The Squandering of America: How the Failure of Our Politics undermines our Prosperity

by: Robert Kuttner

Published by: Vintage Books/division of Random House

Reviewed by C. L. Rossman

Re-issued this November with a new preface, the author predicted a huge failure in the stock market, just before Wall Street took a huge nosedive and Congress planned its largest bailout ever. The author originally wrote warning of economic conditions in 1997, and the market fell in 2001-02.

Kuttner contents that the tremendous stock swings have not been due to Federal regulations, which he says are virtually nonexistent, but rather to the fundamentalist rightward swing that our politics and politicians have taken in the last eight years.

He writes extensively of Wall Street’s history, saying that an unfettered market encourages insider trading and favoritism, and that the combination of laissez-faire government and big-bank and broker greed have given us an economy where credit card debt is soaring, with ordinary citizens no longer able to afford adequate health care, new homes or college educations for their children.

Kuttner backs everything up and writes how conditions today are ominously like those of 1929 just before the crash and the Great Depression. He says the country will need a return to some kind of stock market regulation–and he ties this to a return to basic American freedoms. Nor is he optimistic that this will happen soon. He cites scientific studies which show that while costs of such things as health care, education and housing have risen tremendously, middle/lower class real wages and earnings have stagnated at a level they had thirty years ago. Only the top 10 percent of this country got richer, he says, and the highest returns went to the top one percent of that.

With massive grassroots ”˜ voting in this recent presidential election, it looks like most of the country is searching for a dramatic change in the way it does business and politics. It will give Kuttner’s theories a unique test in the coming four years, to see if America can pull itself out of foreign fiscal debt, stop American jobs going overseas, and recapture those lost freedoms. Otherwise, he doesn’t hold out much hope. It’s a big order to ask of anyone.

The book’s figures and studies support its contentions and will provoke a firestorm of debate among people who want to know “what went wrong.”

Armchair Interviews says: The author is a political analyst, was a regular columnist with Business Week, a graduate of Oberlin College, and co-founder of The American Prospect magazine. This is his analysis of the issues. Another political viewpoint would put forth other reasoning for the problems faced.