Copyright © 2010 by Arianna Huffington All rights reserved. Published in the United States by Crown Publishers, an imprint of the Crown Publishing Group, a division of Random House, Inc., New York. www.crownpublishing.com CROWN and the Crown colophon are registered trademarks of Random House, Inc. Library of Congress Cataloging-in-Publication Data Huffington, Arianna Stassinopoulos Third World America/Arianna Huffington.—1st ed. p. cm. 1. United States—Economic policy—2009– 2. United States—Economic conditions—2009– 3. United States—Social policy—1993– 4. United States—Politics and government— 2009– I. Title. HC106.84.H84 2010 330.973—dc22 2010026871 eISBN: 978-0-307-71997-3 v3.1 For the millions of middle-class Americans fighting to keep the American Dream alive CONTENTS Cover Title Page Copyright Dedication Preface Chapter 1. THIRD WORLD AMERICA Chapter 2. NIGHTMARE ON MAIN STREET Chapter 3. AMERICA THE BEAUTIFUL DILAPIDATED Chapter 4. CSI USA: WHO KILLED THE AMERICAN DREAM? Chapter 5. SAVING OURSELVES FROM A THIRD WORLD FUTURE Acknowledgments Notes PREFACE G rowing up, I remember walking to school in Athens past a statue of President Truman. The statue was a daily reminder of the magnificent nation responsible for, among other things, the Marshall Plan. Everyone in Greece either had a family member, or, like my family, a friend, who’d left to find a better life in America. That was the phrase everyone associated with America: “a better life.” America was a place you could go to work really hard, make a good living, and even send money back home—a better life. I was sixteen when I first came to America as part of a program called the Experiment in International Living. I spent the summer in York, Pennsylvania, staying with four different families. I went back to Athens, and then soon went on to Cambridge and London. But part of me remained in America. When I came back in 1980, I knew that this time it would be for good. Thirty years later, there’s still no other place I’d rather live. Over that time, one of the characteristics I’ve come to love the most about my adopted country is its optimism. In fact, it melded perfectly with my own Greek temperament: Zorba the Greek meets the American spirit. The Italian journalist Luigi Barzini wrote that America “is alarmingly optimistic, compassionate, incredibly generous … It was a spiritual wind that drove Americans irresistibly ahead from the beginning.”1 The only downside of the optimistic spirit is that it can sometimes prevent us from seeing what is unfolding until it’s too late. In recent years, as the evidence mounted about the road we’re on as a country —one that I was sure would prove disastrous if we failed to course-correct in time—I was conflicted. I wanted to believe everything would turn out okay, as it has so often in the past. But the stubborn facts kept nagging at me as the warning signs became more and more numerous. I had to choose whether to sound like Cassandra or fall back on a double dose of the congenital optimism of both my native and adopted countries and assume it was all just another speed bump on the road to a “more perfect union.” It’s never fun being Cassandra. But remember, Cassandra ended up being right. And the Trojans, who remained blissfully blind to her warnings, ended up being very wrong and very dead. So, yes, as I look around at our great, sprawling country, we are obviously not yet a Third World nation. But we are well on our way. This is the unspoken fear of so many out-of-work Americans and those still at work but anxious about their futures and the futures of their children. My goal for this book is to sound the alarm so that we never do become “Third World America.” “America,” Winston Churchill reportedly said, “can always be counted on to do the right thing, after it has exhausted all other possibilities.”2 Well, we have exhausted a lot of possibilities, and for millions of the unemployed, the underemployed, the ones whose homes have been foreclosed, and the ones who’ve declared bankruptcy or can’t pay their credit card bills, the process has already been very painful. It’s time now to do the right things. The book closes on an optimistic note. Part 5 is about many of those right things being done around the country. Because in the end, despite the acts of greed, cronyism, and disregard for the public interest committed by both business and political leaders, I am ultimately heartened by the resilience, creativity, and largely unheralded acts of compassion and empathy that I see among Americans everywhere. Turning our country around will take the concerted effort of citizens all across America, standing up for themselves, their families, and their communities—both demanding change and embodying it— and keeping the promise of the American Dream alive for future generations. 1 THIRD WORLD AMERICA “T hird World America.” It’s a jarring phrase, one that is deeply contrary to our national conviction that America is the greatest nation on Earth—as well as the richest, the most powerful, the most generous, and the most noble. It also doesn’t match our day- to-day experience of the country we live in—where it seems there is, if not a chicken in every pot, then a flat-screen TV on every wall. And we’re still the world’s only military superpower, right? So what, exactly, does it mean—“Third World America”? For me, it’s a warning: a shimmering foreshadowing of a possible future. It is the flip side of the American Dream—an American nightmare of our own making. I use it to sum up the ugly facts we’d rather not know, to connect the uncomfortable dots we’d rather not connect, and to articulate one of our deepest fears as a people—that we are slipping as a nation. It’s a harbinger, a clanging alarm telling us that if we don’t correct our course, contrary to our history and to what has always seemed to be our destiny, we could indeed become a Third World nation—a place where there are only two classes: the rich … and everyone else. Think Mexico or Brazil, where the wealthy live behind fortified gates, with machine-gun-toting guards protecting their children from kidnapping. A place that failed to keep up with history. A place not taken down by a foreign enemy, but by the avarice of our corporate elite and the neglect of our elected leaders. The warning lights on our national dashboard are flashing red: Our industrial base is vanishing, taking with it the kind of jobs that have formed the backbone of our economy for more than a century; our education system is in shambles, making it harder for tomorrow’s workforce to acquire the information and training it needs to land good twenty-first-century jobs; our infrastructure—our roads, our bridges, our sewage and water and transportation and electrical systems—is crumbling. And America’s middle class, the driver of so much of our creative and economic success—the foundation of our democracy—is rapidly disappearing, taking with it a key component of the American Dream: the promise that, with hard work and discipline, our children will have the chance to do better than we did, just as we had the chance to do better than the generation before us. Nothing better illustrates the ways in which we have begun to travel down this perilous road than the sorry state of America’s middle class. So long as our middle class is thriving, it would be impossible for America to become a Third World nation. But the facts show a different trajectory. It’s no longer an exaggeration to say that middle-class Americans are an endangered species. “The middle class has been under assault for a long time,” President Obama said early in 2010 while announcing a series of modest proposals to bolster what he called “the class that made the twentieth century the American century.”1 During the 2008 campaign, Barack Obama’s guiding principle was that he “would not forget the middle class.”2 Indeed, David Plouffe, Obama’s campaign manager, told me after the election, “We held that North Star in our sights at all times. We made many mistakes along the way, but we always remembered that we were running because, as Barack put it, the dreams so many generations had fought for were slipping away.” Well, you’d need a pretty powerful telescope to see that North Star these days. According to Plouffe, Obama and his team decided that he should make a run for the White House because “the core leadership had turned rotten” and “the people were getting hosed.”3 But the extent to which the people have continued to be hosed and the middle class assaulted becomes shockingly clear when the baby steps taken to bail out Main Street are compared to the all-hands-on-deck, no-expenses-spared bailout of Wall Street. In fact, the economic devastation of the middle class is a lot more threatening to the long-term stability of the country than the financial crisis that saw trillions of taxpayer dollars funneled—either directly or through government guarantees—to Wall Street. The middle class is teetering on the brink of collapse just as surely as AIG was in the fall of 2009—only this time, it’s not just one giant insurance company (and its banking counterparties) facing disaster, it’s tens of millions of hardworking Americans who played by the rules. This country’s middle class is going the way of Lehman Brothers—disappearing in front of our eyes. A decline that began decades ago has now become a plummeting free fall. Just how bad things have gotten was succinctly—and bracingly—summed up by Elizabeth Warren, chair of the Congressional Oversight Panel charged with monitoring the Troubled Asset Relief Program (TARP): “One in five Americans is unemployed, underemployed or just plain out of work.4 One in nine families can’t make the minimum payment on their credit cards. One in eight mortgages is in default or foreclosure. One in eight Americans is on food stamps. More than