Chapter 8 2. What went wrong with the "American Dream"?

Not long ago, I participated in a discussion on the "Chinese Dream" at a university in China. Someone asked me: Many Chinese students want to study in the United States. For them, what is the meaning of the "Chinese Dream"?I said that they can live the "American Dream" or the "Chinese Dream" when they go to the United States, but I personally think that the "Chinese Dream" is already more exciting than the "American Dream", and this trend is expected to continue. For a long time, the "American Dream" has almost been the unsuspecting belief of many Americans, and it is also the vision pursued by many foreigners immigrating to the United States: as long as you follow the rules and work hard, no matter where you come from or what class you come from in society, you will eventually can be successful.The American writer Thomas Wolfe once explained the "American Dream" in this way: "Anyone, no matter what his origin, no matter what social status he has, let alone what kind of unique opportunities he has...he The right to live, the right to work, the right to live out one's self, and the right to become who one wants to be according to one's own innate and acquired conditions." In the words of today's "Chinese Dream", it means that "everyone has the opportunity to shine in life." .

But today the "American Dream" seems to have faded away. In 2012, the United States published a book titled "The Betrayal of the American Dream" (The Betrayal of the American Dream), which caused a sensation. The authors are two senior American media professionals, Donald L. Barlett. ) and James B. Steele, longtime investigative reporting partners and two-time Pulitzer Prize winners for journalism.This book tells about the current situation where the "American Dream" no longer exists and how the "American Dream" has been "sold" and by whom. Through the investigation of the actual life of Americans in the past 20 years, the two authors believe that the "American Dream" that once inspired so many people has long since become obsolete.If calculated on the basis of 100 in January 2000, by 2011 the median real income of American families was only 89.4. In other words, the income of the American middle class has dropped by more than 10% in ten years.The gap between rich and poor in the United States has widened.Taxes paid by the rich have been declining since 1980, from 47.9 percent of average income to 19.8 percent in 2007.From 2000 to 2011, the 1 percent increased their income by 18 percent and accounted for 40 percent of society's wealth.

Americans' pensions have also suffered huge losses.In the past 20 years, the traditional pension system in the United States has been replaced by 401K personal retirement savings. Compared with the traditional pension system, the company's contribution has been greatly reduced, and the performance of 401K is closely related to the performance of company stocks and mutual funds. When a financial crisis hits, many Americans' retirement savings have shrunk dramatically, or even been wiped out. Nobel Prize-winning economist Joseph Eugene Stiglitz assessed the impact of the crisis this way: Despite signs of economic recovery, the U.S. economy is now smaller than it was before the 2008 financial crisis 15%.He argues that GDP is not a good measure of success and that a more relevant indicator is household income.The median real income in the United States today is lower than it was in 1989, 25 years ago; the median income of full-time male workers is lower than it was more than 40 years ago.He lamented: "The United States called itself the 'Land of Opportunity' or at least had more opportunities than other regions, which may have been appropriate 100 years ago. However, this has not been the case for at least 20 years."

Compared with the decline of the American dream, the Chinese dream shows a strong upward trend.As far as material life is concerned, in the past 20 years or so, most Chinese people have actually experienced a wealth revolution. If a Chinese immigrated to the United States in the past 20 years and returned to his hometown today, he may feel strongly about the differences between China and the United States. The great changes in the fate of the two countries can really be described as "Hedong in thirty years and Hexi in thirty years". Some recent polls also confirm my judgment.According to a 2013 cross-border poll conducted by the Pew Center of the United States, 85% of Chinese people are “very satisfied” with the direction of their country’s development, compared with 31% in the United States.The UK-based WWP Group released a survey report titled "The Power and Potential of the Chinese Dream," arguing that "the attractiveness of the Chinese Dream may surpass that of the American Dream in the future."More than one-third of the Chinese people surveyed believe that the United States is an "ideal country" in the world today, but this view is limited to the current situation. 42% of the Chinese people believe that in another 10 years, China will become an "ideal country." ".

Who actually betrayed the American Dream?The author of this book believes that American politicians, the government, the rich, and large companies have shaken the foundation of the "American Dream" through power and money transactions, making ordinary Americans less and less likely to succeed.The U.S. government cuts taxes for the rich on the grounds that the rich and their large companies can create a large number of jobs in the United States, but this situation has basically never happened.Rich people and big companies are not keen to repatriate their profits back to the United States, but instead transfer more money to tax havens such as the Cayman Islands, Bahamas, Luxembourg, and Switzerland; the rich have colluded with politicians to influence think tank reports and media propaganda , so that the government greatly deregulated, and as a result, in just 20 years, "the wages, benefits and many other economic benefits enjoyed by the American middle class have been eroded."

Of course, the author of the book also mentioned that large American companies moved their factories to China one after another out of consideration for super profits, causing Chinese workers to rob many American workers of their jobs. But from the perspective of the Chinese, the "Chinese Dream" is actually still To be more tolerant, it is also connected with the "American Dream" in a certain sense. The realization of the "Chinese Dream" does not hinder the realization of the "American Dream".Today, when the economies of China and the United States are highly interdependent, the "Chinese Dream" can even help many Americans realize the "American Dream."In the Sino-US economic relationship, both sides have benefited a lot, but if only from the perspective of monetization profits, the US side is undoubtedly the one that benefits more.The problem is not that Chinese workers have taken jobs from American workers, but that there is something wrong with the political system of the United States. The huge profits that the rich Americans get from China are just enriching their own pockets, instead of giving back to the United States through taxation and other means. of ordinary people.

This involves a bigger question: Is there something wrong with America's own political system?In fact, instead of taking the trouble to sell its own political model to the world every day, the United States should reflect on its own system dilemma and promote its own system reform.If after such a big crisis, the assets of ordinary Americans are lost after 1/5 to 1/4, they still do not reflect on the system problems deeply, do not punish the financial predators who caused the crisis, or continue to deal with financial executives and senior political officials. If there is a "revolving door" between them (i.e. first work in the financial sector, then go to work in the government, and then return to the financial sector), or are they only satisfied with passing on the crisis through quantitative easing of the dollar, then the next crisis may only be a matter of time question.

In "China Shock", I used the concept of "second-generation corruption" to describe the corruption behind the US financial crisis. "Corruption" is a broad term in China, it is widely used in the media and can be used in almost any field, such as football corruption, news corruption, medical corruption, financial corruption, academic corruption, transportation corruption, lottery corruption, festival corruption, youth corruption Wait.In contrast, "corruption" is a narrow term in the American media.For such a financial crisis that caused the assets of American people to shrink by at least 1/5 on average, the mainstream media in the United States only used "moral hazards" (moral hazards) to describe it at most, instead of using the more accurate concept of "financial corruption". Because 1.5 trillion U.S. dollars of low-quality loans were miraculously packaged into high-quality financial products, and most of them were recognized by authoritative evaluation agencies as 3A-level financial products, and then sold to banks in various countries.These financial predators took advantage of all the loopholes in the legal system, took advantage of all available gray areas, cheated and cheated, and did everything, but they did everything in a dignified, mature and sophisticated manner, especially "financial fraud" and "regulatory arbitrage". Such heinous behaviors have caused the wealth of the American people to shrink greatly, and eventually harmed the whole world.

In fact, "political donations" and "money lobbying" in the political life of the United States and the West belong to the "second generation of corruption". Think of it as a "civil society"; China prohibits the buying and selling of officials, and the United States can make large political donations as ambassadors. These practices of legalizing unresolvable corruption problems are commonplace in the United States.But in my opinion, the United States' tolerance of "second-generation corruption" will only eventually cause a greater crisis in the United States in the future and accelerate the decline of the United States. The 2013 American political bestseller "This Town" (This Town) vividly records how various lobby groups in the United States play with American politics.The current legislation in the United States is almost full of countless compromise clauses to fully protect the rights of various vested interests.Obama's health care reform bill ("Patient Protection and Evaluation of Care Act") is more than 2,000 pages long, including various supplementary clauses and exception clauses. To put it bluntly, this is another transaction of money and power, and the execution is very weak bill.

Some people believe that the US economy has begun to recover, but others express doubts.The government bailed out the banks with taxpayers' money, and the banks continued to pour money into the stock market, housing market, and fictitious economy, so there was some kind of "recovery" in the stock market and housing market, but the deep structural problems of the US economy did not touch anything, and this "recovery" "Maybe it's just a prelude to the next crisis.Strictly speaking, this crisis may be a structural crisis rather than a simple cyclical crisis.Economist Justin Yifu Lin believes that since the United States has not really promoted structural reforms in recent years, the mark of the United States' recovery after each severe recession in the past was a growth rate of 7% to 8%, but this situation did not appear this time.

Some scholars also believe that even though the U.S. economy has shown signs of "recovery" since 2009, the richest 10% of Americans have obtained 149% of the results of economic "recovery", and the richest 1% have taken the "recovery" 81% of the results, while the income of the remaining 90% is still shrinking.If the income of the majority of the people continues to decline, this will inevitably lead to continuous insufficient demand, and insufficient demand, how can the United States support its economic recovery and growth?This is a difficult problem facing the United States. An article in the British "Financial Times" warned the American and British prophets who are complacent about the "prosperity of the English-speaking circle" not to be too happy. Slogan, that the Internet revolution in the United States and the London-New York financial circle will become the hub of the globalized economic era, and now the "Washington Consensus" has almost been forgotten by history.The article stated that what the United States and the United Kingdom have experienced is "the weakest economic recovery in history", and that the United States and the United Kingdom are just the "relatively less ugly two" in the "ugly contest" of industrialized countries.The article believes that the relative recovery of the United States and the United Kingdom was "buy" by the rare monetary easing policies in history. These currencies pushed asset prices to unprecedented heights. Still hovering at a low level.Although the US and UK economies are better than some countries, "don't think that good times are coming soon." I personally think that behind all this is a big problem with the American democratic system: the American democratic system has long been hijacked by various well-organized and mobilized interest groups.The "separation of powers" in the United States is only limited to the political field, and outside this field, powerful capital forces influence various institutional arrangements in the United States.A good modern political system should be able to ensure a balance among political power, social power, and capital power on a larger scale.In my opinion, the imbalance between these three forces and the dominance of capital is the main reason why the American Dream has been "sold out". I will discuss this in detail below.

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