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Who Stole the American Dream? Hedrick Smith on His Latest Book

Hedrick Smith

Who stole the American Dream?  That's the title of Pulitzer-Prize winning reporter Hedrick Smith's latest book.

The man who helped publish the Pentagon Papers is making several Florida appearances to talk about his investigation of the American economy and public policy.

He spoke Monday at St. Petersburg College Seminole, and will appear at 5:30 p.m. Thursday at New College in Sarasota and 7:30 p.m. Nov. 6 at the University of South Florida in Tampa.

Smith surprised even himself in learning  that policy changes in the late 1970's undermined middle class opportunity.

Specifically, Smith cites policy changes in one year -- 1978.

"It's amazing," said Smith. "Until I sat down and did the research on this book, I would never have said 1978, even though that was a time I was running the New York Times Washington bureau and looking right at the news and had a good 65-man news bureau that was following it."

So what did Smith and his team miss that had such an impact on the American economy?

"Legislation that labor unions wanted got blocked. Stuff that the consumer movement led by Ralph Nader -- a new consumer protection agency -- it got blocked," Smith explained. "And then you saw the 401 K plan come in which dumped a lot of the cost of retirement from company books to private pocket books and checkbooks."

Smith argues that those and other changes pushed by the business lobby fundamentally changed how the American economic system operates.

"We used to have a system in private business in America in the 50's, 60's and 70's of what is called stakeholder capitalism. That is, the CEO considered it his job -- and they say so absolutely clearly in black and white --  to balance the interests of the various stakeholders in the company," said Smith.  "That meant, of course, the owners, the shareholders, but also management, employees, the supplier companies. When that was going on, companies spent about 53 percent of the profits at the end of the year to give back to shareholders and 47 percent went to expanding the company, investment in R-and-D, worker training and improving worker pay. Today those very same companies spend 91 percent of their money on their shareholders and only 9 percent on growth. We are now in an era of shareholder capitalism."

And, Smith argues, that has made it much tougher to realize the American dream of success and financial security.

"Over the last decade, the household income of the bottom 90 percent has actually gone down," Smith said.  "It's hardly your dream to have your income go down over a decade."

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