Enjoy fast, free delivery, exclusive deals, and award-winning movies & TV shows with Prime
Try Prime
and start saving today with fast, free delivery
Amazon Prime includes:
Fast, FREE Delivery is available to Prime members. To join, select "Try Amazon Prime and start saving today with Fast, FREE Delivery" below the Add to Cart button.
Amazon Prime members enjoy:- Cardmembers earn 5% Back at Amazon.com with a Prime Credit Card.
- Unlimited Free Two-Day Delivery
- Streaming of thousands of movies and TV shows with limited ads on Prime Video.
- A Kindle book to borrow for free each month - with no due dates
- Listen to over 2 million songs and hundreds of playlists
- Unlimited photo storage with anywhere access
Important: Your credit card will NOT be charged when you start your free trial or if you cancel during the trial period. If you're happy with Amazon Prime, do nothing. At the end of the free trial, your membership will automatically upgrade to a monthly membership.
Buy new:
$13.46$13.46
FREE delivery: Tuesday, April 23 on orders over $35.00 shipped by Amazon.
Ships from: Amazon Sold by: WorldPrime
Buy used: $10.78
Other Sellers on Amazon
+ $3.99 shipping
100% positive over last 12 months
FREE Shipping
100% positive over last 12 months
FREE Shipping
100% positive over last 12 months
Download the free Kindle app and start reading Kindle books instantly on your smartphone, tablet, or computer - no Kindle device required.
Read instantly on your browser with Kindle for Web.
Using your mobile phone camera - scan the code below and download the Kindle app.
American Amnesia: How the War on Government Led Us to Forget What Made America Prosper Hardcover – March 29, 2016
Purchase options and add-ons
In Winner-Take-All Politics, Jacob S. Hacker and Paul Pierson explained how political elites have enabled and propelled plutocracy. Now in American Amnesia, they trace the economic and political history of the United States over the last century and show how a viable mixed economy has long been the dominant engine of America’s prosperity.
Like every other prospering democracy, the United States developed a mixed economy that channeled the spirit of capitalism into strong growth and healthy social development. In this bargain, government and business were as much partners as rivals. Public investments in education, science, transportation, and technology laid the foundation for broadly based prosperity. Programs of economic security and progressive taxation provided a floor of protection and business focused on the pursuit of profit—and government addressed needs business could not.
The mixed economy was the most important social innovation of the twentieth century. It spread a previously unimaginable level of broad prosperity. It enabled steep increases in education, health, longevity, and economic security. And yet, extraordinarily, it is anathema to many current economic and political elites. And as the advocates of anti-government free market fundamentalist have gained power, they are hell-bent on scrapping the instrument of nearly a century of unprecedented economic and social progress. In American Amnesia, Hacker and Pierson explain how—and why they must be stopped.
- Print length464 pages
- LanguageEnglish
- PublisherSimon & Schuster
- Publication dateMarch 29, 2016
- Dimensions6.75 x 1.25 x 9.75 inches
- ISBN-101451667825
- ISBN-13978-1451667820
The Amazon Book Review
Book recommendations, author interviews, editors' picks, and more. Read it now.
Frequently bought together

Customers who viewed this item also viewed
Editorial Reviews
Review
“The best business book of the year on the economy.”—Brad DeLong, strategy+business
“This is a fascinating and much-needed book. America once invented universal public education and sharply progressive taxation of income and inherited wealth, and has shown to the world that strong government and efficient markets are complementary—not substitutes. But since 1980 a new wave of anti-governmentideology has prospered, and is about to make America more unequal andplutocratic than Europe on the eve of World War I. If you want to understandwhy this great amnesia occurred, and how it can be reversed, read this book!”—Thomas Piketty, author of Capital in the Twenty-First Century
If you are curious about why our infrastructure, our roads and bridges and water systems, is falling apart—then read American Amnesia. Curious about why the U.S. spends almost 18 percent of our GDP on medical care, but has health outcomes that are at levels of many developing countries—then read American Amnesia."—Inside Higher Ed
Progress and prosperity in the United States, they demonstrate, have rested in no small measure on a constructive relationship between an effective public authority and dynamic private markets. We are now paying a terrible price for "forgetting this essential truth."—The Philadelphia Inquirer
American Amnesia provides chapter and verse on why the public has good reason to be angry..."—The New York Times
About the Author
Paul Pierson is the John Gross Professor of Political Science at the University of California at Berkeley. He is the author of Politics in Time, Dismantling the Welfare State?, and (with Jacob S. Hacker), American Amnesia: The Forgotten Roots of Our Prosperity; Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class; Off Center: The Republican Revolution and the Erosion of American Democracy. His commentary has appeared in The New York Times Magazine, The Washington Post, and The New York Review of Books. He lives in Berkeley, California.
Excerpt. © Reprinted by permission. All rights reserved.
ONE
Coming Up Short
AMERICANS PRIDE themselves on standing tall: rising to the challenge, achieving the once unattainable, raising the bar of social success. Yet as we have faltered in harnessing the enormous positive potential of public authority, we have also fallen behind the pace of social improvement in other rich nations, as well as the pace we set in our own past. In area after area where we once dominated, we are falling down the rankings of social success. In area after area where new threats loom, we are failing to rise up to the challenge. We are not standing tall—literally, we shall see—and our malign neglect of the mixed economy bears a great deal of the blame.
Losing Ground
For much of US history, Americans were the tallest people in the world by a large margin. When the thirteen colonies that occupied the Atlantic seaboard broke from the British Empire, adult American men were on average three inches taller than their counterparts in England, and they were almost that much taller than men in the Netherlands, the great economic power before Britain.1 Revolutionary soldiers looked up to General George Washington, but not, as often assumed, because he was a giant among Lilliputians. David McCullough, in his popular biography of John Adams, describes Washington as “nearly a head taller than Adams—six feet four in his boots, taller than almost anyone of the day.”2 Those must have been some boots, for Washington was six feet two.3 At five foot seven, Adams was just an inch below the average for American soldiers and significantly taller than a typical European soldier.4
Americans were tall because Americans were healthy. “Poor as they were,” notes the colonial historian William Polk, “Americans ate and were housed better than Englishmen.”5 Sickness and premature death were common, of course, especially outside the privileged circle of white men. Still, European visitors like Tocqueville marveled at the fertility of the land and the robustness of its settlers, the relative equality of male citizens and the strong civic bonds among them.6 J. Hector St. John de Crèvecoeur wrote in 1782 of the American settler in Letters from an American Farmer, “Instead of starving he will be fed, instead of being idle he will have employment, and there are riches enough for such men as come over here.”7
The cause of the American height advantage could not have been income alone. According to most sources, the average resident of the Netherlands or England was richer than colonial Americans but also substantially shorter.8 Indeed, as the United States matched and then surpassed Europe economically in the nineteenth century, the average height of American men actually fell, recovering back to colonial levels only around the dawn of the twentieth century.9 These ebbs and flows, which played out in other industrializing nations as well, are a reminder that economic growth and population health are not one and the same.10 (We shall unravel the mystery of their interdependence in the next chapter.) Nonetheless, Americans remained far and away the tallest people in the world throughout the nineteenth century, and average American heights rose quickly in the early decades of the twentieth.11 When the United States entered World War II, young American men averaged five feet nine inches—almost two inches taller, on average, than the young Germans they were fighting.12
While people know that height is a strong predictor of individual achievement (test scores, occupational prestige, pay), it is also a revealing marker of population health.13 Height has a lot to do with genes, but height differences across nations seem to be caused mostly by social conditions, such as income, nutrition, health coverage, and social cohesion.14 Indeed, one reason for the correlation between height and achievement is that kids whose mothers are healthy during pregnancy and who grow up with sufficient food, medical care, and family support tend to be taller adults. An average US white girl born in the early 1910s could expect to reach around five foot three; an average US white girl born in the late 1950s could expect to exceed five foot five.15 Evolution just doesn’t happen that fast.
So it’s striking that Americans are no longer the tallest people in the world. Not even close: Once three inches taller than residents of the Old World, on average, Americans are now about three inches shorter. The average Dutch height for men is six foot one, and for women, five foot eight—versus five foot nine for American men and five foot five for American women.16 The gap is not, as might be supposed, a result of immigration: White, native-born Americans who speak English at home are significantly smaller, too, and immigration isn’t substantial enough to explain the discrepancy in any case.17 Nor can the growing gap be explained by differences in how height is measured. Though some countries rely on self-reported heights for their statistics—and, yes, men tend to “round up”—Americans look shorter even when the only countries in the rankings are those that, like the United States, measure heights directly.18
Americans are not shrinking. (Overall, that is—there is some evidence that both white and black women born after 1960 are shorter than their parents.)19 But the increase in Americans’ average stature has been glacial, even as heights continue to rise steadily abroad. To really see our lost height advantage, you have to break the population into age groups, or what demographers call birth cohorts. People in their twenties, after all, are as tall as they will ever be. Changes in average height come from changes in the height of the young (and deaths among older cohorts). And, indeed, the adult heights of those born during a given period provide a powerful image of the living conditions experienced by infants and adolescents at the time. The fall in average heights among those born in the mid-1800s, for example, signaled the costs as well as benefits of the country’s industrial and urban shift, which brought increased infectious disease as well as higher incomes, harsher lives for the masses as well as better lives for the elite.20 (The privileged American men who applied for passports in 1890 were, on average, more than an inch and a half taller than army recruits at the time.)21
In general, heights are converging among affluent nations, and the biggest gains have occurred in countries admitted most recently to the rich-nation club.22 Within countries, younger age groups are generally much taller than older age groups—which makes sense: Older people spent their growing years (including their growth within the womb) in poorer societies with more limited health technology and knowledge.23 But the United States is a conspicuous exception to these patterns: Average heights have barely budged in recent decades, so young Americans—again, even when leaving out recent immigrants—are barely taller than their parents.24 Older Americans are roughly on par with their counterparts abroad; younger Americans are substantially shorter. The United States is the richest populous nation in the world. Nevertheless, its young are roughly as tall as the young in Portugal, which has a per capita gross domestic product (GDP) less than half ours.25
On Rankings and Ratings
Because height is a powerful indicator of social and individual health, America’s relative decline should ring alarms. Our young are coming up short—relative not just to gains in stature of the past but also to gains in stature in other rich nations.
Still, if shorter kids were the only sign of trouble, we might safely ignore the alarms. For all but aspiring basketball players, tallness is not an end in itself. It can even create problems: The Dutch have had to rewrite their building codes so men don’t routinely smash their heads into door frames.26 Unfortunately, America’s journey from tallest to smallish has played out in area after area. When it comes to health, education, and even income—still our strongest suit, though we’re holding fewer high cards than in the past—we are falling down the rankings of social success.
We often miss this, and not just because triumphant cries of American exceptionalism drown out the alarms. Comparing countries on indicators of social health is tricky, and the temptation to stack the deck is strong. Moreover, our standard statistics frequently understate how poorly the United States is doing at harnessing the combined energies of government and the market. To get an accurate picture, we have to spend a little time sifting through the best available data, separating the meaningful from the misleading. We also have to focus on the experiences most relevant for understanding not how we’ve done in the past but how we are doing now—and unless we change course, how we are likely to do in the future.
Put another way, not all performance assessments are equally valid or instructive. Each year brings scores of scores purporting to rank almost every conceivable object of interest—schools, businesses, cities, states, regions, countries—across almost every conceivable category, from college completion, to wine consumption, to online porn viewing. (For the record, Washington, DC, tops US state rankings in all three.) But sensibly comparing states, countries, or anything else requires following a few simple ground rules. The first is to compare apples to apples. Washington, DC, isn’t actually that comparable to the fifty states because it’s essentially a big city (hence the porn-wine-college trifecta). For cross-national analysis, comparing apples to apples means comparing countries at similar levels of economic development. It also means using indicators that are as close to the same as possible across nations. And it requires transparency: Proprietary data and secret formulas are anathema to serious comparison (but endemic to many special-interest rankings).
So we should compare apples to apples. But which apples should we be comparing? A good place to begin is the three core components of the UN’s Human Development Index: health, education, and income. The index captures the idea that development is about “advancing the richness of human life”—to quote its intellectual father, the Nobel laureate Amartya Sen—and not just “the richness of the economy in which human beings live.”27 The index itself isn’t all that useful for ranking rich nations. It often sets the bar low (can people read and write?), and it’s limited to a few basic indicators available for all countries. Nonetheless, the UN’s pioneering investigations provide a solid jumping-off point for asking how well the contemporary United States is doing relative to other rich nations in fostering citizens’ well-being.
When asking that question, the issue isn’t merely how well we are doing today. It’s also whether we are pulling ahead or falling behind. One data point gives us a level; two or more give us a trend. And, in general, it’s trends that reveal the most about our relative performance. To be sure, we should be careful not to read too much into short-term fluctuations. Nor should we forget that on many metrics, there is a natural process of “reversion to the mean”: Relative to other countries, the highest-performing nations are more likely to fall toward other nations’ performances, and the lowest performing to rise toward other nations’ performances.
Still, trends matter most. And that means we should be at least as interested in the direction social indicators are heading (and at what pace) as in their level. It also means we should pay special attention to one particular group: the young. Most cross-national analyses look at countries as a whole, comparing several generations of people in one nation with several generations in another. Sometimes that’s appropriate. If we want to know which countries are good at getting all citizens flu shots, we are interested in national averages. Usually, however, the experience of the young is most revealing, and not just because the young are most affected by current conditions. The young tell us about trends. If, for example, we’re falling behind in getting young adults through college (and we are), looking at the average educational level of the entire population will provide false reassurance. Typically, then, the critical comparisons across nations concern the young. Unhappily, these are also the comparisons where the most troubling image of American performance emerges.
A final issue to keep in mind: Investment (or lack of investment) does not bear its (bitter) fruit immediately. Supporting science, technology, and education, for example, reaps big returns.28 But it takes time—sometimes a long time—to see the payoffs. As we will see in chapters 2 and 4, the high-tech expansion of the last few decades rested on scientific and technical advances seeded more than a generation earlier.29 The opposite problem arises in cases of deferred maintenance: failing to upgrade critical infrastructure, for example, or to seed technological advances that will blossom in the future. The costs, though real, won’t be fully apparent for some time.
The same can be said about failing to tackle emerging challenges—an area where, we shall see, the United States is doing especially poorly. A generation ago, few worried about how well nations were addressing obesity or global warming. Now we know that the health of our society and the future of our planet depend on effective responses. The low bar for social performance is continuing to meet challenges we’ve met before. The high bar is doing well where we face new challenges. Unfortunately, not only is the United States having trouble clearing the low bar; it is barely even trying to clear the higher one.
The United States is still a remarkably successful nation. Over the last century, we have achieved unprecedented levels of prosperity, witnessed quantum increases in health and life expectancy, and sought to address problems that once mocked our finest traditions of democracy and opportunity, from vicious racial exclusion to grim elderly poverty to dangerously unclean air and water. And we have continued to gain ground in many of these areas over the last generation. Yet these gains have been halting and slow. Even more worrisome, they lag behind gains in other rich democracies.
Health
Among the big three of health, education, and income, none is more important than health. Those who study the economics of health and longevity find consistently that the value of physical well-being within a society vastly exceeds a nation’s total income.30 But even without such calculations, we all know that health is a precondition for everything else we seek to achieve. When the Declaration of Independence celebrated “life, liberty, and the pursuit of happiness,” there was a reason “life” led the list.
When it comes to health—in fact, when it comes to any measure of the well-being of individual members of a society—small differences matter when summed up across large populations. Consider a seemingly trivial example: that dreaded spinning wheel that tells you your computer is spinning its wheels. In his biography of Apple founder Steve Jobs, Walter Isaacson recounts an exchange between Jobs and Larry Kenyon, an engineer whom Jobs had cornered to complain that the new Macintosh took too long to start up:
Kenyon started to explain, but Jobs cut him off. “If it could save a person’s life, would you find a way to shave ten seconds off the boot time?” he asked. Kenyon allowed that he probably could. Jobs went to a whiteboard and showed him that if there were five million people using the Mac, and it took ten seconds extra to turn it on every day, that added up to three hundred million or so hours per year that people would save, which was the equivalent of at least one hundred lifetimes saved per year. “Larry was suitably impressed, and a few weeks later he came back, and it booted up twenty-eight seconds faster,” [Apple programmer Bill] Atkinson recalled.31
Jobs’s point holds more generally: Even small differences in how long we live add up. An extra four months of life expectancy in a country with 321 million residents is 107 million additional years of life. Economists who are comfortable converting lives into dollars generally value a “quality-adjusted life year”—QALY, in economics jargon—in the neighborhood of $100,000 (though estimates range from less than $50,000 per QALY to more than $250,000).32 That would mean those four months are worth somewhere north of $10 trillion.
Shorter Lives, Poorer Health
So it is more than a little disconcerting that health is also where the United States does most poorly compared with other rich nations. In 2013 the prestigious National Academy of Sciences released a mammoth report with a self-explanatory title: U.S. Health in International Perspective: Shorter Lives, Poorer Health. “The United States is among the wealthiest nations in the world,” the report began, “but it is far from the healthiest. . . . Americans live shorter lives and experience more injuries and illnesses than people in other high-income countries.”33
On virtually all measures, according to the report, the United States is losing ground rapidly to other rich nations. At midcentury, American were generally healthier than citizens of other rich nations, and as late as 1980, they were still not far from the middle of the pack.34 Since then, however, other rich countries have seen rapid health gains. The United States has not.35
Take life expectancy at birth—the easiest statistic to track, since death records are generally reliable and consistent across nations. The National Academies study looked at seventeen rich nations. Among these, the United States ranked seventeenth for men in 2011 (life expectancy: 76.3 years, a full 4.2 years shorter than the top-ranking nation). It ranked an equally dismal seventeenth for women (81.1 years, 4.8 years shorter than the top-ranking nation).36 The United States is home to about 163 million women and 158 million men, so ranking in the middle teens rather than at the top translates into 1.45 billion fewer years of life.37
Midlife Crisis
The relative decline has been particularly steep for an unlikely group: middle-aged white adults. In a groundbreaking 2015 study, the Prince-ton University economists Anne Case and Angus Deaton (the latter the recipient of the Nobel Prize in Economics that same year) dug into the mortality statistics to examine how and why the American experience departed so starkly from the international norm.38 Their startling result: Whites ages forty-five to fifty-four were dying at higher rates in 2013 than they had been in 1999, even as every other rich country had seen dramatic drops in mortality in this age group. Case and Deaton calculated that if this reversal had not occurred—if, that is, the decline in death rates of prior decades had continued—a half million deaths would have been avoided. The only other example of such a shocking loss of life in recent decades is the AIDS epidemic.
The trend was most devastating for whites with a high school diploma or less. In 2013 there were 736 deaths per 100,000 people within this group, up from 601 per 100,000 in 1999. (By comparison, the death rate for people in this age group in Canada fell from around 300 per 100,000 in 1999 to just under 249 per 100,000 in 2011.) But those who had gone to college but not received a degree saw no distinguishable improvement in death rates either—even as, again, such rates plummeted abroad. Only among whites with a college degree did death rates fall substantially over this period. In 2013, white adults in the forty-five- to fifty-four-year-old age group with no more than a high school diploma were more than four times as likely to die as those with a college degree.
As this last troubling statistic suggests, there are also stark disparities in life expectancy across racial, economic, and educational groups—disparities that appear to be far larger than in most other rich nations.39 Yet nearly every group of Americans—even, as we have seen, whites—fares poorly when compared with its peers in other rich nations.40 The only area of evident success is life expectancy at age seventy-five, where Americans do quite well. Researchers speculate, however, that this anomaly reflects not just good health care for the aged (who, unlike the young, have universal insurance coverage through Medicare) but also that so many unhealthy Americans die before age seventy-five, leaving behind a hardy group.41
Falling Behind
To be clear, many measures of health are improving in the United States. But they are improving much more slowly than in other countries. One grim statistic commonly used by demographers is the chance that a fifteen-year-old will die before age fifty. For American women, it’s 4 percent: four in a hundred women die between fifteen and fifty. The average for other rich nations is around 2 percent, and, on average, death rates in these nations fell below 4 percent almost forty years ago. We are more than a generation behind.42
A similar story can be told about infant mortality, or deaths of children before their first birthday. In 1960 infant mortality in the United States was lower than in the majority of other rich nations. In recent decades, however, America has seen limited improvement, while death rates for infants have continued to plummet abroad.43 In 2011 the average rate of infant death in other rich nations was 1 child for every 300 or so births. In the United States, it was roughly twice that—1 child for every 164 births. That year, the only countries in the Organization for Economic Cooperation and Development (OECD) with higher rates of infant mortality were Chile, Mexico, and Turkey.44
This unimpressive performance is particularly striking because the United States spends so much more on health care than other rich nations do—roughly twice as much per person.45 Of course, medical care is not the only or even the most important determinant of health. But the United States does poorly even where health care matters most. For almost every cause—from injuries to diseases—death rates are the highest or nearly the highest in the United States.46 And we have the highest rate of what health experts call “amenable mortality”: deaths that could have been prevented with the provision of timely and effective care.47 Despite high spending, we are falling behind other rich nations in reducing such preventable deaths. We don’t see our relative decline because we are getting better at preventing death. But we’re getting better far too slowly for a rich nation.
Education
Another area where the United States was once the undisputed leader is education. As the Harvard economists Lawrence Katz and Claudia Goldin show in their revelatory The Race Between Education and Technology, we bolted decades ahead of other Western nations in the spread of elementary and then high schools during the twentieth century, and we were the world leader in college education in the immediate decades after World War II.48 No more. The United States is now a mediocre performer in international education rankings. And we would look a lot worse if we hadn’t done so well in the past. The share of Americans who have completed high school, for instance, remains impressive. Yet this high average mostly reflects our big early lead. Among young adults, high school graduation rates are subpar (though they have risen in the last decade).49 The United States now ranks twentieth out of twenty-seven OECD nations in the share of young people expected to finish high school.50
Losing the Race
This isn’t just a case of other countries racing ahead; it’s also a story of American stagnation. Graduation rates in the United States have barely budged since the early 1970s, rising from 81 percent to 84 percent. At the same time, more and more kids who are counted as having finished high school actually receive a General Educational Development (GED) certificate.51 Yet GEDs confer little of the economic and social benefits of graduating from high school. (Many European countries have vocational high schools, but, unlike GEDs, these produce strong outcomes.)52 Another reason is that young adults behind bars disappear from the statistics. In most rich nations, this distinction makes little difference because incarceration is so rare. In the United States—which incarcerates roughly ten times as high a share of the population (eight in a thousand versus fewer than one in a thousand in most other advanced industrial democracies)—it makes a real difference, especially for demographic groups with the highest rates of incarceration.53 Indeed, the high school dropout rate for young black men is more than 40 percent higher when we include in our count the incarcerated, wiping out all the apparent gains in their high school completion since the late 1980s.54 Here again, conventional indicators present an overly sunny picture of our relative performance.
The big story, however, is our relative decline in higher education. The United States has many of the finest institutions of higher education in the world. The problem is that the share of young people getting a degree is rising much more slowly in the United States than in other OECD nations.55 One reason is the erosion of public support through federal grants and state universities, leaving students and their families much more reliant on loans. Once without peer, the United States has fallen to nineteenth in college completion in the OECD, and the gap in completion between higher-income and lower-income students has widened.56 Older Americans are the most educated in the world. Younger Americans, not even close.
Skills Slowdown
Indeed, despite the popular image of young Americans as digital wizards, America’s youth fare particularly poorly when it comes to numerical and technological skills. The OECD assessed adult skill levels in twenty-three nations in 2011 and 2012. Across the population as a whole, the United States scores about average when it comes to reading ability and close to the bottom when it comes to mathematical ability and the capacity to work with computer technology.57 Other international tests show us doing even better in reading, but they all show the performance of Americans as a whole to be mediocre or worse in the STEM (science, technology, engineering, math) areas so prominent in our technology-saturated economy.58
The truly alarming results, however, emerge when looking across age groups. In all countries, the young are better at math and working with digital technology than the old. But improvements in test scores from one generation to the next are much smaller in the United States than in other rich countries. Older Americans are close to the international average for older adults. Younger Americans, while scoring slightly higher, are years behind their international peers. So, again, American math scores are improving—barely. But they are improving far faster in other nations. The same is true of the other skills measured by the OECD: The United States falls further and further in the rankings as you move down the age ladder.59
Degrees of Inequality
And if the United States as a whole is in the breakdown lane, some Americans are barely getting on the road. At least as striking as our poor performance among the young is how unequal educational opportunities in the United States are. Decades after de jure integration of schools and the famous 1966 Coleman Report on the subpar schooling of the poor, we remain a nation with gaps in educational quality, funding, and outcomes that are far greater than the norm for developed democracies. These gaps not only thwart the upward progress of tens of millions of Americans but hold back our economy overall.
Since the 1960s, the divide in test scores between children from high-income families and those from low-income families has grown by more than a third; it is now twice as large as the gap between blacks and whites.60 Yet the United States is one of the few nations that finances schools primarily through local property taxes, which magnifies unequal opportunity. As one OECD researcher puts it, “The vast majority of OECD countries either invest equally in every student or disproportionately more in disadvantaged students. The US is one of the few countries doing the opposite.”61
Inequality of opportunity begins early, and it costs everyone. Good pre-K education, for example, more than pays off in higher growth and tax receipts and lower public costs, from social assistance to incarceration.62 Yet the United States ranks twenty-fifth in the OECD in the share of three-year-olds in early childhood education, and even lower, twenty-eighth, when it comes to four-year-olds.63
Income
Income, the third indicator of the big three, might seem to be an exception to the story so far. Only a few small countries surpass us in national income per head, and American productivity growth has remained comparatively strong.64 Even here, however, the reassuring averages hide some worrisome trends.
Beyond GDP
Historically, economists have considered national income per capita the best single measure of the standard of living of middle-class citizens. For much of the twentieth century, it was. Since the early 1970s, however, the link has broken. The American economy is more and more productive, and national income has continued to grow smartly (if more slowly than before).65 But these gains have not translated into substantially higher wages for most Americans. The typical hourly earnings of American workers—adjusting for inflation and including the escalating cost of medical benefits—rose only 10 percent between 1973 and 2011. That works out to an annual raise of 0.27 percent.
But American families have grown significantly richer, right? Yes and no. Between the early 1970s and the late 1990s, the typical household’s income increased from around $49,000 to almost $57,000 (after adjusting for inflation).66 Yet the wage stagnation of the 2000s and the financial crisis that closed out the decade wiped out all of the gains created by the strong economy of the 1990s, leaving typical households about where typical households were in 1989. True, families are smaller than they were in the early 1970s, but they aren’t appreciably smaller than they were in 1989 and, in fact, have grown since the financial crisis. Moreover, families have shrunk in other rich nations, too. Yet over the past generation, the incomes of working-age people in the middle of the distribution have grown more slowly here than in almost any other OECD nation.67
Just as important, the overriding reason the typical family earns a little more today is not more pay per hour but more paychecks per household, as women have moved into the paid workforce. This change isn’t because the United States has led the world in female employment. (In 2010 America was seventeenth in the OECD in the share of women in paid employment, down from sixth in 1990.)68 It’s because US workers, both male and female, work many more hours than workers in other countries do—and the gap is growing.69 More paychecks per household is good in many ways. But given the strains of balancing work and parenting, more hours of work isn’t necessarily a positive development. Either way, it’s a different story than the one of prior decades, when wages and salaries rose smartly even though the number of hours people worked did not.70
America Unequal
Where did all the growth go? The answer, it turns out, is simple: It went to the top, especially the very top. When it comes to inequality, the United States once looked relatively similar to other rich countries. Today it’s the most unequal rich nation in the world by a large margin.71 However else that matters, the increasing concentration of income at the top drives a wedge between overall economic growth and the income gains of most households. When a rising tide lifts all boats, economic growth is a better measure of ordinary Americans’ living standards than when a rising tide lifts only yachts.
You can see the disparity even more clearly when you look at wealth: housing, stocks, bonds, and all the other assets that people hold to weather economic shocks and build their future. Americans’ average net wealth is an impressive $301,000, the fourth highest in the world, behind only Switzerland, Australia, and Norway.72 Median net wealth—the amount held by someone exactly in the middle of the distribution—is another story. The typical American adult has just $45,000, which places the United States nineteenth in the world, behind every rich country but Israel (including such “economic heavyweights” as Spain and Taiwan).73 The obvious reason for the difference is that wealth is so unequal across American households. The richest 1 percent own more than a third of the nation’s wealth; the top 10 percent, more than three-quarters.74 No other rich country comes close to this level of concentration at the top.
Broken Ladders
So the rungs of the economic ladder are farther apart. But isn’t it easier to climb the ladder in the United States than elsewhere? From Crèvecoeur to Tocqueville to the German sociologist Werner Sombart, descriptions of American society from the Founding through the early twentieth century emphasized the ease of mobility compared with Europe. Indeed, Sombart’s basic answer to his famous question Why Is There No Socialism in the United States? (the title of his 1906 book) was that the American worker was less disgruntled because “the prospects of moving out of his class were undoubtedly greater . . . than for his counterpart in old Europe.”75 Historians and social scientists have debated Sombart’s assertion ever since. But there’s little question that the United States—and other settler societies such as Canada—enjoyed a mobility advantage over Europe through the nineteenth century, especially for Americans willing to strike out for the nation’s expanding frontier.76
Today, however, the frontier is gone, and so is America’s mobility advantage. Indeed, the United States now has close to the lowest level of upward mobility in the advanced industrial world: lower than in Tocqueville’s France, lower than in Sombart’s Germany, and lower—much lower—than in our northern neighbor, Canada.77 Roughly two in three Americans born in the bottom fifth of incomes either stay there (42 percent) or rise just into the next fifth (23 percent). An American boy whose dad is in the bottom fifth has only a 30 percent chance of climbing into the top half. A Canadian boy has a 38 percent chance. This 8-point difference might seem small, but it’s not. With 138 million American men, 8 percentage points represent 2 million boys escaping the bottom fifth into the top half.
The Kids Aren’t All Right
Again it’s the youngest of the young who are most disadvantaged. The United Nations Children’s Fund (UNICEF) has compiled a composite index of the “material well-being” of children in developed countries, which takes into account various measures of childhood poverty and material deprivation (lack of access to regular meals, for example). In the most recent report, the United States ranked twenty-sixth out of twenty-nine developed nations.78 First in the standings was the Netherlands, where soon-to-be-giants are born. UNICEF has produced its index since the early 2000s. The United States was one of only five nations that were below average at that time yet failed to improve kids’ material well-being in the following decade. The other four were Greece, Hungary, Italy, and Spain.
“Prediction is very difficult,” the physicist Niels Bohr reportedly said, “especially about the future.” But today’s young are the clearest vision of the future we have. If they are falling behind—unhealthier than young people in other rich countries, less well educated, more likely to be economically marginalized—we face grim prospects. As two health researchers conclude after reviewing the international evidence on the well-being of American children, “The US stacks up relatively poorly on critical measures of child health. Similarly, the US compares unfavorably to other nations on indicators of governmental investment in children and their families. The picture that emerges is one of a powerful and immensely wealthy nation that, compared with other nations, has made a startlingly modest investment in its children.”79
Shortchanging the Future
We come then to the last of our alarming grades. Where we once led, we are losing ground. But that’s better than we are doing in preparing for our future, especially when it comes to responding to newly emerging challenges, such as global warming and obesity, for which no inheritance of American leadership exists. With regard to these crucial tests of the resilience and innovative potential of our society, we are getting failing marks.
R&D RIP
Consider research and development, or R&D, a key source of fuel for the knowledge economy.80 Leave it up to the market, and it won’t be adequately supplied. That’s not because corporations don’t value R&D—they do, and they do a lot of it. It’s because corporations will underinvest in R&D that aids many firms rather than mainly themselves because they pay the cost but receive only a small fraction of the benefit. This incentive problem is a major reason why government support for R&D became so large and so valuable as the capacities of science exploded in the twentieth century.
Nowhere was this problem addressed more capably than in the United States. Though government promotion and funding of science has a long history, it expanded dramatically during World War II and continued afterward with the National Science Foundation (NSF), National Institutes of Health (NIH), and other public agencies that supported training in science and engineering and financed research in the private sector and academia. In the quarter century after World War II, the United States didn’t just lead the world in R&D funding. It owned the field. Well into the 1960s, the federal government spent more than the combined total of all R&D spending by governments and businesses outside the United States.81 The fruits of these investments ranged from radar and GPS, to advanced medical technology, to robotics and the computer systems that figure in nearly every modern technology. Far from crowding out private R&D, moreover, these public investments spurred additional private innovation. The computer pioneers who developed better and smaller systems not only relied on publicly fostered breakthroughs in technology; they also would have found little market for their most profitable products if not for the internet, GPS, and other government-sponsored platforms for the digital revolution.
That was then. Over the last half century, R&D spending by the federal government has plummeted as a share of the economy, falling from a peak of nearly 2 percent of GDP in the mid-1960s to around 0.7 percent in the late 1990s, before rebounding slightly in recent years.82 Between 1987 and 2008, federal expenditures were essentially flat once inflation is taken into account (rising 0.3 percent a year). The United States now ranks ninth in the world in government R&D expenditures as a share of the economy.83 The majority of this spending, however, is for defense-related projects, which have fewer positive spillovers than nondefense R&D does. Take out defense, and the United States ranks thirty-ninth in government R&D spending as a share of the economy.
Calculating the effects of R&D spending on productivity is difficult, but the consensus among economists is that the returns to individual firms are large and the returns to society as a whole, larger still.84 Public R&D expenditures are already at their lowest level as a share of the economy in forty years, and they are slated to fall to their lowest level—0.5 percent of GDP in 2021—since before the great mobilization of science during World War II.85 If they were instead increased in line with the size of the economy, according to one cautious calculation, the economy would generate more than a half trillion dollars in additional income over the next nine years.86 And, of course, this alternative scenario—ambitious given current trends—means never going back to the level of investment of just a quarter century ago. To ramp back up to that level would require tripling current spending as a share of the economy.
We are not talking just about dollars and cents. We are talking about lives. Consider one chilling example: drug-resistant infections. As America’s breakthroughs in antibiotics recede into the past, bacteria are evolving to defeat current antibiotics. For more and more infections, we are plunging back into the pre-antibiotic era. In the United States alone, two million people are sickened and tens of thousands die each year from drug-resistant infections—mostly because private companies see little incentive to invest in the necessary research, and the federal government has failed to step in.87 Though federal funding for the National Institutes of Health ramped up in the mid-1990s, it has fallen precipitously since, cutting the share of young scientists with NIH grants in half in roughly six years.88 As one medical professor lamented recently: “In my daily work in both a university medical school and a public hospital, it’s a rare month that some bright young person doesn’t tell me they are quitting science because it’s too hard to get funded. . . . A decade or two from now, when an antibiotic-resistant bacteria or new strain of bird flu is ravaging humanity, that generation will no longer be around to lead the scientific charge on humanity’s behalf.”89
Public Disinvestment
And health research has fared better than most areas. Public investment of all sorts and by all tiers of government has reached the lowest level since demobilization after the Second World War. Until the 1970s, gross investment by the public sector—R&D plus investment in physical capital—averaged around 7 percent of GDP. It fell below 6 percent in the 1970s and 1980s, and below 4 percent in the 1990s and 2000s. It is now at 3.6 percent and falling.90 The biggest crunch is in infrastructure: roads, bridges, water supplies, communications networks, public buildings, and the like.91 These are among the most productive investments governments make, with average rates of return that are probably several times higher than those of typical private investments.92 And American infrastructure was once the envy of the world: The interstate highway system started under President Eisenhower—a Republican—eventually stretched over forty-two thousand miles, at a cost (in present dollars) of $493 billion. But the investment paid off, accounting for almost a third of the increase in the nation’s economic productivity in the late 1950s and around a quarter in the 1960s.93
American infrastructure is no longer the envy of the world. The World Economic Forum, the Davos-based center of business-oriented thinking, ranks the United States fifteenth in the quality of railway structures, sixteenth in the quality of roads, and ninth in transportation infrastructure.94 The American Society of Civil Engineers estimates that the United States would have to spend $3.6 trillion more than currently budgeted just to bring our infrastructure up to acceptable levels by 2020.95 China and India are spending almost 10 percent of GDP on infrastructure; Europe, around 5 percent.96 Even Mexico spends just over 3 percent.97 The United States has not broken 3 percent once since the mid-1970s.98
Both of us used to live in the Boston area, and since we study American politics, we traveled frequently to the nation’s capital. It takes seven hours to travel from Boston to Washington, DC, on the closest thing the United States has to high-speed rail, Amtrak’s Acela Express. It takes just over two hours to travel roughly the same distance between Changsha and Guangzhou on China’s high-speed rail network.99
Not Stepping Up to the Plate
In January 2013 a blackout shut down Super Bowl XLVII for thirty-four minutes. Blamed wrongly on Beyoncé’s halftime show (which was actually powered by a generator), the exact cause is still not known.100 What is known is that if the United States had invested in a “smart grid”—energy transmission guided by digital monitoring rather than the clunky analog system and manual meter reading from the age of Thomas Edison—the lights barely would have flickered in the Superdome in New Orleans. A smart grid wouldn’t just be more reliable but also more efficient, eliminating a significant amount of the roughly 150 million tons of carbon dioxide that’s spewed into the atmosphere each year by the United States just because of power losses at the grid.101 For some die-hard fans, saving the Super Bowl from blackouts might be reason enough to build a smart grid. Helping to save the planet ought to be reason enough for everyone.
The United States is investing in smart-grid technology. The economic recovery bill passed in 2009 contained $4.5 billion in federal grants, which in turn have fostered new opportunities for tech companies to pursue smart-grid projects.102 Sadly, however, this initiative is far too modest. In any case, it represents the exception rather than the rule in America’s halting effort to tackle the mounting threat of global warming. Every year, the estimated future costs of inaction increase, as the risks of extreme drought, intense storms, lost coastal land, heat-induced pandemics and wildfires, and damaged agriculture loom larger. Economists continue to debate exactly how much a robust response would slow the growth of the world economy (with more and more arguing that it would have little or no effect or even spur growth).103 But it’s become increasingly clear that the costs of inaction are so catastrophic that substantial steps must be taken whatever the exact trade-off—the question is only what the most cost-effective and politically feasible steps would be.
And yet the United States, once the unquestioned leader in addressing pollution and other ecological risks, lags behind the rich world on most measures of environmental performance. It emits more carbon dioxide per person than any affluent country besides tiny Luxembourg—roughly twice as much as Germany and Japan, and more than three times as much as France and Sweden.104 The widely respected Yale Environmental Performance Index, which assesses air and water pollution and other key environmental outcomes as well as measures relevant to climate change, ranked the United States thirty-third in the world in 2014—two spots down from its similarly uninspiring ranking of thirty-first a decade earlier.105
Land of the Big
We have seen how far we have to go in tackling the dangerous warming of our planet—a challenge that cannot be addressed without the leadership of the world’s sole superpower and second-largest carbon emitter. But consider a very different emerging challenge where lack of an effective response is literally weighing down America’s future.
A larger share of Americans are obese than in any other rich country: Defined as having a body mass index of 30 or higher (roughly two hundred–plus pounds for a five-foot-eight person), obesity now afflicts more than one in three adults and one in six children, compared with around one in seven people or fewer in most European countries.106 Individual medical costs associated with obesity are on par with those of smoking.107 In the aggregate, obesity accounts for a tenth of health spending in the United States, generating $270 billion in total economic cost due to medical bills, mortality, and disability.108 When additional consequences of obesity are factored in—lower earnings, lost work time, reduced productivity—the costs are even more staggering.
The basic causes are no mystery: Americans have become more sedentary, and they consume more calories than they once did.109 Even small differences in activity and diet can add up: One soda a day—a twelve-ounce can, not the megacups that are served at fast-food restaurants (KFC’s “Mega Jug” is sixty-four ounces)—adds up to 55,000 additional calories and fifteen extra pounds a year.110 And once again, adding up all these individual changes across the population leads to enormous effects (no pun intended), such as $270 billion in higher health spending a year. It’s often said that obesity is a personal problem. But people’s basic biological desire for fat and sugar hasn’t changed in the last few decades; their environment has. And American food policy—including federal subsidies for sugar and high-fructose corn syrup—has played a major role in shaping that environment.
Want a vivid image of how American bodies have changed? The average American woman now weighs around 165 pounds. According to the US Centers for Disease Control and Prevention (CDC), that’s essentially what the average American man weighed in 1960. (Today’s average man is around 195 pounds.)111 Americans were once the tallest people in the advanced industrial world. We are now not just among the shortest but also far and away the heaviest. Where once we towered over others when standing, now we only do so when everyone is lying down.
Still the American Century?
What makes all this the more poignant and pressing is that it wasn’t always this way. When Henry Luce, founder of Life, Time, and Fortune magazines, wrote of an “American Century” in 1941, the United States had by far the highest standard of living in the world across all dimensions. “At least two-thirds of us are just plain rich compared with all the rest of the human family,” Luce wrote, “rich in food, rich in clothes, rich in entertainment and amusement, rich in leisure, rich.”112 Americans also had enviably good health compared with citizens of other wealthy nations. And, not coincidentally, they were much better educated, too.
After World War II, this advantage widened, and not just because of the devastation the war wrought in Europe. With the GI Bill and expansion of state and federal support for universities, the United States leapt into a dominant lead in college attendance and completion. Massive public investments in science training, communications, transportation, roads, bridges, and R&D continued after the war, emphasizing civilian as well as defense aims. These efforts supercharged US growth, bequeathing many of the scientific breakthroughs and revolutionary technologies that have driven our economy to this day. The American Century was created, not inherited.
Of course, the United States was not alone on this remarkable journey to prosperity. Instead, it occupied the leading edge of a revolutionary economic transformation experienced by a small club of rich nations. Which raises a natural question: How did this revolution in human well-being happen?
Product details
- Publisher : Simon & Schuster; First Edition (March 29, 2016)
- Language : English
- Hardcover : 464 pages
- ISBN-10 : 1451667825
- ISBN-13 : 978-1451667820
- Item Weight : 1.4 pounds
- Dimensions : 6.75 x 1.25 x 9.75 inches
- Best Sellers Rank: #1,372,886 in Books (See Top 100 in Books)
- #1,011 in Economic Policy
- #1,358 in Economic Policy & Development (Books)
- #2,166 in Economic Conditions (Books)
- Customer Reviews:
About the author

Discover more of the author’s books, see similar authors, read author blogs and more
Customer reviews
Customer Reviews, including Product Star Ratings help customers to learn more about the product and decide whether it is the right product for them.
To calculate the overall star rating and percentage breakdown by star, we don’t use a simple average. Instead, our system considers things like how recent a review is and if the reviewer bought the item on Amazon. It also analyzed reviews to verify trustworthiness.
Learn more how customers reviews work on Amazon-
Top reviews
Top reviews from the United States
There was a problem filtering reviews right now. Please try again later.
The first half of the Twentieth Century was characterized by economic extremes that included marked inequality at the turn of the century, severe economic collapse with the Great Depression, and recovery by enormous, debt-fueled World War II spending. This was followed from the 1940s to the 1970s by a brief Goldilocks just-right period when a mixed economy (democratic capitalism) not only made the US rich by providing robust growth but also avoided increased inequality by sharing gains at all levels of income. The mixed economy that made this possible was a combination of market forces to generate growth and government action to correct for the many predictable market failures that result from misalignment of investor’s self-interest and the public interest.
A key component of the success of the mixed economy was bipartisan support for the active role of government, including from the leading Republicans and business leaders of the day, such as Eisenhower, Nixon, GE’s Owen Young, and GMs Charlie Wilson. These leaders supported collective bargaining, extensive social insurance, a reasonable social safety net, provision of crucial public goods, and interventions tackling market failures. Government activity during this Goldilocks period included redistributive progressive taxation, heavy investment in education and infrastructure, dominant investment in basic science and computer science, administration or oversight of social insurance, regulation of business and finance, and much more.
Government action contributed enormously to the strong economic growth of this period. Increased productivity is the source of the growth of per capita GDP, and technical change is the source of most increased productivity (88% 1909-49). Most of the basic science that led to this technical progress during the period was funded by government. The US Defense department created the internet and provided funding and the biggest early market for many high tech items like computer chips and integrated circuits. The US government funded 18 of the 25 biggest advances in computing technology in the critical years of 1946-65, and 60-70% of university computer science and EE research in the 1970s to the 1990s. Government funding of infrastructure and education also contributed substantially to increasing productivity. The federally funded interstate highway system alone increased productivity by one-third in the late 1950s and one-fourth in the 1960s.
Government actions to prevent or cushion the effects of many market failures were a major source of capitalism’s legitimacy during the years of the mixed economy and created a non-socialist alternative to harsh laissez-faire systems. Even Friedrich Hayek in The Road to Serfdom saw no reason “why the state should not be able to assist the individual in providing for those common hazards of life against which, because of their uncertainty, few individual can make adequate provision….The case for the state’s helping to organize a comprehensive system of social insurance is very strong.” Hence, where markets failed to do so, government worked to prevent increasing inequality, provided collective goods, regulated against externalities like pollution and excessive financial risk, protected consumers and investors from corporate predation and their own myopic behavior, and provided social insurance.
So, what happened? What kind of American amnesia allowed the strong growth, widely shared gains, and decreased national debt (from 129% to 30% of GDP) of the mixed economy of the 1940s-1970s to be discarded in favor of weaker growth, gains almost entirely to the rich, and markedly increased national debt (from 30% to 100% of GDP) with market liberalism? Unfortunately, inflation and stagnation of the 1970s provided the opportunity for powerful economic interests to pursue tax cuts and deregulation to increase their fortunes by pressing for the shift to market liberalism. In retrospect, this shift did little to address the causes of the economic turmoil of the 1970s. The inflation was related to the 1973-4 OPEC oil embargo, Johnson’s earlier guns and butter spending, and Nixon’s loose monetary policy prior to reelection. The stagnation was related to slowing of post-war expansion, greater competition from recovering trading partners, and Carter’s appointment of Paul Volker to control inflation by raising interest rates.
The right wing extremist libertarian Koch brothers, Charles and David, played a leading role in creating this antigovernment shift that targeted the mixed economy. Beginning in the 1970s, they brought together many of the nation’s wealthiest families into a rich people’s movement with a political infrastructure that rivals—and in some ways surpasses—that of the GOP itself. This organization now includes hundreds of nonprofit foundations that funnel hundreds of millions of dollars of tax-free, untraceable “dark money” to massive campaign contributions and lobbying. This system was enhanced by financing the legal campaign that led to the Citizens United decision to remove limits for corporate donations to these foundations and PACs.
The Koch network also invested heavily in intellectuals, university institutes, think tanks, and right wing media to shape public opinion. The Koch’s secretive semiannual donor summits raised $889 million for the 2016 elections and were attended by many right wing billionaires, media celebrities, politicians, and even two Supreme Court justices. Enormous sums were also raised by allied but separate groups like Karl Rove’s PAC American Crossroads, which had a budget of $3oo million for the 2012 elections.
Business leaders and associations were also captured by this right wing antigovernment wave. A widely circulated 1971 Lewis Powell memo (from the corporate lawyer and later Nixon Supreme Court justice) was a very influential blueprint for extensive transformation of US politics, academia, and media to serve right wing business agendas. The Chamber of Commerce switched course from relatively nonpartisan business advocacy to open collaboration with the GOP and extreme policies when Thomas Donohue became president in 1997. The chamber registered $1.1 billion in lobbying outlays from 1998 to 2014 and also spent additional large sums on Republican campaign contributions and efforts to influence the nation’s legal system. Of course, corporations also make direct political expenditures. From 1998 to 2014, FIRE (finance, insurance, and real-estate) alone spent $6 billion on lobbying and $3.8 billion on campaigns.
The Chamber now essentially engages in political money laundering when it disguises the self-serving nature of donations from corporations and the superrich by redirecting them without attribution to their real targets. Donohue said, “I want to give them all the deniability they need.” For example, the health insurance industry silently transferred $102 million by this route to fight health care reform while negotiating publicly with the Obama administration. Many of the nonprofit foundations of the Koch network, such as Donor’s Trust and Freedom Partners, do the same thing. For example, three-fourths of $558 million donated for climate change denial was untraceable due to use of these conduits (Jane Mayers, Dark Money).
The third leg of this attack on the mixed economy was the transformation of Republicans from a center right party that believed in compromise for fair governance of multiple constituencies to a radical right party that created dysfunctional government to obtain total victory for one constituency only—the rich and powerful. From 1994 on, the more a tax fell on the wealthiest Americans, the more important it was to cut it—particularly the estate, dividend, and capital gains taxes and the top marginal tax rate.
During this time Republicans purged their ranks of many of their own moderates, routinized filibustering to block all majority party initiatives, provoked repeated government shutdowns, impeached President Clinton, resorted to mid-decade gerrymandering, systematically attempted to disenfranchise voters unlikely to vote for the GOP, refused to raise the debt ceiling to finance spending already appropriated, and blocked appointments of many federal judges and all appointments for some statutorily established bodies. Republican appointees to the current Supreme Court (before the death of Scalia) are four of the six and one of the ten most conservative in the last seventy-five years.
Why would Republicans want to move so far to the right? To begin with, the Republican base is becoming older, whiter, more rural, and more male. Before the 1960s, conservatives were divided between Democrats in the South and Republicans elsewhere. The Civil Rights Act of 1964 changed that. Within a generation, southern conservatives changed from Democrats to Republicans at least partly from racial antipathies easily pandered to by ostensibly race-neutral language conveying racially charged messages. Other catalysts for Republican transformation are Christian conservatism, polarizing right-wing media, and growing bankrolling by business and the wealthy. Key components of the well-funded right-wing propaganda machine include Rupert Murdoch’s Fox News, built by Roger Ailes, a former consultant to Republican candidates, and conservative talk radio that dwarfs on-air minutes of liberals by more than 10 to 1.
The two major figures within the Republican Party for its transformation were Newt Gingrich and Mitch McConnell. Gingrich’s strategy was to make bipartisan government dysfunctional to create misdirected voter anger against it and shift control to his antigovernment Republicans. In a 1988 speech, he said, “This war has to be fought with a scale and a duration and a savagery that is only true of civil wars.” His PAC sent out tapes to Republicans telling them how to demonize Democrats, including by a long list of “contrast words”: betray, corrupt, sick, decay, incompetent, disgrace, traitors, pathetic, obsolete. McConnell knew that voters would punish and reward politicians for events they have no control over, including failure of their opposition to play by the norms. Hence, he worked to deny even minimal Republican support to Obama by unprecedented use of the filibuster, procedural delay, and protracted bad-faith negotiation. Supporting roles are described for several other Republicans, including Tom DeLay, John Boehner, Paul Ryan and organizers of the Tea Party.
Parties that become too extreme on the major issues of the day are supposed to lose. So why are Republicans winning even as middle of the road voters remain moderate? Turnout favors the GOP, whose affluent and elderly are more likely to vote than younger and minority Democrats, some of whom experience GOP-directed voter suppression. The increasingly rural base of the GOP is favored in all federal elections. With two senators per state, the smaller rural states with one-sixth of the population control one-half of senate seats. This same pattern contributes to the rural bias of the Electoral College, for which states are assigned one vote for each senator and for each congressman. After the 2014 election, Democrats had won the majority of votes for all seated senators but had only a 46 to 54 minority of seats. In the last five presidential elections (one after this book was written), Democrats won the general election four times but the presidency only twice because of the Electoral College. For the House of Representatives, Democrats won 51% of the vote but only 46% of seats in 2012 due to gerrymandering and higher percentages of Democrats packed into urban districts.
According to Mann and Ornstein (It’s Even Worse Than It Looks), the first step in dealing with dysfunctional government and the overthrow of the mixed economy is to understand the origins of the problem. Seeing Republicans and Democrats as equally at fault superficially suggests objectivity, but it’s an abdication of responsibility. As they wrote:
"However awkward it may be for the traditional press and nonpartisan analysis to acknowledge, one of the two major parties, the Republican Party, has become an insurgent outlier—ideologically extreme; contemptuous of the inherited social and economic policy regime; scornful of compromise; unpersuaded by conventional understanding of facts, evidence, and science; and dismissive of the legitimacy of its political opposition. When one party moves this far from the center of American politics, it is extremely difficult to enact policies responsive to the country’s most pressing challenges."
Unfortunately, the prospect of sensible reform of our political dysfunction is likely to depend on a series of GOP electoral defeats. When conservative business leaders like the Koch brothers invested in Cato, Heritage, AEI, and other intellectual weapons of the right, they were playing the long game. When Gingrich and McConnell developed a strategy to tear down American government to build up GOP power, they were playing the long game. Those who believe we must rebuild a mixed economy for the Twenty-first Century need to play the long game, as well. Americans must remember what made America prosper.
“American Amnesia” is a much-needed refresher of what truly made America great and what we can do to restore a well-functioning government that promotes shared prosperity. Political Science professors Hacker and Pierson join forces once again to provide the public with the virtues of the greatest invention in history, the mixed economy. This insightful 464-page book includes ten chapters and is broken out by two parts: 1. The Rise of the Mixed Economy, and 2. The Crisis of the Mixed Economy.
Positives:
1. A professionally written and exhaustively researched book.
2. A much needed topic, what truly made America great and what we can do to restore it.
3. Professors Hacker and Pierson make a great team, they have great command of the topic and make persuasive arguments based on sound research.
4. An excellent introductory chapter that captures the main topics of the book and the general approach taken. “We are told that the United States got rich in spite of government, when the truth is closer to the opposite: The United States got rich because it got government more or less right.”
5. Taking back Adam Smith, the authors counter revisionist economy. “When ‘regulation . . . is in favor of the workmen,’ he wrote in The Wealth of Nations, ‘it is always just and equitable.’ He was equally enthusiastic about the taxes needed to fund effective governance. ‘Every tax,’ he wrote, ‘is to the person who pays it a badge, not of slavery but of liberty.’” Bonus, “As Adam Smith was keen to point out, the greatest threat to functioning markets is often those functioning in markets.”
6. Throughout this book the recurring theme of the virtues of a mixed economy is at its heart. “The mixed economy was at the heart of this success—in the United States no less than in other Western nations. Capitalism played an essential role. But capitalism was not the new entrant on the economic stage. Effective governance was.”
7. Taking back James Madison against conservation revisionist rhetoric. “Madison arrived at the convention with one firm conviction: Government needed the authority to govern.” Bonus, “Like the demonization of Woodrow Wilson, the morphing of Madison into some sort of protolibertarian is a manifestation of American Amnesia.”
8. A look at the current reality versus what once was. “Older Americans are the most educated in the world. Younger Americans, not even close.”
9. Inequality. “When it comes to inequality, the United States once looked relatively similar to other rich countries. Today it’s the most unequal rich nation in the world by a large margin.”
10. Highlights some underrated themes, lack of science funding. “The United States now ranks ninth in the world in government R&D expenditures as a share of the economy.”
11. The emergence of effective government. “What happened around the turn of the last century was neither a revolution in medical treatment nor a natural dividend of growth. It was the emergence of effective government action to improve the health of citizens.” Bonus, “In drug development, a 1995 investigation by researchers at the Massachusetts Institute of Technology (MIT) found that government research had led to eleven of the fourteen most medically significant drugs over the prior quarter century.” Bonus #2, “A short list of nonmedical technologies that originated in government-funded research or contracts would include semiconductors, integrated circuits, nuclear power, satellite communications, GPS, radar, the microwave (used in communication as well as cooking), jet engines, the radio (and its sister technology, television), and a dazzling range of high-tech materials and innovative methods for making them, from titanium to powder metallurgy.” And finally bonus #3, “Of the twenty-five biggest advances in computing technology during the critical period between 1946 and 1965—breakthroughs like magnetic core memory, graphics displays, and multiple central processors—the US government financed eighteen.”
12. The achievements of America’s mixed economic model. “Alongside companies like Apple, however, government plays a dominant or vital role in the many places where markets fall short. Look inside that iPhone, and you’ll find that nearly all its major components (GPS, lithium-ion batteries, cellular technology, touch-screen and LCD displays, internet connectivity) rest on research that was publicly funded—and, in some cases, carried out directly by government agencies.”
13. The important role of governance. “A big government isn’t a guarantee of prosperity, but where we find prosperity, we find big government, too.”
14. The resistance to government. “The annals of consumer safety see this story repeated again and again: On issues from smoking to auto safety, government regulations faced tenacious resistance from the industries that profited from our myopic behavior.”
15. The role of government. “Governments provide essential public goods, correct externalities, combat monopolies, reduce the intensity of boom-and-bust cycles in the economy, expand economic opportunity, and promote social stability and the legitimacy of the market economy.”
16. How and why the successful mixed economic fell apart. How negative forces depleted political support needed to sustain the mixed economy but have undermined effective governance to secure American prosperity. “When businesses can use their economic power to influence government, they can extract policies that guarantee them returns above and beyond those they would obtain in a competitive marketplace.”
17. The two grave threats to the mixed economy. “A new economic elite with ideas (and earnings) starkly distinct from the American mainstream and a newly influential economic philosophy that we call “Randianism” (after the radically individualistic thinking of the midcentury novelist Ayn Rand).”
18. A look at the forces that have undermined our mixed economic model: the Roundtable, the revamped US Chamber of Commerce and the Koch brothers. “In American political history, few groups have assembled more resources or amassed more power than these three, and few have done more to shape the world we occupy today.”
19. Libertarian politics, the why behind smaller government. “No doubt the Koch brothers’ stance was also consistent with the interests of Koch Industries, a company knee-deep in oil. The economic rents that flow to corporations from the absence of regulation are especially great for companies, such as Koch Industries, that engage in the business of extracting, processing, and transporting commodities. If your business model generates huge negative externalities, libertarian governance is profitable.”
20. The march of the Republican Party further to the right and how it threatens our mixed economic model.
21. How to restore a well-functioning politics that promotes shared prosperity.
22. Links and so much more…
Negatives:
1. At over 400 pages, it will require an investment of your time.
2. Lacks charts and visual material that would have complemented the excellent narrative.
3. The flow of the book is not optimal. It is a little repetitive and it drags here and there.
4. I would have provided a chapter or two on the top technologies that originated from government-funded research versus incorporating it loosely in the narrative. Too important a highlight to allow it to get lost in the shuffle.
5. No formal bibliography.
In summary, this is a very good and provocative book that dispels many of the myths emanating from the right-wing conservative machine. Professors Hacker and Pierson show that America’s mixed economic model was at the heart of its rise to prominence and persuasively present the forces that are undermining government and hence a threat to the prosperity that made America great. There is so much valuable information in this book. A must read, I highly recommend it!
Further suggestions: “Winner-Take-All Politics” by the same authors, “Dark Money: The Hidden Story of the Billionaires Behind the Rise of the Radical Right by Jane Mayer, “Plutocrats” by Chrystia Freeland, “Why the Right went Wrong” by E.J. Dionne Jr., “Nation on the Take” by Wendell Potter, "The Age of Greed" by Jeff Madrick, “Predator Nation” by Charles H. Ferguson, “The Monster: How a Gang of Predatory Lenders and Wall Street Bankers Fleeced America…” by Michael W. Hudson, “Republic, Lost” by Lawrence Lessig, and “The Looting of America” by Les Leopold.
Top reviews from other countries
Mit etwas Kenntnis von der Vergangenheit kann man aber seit längerer Zeit sehen, dass dies nicht stimmt, zumindest nicht für die Mehrheit der Bevölkerung oder für die kleineren und mittleren Unternehmen. Der Staat hat früher in wesentlich größerer Umfang die Wirtschaft geholfen, Wohlstand zu schaffen, als sie es heute tut. In den ersten 25 Jahren nach dem zweiten Weltkrieg hat USA mehr für Forschung und Entwicklung ausgegeben als der Rest der Welt zusammen. Heute liegt USA an Platz 9. Rechnet man die militärische Forschung nicht, liegt USA auf Platz 39. Dies wird langfristige Folgen haben.
Als USA 1956 beschlossen hat, das Autobahnnetz zu bauen, lag der Spitzensteuersatz in USA bei 94% und auch die großen Unternehmen haben ihre Gewinne versteuert. Heute sind Schulen, Straßen und Brücken in USA in einem miserablen Zustand, weil kaum etwas unternommen worden ist um sie im Stand zu halten. Millionen von Amerikaner haben ihre Arbeitsplätze verloren und die Ungleichheit ist so groß wie in Europa vor dem ersten Weltkrieg.
Auf dem Umschlag wird das Buch von Thomas Piketty gelobt.





