longtime friend and fellow investigative reporter, provided ideas that were helpful in shaping the project. Thanks are also due to Barbara Schecter, the Workshop’s able development director. We had the benefit of working with the Workshop’s talented young staff, including Monica Arpino, Lydia Beyoud, Russ Choma, Jacob Fenton, Alissa Scheller, and Michael Lawson. Michael’s sensitive interviews greatly enriched this story by providing a deeper understanding of the challenges that many Americans face today.

Also at American University, we want to express our thanks to Larry Kirkman, dean of the School of Communication, whose support and encouragement for this venture from the start is deeply appreciated.

Our remarkable collaboration with the Workshop would not have been possible were it not for the generous support of the Nathan Cummings Foundation, the Deer Creek Foundation, the Otto Haas Charitable Trust, the Public Welfare Foundation and the Wyncote Foundation.

Additional research for the project was provided by Allison Steele, whom we would like to thank for her thoughtful and incisive reporting.

At PublicAffairs, we have been fortunate to work with an extremely talented group of professionals who have given us all the encouragement and assistance any authors could ever expect: Peter Osnos, founder and editor-at-large, who enthusiastically supported this book from day one and offered wise counsel at every stage; publisher Susan Weinberg, whose support and encouragement were unstinting; and editor Clive Priddle for his outstanding editing, his intellectual curiosity, and his ability to draw out of us information we didn’t even realize we had. We also want to thank three others at PublicAffairs who are emblematic of this deeply talented publishing house—Lisa Kaufman, Melissa Raymond, and Jaime Leifer.

We would also like to thank editors at the
Philadelphia Inquirer,
which copublished six articles we wrote for the Investigative Reporting Workshop: Stan Wischnowski and Rose Ciotta, who initiated the idea of copublishing with the Workshop, and Kevin Ferris, who shepherded the stories into print.

At the Wylie Agency, which has represented us for many years, we want to thank Jeffrey Posternak for his suggestions and his commitment to this book, as well as for his many courtesies and help through the years.

We are greatly thankful to Maxwell King, our former editor at the
Philadelphia Inquirer,
who was instrumental in helping to shape our 1991 series “America: What Went Wrong?” and who also urged us to write this book. Max gave a thoughtful, thorough reading of the first draft of this work and made his usual excellent suggestions, all the while offering his encouragement as we threaded our way through the thickets of trade and tax policy.

We would like to thank Martin Lobel, a Washington tax lawyer who for more than forty years has guided us through the labyrinth of the U.S. tax system, always with great patience and good humor.

And to Eileen Reynolds, who always asks the right questions.

Last, a special word of thanks to Nancy Steele, a superb editor who made important contributions to each stage of this project.

One final word: This book is another chapter in the continuation of a story we have been reporting and writing about for many years in newspapers, magazines, and books. Some of the individuals in this book have appeared in our previous work, but we have updated their stories to place them in the context of recent economic events. Staying in contact with some of them over the years has deepened our perspective about the plight of the middle class, which we have tried to convey in this book.

As always, whatever errors there may be, and we hope there are few, are solely our own.

A NOTE ON SOURCES

This book is based on interviews and public records and data from a wide variety of federal, state, and local agencies.

With few exceptions, the statistics used in this book were drawn from government and corporate sources. They include the U.S. Internal Revenue Service, the Bureau of Labor Statistics, the Federal Reserve Board, the
Annual Budget of the U.S. Government,
the
Economic Report of the President,
corporate filings with the U.S. Securities and Exchange Commission, the Congressional Budget Office, the Organization for Economic Cooperation and Development, the U.S. Department of Commerce, the U.S. State Department, the International Trade Administration, the Social Security Administration, and the U.S. Census Bureau.