Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream Hardcover – Sep 7 2010
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“A voice of conscience in a time when we need conscience more than ever. . . Arianna Huffington is right: it’s not too late for citizens to wake up politicians or to take matters into their own hands. Time is short: read this book now.”
--Elizabeth Warren -- Harvard Law School professor and author of The Two-Income Trap
“Luckily for Congress, the White House, and Corporate America, no one reads anymore, because if people discover this book, America will become a very different place.”
“Restoring the values that have made America strong – a thriving middle class and a sense of basic fair play – are of crucial importance to all Americans, left and right. Third World America is a powerful plea for our country to wake up so that we can change course -- before it’s too late.”
“Politicians talk endlessly about “protecting the middle class,” yet, over the last 30 years, the middle class has taken a relentless pounding. In precise, graphic, and shocking terms that will bring the crisis home to everyone, Arianna Huffington explains why: special interests have become too powerful, money dominates our politics, and there is no sense of empathy or even shame amongst our elite. The national spirit that built America. . . lies in tatters. Turning this situation around will require strong new leadership. How long will that take? That depends on you - read this book and push hard for change”
--Simon Johnson – professor of economics at MIT Sloan School of Business and co-author of 13 Bankers
“Arianna Huffington is one of the very few people in America committed to say things the way they are and to expose the monstrous elephants in the room ignored by the dominant discourse. Even rarer, she does so in a lively, engaging, and, mostly, charming way.”
--Nassim Nicholas Taleb, author The Black Swan
“Third World America is simultaneously hard-hitting and empathetic. It makes the case that, as the world's largest economy fights to define its future, a viable middle-class is essential to our country's well-being and something we should all fight to ensure.”
--Rob Johnson -- Senior Fellow and Director of the Project on Global Finance at the Roosevelt Institute
“The quick wit and sharp critique of Arianna Huffington will now be heard where they are needed most -- in defense of our quickly disappearing middle class. Taking direct aim at the misguided policies that have protected the plutocracy at the expense of the middle class, Arianna explains in stark language where we will end up if we don't change course. A must-read for all concerned citizens and thinkers. “
--Eliot Spitzer, former Attorney General and governor of New York.
“With great passion and insight, Arianna tells it like it is. Blending outrage and optimism – indignation at how America’s crony capitalists have wrecked the nation’s great middle class, and unremitting hope that our people will rise and put things right – she explains what’s happened and what must be done. Here, clearly, is a book for our times.”
--Robert B. Reich, Professor of Public Policy, University of California, Berkeley, and former U.S. Secretary of Labor
“An alarming account of the plight of the American middle class.”
--Joseph Stiglitz, professor of economics at Columbia University and Nobel Laureater
About the Author
ARIANNA HUFFINGTON is the cofounder and editor in chief of the Huffington Post, a nationally syndicated columnist, and the author of thirteen books. She is also the cohost of Left, Right & Center, public radio’s popular political roundtable program. She was named to the Time 100, Time magazine’s list of the world’s one hundred most influential people, and to the Financial Times’s list of fifty people who shaped the decade. Originally from Greece, she moved to England when she was sixteen and graduated from Cambridge University with an MA in economics.See all Product Description
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Top Customer Reviews
In her most recent and easy to read book, Arianna Huffington, co-founder of opinion maker Huffington Post and one of the most influential women of the USA, explores how inefficiently the governments in the USA are being run and how real is the threat that the USA can become a Third World country very soon. She attributes the current economic fiasco of the US simply to one aspect - successive US Governments being run under heavy influence of lobbies, financial and manufacturing cartels, special interest groups and the like.
She goes on to show how President Obama gave in to the same groups and did not invest in improving the crumbling infrastructure, school system, and encouraging bringing new ideas to the land by immigrants. But she does not paint a gloom and doom scenario altogether. She gives many encouraging examples of individuals, small businesses, and niche corporate players who are improving the lives in the USA without any help from the government.
So now I can defend my answer to the question I asked at the outset.
If Canadian politicians become pawns in the hands of special interest groups, such as price gouging gas companies, and the Central Bank decides to increase interest rate at its whim at a time when most Canadians have just moved into their new homes or have started new businesses under the encouragement of the Federal and provincial governments, like it did last few times, then there is a possibility that average Canadians will be hit too badly to recover at all.
Most Helpful Customer Reviews on Amazon.com (beta)
Our mediocre grammar school and high school educational system continues its downward slide. The Great Recession is squeezing school budgets.
Meanwhile, multi-national corporations avoid taxes, while enjoying bailout loans and fat government contracts.
The over-hyped American Recovery and Reinvestment Act of 2009 earmarked only $72 billion of the $787 billion appropriation of taxpayer dollars to projects to improve the country's infrastructure.
Top subprime lenders included Wells Fargo; Countrywide, purchased by Bank of America, Washington Mutual, now part of JPMorgan Chase; CitiMortgage, part of Citigroup; First Franklin (now closed), purchased by Merrill Lynch, which was purchased by Bank of America; ChaseHome Finance, part of JPMorgan Chase; Ownit, partly owned by Merrill Lynch, which was later purchased by Bank of America; and EMC, part of Bear Stearns, which was purchased by JPMorgan Chase. Most of the rest depended on massive loans from Wall Street. Many of these lenders were sued by states for fraud and paid billions in settlements.
According to trade publication "Inside Mortgage Finance," top mortgage backed securities underwriters included now defunct Lehman Brothers, Bank of America's Countrywide Securities, Morgan Stanley, Bank of America's Merrill Lynch, JPMorgan's Bear Stearns, and Goldman Sachs.
This doesn't even include collateralized debt obligations (CDOs), and structured investment vehicles (SIVs) and credit derivatives, all of which amplified losses.
Fannie and Freddie do not make loans. They purchase mortgage loans and earn fees for guaranteeing payments on the loans. In 2006, Fannie and Freddie accounted for 33% of total mortgage backed securities issuance. In the first half of 2010, they accounted for around 64% of new issuance. They were forced to pick up the slack and buy more when Wall Street's private label securitization Ponzi scheme blew up. Fannie and Freddie did not create the housing bubble, and they are now Wall Street's dumping ground.
At the start of the meltdown, the IMF and the U.S. administration estimated losses of $2 to $2.5 trillion. Unemployment and the losses are now shockingly worse. What was merely a recession escalated into the Great Recession.
According to William K Black, after the much tinier S&L crisis, there were over 1,000 successful felony prosecutions, several thousand successful enforcement actions, and roughly 1,000 successful civil actions. This time Congress gave us the Great Cover-up. Bank officers dodged jail time and collected billions in bonuses.
Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream names the culprits and gives a roadmap for solutions. Congress must start over on financial reform, regulate derivatives, commodities trading, break-up the Too Big to Fail financial institutions (update Glass-Steagall), and more. We deserve better than a third world economy divided by ultra-rich on one side and debt-ridden middle class and dirt poor citizens on the other.
We'll need a Constitutional amendment requiring full public financing for political campaigns (for starters). Our politicians have shown us how willing they are to be owned by special interest groups that will buy votes, buy a campaign, or just buy them off. As Arianna Huffington explains: "If someone's going to own the politicians, it might as well be the American people." (P. 172)
My major complaint is that Huffington fails to indentify advancing technology as a primary driving force behind income inequality. This is an important point because if technology (along with globalization) is a major culprit, then it tells us something about the future: Things are very likely to get even worse. We're sure to see more advanced automation and also new technology that makes it even easier for companies to offshore work. Even the upper middle class is not going to escape this tend. The basic reality is that technology and globalization are making our labor worth much less and giving workers less and less bargaining power.
For a great overview of this issue--and a focus on the future rather than the past--I'd strongly recommend this book: The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future. It shows how advancing technology will very likely lead to structural uemployment and even more extreme concentration of income into the hands of the few. As someone who works in the technology field, I'm convinced that the trends described in this book are already well underway and explain, at least in part, the situation that Huffington describes. As "The Lights in the Tunnel" points out, this problem may ultimately be so big that it defies conventional solutions. I highly recommend that anyone concerned about the plight of middle class Americans check out this book and give these issues some serious thought.
Embedded in one of the most powerful chapters in this short, concise, and mighty wallop of a book, Huffington calls out the culture of corruption and greed that has taken over our government. Money from corporate lobbyists has filled the halls of Congress, influences vote, and despite public outrage over bank bailouts, BP oil rig disasters, and an economy still on shaky ground, real reform that would make a difference in the lives of the dwindling American Middle Class has no chance of succeeding. The facts are not new, and are not unknown, but terrifying none-the-less.
Huffington's book is filled with stories of what Palin calls "real Americans", people who paid the price of becoming middle class by attending college, working hard, owning a home, and living comfortably. However, due to circumstances beyond their control, (having jobs shipped overseas, health crises, et. al), these people are living off retirement savings and credit cards, just to make ends meet. These aren't people living the high life off a government buck; these are our fellow citizens who played by the rules, but somewhere down the road, the rules changed to favor corporate profits beyond anything else, and when it comes time to pay the piper, the middle class gets stuck with the bill.
This is one of the most accessible books on the current crisis. Huffington writes with such precision that her points and information resonates powerfully. This book could easily be read in one night. Warning: have post it notes, sticky arrows, or a notepad nearby. There are facts, phrases and statistics you are going to want to remember. My book is covered with them.
Finishing the book, I wondered if anyone who has anything to do with this mess is going to listen? Is corporate money so pervasive in our system that it's made our policy makers, both Democratic and Republican, deaf to the concerns of the citizens they purport to represent? Are our children going to look at books such as this and Rebooting the American Dream: 11 Ways to Rebuild Our Country and ask why didn't people read and heed these lessons as we live in a truly corporate run America?
This book should not only be read by everyone, but paid attention to. Huffington has sounded the alarm brilliantly, but will anyone listen?
The first disconnect, between Wall Street and Main Street is a sore spot with Americans of any political hue. Goldman Sachs commits fraud on a grand scale and is slapped with fines that barely put a dent in the company's profits, yet we will put in jail the person who holds up $500 from the cash register. The disparity in treatment between those in power and those who are powerless is glaring. Huffington wonders why those who have caused so much financial misery are not held accountable, and avoid being treated as the common thieves they are.
The disconnect between the middle and lower classes with the wealthiest. The disparity is well documented, but Huffington adds one depressing statistic after another: the reduction or elimination of aid programs, the increase in foreclosures and people below the poverty line, and the increase in productivity and decline in income.
The two most profound disconnects are the differences between Congress and citizens, and what the author calls, "Who could have known?" The disconnect between Congress and citizens is that Congress dances to the tune of the lobbyists and the money they contribute to members of Congress. According to Huffington lobbyists outnumber Congressmen by 26 to 1, and have spent 3.5 billion to influence their bills and their votes. That works out to 6.1 million for each of the 535 members of the House and Senate. Huffington contends that by the time a bill has made it to the floor or even to committee, the particulars and loopholes have already been decided in backroom deals with lobbyists present. She doesn't distinguish betweeen Republican or Democrat noting that Phil Gramm, Chuck Schumer, Alfonse D'Amato, and Chris Dodd have their hands dirty. The result were bills that would not protect us against future Wall Street greed, bank incompetence, or inadequate medical care. Knowing about crony capitalism was one thing, reading it was quite another.
"Who could have known" or "the struggle of memory against forgetting" describes the various blunders over the past several years as the excuses of people who were paid to anticipate such blunders. Who could have known that al-Qaeda was going to use airplanes as missiles against the United States? Who could have known that the wars in Afghanistan and Iraq would go on for nine and seven years respectively? Who could have known that Citicorp was awash in toxic investments that would collapse? Who could have known that New Orleans would be hit with a Category 5 hurricane and its levees would be breached, and how could Alan Greenspan have predicted the economic collapse after he gave such a rosy picture of its future? In other words, how can people predict success without the possibility of predicting failure? The August 8th Memo, General Shinseki, Brooksley Born (not mentioned in the book) all gave ample warning.
Two important elements emerge here. Free market economics has become crony capitalism and the democratic process that is supposed to be good for a plurality is only for the benefit of the few.
Huffington spends a long last chapter that expresses the American optimism that she claims is disappearing. Personal stories are interspersed with suggestions of how we can recapture government. Knowing our democracy is a rigged game, she suggests the reader makes a number of changes. "Fix Congress First" is a website dedicated to financial reform in Congress. Choking the powerful lobbyists is essential to restoring the democratic process. Innovative technology in the form of the Sunlight Foundation is also promising. During the healthcare summit in February 2010, the website was able to stream live the major contributors of each elected official speaking. Moving our money from banks "too big to fail" to consumer credit unions is another way of taking power away from the powerful.
This is a book for the uninitiated in American politics. It is for the people who are finally becoming aware of the economic and political world around them and information they may lack. While I found this book illuminating, I was already aware of much of the information. Nevertheless, it reminded me of one very important thing.
There are no lobbyists for the American Dream.
Johnston, David Cay, "Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expesne and Stick you with the Bill." This is even better than "Third World America" and far more detailed.
Krugman, Paul, "Conscience of a Liberal."
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