A Sobering Analysis
CHASE, EDWARD T.
A Sobering Analysis Silent Depression: The Fate of the American Dream By Wallace C. Peterson Norton. 317 pp. $25.00. Reviewed by Edward T. Chase Writer and book editor THIRTY YEARS AGO, on...
...Second, whereas American wages before '73 all grew at roughly the same pace, 2.5 to 3 per cent a year, subsequently the rates of increase began to diverge radically from one kind of job to another, producing a steady rise in low-wage or poverty-level employment...
...But no cataclysm occurred at the time...
...revitalizing the country's public education system, and giving greater attention to the non-college-bound...
...a total overhaul of the Federal revenue system through a flat-rate income tax (made progressive by an adequate exemption level...
...Peterson goes on to investigate the nature of poverty in America today: the single-parent problem, the special plight of black America, homelessness...
...The top 1 per cent owns 37 per cent of the nation's financial net worth...
...Between 1970 and 1990, Peterson observes, "the rising tide was lifting the yachts, but not the rest of the boats...
...Unlike the resounding crash in 1929 and the '30s, he demonstrates, the precipitous descent of the past 20 years has been "silent" because of two cushions: the safeguard provided by the Federal Deposit Insurance Corporation, and the fact that now-adays "Federal spending equal to nearly one-fourth the value of production is a floor that keeps economic activity from falling very far in any downturn...
...First, Federal income-transfer spending ("entitlement" programs) since the 1970s has increasingly benefited the middle and even upper-middle classes...
...His chapter entitled "...And the Rich Get Richer," for example, begins with a telling anecdote about the Godfather pizza chain centimillionaire, Willy Thie-sen, who celebrated his 40th birthday in 1985 by renting a Concorde to take 100 friends to party in London—at a cost of over $500,000...
...While throwing light on our current economic morass, Peterson also suggests how it can be alleviated...
...He begins by noting that real unemployment is running between 10 and 11 per cent, counting discouraged retirees from the labor force, part-timers, etc...
...Reviewed by Edward T. Chase Writer and book editor THIRTY YEARS AGO, on March 23, 1964, a front-page New York Times story heralded a manifes to entitled "The Triple Revolution...
...The document received wide press coverage and national circulation, partly for its cogency and more for the status of its authors—who included Linus Pauling, Michael Harrington, Irving Howe, Gerard Piel, Norman Thomas, Dwight Mac-donald, Gunnar Myrdal, Robert Heil-broner, W.H...
...This ultimately has meant downward mobility for most Americans...
...Many hundreds of thousands of jobs have disappeared, and with the downsizing of such giants as Du Pont, McDonnell Douglass, IBM, American Express, ITT, General Motors, Eastman Kodak, Sears, American Airlines, and Boeing, the white-collar sector has not been spared...
...And it has undermined the national expectation that children will do better than their parents...
...Moreover, half of the 12 million jobs "created" during the '80s paid an annual wage below the official poverty level, while only 11.9 per cent of those new jobs could be classified as high-wage...
...Peterson links the imbalance to two developments...
...After the pivotal year of 1973, when several key economic indicators changed course, the prophecy began to take form...
...Four fifths of American families have experienced falling or stagnant incomes over the past two decades...
...Nevertheless, Peterson's picture is scary...
...The solutions Peterson puts forth in the closing quarter of his lively work, although not entirely new, are carefully nuanced and confront present-day realities...
...The pamphlet's central theme, if hardly surprising, was still deeply distressing: Technological progress was eliminating jobs worldwide in an irreversible cycle...
...Only the top quintile—John Kenneth Galbraith's celebrated "contented" 20 per cent—has prospered handsomely...
...His proposed "agenda for change," he says, would "occupy our economic and political energies for the rest of the century...
...In brief, he urges serious public and private investment to restore productivity growth...
...Since mid-1980," writes Peterson, "over 2 million middle management jobs have been permanently eliminated...
...Such has been the relentless "deindustrialization" of the nation's workforce...
...and the introduction of a single-payer national health insurance system that is not tied to employment...
...Ping") Ferry, and Robert Theobald...
...From 1973 into the 1990s, the annual average rate of productivity growth—a crucial number—declined 72 per cent compared with the period from 1948 to the watershed year...
...Many dismissed the warning as mere neo-Luddite anxiety, and the whole thing was largely forgotten...
...He's right...
...No doubt...
...rebuilding our crumbling national infrastructure, with specific emphasis on transportation...
...The opec cartel's inflationary fourfold hike of oil prices starting in 1973 did not help matters...
...In a blurb on the dust jacket of Silent Depression Robert Heilbroner says, "Wallace Peterson has written a book that could turn this country around...
...One result of the silent depression has been a fractured society, with the "fortunate fifth" able to insulate itself from violent street crime, the decay of the infrastructure, the social disaster of teenage pregnancy, drugs, and burgeoning jail populations...
...After-tax income for households in the top fifth of the earning scale is now 44.5 times larger than for households in the bottom fifth, with the lower three fifths having lost ground...
...The bulk of Peterson's volume is a tour de force of statistical and anecdotal evidence that defines and establishes the existence of what he calls the "silent depression...
...The revolution's onset, however, was only temporarily delayed...
...I hope the publisher has sent a copy to the White House...
...Massive permanent structural unemployment was predicted, not simply the sort of relatively short-term layoffs that accompany a recession...
...In various ways the author repeatedly shows how that escalating inequality in income and wealth is bedeviling the country...
...And now Wallace C. Peterson examines the consequences of this unhappy turn of events in his altogether convincing new book...
Vol. 77 • February 1994 • No. 2
