Letter from the Author

America is no longer the land of opportunity it once was. Among the democracies, it has become the worst poor man’s county and the best rich man’s country, a nation where economic mobility has declined 40 percent to at least a 60-year low and you need to pick your parents extremely carefully to prosper.”

Dear Reader:

Thank you for visiting this website. I wanted to explain why I wrote What Went Wrong. Finding meaningful solutions to the plight of American families has been frustrating. Most realize that acquiring more education and jobs skills like computer literacy are important to improve career prospects. That can help attain the American Dream of a good job, good health care, a bright future for children, and a secure retirement.

But economists know a deeper truth: while better education may work at a personal level, improving education has not caused wages nationwide to rise. Rising productivity has not been matched by rising real earnings. That means the barriers to reigniting the American Dream are structural and can only be removed by structural changes to the economy. These structural problems account for the Reagan era of stagnant wages, dwindling economic opportunity, widening income disparities, and a generation of toil and savings squandered, with household wealth no higher than in your parents’ day.

The most valuable lesson in What Went Wrong is that structural changes can restore the American Dream. Success is possible. And, lessons from other rich democracies are valuable in determining what those changes need to be. (Read Michael Pascoe to find out where the American Dream is alive and well). The major change is to return economic sovereignty to families, to make family- rather than firm-prosperity the American covenant. That means tossing shareholder capitalism in the bin and reintroducing stakeholder capitalism. Another is that globalization is not the cause of wage stagnation and rising income disparities. A third lesson is that widely broadcasted wage gains tied to productivity do not reduce productivity growth or economic growth. And a fourth lesson is that reforming corporate governance by introducing codeterminism is vital to raising productivity and reindustrializing America with good jobs paying good wages.

Acting on these four lessons won’t be easy. Change must come from a Washington in the throes of pecuniary politics where the fortunate sitting atop the income pyramid are determined to perpetuate their skewed gains from growth by grid-locking Washington. But that strategy will continue to succeed only if families choose to allow it. The best news of all is that families have the ability at the ballot box to change their futures, to regain family economic sovereignty and restore the American Dream. It is up to you to make that choice.

BenBella Books, the publisher, deserves credit for helping me concisely and clearly explain the choices you have, the opportunity to change your future for the better while creating hope for a still brighter future for your children.

I hope that you will choose to share your thoughts by returning to the forum on this site, and share with others your reaction to the Reagan era and to the exciting prospects suggested by experience in Australia and the northern European nations.

Thank you.

George

What Went Wrong

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The government of an exclusive company of merchants is, perhaps, the worst of all governments for any country whatever.”

Adam Smith, Wealth of Nations

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(Adam Smith) explained that “the welfare of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.

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