Kitabı oku: «Third World America: How Our Politicians Are Abandoning the Ordinary Citizen»

THIRD WORLD

AMERICA

HOW OUR POLITICIANS ARE ABANDONING THE ORDINARY CITIZEN

ARIANNA HUFFINGTON

For the millions of middle-class Americans fighting to keep the American Dream alive

Contents

Cover

Title Page

NOTE: A WARNING FOR BRITAIN

Preface

Chapter 1 - THIRD WORLD AMERICA

Chapter 2 - NIGHTMARE ON MAIN STREET

Chapter 3 - AMERICA THE BEAUTIFUL DILAPIDATED

Chapter 4 - CSI USA: WHO KILLED THE AMERICAN DREAM?

Chapter 5 - SAVING OURSELVES FROM A THIRD WORLD FUTURE

Acknowledgments

Notes

Index

About the Author

Praise

Copyright

About the Publisher

NOTE: A WARNING FOR BRITAIN

When I sat down to write Third World America, my goal was to sound the alarm about what was happening in the United States, and to do so while there was still time to course-correct.

And though the book focuses primarily on the U.S., the conditions it depicts are by no means an example of “American Exceptionalism.” In fact, the breakdown I describe—the increasing tilt of the economy toward those in finance and away from working families, the costly short-sightedness about a decaying infrastructure, the lack of upward mobility, the shredding of the social safety net, the rising income inequality, the lack of shared sacrifice—is, unfortunately, also happening in the U.K.

The U.S. and the U.K. may be, as Shaw once said, two nations “separated by a common language,” but they’re definitely joined by a common problem. There is the distinct possibility that, if action is not taken to change the current trajectory, both countries will no longer represent a beacon of hope to those looking to better their lives and the lives of their children.

I have been a lucky beneficiary of the opportunities offered by both countries. I came from Greece to England to study when I was 16 years old and then spent almost 10 years in London writing. I then moved to the United States and have made a life here. But when I look at what has happened in both of my adopted countries, and at the path they’re currently headed down, I don’t see those same opportunities being offered.

In both countries, the economic debate has been hijacked by deficit and austerity hawks proposing spending cuts that will fall most heavily on the poor and on working families, even as millions continue to be out of work and both economies are barely growing.

In the U.S., nearly 25 million Americans are unemployed or underemployed. In the U.K., 2.5 million are out of work.

For 2011, real wages in the U.K. are forecast to be roughly the same as they were back in 2005. And, in the wake of the first round of government belt-tightening, growth in the U.K. slowed to just 0.5 percent in the first quarter of 2011.

In both the United States and Britain, there is a profound sense that the countries are on the wrong track. A Gallup poll from 2010 found that one in three Britons would like to leave the country, the highest proportion in all of Europe, narrowly topping Romania.

In a May 2011 poll, 69 percent of Americans said they were worried about having enough money to live comfortably in the next two or three years. 41 percent were worried about losing their home. 60 percent were worried about finding work. Nearly 60 percent thought budget cuts were being enacted unfairly, and over half thought their family’s financial situation was going to get worse over the next year.

Fortunately, although both countries share strikingly similar economic situations, they also share a similar foundation of resilience. The British stiff upper lip is merely the ancestor of the American can-do spirit. Additionally, the solutions I focus on in the latter sections of this book apply to both countries as well. While each nation needs to demand more of its leaders, the solutions increasingly are going to have to come from the bottom up.

And, in both countries, social media and community engagement are fueling this bottom-up dynamic. Real solutions are less likely to come from politicians than from millions of people in thousands of communities taking the initiative to share, connect, engage, and solve problems. This movement may be fueled by technology, but at its core is a real person connecting with another person. As I show in this book, by collectively reaching out to those in need around us—to our neighbors and our communities—we can take the first steps to modifying our current trajectory.

I wrote this book to turn a spotlight on both the problems and the solutions—and the very real consequences of not taking action. Both nations stand at a crossroads. Both were once undisputed superpowers. And both are now having to get used to a new reality in which, in many important ways, the power they enjoyed in the past has dissipated. But it would be tragic if the opportunity for upward mobility that both nations have historically afforded their citizens also became a thing of the past.

Moving forward in this new era, Britain—like America—will have to choose: connection or division; understanding or fear; reaching out or turning away.

The anger we rightly feel when looking at what’s happening in both the U.S. and the U.K. can lead us to either tap into our baser instincts or into the better angels of our nature. The future of each country depends on the choice we make.

PREFACE

Growing up, I remember walking to school in Athens past a statue of President Truman. The statue was a daily reminder of the magnificent nation responsible for, among other things, the Marshall Plan.

Everyone in Greece either had a family member, or, like my family, a friend, who’d left to find a better life in America. That was the phrase everyone associated with America: “a better life.” America was a place you could go to work really hard, make a good living, and even send money back home—a better life.

I was sixteen when I first came to America as part of a program called the Experiment in International Living. I spent the summer in York, Pennsylvania, staying with four different families. I went back to Athens, and then soon went on to Cambridge and London. But part of me remained in America.

When I came back in 1980, I knew that this time it would be for good. Thirty years later, there’s still no other place I’d rather live. Over that time, one of the characteristics I’ve come to love the most about my adopted country is its optimism. In fact, it melded perfectly with my own Greek temperament: Zorba the Greek meets the American spirit. The Italian journalist Luigi Barzini¹ wrote that America “is alarmingly optimistic, compassionate, incredibly generous . . . It was a spiritual wind that drove Americans irresistibly ahead from the beginning.” The only downside of the optimistic spirit is that it can sometimes prevent us from seeing what is unfolding until it’s too late.

In recent years, as the evidence mounted about the road we’re on as a country—one that I was sure would prove disastrous if we failed to course-correct in time—I was conflicted. I wanted to believe everything would turn out okay, as it has so often in the past. But the stubborn facts kept nagging at me as the warning signs became more and more numerous. I had to choose whether to sound like Cassandra or fall back on a double dose of the congenital optimism of both my native and adopted countries and assume it was all just another speed bump on the road to a “more perfect union.” It’s never fun being Cassandra. But remember, Cassandra ended up being right. And the Trojans, who remained blissfully blind to her warnings, ended up being very wrong and very dead.

So, yes, as I look around at our great, sprawling country, we are obviously not yet a Third World nation. But we are well on our way. This is the unspoken fear of so many out-of-work Americans and those still at work but anxious about their futures and the futures of their children. My goal for this book is to sound the alarm so that we never do become “Third World America.”

“America,” Winston Churchill reportedly said², “can always be counted on to do the right thing, after it has exhausted all other possibilities.” Well, we have exhausted a lot of possibilities, and for millions of the unemployed, the underemployed, the ones whose homes have been foreclosed, and the ones who’ve declared bankruptcy or can’t pay their credit card bills, the pro cess has already been very painful. It’s time now to do the right things.

The book closes on an optimistic note. Part 5 is about many of those right things being done around the country. Because in the end, despite the acts of greed, cronyism, and disregard for the public interest committed by both business and political leaders, I am ultimately heartened by the resilience, creativity, and largely unheralded acts of compassion and empathy that I see among Americans everywhere. Turning our country around will take the concerted effort of citizens all across America, standing up for themselves, their families, and their communities—both demanding change and embodying it—and keeping the promise of the American Dream alive for future generations.

Chapter 1 THIRD WORLD AMERICA

“Third World America.”

It’s a jarring phrase, one that is deeply contrary to our national conviction that America is the greatest nation on Earth—as well as the richest, the most powerful, the most generous, and the most noble. It also doesn’t match our day-today experience of the country we live in—where it seems there is, if not a chicken in every pot, then a flat-screen TV on every wall. And we’re still the world’s only military superpower, right?

So what, exactly, does it mean—“Third World America”?

For me, it’s a warning: a shimmering foreshadowing of a possible future. It is the flip side of the American Dream—an American nightmare of our own making.

I use it to sum up the ugly facts we’d rather not know, to connect the uncomfortable dots we’d rather not connect, and to articulate one of our deepest fears as a people—that we are slipping as a nation. It’s a harbinger, a clanging alarm telling us that if we don’t correct our course, contrary to our history and to what has always seemed to be our destiny, we could indeed become a Third World nation—a place where there are only two classes: the rich . . . and everyone else. Think Mexico or Brazil, where the wealthy live behind fortified gates, with machine-gun-toting guards protecting their children from kidnapping.

A place that failed to keep up with history. A place not “ taken down by a foreign enemy, but by the avarice of our corporate elite and the neglect of our elected leaders.

The warning lights on our national dashboard are flashing red: Our industrial base is vanishing, taking with it the kind of jobs that have formed the backbone of our economy for more than a century; our education system is in shambles, making it harder for tomorrow’s workforce to acquire the information and training it needs to land good twenty-first-century jobs; our infrastructure—our roads, our bridges, our sewage and water and transportation and electrical systems—is crumbling.

And America’s middle class, the driver of so much of our creative and economic success—the foundation of our democracy—is rapidly disappearing, taking with it a key component of the American Dream: the promise that, with hard work and discipline, our children will have the chance to do better than we did, just as we had the chance to do better than the generation before us.

Nothing better illustrates the ways in which we have begun to travel down this perilous road than the sorry state of America’s middle class. So long as our middle class is thriving, it would be impossible for America to become a Third World nation. But the facts show a different trajectory. It’s no longer an exaggeration to say that middle-class Americans are an endangered species.

“The middle class has been³ under assault for a long time,” President Obama said early in 2010 while announcing a series of modest proposals to bolster what he called “the class that made the twentieth century the American century.”

During the 2008 campaign⁴, Barack Obama’s guiding principle was that he “would not forget the middle class.” Indeed, David Plouffe, Obama’s campaign manager, told me after the election, “We held that North Star in our sights at all times. We made many mistakes along the way, but we always remembered that we were running because, as Barack put it, the dreams so many generations had fought for were slipping away.” Well, you’d need a pretty powerful telescope to see that North Star these days.

According to Plouffe, Obama and his team⁵ decided that he should make a run for the White House because “the core leadership had turned rotten” and “the people were getting hosed.” But the extent to which the people have continued to be hosed and the middle class assaulted becomes shockingly clear when the baby steps taken to bail out Main Street are compared to the all-hands-on-deck, no-expenses-spared bailout of Wall Street. In fact, the economic devastation of the middle class is a lot more threatening to the long-term stability of the country than the financial crisis that saw trillions of taxpayer dollars funneled—either directly or through government guarantees—to Wall Street.

The middle class is teetering on the brink of collapse just as surely as AIG was in the fall of 2009—only this time, it’s not just one giant insurance company (and its banking counter-parties) facing disaster, it’s tens of millions of hardworking Americans who played by the rules. This country’s middle class is going the way of Lehman Brothers—disappearing in front of our eyes. A decline that began decades ago has now become a plummeting free fall.

Just how bad things have⁶ gotten was succinctly—and bracingly—summed up by Elizabeth Warren, chair of the Congressional Oversight Panel charged with monitoring the Troubled Asset Relief Program (TARP): “One in five Americans is unemployed, underemployed or just plain out of work. One in nine families can’t make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than 120,000 families are filing for bankruptcy every month. The economic crisis has wiped more than $5 trillion from pensions and savings.”

The Bush and Obama administrations bailed out America’s big banks because it suddenly became imaginable that the financial system might collapse. When we take a hard look at what’s happening to America’s middle class, its disappearance suddenly becomes not only imaginable but, unless drastic action is taken, inevitable.

SHORTING THE MIDDLE CLASS

In April 2010, the shot heard⁷ around the country—or at least around Wall Street and Capitol Hill—was the Securities and Exchange Commission suing Goldman Sachs for fraud. It was big news in itself, as Goldman Sachs has become the poster child for the deep disconnect between Wall Street and Main Street. But much more important than the Goldman case in particular was the light it shed on what the financial and political elite had been doing to America for the last thirty years: shorting the middle class.

The American people have been sold on the very American idea that working hard and playing by the rules would ensure some modicum of prosperity and stability, while at the same time Wall Street has been overseeing a massive transfer of wealth from the middle class to the richest Americans. Ordinary working Americans were seen as the counterparty in a zero-sum bet—in Wall Street parlance, the proverbial “dumb money” at the table.

The results have been devastating: a disappearing middle class, a precipitous drop in economic and social mobility, and, ultimately, the undermining of the foundation of our democracy.

The human toll of the shorting of the middle class is tallied every day on websites such as Recessionwire.com, Layoff-SupportNetwork.com, and HowIGotLaidOff.com, where the casualties of Wall Street’s systemic scam share their personal stories. One tale in particular struck me as emblematic of the place America’s middle class finds itself these days. It feels like a dark reboot of the American Dream. Think Horatio Alger rewritten by O. Henry—or Rod Serling.

It’s the story of Dean Blackburn of Alameda, California. The first part of his life was a classic American success story. Raised in Minnesota by a single mom who worked as a teacher, he was “middle class by default.” Through a combination of smarts and hard work, he made his way to Yale, then, for seventeen years, he steadily progressed up the economic ladder, gaining skills as a project manager, analyst, and IT director.

Then came February 2009, when, at age thirty-five, he was laid off on the last day of the month. His boss chose that day because it meant the company would not have to pay for another month of his health coverage. “Looking back on it,” he told me, “that hurt more than the layoff itself—just knowing that the president of the company was exactly that calculating and that unfeeling about my own and my family’s well-being.” The timing, Blackburn continued, “put those ‘family days’ and company picnics in a weird new light.”

Fourteen months later, Blackburn was still looking for a new job. His wife, who had taken a year off work when their daughter, Robin, was born, was eager to return to a full-time job. They faced the double challenge of finding an affordable preschool for their two-year-old as well as the jobs that would pay for it. Meanwhile, they tried to maintain their sanity by participating in life as they once had, “but we look at the numbers constantly now, and worry about what will happen when our savings run out,” Blackburn told me. “Not if, but when.”

As Blackburn dealt with the immediate financial struggles his extended unemployment brought, he became acutely aware of the broader implications of the shorting of the middle class. “Ultimately,” he says, “it’s not about a dip in corporate profits, but a change in corporate attitude—a change that means no one’s job is safe, and never will be, ever again.”

It’s one of the reasons he decided to start his own company, NaviDate, a data-driven twist on online dating sites: “It’s no longer a trade-off between doing what you love and having stability. Stability is long gone, so you better do something you love!”

Achieving middle-class stability has always been a big part of the American Dream, but, as Blackburn notes, mobility now is increasingly one way: “The plateaus of each step, which can be a great place to stop a bit and catch your breath, are gone. Now, it’s climb, climb, climb, or start sliding back down immediately.” The result: “The odds are you’re going to wind up at the bottom eventually, unless you get lucky.”

Luck. That’s what the American Dream now rests on. It used to be about education, hard work, and perseverance, but today the system is rigged to such an extent that the middle-class life is the prize on a scratch-off lottery ticket. The revelation of the corruption behind the financial crisis has put the very idea of the middle class and the American Dream, as Blackburn put it, “in a weird new light.”

A lot of people at the top of the economic food chain have done very well shorting the middle class. But the losers in those bets weren’t Goldman Sachs investors—they were millions of Americans whose sole crime was to optimistically buy into the American Dream, only to find it had been replaced by a sophisticated scam.

In November 2008, as the initial⁸ aftershocks of the economic earthquake were being felt, New York Times columnist David Brooks predicted the rise of a new social class—“the formerly middle class”—made up of those who had just joined the middle class at the end of the boom, only to fall back when the recession began. “To them,” he wrote, “the gap between where they are and where they used to be will seem wide and daunting.” But, in the time since Brooks wrote this, the ranks of the formerly middle class have swelled far beyond those who joined at the tail end of the boom. And for millions of Americans, that “wide and daunting” gap is also beginning to look permanent.

The evidence that the middle class has been consistently shorted is so overwhelming—and the results so potentially damaging to our society—that even bastions of establishment thinking are on alert. In a 2010 strategy paper⁹, the Hamilton Project—the economic think tank founded in 2006 by former U.S. Treasury secretary Robert Rubin (a big beneficiary of the shorting of the middle class)—argued “that the American tradition of expanding opportunity from one generation to the next is at risk because we are failing to make the necessary investments in human, physical, and environmental capital.”

Of course, it’s even worse than that. Beyond failing to make necessary investments for the future, we are actually cutting back on our current investment in people, with massive bud get cuts in education, health care, and social services in state after state after state, all across America.

At least forty-five states¹⁰ have imposed bud get cuts that hurt families and reduce vital services to their most vulnerable residents. Those affected include children, the elderly, the disabled, the sick, the homeless, and the mentally ill, as well as college students and faculty.

According to a report by¹¹ the Center on Bud get and Policy Priorities, at least twenty-nine states have made cuts to public health programs, twenty-four states have cut programs for the elderly and disabled, twenty-nine states have cut aid to K– 12 education, and thirty-nine states have cut assistance to public colleges and universities.

America’s states faced¹² a cumulative bud get gap of $166 billion for fiscal 2010. Total shortfalls through fiscal 2011 are estimated at $380 billion—and could be even higher depending on what happens to unemployment.

These are massive numbers¹³. But when you remember that we spent $182 billion to bail out AIG ($12.9 billion of which¹⁴ went straight to Goldman Sachs), you realize that this amount alone would be more than enough to close the 2010 bud get gap in every state in the Union. Toss in the $45 billion¹⁵ we gave to now-making-a-profit Bank of America and the $45 billion¹⁶ we gave to now-making-a-profit Citigroup, and we would be well on the way to ensuring that no state’s vital services are cut through 2011.

But instead that money has gone to the banks without any fundamental reform of the system, without any strings attached or edicts about how much they have to lend to help the real economy recover—or, indeed, without even having to tell us what they did with our money.

All across the country, the fiscal ax is falling. The devastation is in the details:

• California is eliminating CalWORKS¹⁷, a financial assistance program for families in need, a cut that will affect 1.4 million people, two-thirds of whom are children. This plan would also cut state subsidies for child care, affecting 142,000 children.

• Minnesota has eliminated a program¹⁸ that provides health care to 21,500 low-income employed adults with no children.

• Rhode Island has cut health insurance for 1,000 low-income families.

• Maine has cut education grants and funding for homeless shelters.

• Utah has cut Medicaid for physical and occupational therapies, as well as for speech and hearing ser vices.

• Michigan, Nevada, California, and Utah have eliminated coverage of dental and vision services for those receiving Medicaid.

• Alabama has canceled services that allow 1,100 seniors to stay in their own homes instead of being sent to nursing facilities.

• Georgia has cut $112 million from an initiative designed to reduce the gap in funding between wealthy and poor school districts.

• Arizona has cut cash assistance grants for 38,500 low-income families.

• Virginia has decreased payments for people with mental retardation, mental health issues, and problems with substance abuse.

• Illinois has cut funding for child welfare and youth services programs.

• Connecticut has cut programs that help prevent child abuse and provide legal services for foster children.

• Massachusetts is making cuts in Head Start, universal pre-K programs, and services to prepare special-needs children for school.

Keep in mind, all these services are being cut at a time when more and more people are finding themselves in need of them. It’s a perfect storm of middle-class suffering.

And yet the human consequences of the financial collapse are largely missing from our national debate. I’m referring especially to the people who had steady jobs; people with college degrees; people who were paying their bills, saving for retirement, doing the right thing—and who have, in many instances, lost everything. The daily miseries being visited upon them are unfolding across the country.

So why is there no sense of urgency coming out of Washington?

Perhaps the reason can¹⁹ be found in the stunning results of a study conducted by Northeastern University’s Center for Labor Market Studies that broke down the unemployment rate by household income. Unemployment for those making $150,000 a year, the study found, was only 3 percent in the last quarter of 2009. The rate for those in the middle income range was 9 percent—not far off the national average. The rate for those in the bottom 10 percent of income was a staggering 31 percent.

These numbers, according to²⁰ the Wall Street Journal’s Robert Frank, “raise questions about the theory behind what is informally known as ‘trickle down’ economics, since full employment at the top doesn’t seem to be translating into more jobs below.”

In fact, these numbers do more than raise questions—they also supply the answers.

Does anyone believe that the sense of urgency coming out of Washington wouldn’t be wildly different if the unemployment rate for the top 10 percent of income earners was 31 percent? If one-third of television news producers, pundits, bankers, and lobbyists were unemployed, would the measures proposed by the White House and Congress still be as anemic? Of course not—the sense of national emergency would be so great you’d hear air-raid sirens howling.

Instead we get policy Band-Aids—timid moves that will do little to abate a crisis that threatens to change the very fabric of our society. For much of our history, America was known for its promise of upward mobility. That promise has been called into question over the past three decades, and an extended run of high unemployment could be its death knell.

“These are the kinds²¹ of jobless rates that push families already struggling on meager incomes into destitution,” wrote New York Times columnist Bob Herbert. “And such gruesome gaps in the condition of groups at the top and bottom of the economic ladder are unmistakable signs of impending societal instability. This is dangerous stuff.”

The lack of urgency we are seeing in Washington—and the lack of focus on real people—is stunning considering that the consequences of our failed financial system are everywhere you look. Putting flesh and blood on the cold, hard statistics means putting the spotlight on the people whose lives were turned upside down as a result of our out-of-control financial system.

Ron Bednar and Mary McCurnin of Rancho Cordova, California, are a loving couple that got divorced last year, not because their relationship wasn’t working but because it was the only way to make ends meet. Due to unemployment and a bankruptcy caused by a prolonged illness, they found themselves with only $300 in the bank. By getting divorced, McCurnin was able to collect Social Security widow’s benefits from her first husband, who died in 1989. “We literally live from week to week,” she says.

Kimberly Rios of North East, Mary land, sold her wedding ring on Craigslist so she could pay her utility bills. “This is no joke, please be a serious buyer,” her ad read. “It is too cold for us to be without electric and heat so if you have been looking consider my deal.” After selling her ring, she locked herself in her bathroom, pretending to take a shower, so she could cry without upsetting her family. “I just felt like it was the last piece of what little I had left,” she says. “I came out smiling as usual and tried to get my husband and daughter excited that this was a good thing.”

Faye Harris was laid off from her accounting job at Emory University Hospital in Atlanta last year. She had been diagnosed with cancer and was fighting it successfully. But as soon as the time off she was guaranteed by the Family and Medical Leave Act expired, she received a letter of termination and her health insurance was canceled. “Do I just lie down and die? Am I not worthy anymore?” she asked herself. “I’ve worked all my life. Put myself through school, raised four children, played by the rules, saved money, and this one illness has just wiped me out.”

Ricky Macoy of Quinlan, Texas, is a fifty-two-year-old electrician who found himself among the long-term unemployed. With little work since late 2008, he began pawning his possessions, including his tools, and holding yard sales to get enough money to feed his family. “The thing that hurt the most was we had to hock my son’s PlayStation 3, his Wii, his electric guitar,” Macoy says. “We lived a good life. Middle-income America, man. I’m used to construction, the booms and the busts . . . [but] I was not expecting to be laid off this long.”