The plundering of America.

• Author: Scialabba, George
• Position: The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity - Book review

The Squandering of America: How the Failure of Our Politics Undermines Our Prosperity by Robert Kuttner Knopf. 352 pages. $26.95.

In one sense, The Squandering of America is misnamed. One squanders one's own wealth, not other people's; one can only squander what one already controls. But the corporate and financial elites who play the leading role in Robert Kuttner's excellent new book are shown not spending but acquiring: manipulating or rewriting economic rules in order to loot their shareholders, beggar their workers, and shift their tax obligations onto their fellow citizens. Arguably, Kuttner's book should be titled The Plundering of America .

Then again, perhaps "squandering" is the right word. The quarter-century or so of what Kuttner calls "managed capitalism"--the New Deal and its international counterpart, the Bretton Woods regime--was America's golden age of broadly based prosperity and increased security for working people. If the economy had continued to grow at the same pace and with the same income distribution as in those decades, present-day America would be a far richer, safer, happier, healthier, and fairer country--truly America the Beautiful. But that opportunity was tragically wasted--squandered--through a combination of ideological delusion and raw greed. Kuttner tells this painful story extremely well.

Though challenged periodically by labor unions, Populist farmers, and Progressive reformers, business elites dominated American politics from the beginnings of industrialization in the second half of the nineteenth century. But when the economy collapsed in the 1930s, business could no longer stave off substantial regulation, and the collective effort called forth by World War II gave rise to a modicum of social solidarity. The resulting institutions of managed capitalism included labor legislation, unemployment insurance, tuition assistance through the GI Bill, mortgage assistance for first-time homebuyers, Social Security, Medicaid, a fiscal policy aimed at full employment, a structure of mainly reasonable industrial and financial regulations (along with a serious commitment to enforce them), and a decently progressive income tax. Together, these policies produced a high level of widely shared economic well-being and security. For a brief, bright interval, capitalism worked.

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