The End of Affluence: The Causes and Consequences of America's Economic Dilemma [Paperback]

Jeff Madrick (Author)

Book Description

Publication Date: September 23, 1997

Sure to spark controversy, this book, reminiscent of the bestsellers Politics of Rich and Poor and Day of Reckoning, tells the real truth about America's long term economic decline--what caused it, what it has done to Americans, and what Americans should do about it.


From the Hardcover edition.

Editorial Reviews

From Publishers Weekly

Disputing with economists who blame declining U.S. living standards on inflation, federal budget deficits, shoddy education or low levels of investment, Madrick views these presumed causes as the consequences of a sharp slowdown in U.S. economic growth since 1973. Smaller annual growth rates, in his often provocative analysis, have translated into lost jobs, stagnating wages, eroding markets, insecure pensions and reduced home-ownership. Former Business Week finance editor and a former NBC economic reporter, Madrick believes that Americans will create a realistic national agenda only when they abandon misplaced optimism by recognizing that slower economic growth may well be permanent and a structural rather than a cyclical phenomenon. Although offering a few concrete proposals, he recommends more investment in plants, equipment and research and development. He sets as top priorities control of health care costs and greater allocations to schools, day care centers and libraries. Author tour.
Copyright 1995 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

From Library Journal

Madrick, the former national economic reporter for NBC and former finance editor for Business Week magazine, believes that the United States has been experiencing economic decline since 1973, with a loss of some $12 trillion in production. This explains our chronic government budget deficits and the stagnant or falling incomes of most Americans. Madrick rejects conventional solutions such as making business more competitive, raising the savings rate, increasing exports, and improving education. In his view, our reduced economic circumstances are structural and permanent. Before searching for a way out, Americans must accept these realities. Madrick's account is adequate, but the essentials of his analysis are "in the air" and have been made more systematically in magazine articles, for example. An optional purchase for large public libraries.?Harry Frumerman, formerly with Hunter Coll., New York
Copyright 1995 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

See all Editorial Reviews

Product Details

• Paperback: 240 pages
• Publisher: Random House (September 23, 1997)
• Language: English
• ISBN-10: 0375750339
• ISBN-13: 978-0375750335
• Product Dimensions: 5.5 x 0.5 x 8.5 inches
• Shipping Weight: 6.4 ounces (View shipping rates and policies)
• Average Customer Review: 3.3 out of 5 stars  See all reviews (6 customer reviews)
• Amazon Best Sellers Rank: #2,114,057 in Books (See Top 100 in Books)

More About the Author

JEFF MADRICK is a former economics columnist for The New York Times and has been a regular contributor to The New York Review of Books for many years. He is editor of Challenge Magazine, visiting professor of humanities at The Cooper Union, and senior fellow at The Roosevelt Institute and the Schwartz Center for Economic Policy Analysis, The New School. He is the author of a half dozen books, including Taking America (Bantam), and The End of Affluence (Random House), both of which were New York Times Notable Books of the Year. Taking America was also chosen by Business Week as one of the ten best books of the year. His most recent books are Why Economies Grow (Basic Books) and The Case for Big Government, which won a general non-fiction award from Pen America. His new book, published in mid-2011 by Alfred A. Knopf, is Age of Greed, The Triumph of Finance and the Decline of America, 1970 to the Present.

He has written for many other publications, including The Washington Post, The Los Angeles Times, Institutional Investor, The Nation, American Prospect, The Boston Globe, Newsday, Dissent, and the business, op-ed, and magazine sections of The New York Times. He has appeared on Charlie Rose, The Lehrer News Hour, Now With Bill Moyers, Frontline, CNN, CNBC, CBS, BBC,and NPR. He was formerly finance editor of Business Week Magazine, a columnist for Money Magazine, and an NBC News reporter and commentator. His awards also include an Emmy and a Page One Award. He was educated at New York University and Harvard University, and was a Shorenstein Fellow at Harvard.

Customer Reviews

Most Helpful Customer Reviews

6 of 6 people found the following review helpful:

5.0 out of 5 stars Slow Economic Growth: The End of Social Mobility, December 31, 1999

By 

Patrick W. O'Hara "taparaho" (Salt Point, NY United States) - See all my reviews
(REAL NAME)   

This review is from: The End of Affluence: The Causes and Consequences of America's Economic Dilemma (Paperback)

Madrick describes the subtle economic decline in America that has taken place over the last thirty years. Many people find themselves working more hours, or even a second job without getting ahead. The rise in social problems, lack of faith in the government, and America's poor economic performance are approached from a historical perspective, where Madrick cites the underlying problem as "a sharp slowdown in economic growth from our historical average of 3.4% a year, and often higher since the Civil War to a little more than 2% a year since 1973." He makes the case that politicians and economists often look at economic indicators to determine economic expansion or recession, but fail to acknowledge that the slow average economic growth over time has had a somewhat irreversible effect on lost production, which he has estimated to be about $12 trillion over the twenty year period of 1973 to 1993. As a nation we tend to blame these economic problems on inflation, government budget deficits, low levels of investment, faltering education, or the irresponsible politicians and their special interest spending -- which are really symptoms of the root cause, slow growth. Conversely, Madrick presents a positive correlation with the increase of growth in productivity as the solution to all of society's problems. Furthermore, he makes the case that the decline cannot be rooted to any political party, change in moral values, or the rise in special interests -- but has to do with the corporate America's reluctance to identify and adapt to the changing global marketplace.

Madrick tells of America's second frontier of mass production which had once given the U.S. a great competitive advantage: having the operating experience to produce large qualities at a small enough unit price and distribute it over the nation's large consumer base -- which is unparalleled in the world. While American businesses were caught up in a paradigm of mass production of standardized products with broad marketing, the rest of the world began systems of flexible production of specialized products, produced for narrower markets. This coupled with the reduction of trade barriers and the ease of entrance into U.S. markets created competition that American companies had never before experienced, and were unprepared for. As their corporate paradigm shifted, and companies began to realize that what had once been was no longer, they reacted by trying to compete through reducing costs-- such as reducing labor or wages-- rather than focusing on increasing their productivity. Corporate America's failure to adapt to the changing market conditions, essentially caused an economic retreat in industries where American companies felt they couldn't compete -- most noticeably in manufacturing. Madrick presents a model which represents the cyclical decline created by the internationalization and fragmentation of markets which create cost cutting and lower wages, which further creates uncertainty, which creates weak investment, which leads to lower productivity and more lost jobs, then reduced consumption which compounds the slow growth, which only starts the cycle of cost cutting once again.

All in all, Madrick has written an excellent book that is easy and enjoyable to read.

8 of 9 people found the following review helpful:

4.0 out of 5 stars Strong Reporting on an Important Issue, April 28, 2000

By 

Mark Wylie (Spokane, WA United States) - See all my reviews
(REAL NAME)   

This review is from: The End of Affluence: The Causes and Consequences of America's Economic Dilemma (Paperback)

While the conventional wisdom is that the 1990's have been a decade of prosperity, every so often undercurrents of discontent surface (in places like Seattle), and suggest that for many people in the United States, this is not the case. Jeffrey Madrick's "The End of Affluence" offers an explanation of why this is so.

Madrick begins by noting that since the early 1970's the US has been in the doldrums economically; starting in 1973, the long-term economic growth rate fell by over 1% annually (contrary to the previous reviewer, this is still the case). Madrick notes many of the consequences of this slowdown. He contrasts the present period with the rapid growth of the past in a concise but informative review of US economic history--this segment by itself makes the book worth reading.

Madrick then turns to what he sees as the main cause of the slowdown. As European and Japanese firms adopted American methods of mass production and distribution, this increased international competition eroded much of the US's long-standing advantages. The slowness of US firms, such as the automakers, to adopt new methods of flexible production, and the lagging rate of US capital investment, further aggravated this trend. A major consequence of this trend has been a sharp decline in the availability of well-paying jobs for those without college degrees.

Madrick criticizes the "misplaced optimism" of those who see our problems as minor or readily solved. He critiques some alternative explanations for the growth slowdown, such as our allegedly insufficient savings rate and supposed "skills shortage." While he offers little in the way of specific solutions, he does give a solid refutation of the Republican Party's ever-resurrected "solution" of yet one more round of supply-side, trickle-down tax cuts.

Madrick's analysis is often solid, but he falls short in two respects. First, he is too focused on a single explanation for our "end of affluence," international competition, and neglects other factors that also are important--the collapse of the labor movement comes to mind as one. Second, his vision is centered too narrowly on GDP and related economic measures, and so neglects issues like environmental degradation, which are of considerable importance, but are not captured in convential economic statistics.

While Madrick's story is an incomplete one, his superb reporting makes his book, even though it is somewhat dated, worthwhile reading.

5 of 5 people found the following review helpful:

5.0 out of 5 stars An honest review of where America stands economically, January 6, 1997

By A Customer

This review is from: The End of Affluence: The Causes and Consequences of America's Economic Dilemma (Hardcover)

Jeffrey Madrick uses facts to explain what went wrong with the American dream. The cold hard facts explain how it is unlikely that economic growth will return to historic levels. The truly amazing points to me were that education reform, welfare reform, balanced budgets, health care reform...even if all of these come to pass...will still not return America back to where we have been for the past 150 years. Most Americans believe that the Great Drepression was a period of negative growth, and the period following WWII was unprecedented rapid growth. The reality is that the period following WWII was a return to our historic growth patterns. I continue to send my children to private schools due to the abysmal public schools in California, but the ecomonic payoff is not likely to be achieved. I still retain a healthy optimism about Americas future, but this book was definitely food for thought