The Servant Economy

Jeff Faux

Description

Renowned economist Jeff Faux explains why neither party's leaders have a plan to remedy America's unemployment, inequality, or long economic slide

America's political and economic elite spent so long making such terrible decisions that they caused the collapse of 2008. So how can they continue down the same road? The simple answer, that no in charge one wants to publicly acknowledge: because things are still pretty great for the people who run America. It was an accident of history, Jeff Faux explains, that after World War II the U.S. could afford a prosperous middle class, a dominant military, and a booming economic elite at the same time. For the past three decades, all three have been competing, with the middle class always losing. Soon the military will decline as well.

• The most plausible projections Faux explores foresee a future economy nearly devoid of production and exports, with the most profitable industries existing to solely to serve the wealthiest 1%
• The author's last book, The Global Class War, sold over 20,000 copies by correctly predicting the permanent decline of our debt-burdened middle class at the hands of our off-shoring executives, out of control financiers, and their friends in Washington
• Since his last book, Faux is repeatedly asked what either party will do to face these mounting crises. After looking over actual policies, proposed plans, non-partisan reports, and think tank papers, his astonishing conclusion: more of the same.

Part I: The Pursuit of Folly

1. The Politics of Hope 3

2. A Brief History of America’s Cushion 21

3. The Cushion Deflates 47

4. The Age of Reagan: American Abandoned 69

Part II: What the Crash Revealed

5. Who Knew? They Knew 93

6. Obama: Stuch in the Sandpile 115

7. The Shaky Case for Optimism 143

Part III: When What We See Coming, Finally Comes

8. The Politics of Austerity 163

9. Grand Bargain? A Done Dea 185

10. Flickering Hope: Schools, Trade Winds, and the Bubble’s Return 201

11. From Service to Servitude 223

12. Hope, from the Ashes of No Hope 247

Acknowledgments 263

Notes 265

Index 285

Sujets

• Political Economy
• Political Science
• American politics
• Politics of the United States

Informations

• Publié par: Turner Publishing Company
• Date de parution: 17 mai 2012
• Nombre de lectures: 0
• EAN13: 9781118233863
• Langue: English

Extrait

Contents
Cover
Series
Title Page
Copyright
Dedication
Part I: The Pursuit of Folly
Chapter 1: The Politics of Hope
Chapter 2: A Brief History of America’s Cushion
Chapter 3: The Cushion Deflates
Chpater 4: The Age of Reagan: Americans Abandoned
Part II: What the Crash Revealed
Chapter 5: Who Knew? They Knew
Chapter 6: Obama: Stuck in the Sandpile
Chapter 7: The Shaky Case for Optimism
Part III: When What We See Coming Finally Comes
Chapter 8: The Politics of Austerity
Chapter 9: Grand Bargain? A Done Deal
Chapter 10: Flickering Hope: Schools, Trade Winds, and the Bubble’s Return
Chapter 11: From Service to Servitude
Chapter 12: Hope, from the Ashes of No Hope
Acknowledgments
Index
Also by Jeff Faux
New Hope for the Inner City
The Star-Spangled Hustle (with A. Blaustein)
Rebuilding America (with G. Alperovitz)
Reclaiming Prosperity (with T. Schafer)
The Party’s Not Over
The Global Class War

Copyright © 2012 by Jeff Faux. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada
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Library of Congress Cataloging-in-Publication Data: Faux, Geoffrey P. The servant economy: where America’s elite is sending the middle class/Jeff Faux. pages cm Includes bibliographical references and index. ISBN 978-0-470-18239-0 (cloth); ISBN 978-1-118-22011-5 (ebk); ISBN 978-1-118-23386-3 (ebk); ISBN 978-1-118-25848-4 (ebk) 1. United States–Economic policy–2009 2. United States–Economic conditions–2009 3. Middle class–United States–Economic conditions. I. Title. HC106.84.F38 2012 330.973–dc23 2012013719
To my wife, Marge, helpmate and soul mate
Part I
The Pursuit of Folly
The future ain't what it used to be.
—Yogi Berra
1
The Politics of Hope
Historians who look back to our time will surely conclude that our problem was not that we didn’t know where we were headed, it was that we didn’t act on what we knew.
Even before the financial crash of 2008–2009 and the Great Recession that followed, there was ample warning. Whether you were a journalist who produced the news, a politician who made the news, or a citizen who read or watched the news, it was hard not be aware that for the past thirty years, the following had been happening: Most Americans had experienced stagnant real incomes, shrinking financial security, and fraying social safety nets. The nation had been buying more from the rest of the world than it had been selling and was borrowing to finance the difference. Despite the erosion of U.S. economic power, the governing class—Democrats and Republicans alike—insisted on maintaining its global hegemony, whatever the cost.
Sweeping historical analogies between the present-day United States and the decline and fall of earlier empires, once the subject of rarified university seminars, had been seeping into public consciousness for the previous three decades. Yale historian Paul Kennedy’s best-selling book, The Rise and Fall of the Great Powers , revived grand theories of the natural life cycles of empires that had been proposed earlier in the twentieth century by German philosopher Oswald Spengler and British historian Arnold Toynbee. Looking at the erosion of U.S. leadership in technology and trade competitiveness, Kennedy suggested that the United States might be headed for the same fate as past superpowers that had collapsed because their political ambitions had expanded beyond their economic bases. 1. His book spawned an academic cottage industry that fondled the historical analogies: Were we Rome in the fourth century? Spain in the sixteenth century? England at the beginning of the twentieth century?
Kennedy’s book also spawned an even larger industry of politicians, pundits, and academics who flatly rejected the notion that anyone could hear the bells of history tolling the end of America’s time in the sun. Indeed, the neoconservative academic Francis Fukuyama responded that the bell was tolling for history itself: the United States had already achieved the best possible society in an imperfect world. Fukuyama later backed off, but his thesis remains the operating assumption of the U.S. governing class.
Still, throughout the giddy years of the successive stock market and real estate booms, Kennedy’s analysis touched an undercurrent of economic anxiety among traditionally optimistic middle-class Americans, who were increasingly aware that more of their shoes, underwear, televisions, automobiles, and computers were being made in China, Korea, and Mexico. A stream of books, news articles, and websites pumped out the accumulating statistics of working Americans’ financial stress. Plots about lousy jobs, layoffs, and maxed-out credit cards popped up in TV sitcoms, Hollywood movies, and popular music. In his 1992 campaign for president Bill Clinton observed in television advertisements that Americans were “working harder for less.” Fifteen years later, at the peak of the financial bubble, the numbers showed that they still were.

The United States remains rich in industrious and adaptable people, stable political institutions, a widespread commitment to material progress, and more than its share of the planet’s natural assets, but it is no longer rich enough to continue to finance America’s three principal national dreams:

1. The dream of the business elite for subsidized, unregulated capitalism
2. The dream of the political elite for global hegemony
3. The dream of the people for a steadily rising standard of living
We can certainly continue to have one out of three, and perhaps even two out of three. But, three out of three? No.
Nevertheless, the end-of-empire story has limited appeal for the U.S. governing class: the politicians, the media pundits, and the policy managers who move through revolving doors to and from investment banks, global corporations, universities, think tanks, and high-level government jobs. 2. Of course they admitted that the country had problems; indeed, it was their job to solve them. But the suggestion that the United States might no longer be able to have it all was not very useful for ambitious leaders whose careers depended on their ability to project self-confidence. Nor was it useful for their wealthy patrons who valued the prices of the futures in their global portfolios more than the future of their country.
Acknowledging these limits is dangerous territory for them. If the market is no longer delivering the prosperity promised the citizen in the American dream, then the political system bears more responsibility than our leaders want to admit for the relentless redistribution of income and wealth from the bottom and the middle of the pyramid to the top. Most dangerous of all, such an acknowledgment encourages discussion about who our political representatives actually represent. The Democrats are no more eager to have this conversation than the Republicans are.

Ronald Reagan’s election, like Franklin Roosevelt’s half a century earlier, profoundly changed the way that Americans think collectively about the future.
The stock market crash of 1929 and the Great Depression that followed thoroughly discredited the system of unregulated financial speculation that had driven the country and the world to its economic knees. In response, the New Deal not only expanded the role of government in managing the market and protecting the public from the hard edges of laissez-faire, it also established a presumption of collective responsibility for the future. The New Deal restored the earlier idea of internal development as a conscious national enterprise, which had been lost in the late nineteenth century when industrialization morphed into finance capitalism and the westward expansion morphed into the thirst for overseas empire.
Roosevelt understood that investment is the future-shaping act. The government financed dams, rural electrification, schools