The American Dream vs. The Gospel of Wealth

The American Dream vs. The Gospel of Wealth: The Fight for a Productive Middle-Class Economy

Copyright Date: 2006
Published by: Yale University Press
Pages: 240
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  • Book Info
    The American Dream vs. The Gospel of Wealth
    Book Description:

    Norton Garfinkle paints a disquieting picture of America today: a nation increasingly divided between economic winners and losers, a nation in which the middle-class American Dream seems more and more elusive. Recent government policies reflect a commitment to a new supply-side winner-take-all Gospel of Wealth. Garfinkle warns that this supply-side economic vision favors the privileged few over the majority of American citizens striving to better their economic condition.Garfinkle employs historical insight and data-based economic analysis to demonstrate compellingly the sharp departure of the supply-side Gospel of Wealth from an American ideal that dates back to Abraham Lincoln-the vision of America as a society in which ordinary, hard-working individuals can get ahead and attain a middle-class living, and in which government plays an active role in expanding opportunities and ensuring against economic exploitation. Supply-side economic policies increase economic disparities and, Garfinkle insists, they fail on technical, factual, moral, and political grounds. He outlines a fresh economic vision, consonant with the great American tradition of ensuring strong economic growth, while preserving the middle-class American Dream.

    eISBN: 978-0-300-13780-4
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Preface
    (pp. vii-x)
  4. Introduction
    (pp. 1-11)

    As the new millennium dawned in 2000, the American economy presented an extraordinary portrait of success. For the previous four years, Gross Domestic Product (GDP) had grown at an average real rate of 4.2 percent, a figure well above the 3.2 percent average for the post– World War II era. Unemployment, at 4.2 percent, was well below the postwar average. Inflation was minimal. Yearly growth in business investment was at levels not seen since the 1960s. Indeed, to find a similar run of robust economic growth, low unemployment, low inflation, and high business investment, one would have to go back...

  5. Chapter I The American Economic Vision
    (pp. 12-26)

    Is there an American economic vision? Is there some guiding principle of economics implicit in our Declaration of Independence, our Constitution, and our form of government? There is—though at first glance this principle might appear to have little to do with the modern debates over fiscal and monetary policy, the size of government, or the degree of government regulation of economic life. But underlying these modern debates is an economic vision familiar to virtually all Americans: the American Dream—the dream that all Americans will have the opportunity through hard work to build a comfortable middle-class life.

    To a...

  6. Chapter II Lincoln’s Economics: The Origins of the American Dream
    (pp. 27-46)

    Abraham Lincoln was not only a moral leader; he was also a political philosopher and an economic realist. We so fully undersatnd Abraham Lincoln’s contribution to our nation’smoralbeliefs that we have neglected his role in shaping our uniquely Americaneconomicvision. Because the moral issues surrounding the slavery question are so clear to us today, there is a tendency to understand the origins of the American Civil War solely in this familiar moral context. In actuality, the Civil War was fought not just about slavery, but about what kind of economy the nation would have. It was a...

  7. Chapter III The Gospel of Wealth
    (pp. 47-68)

    The decades following the Civil War were a period of unprecedented industrial growth and economic and social transformation in the United States. Literally within the span of a generation, America grew from a dominantly agrarian nation into the world’s leading industrial power. The transformation of the American landscape was epochal. From 1870 to1900, railroad mileage more than tripled, while steel production increased by more than a hundredfold. In the same period, overall manufacturing output quadrupled, while agriculture’s share of the economy declined. An abundance of new products became available, and a national system of commerce emerged, linking farmers and manufacturers...

  8. Chapter IV The Age of Reform
    (pp. 69-87)

    The first stirrings of real economic reform in the last decades of the nineteenth century came not from above—from the editorial offices and ivory tower classrooms of the self-professed reformers—but rather from below—from the victims of the new industrial order: the farmers, the industrial workers, and the small business owners and consumers who were being exploited by the railroads and the trusts.

    The earliest laws to address the era’s economic abuses were enacted at the state level. Gradually, the concerns occupying state governments percolated upward to the U.S. Congress. As the century moved toward its final decade,...

  9. Chapter V The Business of America Is Business
    (pp. 88-106)

    Republicans correctly gauged the public mood and hit on an apt theme for the election of 1920: normalcy. “Not heroism, but healing,” said the Republican candidate, Warren G. Harding, “not nostrums, but normalcy.”¹ The swipe at Wilson’s rhetorical grandiosity (dismissing it as so many “nostrums”) struck a powerful chord. Harding, an affable but otherwise unremarkable senator from Ohio, trounced the Democratic candidate, Governor James M. Cox of Ohio, winning sixteen million votes to Cox’s nine million. In certain respects, Harding’s postwar administration harked back to President Ulysses S. Grant’s administration following the Civil War. It would be remembered mainly for...

  10. Chapter VI The Renewal of the American Dream
    (pp. 107-143)

    Franklin D. Roosevelt, the Democratic nominee in 1932, was no less a captive of economic orthodoxy than the Republicans. During the campaign, Roosevelt attacked the Hoover administration as spendthrift and called for a balanced budget and a reduction in federal spending. In other words, Roosevelt assailed Hoover for just about the only thing he was doing right. After the fact, a supporter of Roosevelt observed, “Given later developments, the campaign speeches often read like a giant misprint, in which Roosevelt and Hoover speak each other’s lines.”¹

    Yet while sharing some of the orthodox beliefs of the time—in particular, favoring...

  11. Chapter VII The New Gospel of Wealth
    (pp. 144-162)

    The rise of inflation under the Democratic administrations of Johnson and Carter paved the way for the return of Gospel of Wealth thinking, focused on tax reductions, support for business enterprise, and a laissez-faire approach to regulation of business. Whatever else might be said about Ronald Reagan’s approach, it is clear he confronted a real economic crisis when he assumed office. The stagflation episode marked the worst economic dislocation since the Great Depression. The crisis provided the context for Reagan’s program. Reagan brought a new approach to economic policy. Clearly, inflation had to be gotten under control. There was also...

  12. Chapter VIII The Current Debate: Supply-Side vs. Demand-Side Economics
    (pp. 163-188)

    Since the 1980s the dispute between demand-side and supply-side economics has dominated the debate over U.S. tax policy.¹ Both sides acknowledge that tax cuts can stimulate the economy during a downturn, but the two sides view the problem, as it were, through opposite ends of the telescope.

    Demand-siders emphasize the centrality of aggregate demand in driving economic expansions and contractions. When demand-siders discuss the potential benefits of cutting taxes during a recession, they emphasize the need to put money into the hands of the vast mass of consumers. The point is to increase consumer spending, which in turn will stimulate...

  13. Chapter IX The Way Forward
    (pp. 189-200)

    Two opposing ideas compete today as they have through much of our history for the support of all Americans. One is the American Dream, inspired by President Lincoln and carried forward by Presidents Theodore Roosevelt, Woodrow Wilson, Franklin Roosevelt, and Bill Clinton. The other is the Gospel ofWealth, developed in the second half of the nineteenth century and carried forward in the twentieth century by Presidents Harding, Coolidge, and Hoover and more recently by Presidents Ronald Reagan and George W. Bush. The implementation of one or the other of these ideas has had and will have major economic, moral, and...

  14. Appendix GDP, Consumption, Investment, Employment, Unemployment, and Marginal Tax 1951–2004
    (pp. 201-204)
  15. Notes
    (pp. 205-220)
  16. Index
    (pp. 221-230)