How the American dream was lost

As we enter into a presidential election year in the United States, we will soon be hearing more about the fierce political divisions there and the social and economic factors behind them.

With this in mind, David Leonhardt of The New York Times has set out to diagnose the central economic problems, while also encouraging his counterparts on the political Left to broaden their appeal.

Ours Was the Shining Future: The Story of the American Dream, published in October, is the fruit of his labour.

The writer of his paper’s flagship The Morning newsletter has produced an absorbing, readable and in many ways persuasive account of the long decline of the “American Dream”.

Surveying the evidence of sluggish growth in incomes, deteriorations in various measures of public health and stagnating life expectancy, Leonhardt labels recent decades as the “Great American Stagnation”.

The promise of upward social mobility lay at the heart of America’s self-understanding, and this was not a fictional notion. It was instead the norm.

Leonhardt points to analysis by the Harvard economist Raj Chetty which showed that 92 percent of children born in 1940 grew up to have higher household incomes than their parents.

In subsequent decades, it became far less likely that children would surpass their parents on the economic ladder. In fact, Professor Chetty states that about half of the babies born in 1980 will attain this feat, thereby meaning that “achieving the American dream is a 50-50 proposition.”

Leonhardt notes additional evidence showing that the typical American family in 2019 had a net worth lower than the typical family in 2001, before describing the range of ways in which life appears to have gotten worse.

“The number of children living with only one parent or with neither has doubled since the 1970s. The obesity rate has nearly tripled. The number of Americans who have spent time behind bars at some point has risen five-fold. Measures of childhood mental health have deteriorated,” he writes.

Social institutions

The book’s nostalgic title is no accident. As the author makes clear, things were not always like this. Colonial America was strikingly less unequal in economic terms than most countries in western Europe, with their systems of inherited wealth and hereditary title.

As the author recounts, the extraordinary levels of income inequality which developed during the ‘Gilded Age’ in the late 19th and early 20th centuries eventually led to a decisive reversal in US economic policy: with President Franklin Roosevelt’s administration increasing regulations, strengthening labour unions and intervening more in critical sectors of the economy.

While Leonhardt is clearly a supporter of the Democratic Party, he goes to considerable lengths to highlight the achievements of the moderate Republican administrations of the mid-20th century, in particular that of President Dwight Eisenhower which prioritised infrastructural improvements and greatly increased federal spending on research and development — thus laying the groundwork for future innovation by private sector companies.

Unions are a core focus here. Leonhardt maintains that the rise of the labour movement from the Depression era onwards helped usher in the period of widespread affluence which followed, just as he believes that declining union membership is central to the poor wage growth of recent decades.

Government policy certainly played a role in making union membership more common — more than 30 percent of American workers were union members by the mid-40s, up from just over 10 percent a decade prior to that.

Frustratingly though, the author does little to connect these shifts to the broader trends of decreased institutional involvement (be that in unions, churches, membership associations or so forth) in the last half-century.

For a book that assails economic individualism while also taking occasional aim at social individualism, this is certainly a weakness.

Movers and shakers

Leonhardt is on steadier ground in identifying a greater sense of social responsibility among mid-20th century business leaders, who were far less likely to seek disproportionately high salaries.

The author’s profiles of particularly important figures throughout his narrative constitute a powerful part of this book’s appeal.

One particularly effective description is that of the businessman turned politician George Romney, who turned down enormous performance-related bonuses while serving as a very successful chief executive of American Motors Corporation.

Even in good times, Romney did not wish to violate the salary cap which he had helped put in place. Leonhardt draws a sharp contrast between George and his son Mitt, who decades later would earn vastly more money running a private equity firm.

The comparison between Romney Senior and Junior highlights the rapid growth in executive pay in recent decades in an era of declining median family incomes, not to mention the transformation of an economy centred around making things to one centred around making money.

Much of the space in Leonhardt’s book is dedicated to his critique of the more market-oriented policies which have been pursued from the time of President Ronald Reagan onwards.

However, he also laments the tendency of today’s progressives to downplay economic solidarity while promoting a radical social agenda which is not always supported by most voters.

Why has this been the case?

According to Leonhardt, the motivations of the ‘New Left’ which came to the fore in the 1960s contrasted sharply with those of the left-wing reformers in the New Deal era. They had less interest in the importance of social institutions (such as unions) and were also less favourably inclined to the patriotic views of most ordinary Americans.

Instead of seeking to expand on the work of those who went before them in bringing their nation together, the (often affluent) 1960s liberals rebelled against the social status quo while “calling for a new individualism without acknowledging that individualism was often a better deal for privileged members of a society than for everybody else.”

One noteworthy example of this is the author’s description of the feminist campaigner Betty Friedan, whose analysis of gender relations was heavily focused on higher-income females, and whose criticism of traditional family life was not popular with many American women.

In time, this class division became more obvious as college graduates began to gravitate ever more strongly towards the Democratic Party.

At the same time, concerns over the rapid increase in crime from the 1960s onwards helped the Republican Party to make major inroads among low- or middle-income voters.

Indeed, a similar trend is now at play when it comes to liberal (and usually upper-class liberal) demands to ‘defund the police’, a tagline which has become a key weapon in an increasingly racially diverse GOP’s rhetorical arsenal.

Melting pot

Immigration is arguably the most contentious issue in American politics today.

Leonhardt’s overview of how immigration levels have increased significantly since the liberal reforms of the 1960s — and the degree to which this change came about in spite of public opinion tending towards a more restrictionist policy — is probably the bravest part of this liberal’s book.

It also has a much wider relevance to the debates taking place across advanced Western societies.

Again and again, we can observe working-class voters defecting from the centre-left parties of their parents and embracing conservative or populist alternatives precisely because of cultural changes taking place against their wishes. Leonhardt offers a perceptive explanation for what is happening.

“When immigration is a salient issue, it serves to remind many working-class voters that they agree with conservative parties on questions of patriotism, nationhood and security. When immigration fades as an issue, voters think less about these questions and more about a society’s economic divisions. Those class divisions, in turn, remind workers that they generally agree with progressive parties on economic policies, such as tax rates and government benefits,” he explains.

Likely with one eye towards a fateful date in November 2024, Leonhardt advises American progressives to take a number of steps: to listen more to working-class concerns; to cease insisting that all aspects of the socially liberal agenda (like transgender issues) are non-negotiable; and to adopt a more patriotic position in place of the recent tendency of many on the Left to denigrate or at least distance themselves from American traditions.

No reasonable observer could disagree with any of this. Unfortunately for the author, reasonableness is in short supply among those who have embraced progressive radicalism on race, gender and sexuality.

This book is not perfect. The author does not place sufficient attention on increasing societal atomisation, instead seeking to use the heavy hand of government to forcibly reverse the decline in the number of Americans choosing to join one particular institution: the trade union.

It is also regrettable that the dichotomy which is sometimes presented between college-educated people and the working-class is not examined in a more comprehensive way.

Questions could have been asked about whether the current educational structure is not itself to blame by overvaluing academic credentials while undervaluing practical skills — not to mention the way colleges often serve as incubators for the most destructive ideas and ideologies.

Leonhardt’s book still offers an exceptional analysis of the American political scene though, especially the flaws within the American Left, which are daily increasing the chances of President Trump’s return to the White House.

AUTHOR

JAMES BRADSHAW

James Bradshaw writes on topics including history, culture, film and literature.

EDITORS NOTE: This Mercator column is republished with permission. ©All rights reserved.

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