More and more these days, middle-class Americans seem to feel that their opportunities for income growth and achieving the American dream simply aren’t what they used to be.
Pulitzer Prize winning journalist Hedrick Smith, author of the new book Who Stole the American Dream, joined Hardball Friday to explain the hidden causes of inequality in the U.S. economy. The public, Smith said, has been led to believe that the middle class squeeze in this country has been caused by globalization, technology and market forces.
Not so, argues Smith, who points to a political/corporate power shift in the late 1970’s as the culprit of the widening wealth gap.
” There was a political rebellion. [The corporate interests] absolutely stuffed labor, they stuffed the consumer movement, they got deregulation, they got tax cuts, they got all kinds of things so the power shift tilted the policy towards business, towards the wealthy,” Smith told Chris Matthews.
“It used to be that the prosperity, the growth of American productivity was shared. The middle class had its share, along with the owners, along with the shareholders. The productivity of the American workforce, it doubled from 1945 to 1975.”
Smith argued that this last fact represents the clearest evidence of what this power shift has wrought: In 1980, the average pay of a CEO was only 40 times that of the average company employee. By 2000, the ratio had skyrocketed to 400 times that of the average employee.
“A lot of our progressive viewers have a hunch about this, but they don’t know the details,” Matthews said. “Because they know the squeeze is real.”