Searching...
English
EnglishEnglish
EspañolSpanish
简体中文Chinese
FrançaisFrench
DeutschGerman
日本語Japanese
PortuguêsPortuguese
ItalianoItalian
한국어Korean
РусскийRussian
NederlandsDutch
العربيةArabic
PolskiPolish
हिन्दीHindi
Tiếng ViệtVietnamese
SvenskaSwedish
ΕλληνικάGreek
TürkçeTurkish
ไทยThai
ČeštinaCzech
RomânăRomanian
MagyarHungarian
УкраїнськаUkrainian
Bahasa IndonesiaIndonesian
DanskDanish
SuomiFinnish
БългарскиBulgarian
עבריתHebrew
NorskNorwegian
HrvatskiCroatian
CatalàCatalan
SlovenčinaSlovak
LietuviųLithuanian
SlovenščinaSlovenian
СрпскиSerbian
EestiEstonian
LatviešuLatvian
فارسیPersian
മലയാളംMalayalam
தமிழ்Tamil
اردوUrdu
Who Stole the American Dream?

Who Stole the American Dream?

by Hedrick Smith 2012 592 pages
4.19
500+ ratings
Listen
Try Full Access for 7 Days
Unlock listening & more!
Continue

Key Takeaways

1. The Power Shift: Business Rebellion Transformed American Politics

"The Powell memo sparked a business and corporate rebellion that would forever change the landscape of power in Washington and would influence our policies and economy even now."

Corporate America mobilizes. In 1971, future Supreme Court Justice Lewis Powell wrote a memo urging American businesses to become more politically active. This sparked a massive mobilization of corporate interests in Washington. Within a few years:

  • Over 2,000 companies set up Washington offices
  • New conservative think tanks like Heritage Foundation and Cato Institute were founded
  • Business groups like the Business Roundtable formed to coordinate lobbying efforts

Policy impact. This newfound political clout allowed business interests to shape policy in their favor:

  • Deregulation of industries like airlines and trucking
  • Tax cuts benefiting corporations and the wealthy
  • Weakening of labor unions and worker protections

The result was a seismic shift in the balance of power in Washington away from labor and consumer interests toward business and financial elites.

2. Middle-Class Prosperity: The Rise and Fall of Shared Economic Growth

"The Great Compression succeeded in equalizing incomes for a long period—more than thirty years. And the era of equality was also a time of unprecedented prosperity, which we have never been able to recapture."

Post-war prosperity. From the 1940s to 1970s, the U.S. experienced broad-based economic growth that benefited the middle class:

  • Wages rose in tandem with productivity gains
  • Strong labor unions negotiated better pay and benefits
  • Progressive taxation and regulation constrained inequality

The unraveling. Starting in the late 1970s, this model broke down:

  • Wages stagnated while productivity continued to rise
  • Union membership declined dramatically
  • Tax cuts favored the wealthy and corporations
  • Deregulation unleashed market forces

The result was a divergence between overall economic growth and middle-class living standards, with gains increasingly concentrated at the top.

3. The New Economy: How Corporate Strategies Widened Income Inequality

"Wedge economics split the fortunes of CEOs from the fate of their employees. It split Wall Street from Main Street."

Shareholder primacy. In the 1980s and 90s, corporate priorities shifted from balancing stakeholder interests to maximizing shareholder returns:

  • Mass layoffs and outsourcing to cut costs
  • Stock options tying executive pay to share prices
  • Financial engineering to boost short-term profits

Winners and losers. This new model produced:

  • Soaring CEO pay (from 40x to 400x average worker pay)
  • Stagnant wages for most workers
  • Job insecurity and benefit cuts
  • Booming profits and stock market gains

The "virtuous circle" of shared prosperity was replaced by a widening gap between corporate elites and average workers.

4. The Great Burden Shift: From Corporate to Individual Responsibility

"The burden shift has turned the traditional definition of the American Dream 'on its ear.'"

Retirement insecurity. The shift from defined-benefit pensions to 401(k) plans transferred retirement risk to workers:

  • Only 28% of large firms offer pensions vs. 83% in 1980
  • Typical 401(k) balance for 55-64 year olds: $120,000
  • Experts say $1 million+ needed for secure retirement

Healthcare costs. Employers have reduced health benefits and shifted costs to workers:

  • Employee share of premiums up 3x since 1999
  • High-deductible plans now cover 51% of workers

Education debt. As state funding declined, college costs skyrocketed:

  • Average student debt: $37,000
  • Total student debt: $1.7 trillion

The result is a middle class shouldering far more financial risk and insecurity than previous generations.

5. Unequal Democracy: How Money Dominates Modern American Politics

"In contrast with the past, what is good for America's global corporations is no longer necessarily good for the American people."

Campaign finance. The flood of money in politics has grown exponentially:

  • 2010 Citizens United ruling allowed unlimited corporate spending
  • 2012 presidential election cost $2.6 billion vs. $540 million in 2000

Lobbying power. Business interests dominate lobbying efforts:

  • 30 corporate lobbyists for every 1 labor/public interest lobbyist
  • Finance industry spent $5 billion on lobbying and campaigns 2008-2012

Policy outcomes. Studies show policy aligns more with elite preferences than average voters on issues like:

  • Taxes
  • Financial regulation
  • Social programs

The result is a political system increasingly responsive to moneyed interests rather than popular will.

6. The Housing Crisis: Predatory Lending and the Erosion of Middle-Class Wealth

"Instead of enabling ordinary Americans to achieve The Dream, they fashioned stratagems that stole the dream."

Predatory lending. Banks pushed risky loans on borrowers:

  • Subprime mortgages with teaser rates that reset higher
  • No-doc loans requiring no proof of income
  • Pressure tactics targeting minority communities

The bubble bursts. When home prices fell:

  • Millions faced foreclosure (6.7 million 2007-2013)
  • $7 trillion in home equity evaporated
  • Black and Hispanic wealth fell 50%+

Bailouts for banks, not homeowners. Government rescued financial institutions but provided limited help for underwater homeowners.

The housing crisis wiped out the primary source of wealth for many middle-class families, especially minorities.

7. Offshoring and Outsourcing: The Hollowing Out of American Jobs

"Over the past 8 years, China has cored out our manufacturing base and we have closed over 43,400 factories in the United States and lost almost 8 million manufacturing jobs."

Manufacturing decline. Since 2000:

  • U.S. lost 5 million manufacturing jobs
  • 70,000 factories closed
  • Trade deficit with China grew from $83 billion to $315 billion

High-tech exodus. Even advanced industries moved production:

  • Major tech firms like Apple, IBM, Intel built R&D centers in China
  • U.S. ran $131 billion high-tech trade deficit with China in 2018

H-1B visas. Companies use guest worker programs to replace U.S. workers:

  • 85,000 visas issued annually
  • Critics say used to undercut wages of U.S. tech workers

The offshoring of both blue-collar and white-collar jobs has hollowed out employment opportunities for the American middle class.

8. Political Polarization: The Disappearance of Bipartisanship and the Center

"Over the past thirty years, the parties have deserted the center … in favor of the wings…. First, at the level of individual members of Congress, moderates are vanishing. Second, the two parties have pulled apart."

Ideological sorting. The parties have become more ideologically homogeneous:

  • Liberal Republicans and conservative Democrats largely extinct
  • Geographic sorting has created partisan enclaves

Institutional changes. Several factors reinforce polarization:

  • Gerrymandering creates safe seats, encouraging extremism
  • Primary elections favor partisan voters
  • Social media and partisan news create echo chambers

Gridlock. The result is a dysfunctional political system:

  • Fewer bipartisan bills passed
  • More use of filibusters and government shutdowns
  • Difficulty addressing major challenges like climate change, immigration

The disappearance of the political center has made compromise and effective governance increasingly difficult.

9. Reclaiming the American Dream: A Call for Economic and Political Reform

"It will take a political metamorphosis, a populist renaissance, in America to reverse the political and economic tides of the past three decades and to make our country strong and whole again."

Economic reforms. Potential policies to rebuild middle-class prosperity:

  • Higher minimum wage and stronger labor protections
  • Universal healthcare and affordable higher education
  • Progressive taxation and closing of tax loopholes
  • Incentives for companies to share profits with workers

Political reforms. Ideas to rebalance democracy:

  • Campaign finance reform
  • Nonpartisan redistricting
  • Ranked choice voting to empower moderates
  • Limits on revolving door between government and industry

Civic engagement. Ultimately, change requires an active citizenry:

  • Grassroots organizing and protest movements
  • Increased voter turnout, especially in primaries and local elections
  • Pressure on elected officials through calls, letters, town halls

The path to renewing the American Dream requires both policy changes and a reinvigoration of democratic participation.

Last updated:

FAQ

What's Who Stole the American Dream? about?

  • Focus on Economic Inequality: The book examines the growing economic divide in America, highlighting how wealth has shifted from the middle class to the top 1%.
  • Historical Context: It traces the roots of this divide back to the 1970s, emphasizing the impact of policies and corporate practices on the middle class.
  • Call to Action: Author Hedrick Smith advocates for a grassroots movement to reclaim the American Dream, urging citizens to engage politically and demand changes that promote fairness and opportunity.

Why should I read Who Stole the American Dream??

  • Insightful Analysis: The book provides a comprehensive analysis of the factors leading to economic inequality, making it essential for understanding contemporary American economic issues.
  • Informed Citizenship: It encourages readers to engage in civic activism and understand their role in shaping policies that affect their lives.
  • Practical Solutions: Smith proposes actionable solutions, such as a domestic Marshall Plan, to address economic inequality and revitalize the American economy.

What are the key takeaways of Who Stole the American Dream??

  • Two Americas: The book emphasizes the concept of "Two Americas," where the rich get richer while the middle class struggles.
  • Power Shift: It discusses the shift in power from the middle class to corporate elites, particularly after the 1970s.
  • Need for Unity: Smith calls for a new unity among citizens to reclaim the American Dream, suggesting that collective action is essential to address systemic issues.

What are the best quotes from Who Stole the American Dream? and what do they mean?

  • Democracy vs. Wealth Concentration: “We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” This highlights the conflict between economic inequality and democratic governance.
  • Unity and Division: “A house divided against itself cannot stand.” Quoting Lincoln, Smith emphasizes the need for unity to address America's challenges.
  • Retirement System Critique: “The 401(k) system has proven to be totally inadequate.” This critiques the 401(k) as a flawed solution for retirement savings.

How does Who Stole the American Dream? address the concept of the "New Economy"?

  • Definition of New Economy: The "New Economy" refers to the economic landscape characterized by deregulation, globalization, and a focus on shareholder value.
  • Wedge Economics: Smith describes "wedge economics" as prioritizing corporate profits at the expense of workers, leading to stagnant wages.
  • Consequences for Workers: This shift has dismantled the social contract that once provided job security and benefits, leaving many workers vulnerable.

What is the Powell Memorandum and its significance in Who Stole the American Dream??

  • Corporate Call to Arms: The Powell Memorandum, written in 1971, urged businesses to engage in politics to protect their interests against regulations.
  • Shift in Power Dynamics: It marked a significant shift in power from the middle class to corporate elites, influencing policies favoring business interests.
  • Long-term Impact: The memo is seen as a catalyst for the economic and political changes leading to current inequality.

How does Who Stole the American Dream? propose to revitalize the American economy?

  • Domestic Marshall Plan: Smith calls for a comprehensive strategy to create jobs and rebuild the manufacturing sector through public-private partnerships.
  • Investment in Infrastructure: Emphasizes the importance of investing in infrastructure to create jobs and boost the economy.
  • Focus on Middle-Class Needs: Advocates for policies prioritizing the middle class, ensuring economic growth benefits a broader population.

What role does the middle class play in Who Stole the American Dream??

  • Foundation of Democracy: A strong middle class is essential for a healthy democracy, fostering civic engagement and political participation.
  • Victims of Economic Policies: The middle class has been systematically undermined by policies favoring the wealthy, leading to economic stagnation.
  • Call for Empowerment: Smith emphasizes the need for the middle class to reclaim its power through collective action and advocacy.

How does Who Stole the American Dream? address the role of government in the economy?

  • Government as a Player: Smith argues that government has always played a crucial role in shaping the economy, often intervening to support industries.
  • Historical Examples: Provides examples like the New Deal to illustrate how government actions have fostered growth and stability.
  • Call for a New Industrial Policy: Advocates for a proactive policy leveraging government resources to revitalize manufacturing and create jobs.

What are the implications of the wealth gap discussed in Who Stole the American Dream??

  • Social Fabric Threatened: The growing wealth gap threatens America's social fabric, undermining equal opportunity and leading to unrest.
  • Political Polarization: Economic inequality is linked to political polarization, making the system unresponsive to the majority's needs.
  • Long-term Economic Risks: Extreme wealth concentration can lead to economic instability, diminishing consumer demand and growth.

How does Who Stole the American Dream? address the issue of corporate influence in politics?

  • Corporate Lobbying: Smith discusses the overwhelming influence of corporate lobbying, highlighting how special interests overshadow citizens' needs.
  • Historical Context: Provides a historical overview of how corporate power has grown, leading to a political environment favoring corporate interests.
  • Call for Reform: Advocates for reforms to reduce corporate influence, including campaign finance reform and greater transparency.

How does Who Stole the American Dream? suggest we can reclaim the American Dream?

  • Civic Engagement: Advocates for a revival of grassroots activism, encouraging citizens to become involved in political processes.
  • Policy Changes: Outlines a ten-step strategy for a "Domestic Marshall Plan" aimed at restoring economic fairness.
  • Unity and Consensus: Stresses the importance of finding common ground among diverse groups to build a united front against inequality.

Review Summary

4.19 out of 5
Average of 500+ ratings from Goodreads and Amazon.

Who Stole the American Dream? receives mostly positive reviews for its detailed analysis of economic inequality and the erosion of the middle class. Readers appreciate Smith's clear writing, thorough research, and historical perspective. Many find the book eye-opening and infuriating, as it exposes how corporate interests and policy changes have favored the wealthy. Some criticize its left-leaning bias, while others praise its proposed solutions. Overall, reviewers consider it an important, accessible work that illuminates complex economic issues affecting average Americans.

Your rating:
4.62
25 ratings

About the Author

Hedrick Smith is a renowned journalist with a distinguished career spanning print and television media. As a reporter and editor for The New York Times, he covered major national and international stories. Smith also worked as a producer and correspondent for PBS's Frontline, creating in-depth documentaries on various topics. He has authored several books, including the critically acclaimed "Who Stole the American Dream?" Smith's work is known for its thorough research, clear explanations of complex issues, and ability to connect historical events to current societal challenges. His journalism has earned him numerous accolades, including Pulitzer Prizes, establishing him as a respected voice in American media.

Download PDF

To save this Who Stole the American Dream? summary for later, download the free PDF. You can print it out, or read offline at your convenience.
Download PDF
File size: 0.23 MB     Pages: 13

Download EPUB

To read this Who Stole the American Dream? summary on your e-reader device or app, download the free EPUB. The .epub digital book format is ideal for reading ebooks on phones, tablets, and e-readers.
Download EPUB
File size: 3.05 MB     Pages: 9
Listen to Summary
0:00
-0:00
1x
Dan
Andrew
Michelle
Lauren
Select Speed
1.0×
+
200 words per minute
Home
Library
Get App
Create a free account to unlock:
Requests: Request new book summaries
Bookmarks: Save your favorite books
History: Revisit books later
Recommendations: Personalized for you
Ratings: Rate books & see your ratings
100,000+ readers
Try Full Access for 7 Days
Listen, bookmark, and more
Compare Features Free Pro
📖 Read Summaries
All summaries are free to read in 40 languages
🎧 Listen to Summaries
Listen to unlimited summaries in 40 languages
❤️ Unlimited Bookmarks
Free users are limited to 10
📜 Unlimited History
Free users are limited to 10
Risk-Free Timeline
Today: Get Instant Access
Listen to full summaries of 73,530 books. That's 12,000+ hours of audio!
Day 4: Trial Reminder
We'll send you a notification that your trial is ending soon.
Day 7: Your subscription begins
You'll be charged on May 16,
cancel anytime before.
Consume 2.8x More Books
2.8x more books Listening Reading
Our users love us
100,000+ readers
"...I can 10x the number of books I can read..."
"...exceptionally accurate, engaging, and beautifully presented..."
"...better than any amazon review when I'm making a book-buying decision..."
Save 62%
Yearly
$119.88 $44.99/year
$3.75/mo
Monthly
$9.99/mo
Try Free & Unlock
7 days free, then $44.99/year. Cancel anytime.
Scanner
Find a barcode to scan

Settings
General
Widget
Loading...