<<

Notes

Introduction 1. “Economic Focus: Marathon Machine,” , November 25, 2011, 84. 2. Rana Foroohar, “What Ever Happened to Upward Mobility?” Time, November 14, 2011, 34. 3. “Average Hourly and Weekly Earnings in Current and Constant (1982) Dollars, by Private Industry Group, 1970–2007,” U.S. Bureau of Labor Statistics, Employment and Earnings Monthly, http:// www.census.gov/compendia/statab/cats/income_expenditures _poverty_wealth.html. 4. “The Next China,” The Economist, August 6, 2010, 49. 5. James Haggerty, “U.S. Factories Buck Decline: Sector Creating More Jobs than It’s Cutting; ‘Shining Star,’” , January 19, 2011. 6. Time, November 14, 2011, 30. 7. Michael Spence, “The Impact of Globalization on Income and Employ- ment,” Foreign Affairs 90, no. 4 (July/August 2011): 28. 8. Ibid., 30 9. Robyn Meredith, The Elephant and the Dragon: The Rise of and China and What It Means for All of Us (New York: W. W. Norton, 2008): 212. 10. Alan Blinder and Jagdish Bhagwati, Offshoring of American Jobs: What Response from U.S. Economic Policy? The Alvin Hansen Symposium on Public Policy— (Cambridge: MIT Press, 2009): 98. 11. David Barboza and Nick Bunkley, “G.M. Shines in China,” , July 22, 2010, 1. 12. David Wessel, “Big U.S. Firms Shift Hiring Abroad: Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Globalization,” The Wall Street Journal, April 19, 2011. 13. Anand Giridharadas, “India’s Edge Goes beyond Outsourcing,” The New York Times, April 4, 2007. 14. David Wessel, “Big U.S. Firms Shift Hiring Abroad: Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Globalization,” The Wall Street Journal, April 19, 2011. 15. Ibid. 16. Rana Foroohar, “What Ever Happened to Upward Mobility?” Time, November 14, 2011, 34. 172 The Shrinking American Middle Class

17. Clyde Prestowitz, Three Billion New Capitalists (New York: Basic Books, 2005), 148 18. Arianna Huffington, Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream (New York: Crown, 2010), 48 19. Dennis Cauchon and Barbara Hansen, “Typical U.S. Family Got Poorer during the Past 10 Years,” USA Today, September 11, 2011. 20. Francis Fukuyama, “The Future of History: Can Liberal Democracy Sur- vive the Decline of the Middle Class?” Foreign Affairs 91, no. 1. (Janu- ary/February 2012): 53. 21. Niall Ferguson, “The Inequality Dodge,” , February 8, 2012, 25.

Chapter 1 1. Nicholas Kristoff, “Obama’s Inauguration,” The New York Times, Janu- ary 20, 2009. 2. F. A. von Hayek, In Law, Legislation, and Liberty: The Mirage of Social Justice, vol. 2 (Chicago: University of Chicago Press, 1976). 3. Ibid. 4. F. A. von Hayek, “Social Security,” in The Constitution of Liberty (Chi- cago: University of Chicago Press, 1960). 5. William Safire, “No . . . Left Behind,” The New York Times, February 2, 2006. 6. Herbert Spencer, “The Man versus the State,” (: Williams and Norgate, 1884). 7. Garret Hardin, “The Tragedy of the Commons,” Science 162, no. 3859 (1968): 1243– 48. 8. Kara Scannell and Sudeep Reddy, “Greenspan Admits Errors to Hostile House Panel,” The Wall Street Journal, October 24, 2008. 9. Definition of justice from the Free Merriam-Webster Dictionary, http:// www.merriam-webster.com/dictionary/justice. 10. Definition of lawfulness from the Free Online Dictionary, http://www .thefreedictionary.com/lawfulness. 11. Anatole France, Chapter 7 in The Red Lily, 14th ed. [Le lys rouge, qua- torzième édition] (Calmann-Lévy: 1894), 1– 30. 12. Tami Luhby, “Obama Wants to Cut Mortgage Interest Deductions for the Rich,” Money.CNN.com, February 15, 2011. 13. Dina El Boghdady, “HUD Budget Would Drop to $41.7 Billion under Obama Proposal,” , February 15, 2011. 14. Organisation for Economic Co- operation and Development, “Grow- ing Income Inequality in OECD Countries: What Drives It and How Can Policy Tackle It?” OECD Forum, , May 2, 2011, http://www .oecd.org/dataoecd/32/20/47723414.pdf. 15. “Shame on them,” The Economist, July 15, 2011, 13. Notes 173

16. “International Financial Statistics, May, 2010,” International Monetary Fund. Statistics Department. 17. Jeffrey Sachs, “How to Tame the Deficit,” Time, February 15, 2010, 38. 18. “Federal Government Receipts by Source, 1934–2008,” Budget of the Government: FY 2009, Office of Management and Budget 19. Christopher Chantrill, “Comparison of State and Local Government Spending and Debt in the United States.” usgovedebt.us. 20. “National Income and Product Accounts of the United States,” US Bureau of Economic Analysis. 21. David Leonhardt, “The Deficit, Real vs. Imagined,” The New York Times, June 21, 2011. 22. “Spare a Dime,” The Economist, April 10, 2009, 14. 23. Ibid., 11. 24. Ibid. 25. “Average Hourly and Weekly Earnings in Current and Constant (1982) Dollars, by Private Industry Group, 1970–2007,” Statisti- cal Abstract: Income, Expenditures, Poverty, & Wealth, US Bureau of Labor Statistics, Employment and Earnings Monthly. http://www .census.gov/compendia/statab/cats/income_expenditures_poverty _wealth.html. 26. “GDP in Current and Constant (2000) Dollars 1960–2007,” US Bureau of Economic Analysis, National Income and Product Accounts of the United States. 27. “Spare a dime,” The Economist, April 10, 2009, 15. 28. Ibid., 11. 29. Ibid., 13. 30. Ibid., 4. 31. Nelson D. Schwartz and Louise Story, “Pay of Hedge Fund Managers Roared Back Last Year,” The New York Times, March 31, 2010. 32. The Sales Tax Clearinghouse, http://thestc.com/STrates.stm. 33. SocialSecurity.gov, “2012 Social Security Tax Rate and Maximum Taxable Earnings,” http://ssa-custhelp.ssa.gov/app/answers/detail/a_id/240/ ~/2012-social-security-tax-rate-and-maximum-taxable-earnings. 34. Tax Policy Center, “Tax Topics: Payroll Taxes,” http://www .taxpolicycenter.org/taxtopics/Payroll-Taxes.cfm. 35. Warren Buffet, “Stop Coddling the Super Rich,” The New York Times, August 14, 2011. 36. OECD, Growing Unequal? Income Distribution and Poverty in OECD Countries (Paris: OECD, 2008). 37. Median Household Income for States: 2008 and 2009 American Com- munity Survey (ACS BR/09– 2). US Census Bureau: Income, http:// www.census.gov/hhes/www/income/income.html. 38. Thomas Pikety and Emmanuel Saez, “Income Inequality in the United States, 1913–1998,” National Bureau of Economic Research, Septem- ber 2001. 174 The Shrinking American Middle Class

39. Joel Kotkin, “The End of Upward Mobility?” Newsweek, January 26 2009, 64. 40. Michael Spence, “The Impact of Globalization on Income and Employ- ment,” Foreign Affairs, July/August 2011, 40.

Chapter 2 1. “The Rich and the Rest,” The Economist, January 28, 2011, 13. 2. Francis Fukuyama, “The Future of History: Can Liberal Democracy Sur- vive the Decline of the Middle Class?” Foreign Affairs 91, no. 1 (January/ February, 2012): 53. 3. Kevin Phillips, The Politics of Rich and Poor (New York: Random House, 1990), 241. 4. Ibid., 14. 5. Michael Katz, The Undeserving Poor (New York: Pantheon Books, 1989), 168. 6. Harrison Bennett and Barry Bluestone, The Great U- Turn: Corporate Restructuring and the Polarizing of America (New York: Basic Books, 1988), xi. 7. Alan Blinder and Jagdish Bhagwati, Offshoring of American Jobs: What Response from U.S. Economic Policy? The Alvin Hansen Symposium on Public Policy— Harvard University (Cambridge: MIT Press, 2009): 67. 8. , The Age of Diminished Expectations: U.S. Economic Policy in the 1990s (Cambridge: MIT Press, 1992), 20. 9. “As Jobs Fade Away,” The Economist, May 8, 2010, 33. 10. Joel Kotkin, “The End of Upward Mobility?” Newsweek, January 26, 2009, 64. 11. “Unrest in Peace,” The Economist, October 28, 2011, 94. 12. L. McCall and J. Brash, “What Do Americans Think about Inequality?” (working paper, Demos, New York, 2004). 13. L. Osberg and T. Smeeding, “‘Fair’ Inequality? Attitudes to Pay Differ- entials: The United States, a Comparative Perspective,” American Socio- logical Review 71 (2006): 450– 73. 14. John Weeks, “Inequality Trends in Some Developed OECD Countries” (working paper 6, United Nations Department of Economic and Social Affairs, New York, 2005). 15. Matt Bloom, “The Performance Effects of Pay Dispersion on Individuals and Organizations,” Academy Management Journal 42 (1999): 25– 40. 16. Alberto F. Alesina and Roberto Perotti, “Income Distribution, Politi- cal Instability, and Investment (October 1993),” NBER Working Paper Series w4486 (1993), http://ssrn.com/abstract=227302. 17. H. C. Wallich, “Zero Growth,” Newsweek, January 24, 1972, 62. 18. “Spare a Dime: More or Less Equal,” The Economist, April 10, 2009, 13. 19. Jason DeParle, “Harder for Americans to Rise from Lower Rungs,” The New York Times, January 4, 2012. Notes 175

20. “Snakes and Ladders,” The Economist, May 27, 2006, 52 21. Jo Blandern, Paul Gregg, and Stephen Machin, Intergenerational Mobil- ity in Europe and North America (London: Center for Economic Perfor- mance, London School of Economics, 2005). 22. Rana Foroohar, “What Happened to Upward Mobility?” Time, Novem- ber 14, 2011, 29. 23. Thomas Hobbes, “Of the Natural Condition of Mankind as Concerning Their Felicity and Misery,” in The Leviathan (Paris: 1651). 24. Stephen G. Tibbetts and Craig Hemmens, Criminological Theory: A Text/Reader (Thousand Oaks: Sage Publications, 2010), 318. 25. P. Fajnzylber, D. Lederman, and N. Loayza, “Inequality and Violent Crime,” Journal of Law and Economics 45 (2002): 1– 40. 26. R. Wilkinson, “Why Is Violence More Common Where Inequality Is Greater?” Annals of New York Academy of Sciences 1036 (2004): 1–12. 27. M. Daly, M. Wilson, and S. Vasdev, “Income Inequality and Homicide Rates in Canada and the United States,” Canadian Journal of Public Health, Revue Canadienne de Criminology 43, no. 2 (2001): 219– 36. 28. C. C. Hsieh and M. D. Pugh, “Poverty, Income Inequality, and Violent Crime: A Meta-Analysis of Recent Aggregate Data Studies,” Criminal Justice Review 18 (1993): 182– 202. 29. J. Gilligan, Preventing Violence (New York: Thomas and Hudson, 2001), 110. 30. Drake Morgan, Kathleen A. Grant, H. Donald Gage, Robert H. Mach, Jay R. Kaplan, Osric Prioleau, Susan H. Nader, Nancy Buchheimer, Richard L. Ehrenkaufer, and Michael A. Nader, “Social Dominance in Monkeys: Dopamine D2 Receptors and Cocaine Self Administration,” Nature Neuroscience 5, no. 2 (2002): 169– 74. 31. “Center for Disease Control and Prevention: Compressed Mortality Files 1999– 2002,” accessed September 9, 2009, http://wonder.cdc.gov/ mortsql.html. 32. P. Bjorntorp, “Do Stress Reactions Cause Abdominal Obesity and Comorbidities?” Obesity Reviews 2, no. 2 (2001): 73– 86. 33. E. Brunner, M. Juneja, and M. Marmot, “Abdominal Obesity and Disease Are Linked to Social Position,” British Medical Journal 316 (1998): 308. 34. International Obesity Taskforce, Overweight and Obese (London: Inter- national Obesity Taskforce, 2002) 35. X. R. G. Wilkinson and K. E. Pickett, “Income Inequality and Popula- tion Health: A Review and Explanation of the Evidence,” Social Science and Medicine 62, no. 7 (2006): 1768– 84. 36. Editor’s Choice, “The Big Idea,” British Medical Journal 312, no. 7037 (1996): 312. 37. State Senate Republican Caucus, “State Prisons Incarceration Rate,” http://cssrc.us/pubs/090813_Prison_Data.pdf. 176 The Shrinking American Middle Class

38. US Department of Justice, Uniform Crime Reports (2008), http:// www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2008; Federal Bureau of Investigation, “Some Good News: Crime is Declining,” January 12, 2009, http://www.fbi.gov/news/stories/2009/january/ucr_stats011209. 39. Justice Policy Institute, Cellblocks or Classrooms? (Washington, DC: Jus- tice Policy Institute, 2002), 1. 40. K. Beckett and B. Western, “Governing Social Marginality,” Mass Impris- onment: Social Causes and Consequences, ed. D. Garland (London: Sage, 2001), 35– 44. 41. S. J. Solnick, “Is More Always Better? A Survey on Positional Concerns,” Journal of Economic Behavior and Organization 37 (1998): 373– 83. 42. J. Henrich, R. Boyd, S. Bowles, C. Camerer, E. Fehr, H. Gintis, and R. McEleath, “Overview and Synthesis,” Foundations of Human Sociality (Oxford: Oxford University Press, 2004), 8–54. 43. “As Jobs Fade Away,” The Economist, May 8, 2010, 33.

Chapter 3 1. “As Jobs Fade Away,” The Economist, May 8, 2010, 33. 2. Joel Kotkin, “The End of Upward Mobility?” Newsweek, January 26 2009, 64. 3. Lawrence Mishel, Jared Bernstein, and Heidi Shierholz, The State of Working America 2008/2009 (Washington, D.C.: Economic Policy Insti- tute, 2009) 4. “GDP in Current and Constant (2000) Dollars 1960– 2007,” U.S. Bureau of Economic Analysis, National Income and Product Accounts of the United States, http://www.bea.gov; Or, John H. Wright, ed., The New York Times Almanac (New York: Penguin Books, 2008), 330. 5. Lewis Uchitelle, “The Wage That Meant Middle Class,” The New York Times, April 20, 2008, 3. 6. Kishore Mahbubani, The New Asian Hemisphere: The Irresistible Shift of Global Power to the East (New York: Public Affairs, 2008), 10. 7. Robyn Meredith, The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us (New York: W. W. Norton, 2008), 212. 8. John C. Dvorak, “Scams, Lies, Deceit and Off Shoring,” PC Magazine, April 28, 2004, 23. 9. David Wessel, “Big US Firms Shift Hiring Abroad: Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Global- ization,” The Wall Street Journal, April 19, 2011, http://online.wsj .com/article/SB10001424052748704821704576270783611823972 .html?mod=djemTMB. 10. Ibid. 11. “China: Is the West Being Overtaken by the Rest?” , April 21, 2008, 126. Notes 177

12. Clyde Prestowitz, Three Billion New Capitalists (New York: Basic Books, 2005), 79. 13. Stephen S. Cohen and J. Bradford DeLong, “The United States Is about to Experience Economic Upheaval on a Scale Unseen for Generations. Will Social Harmony Be a Casualty?” Atlantic Monthly 295, January/ February 2005. 14. Ibid. 15. “Can Anyone Steer This Economy?” Business Week, November 20, 2006, http://www.businessweek.com/magazine/content/06_47/b4010001 .htm. 16. Ibid. 17. Nick Kurczewski, “Behind the Wheel of Tata Nano—and Now, for Some Serious Belt- Tightening,” The New York Times, June 28, 2009. 18. Alan Blinder and Jagdish Bhagwati, Offshoring of American Jobs: What Response from US Economic Policy? The Alvin Hansen Sympo- sium on Public Policy—Harvard University (Cambridge: MIT Press, 2009): 98. 19. James Haggerty, “U.S. Factories Buck Decline: Sector Creating More Jobs than It’s Cutting; ‘Shining Star,’” The Wall Street Journal, January 19, 2011. 20. David Barboza and Nick Bunkley, “GM Shines in China,” The New York Times, July 22, 2010. 21. “The Next China,” The Economist, August 6, 2010, 49. 22. Michael Rizzo, “The Decline of Manufacturing?” American Institute for Economic Research, April 24, 2008. http://www.aier.org/research/ commentaries/60-commentaries/206-the-decline-of-manufacturing. 23. Peter S. Goodman, “Joblessness Hits 9.5%, Deflating Recovery Hopes,” The New York Times, July 2, 2009. 24. Amelia Gentleman, “India Nurtures Business of Surrogate Mother- hood,” The New York Times, March 10, 2008. 25. Maureen Dowd, “A Penny for My Thoughts?” The New York Times, November 30, 2008. 26. Saritha Rai, “Prayers to Indian Clergy,” The New York Times, June 13, 2004. 27. Ibid. 28. Anand Giridharadas, “India’s Edge Goes Beyond Outsourcing,” The New York Times, April 4, 2007. 29. “The Other Elephant,” The Economist, November 12, 2010, 82. 30. “Passage to India: The Growth of Legal Outsourcing,” The Economist, June 26, 2010, 69. 31. William M. Bulkeley, “IBM Now Plans Fewer Layoffs from Off Shor- ing,” The Wall Street Journal, July 29, 2004. 32. Alan S. Blinder, “Off Shoring: The Next Industrial Revolution?” Foreign Affairs, March/April 2006. 33. “Globalization Is Generating Huge Economic Gains. That Is No Reason to Ignore Its Costs,” The Economist, September 2, 2006, 66. 178 The Shrinking American Middle Class

34. Carolyn Lochhead, “Economists Back Tech Industry’s Overseas Hir- ing; Workers Deny U.S. Lacks Qualified Staff,” San Francisco Chronicle, January 9, 2004. 35. William J. Holstein, “India Taps China’s Reserve of Technological Tal- ent,” The New York Times, November 2, 2004. 36. Anthony Lin, “Law Firms Offered Outsourced Support Staffs,” New York Law Journal, June 7, 2004. http://www.law.com/jsp/article .jsp?id=1085626382900. 37. “Passage to India: The Growth of Legal Outsourcing,” The Economist, June 26, 2010, 69. 38. “Off Shoring Your Lawyer: Outsourcing Can Cut Your Legal Bills,” The Economist, December 16, 2010, 132. 39. “Addressing the Justice Gap,” The New York Times, August 23, 2011. 40. Saritha Rai, “Union Disrupts Plan to Send Ailing Workers to India for Cheaper Medical Care,” The New York Times, October 11, 2006. 41. “Weaving the World Together,” The Economist, November 25, 2011, 72. 42. “Wall Street Strengthens Its Wary Embrace of India,” New York Times, August 11, 2008. 43. Ibid. 44. Ibid. 45. Phillip Mattera, “Your Tax Dollars at Work Offshore: How Foreign Off Shoring Firms Are Capturing State Government Contracts,” Corporate Research Project of Good Jobs First, July 2004, http://www.goodjobsfirst .org/sites/default/files/docs/pdf/offshoringtext.pdf. 46. Eva Paus, Global Capitalism Unbound (New York: Palgrave Macmillan, 2007), 11.

Chapter 4 1. “The New Titans,” The Economist, September 22, 2006, 14. 2. Robert Kagan, Dangerous Nation (New York: Knopf, 2006), 328. 3. Eva Paus, Global Capitalism Unbound (New York: Palgrave Macmillan, 2007), 132. 4. Ibid., 149. 5. Ibid., 151. 6. “Back to Work for Less: Survey: 57% Who Lost Full-Time Jobs 2001– 2003 and Found Full-Time Work Again Are Earning Less,” CNN Money, July 30, 2004, http://money.cnn.com/2004/07/30/news/economy/ displaced_workers/index.htm. 7. Bureau of Labor Statistics, Displaced Workers Survey 2001–2003, Table 5 (July 30, 2004), http://www.bls.gov/news.release/archives/ disp_07302004.pdf. 8. Anand Giridharadas, “India’s Edge Goes Beyond Outsourcing,” The New York Times, April 4, 2007. Notes 179

9. David Barboza and Nick Bunkley, “G.M. Shines in China,” The New York Times, July 22, 2010. 10. Ralph E. Gomory and William Baumol, Global Trade and Conflicting National Interests (Cambridge: MIT Press, 2000), 4. 11. Ibid. 12. Alan S. Blinder, “Off Shoring: The Next Industrial Revolution?” For- eign Affairs, March/April 2006, http://www.citizen.org/documents/ FactSheetonOutsourcing2007.pdf. 13. Alan S. Blinder and Jagdish Bhagwati, Offshoring of American Jobs: What Response from U.S. Economic Policy? The Alvin Hansen Symposium on Public Policy— Harvard University (Cambridge: MIT Press, 2009): 72. 14. Paul Krugman, “The Trade Tightrope,” The New York Times, February 27, 2004. 15. Clyde Prestowitz, Three Billion New Capitalists (New York: Basic Books, 2005), 20. 16. “The New Titans,” The Economist, September 22, 2006, 28. 17. Paus, Global Capitalism Unbound, 132. 18. Ron Hira and Anil Hira, Outsourcing America: What’s Behind Our National Crisis and How We Can Reclaim American Jobs (New York: Amacom, 2005), 103. 19. Joshua Cooper Ramo, “Unemployment Nation,” Time, September 21, 2009, 28. 20. Diana Farrell, ed., “Offshore: Understanding the Emerging Global Label Market,” McKinsey Global Institute— Critical Trends in Economics and Management (Boston: Harvard Business School Press, 2006), 59. 21. Arvind Panagarriya, India: The Emerging Giant (London: Oxford Uni- versity Press, 2008), 94. 22. Prestowitz, Three Billion New Capitalists, xiii. 23. “The New Titans,” The Economist, September 22, 2006, 14. 24. Ibid., 15. 25. Paus, Global Capitalism Unbound, 23. 26. Joel Kotkin, “The End of Upward Mobility?” Newsweek, January 26, 2009, 64. 27. Farrell, “Offshore,” 88. 28. Heather Timmons, “Reuters Plans to Triple Jobs in India,” The New York Times, October 8, 2004. 29. Timmons, “Reuters Plans to Triple Jobs in India.” 30. Prestowitz, Three Billion New Capitalists, 100. 31. Rob Atkinson, “Understanding the Outsourcing Challenge,” Progres- sive Policy Institute, May 28, 2004, 7, http://www.dlc.org/documents/ Offshoring_0504.pdf. 32. Prestowitz, Three Billion New Capitalists, 103. 33. “Immigration to the U.S.: Brains and Borders,” The Economist, May 4, 2006, 15. 34. Paus, Global Capitalism Unbound, 26. 180 The Shrinking American Middle Class

35. “The New Titans,” The Economist, September 22, 2006, 12. 36. Richard Freeman, “The Challenge of the Growing Globalization of Labor Markets to Economic and Social Policy,” Global Capitalism Unbound (New York: Palgrave Macmillan, 2007), 24. 37. “Rising Power, Anxious State: Getting On,” The Economist, July 1, 2011, 16. 38. Kishore Mahabubani, The New Asian Hemisphere: The Irresistible Shift of Global Power to the East (New York: Public Affairs, 2008), 64. 39. Chronicle of Higher Education, October 9, 2009, A21, http://chronicle .texterity.com/chronicle/20091009a/?pg=1. 40. Ibid., A26. 41. Paul Krugman, “The Uneducated American,” The New York Times, October 9, 2009. 42. Chronicle of Higher Education, October 9, 2009, A26, http://chronicle .texterity.com/chronicle/20091009a/?pg=1. 43. Ibid. 44. Paus, Global Capitalism Unbound, 134.

Chapter 5 1. “The Next China,” The Economist, August 6, 2010, 49. 2. Nicholas D. Kristof and Sheryl WuDunn, China Wakes: The Struggle for the Soul of a Rising Power (New York: First Vintage Books, 1994), 387. 3. Pete Engardio, “Forget , Whatever Works,” Business Week, October 16, 2008. 4. Alan Jiao, Rowan University, “China Today,” September 2009. 5. , The Post- American World (New York: W. W. Norton, 2008), 89. 6. “The China Trade Syndrome,” The Economist, October 12, 2007, 62. 7. “Questioning the Middle Kingdom,” The Economist, August 3, 2007, 68. 8. Robyn Meredith, The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us (New York: W. W. Norton, 2008), 170. 9. Ted C. Fishman, “New Great Walls: Beijing Is Building Up for the Olympics,” National Geographic 213, no. 5 (May 2008): 142. 10. Ted Conover, “Capitalist Roaders,” The New York Times Magazine, July 2, 2006, 1. 11. “Rot in the Vaults,” The Economist, April 8, 2006, 74. 12. Nina Hachigian and Mona Sutphen, The Next American Century: How the U.S. Can Thrive as Other Powers Rise (New York: Simon and Schus- ter, 2008), 15. 13. “Come In Number One, Your Time Is Up,” The Economist, April 12, 2007, 14– 20. 14. The New York Times, July 22, 2010, 1. Notes 181

15. Hachigian and Sutphen, The Next American Century, 89. 16. Ibid., 103. 17. “A Ravenous Dragon,” The Economist, March 21, 2008, 22. 18. Hachigian and Sutphen, The Next American Century, 102. 19. Brook Larmer, “Bitter Waters: Can China Save the Yellow—Its Mother River?” National Geographic 213, no. 5 (May 2008): 170. 20. Bill Emmott, Rivals: How the Power Struggle between China, India and Japan Will Shape Our Next Decade (New York: Harcourt, 2008), 194. 21. Hachigian and Sutphen, The Next American Century, 89. 22. Meredith, Elephant and Dragon, 207. 23. Andrew Batson, “China’s Fast Growth Spurs Effort to Spread Wealth,” The Wall Street Journal Asia, January 24, 2007. 24. “Come In Number One,” 14– 20. 25. Carsten A. Holz, “China’s Economic Growth, 1978–2005: What We Know Today about China’s Economic Growth Tomorrow” (working paper 8, Center on China’s Transnational Relations, Clear Water Bay, Hong Kong, July 3, 2005). 26. Kishore Mahbubani, The New Asian Hemisphere: The Irresistible Shift of Global Power to the East (New York: Public Affairs, 2008), 52. 27. Vanessa Lide Whitcomb and Michael Benson, Modern China (Indianap- olis: Alpha Books, 2003), 46. 28. Pearl S. Buck, The Good Earth (New York: Pocket Books, 1931). 29. Paul Collier, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done about It (New York: Oxford University Press, 2007), 66. 30. Peter Hessler, “The Road Ahead: Despite the Bumps, There’s No End in Sight,” National Geographic 213, no. 5 (May 2008): 177. 31. Hu Jintao, “Why China Loves Globalization,” Globalist, June 7, 2005. 32. Zakaria, The Post- American World, 89. 33. Ibid. 34. Ibid., 97. 35. Hachigian and Sutphen, The Next American Century, 15. 36. Meredith, Elephant and Dragon, 72. 37. Diana Farrell and Andrew J. Grant, “China’s Looming Talent Short- age,” McKinsey Quarterly. http://www.mckinseyquarterly.com/Chinas _looming_talent_shortage_1685. 38. Mahbubani, The New Asian Hemisphere, 64. 39. Ibid. 40. “The Magic of Diasporas,” The Economist, November 21, 2011, 13. 41. , Fortune Favors the Bold: What We Must Do to Build a New and Lasting Global Prosperity (New York: Harper Collins, 2003), 214. 42. Mahbubani, The New Asian Hemisphere, 64. 43. Ibid., 122. 44. “A Worker’s Manifesto for China,” The Economist, October 19, 2007, 90. 45. Zakaria, The Post- American World, 92. 182 The Shrinking American Middle Class

46. “A Ravenous Dragon,” 22. 47. Mahbubani, The New Asian Hemisphere, 53. 48. “Of Internet Cafes and Power Cuts,” The Economist, February 15, 2008, 76. 49. Joe Studwell, The China Dream (London: Profile Books, 2003). 50. United Nations Conference on Trade and Development, “Global and Regional FDI Trends in 2010,” UNCTAD Global Investment Trends Monitor 5 (January 17, 2011), http://unctad.org/en/docs/ webdiaeia20111_en.pdf. 51. Thurow, Fortune Favors the Bold, 181. 52. “The Problems with Made in China,” The Economist, January 19, 2007, 70. 53. Thurow, Fortune Favors the Bold, 213. 54. Ibid., 241. 55. “Chaos in the Classroom,” The Economist, August 18, 2006, 32. 56. Thurow, Fortune Favors the Bold, 213. 57. Hessler, “The Road Ahead,” 177. 58. Meredith, Elephant and Dragon, 72. 59. Ibid. 60. Mahbubani, The New Asian Hemisphere, 64. 61. Zakaria, The Post- American World, 96. 62. Thurow, Fortune Favors the Bold, 216. 63. Hessler, “The Road Ahead,” 177. 64. Andrew Mukherjee, “Viewpoint: India’s Vision Problem,” International Herald Tribune, March 15, 2007. 65. Hessler, “The Road Ahead,” 177. 66. Zakaria, The Post- American World, 92. 67. “Capital Inflows in China,” The Economist, July 4, 2008, 79. 68. “How to Get a Date,” The Economist, January 6, 2012, 61. 69. “Sovereign Wealth Funds: The Rise of State Capitalism,” The Economist, September 26, 2008, 23. 70. “The Rise of State Capitalism: Coming to Grips with Sovereign Wealth Funds,” The Economist, September 26, 2008, 22. 71. Patrick McGeehan, “Port Agency to Break Lease in Bid to Block Dubai Sale,” The New York Times, January 24, 2006. 72. “Adding Up the Government’s Total Bailout Tab,” The New York Times, July 24, 2011. 73. Lynnley Browning, “Airing the Depth of Troubles at Fannie Mae,” The New York Times, December 8, 2008. 74. Louise Story and , “In US Bailout of AIG, Forgive- ness for Big Banks,” The New York Times, June 29, 2010. 75. Scott DeCarlo, “The World’s Biggest Companies,” Forbes.com, April 20, 2011, http://www.forbes.com/sites/scottdecarlo/2012/04/18/ the-worlds-biggest-companies. 76. Eric Dash, “Citigroup’s Hopes for Investment from Chinese Bank Hit a Snag,” The New York Times, January 4, 2008. Notes 183

Chapter 6 1. Vanessa Lide Whitcomb and Michael Benson, Modern China (Indianap- olis: Alpha Books, 2003), 208. 2. “Economic Focus: Reading the Tea Leaves,” The Economist, February 2, 2007, 78. 3. “Migration in China: Invisible and Heavy Shackles,” The Economist, May 8, 2010, 27. 4. Ibid., 26. 5. Chi- Chu Tschang, “China Production Rises as Spending Takes Hold,” International Herald Tribune, January 16, 2003, B1. 6. Robyn Meredith, The Elephant and the Dragon: The Rise of India and China and What It Means for All of Us (New York: W. W. Norton, 2008), 72. 7. “The next emperor,” The Economist, October 29, 2010, 13. 8. Joseph E. Stiglitz, Making Globalization Work (New York: W. W. Nor- ton, 2007), 190. 9. “Raising a Stink,” The Economist, August 13, 2010, 40. 10. Meredith, Elephant and Dragon, 179. 11. Ibid. 12. Kishore Mahbubani, The New Asian Hemisphere: The Irresistible Shift of Global Powers to the East (New York: Public Affairs, 2008), 191. 13. Elizabeth Rosenthal, “China Increases Lead as Biggest Carbon Dioxide Emitter,” The New York Times, June 14, 2008, A5. 14. Bill Emmott, Rivals: How the Power Struggle between China, India and Japan Will Shape Our Next Decade (New York: Harcourt, 2008), 196. 15. Rosenthal, “China Increases Lead,” A5. 16. “Constellation’s Cancellation,” The Economist, October 22, 2010, 76. 17. Zijun Li, “Filthy Air Choking China’s Growth, Olympic Goals,” World Watch Institute, February 14, 2006. 18. Andrew Batson, “China Warns Pollution Will Grow with Economy,” The Wall Street Journal, October 25, 2005. 19. Jonathan R. Woetzel, “Checking China’s Vital Signs: The Social Chal- lenge,” McKinsey Quarterly, Special Edition: Serving the New Chi- nese Consumer (June 2006), http://www.mckinseyquarterly.com/ Checking_Chinas_vital_signs_The_social_challenge_1791. 20. Meredith, Elephant and Dragon, 180. 21. Brook Larmer, “Bitter Waters: Can China Save the Yellow—Its Mother River?” National Geographic 213, no. 5 (May 2008): 168. 22. Joseph Kahn and Jim Yardley, “As China Roars, Pollution Reaches Deadly Extremes,” The New York Times, August 26, 2007. 23. Jonathan Watts, “Beijing Pollution,” Guardian (London), October 31, 2005. 24. Woetzel, “Checking China’s Vital Signs: The Social Challenge,” http://www.mckinseyquarterly.com/Checking_Chinas_vital_signs _The_social_challenge_1791. 184 The Shrinking American Middle Class

25. Katie Thomas, “Citing Pollution, Gebrselassie Opts Out of Olym- pic Marathon,” The New York Times, March 11, 2008, http://www .nytimes.com/2008/03/11/sports/othersports/11olympics.html. 26. Meredith, Elephant and Dragon, 180. 27. Rosenthal, “China Increases Lead,” A5. 28. Terence Chea, “China’s Growing Air Pollution Reaches American Skies,” Associated Press, July 29, 2006. 29. , Collapse: How Societies Choose to Fail or Succeed (New York: Penguin Books, 2005), 371. 30. Larmer, “Bitter Waters,” 168. 31. Meredith, Elephant and Dragon, 181. 32. Diamond, Collapse, 368. 33. Jamil Aderlini and Mure Dickie, “Taking the Waters,” , July 24, 2007. 34. Whitcomb and Benson, Modern China, 215. 35. Larmer, “Bitter Waters,” 168. 36. Ibid., 159. 37. Shai Oster and Mei Fong, “Village Battle against Pollution Shows Chi- na’s Enduring Struggle,” The Wall Street Journal Asia, July 19, 2006. 38. Whitcomb and Benson, Modern China, 215. 39. Diamond, Collapse, 367. 40. Emmott, Rivals, 187. 41. Fareed Zakaria, The Post- American World (New York: W. W. Norton, 2008), 98. 42. Emmott, Rivals, 187. 43. Larmer, “Bitter Waters,” 168. 44. Oster and Fong, “Village Battle.” 45. Emmott, Rivals, 186. 46. Whitcomb and Benson, Modern China, 215. 47. Emmott, Rivals, 58. 48. Zakaria, The Post- American World, 97. 49. Ted Widmer, “The Insiders,” The New York Times Magazine, June 8, 2008, 12. 50. Minxin Pei, Corruption Threatens China’s Future E-mail (Carn- egie Endowment, Policy Brief No. 55, October 2007), http://www .carnegieendowment.org/2007/10/09/corruption-threatens-china -s-future/d5z. 51. Geoffrey York, “Why China’s Buildings Crumbled,” Globe and Mail, May 15, 2008, http://v1.theglobeandmail.com/servlet/story/RTGAM .20080515.wchinaside15/front/Front/Front/. 52. “Dirty Dealing,” The Economist, August 10, 2007, 55. 53. Minxin Pei, China’s Trapped Tradition: The Limits of Developmental Autocracy (Cambridge: Harvard University Press, 2006). 54. Pei, Corruption Threatens, http://www.carnegieendowment.org/2007/ 10/09/corruption-threatens-china-s-future/d5z. Notes 185

55. Lester Thurow, Fortune Favors the Bold: What We Must Do to Build a New and Lasting Global Prosperity (New York: Harper Collins, 2003), 187. 56. “Dirty Dealing,” The Economist, August 10, 2007, 55. 57. “The Most Surprising Demographic Crisis,” The Economist, May 13, 2011, 43. 58. Pascal Rocha da Silva, The One Child Policy of China (Geneva: University of Geneva, 2006), 116. 59. Peter Hessler, “The Road Ahead: Despite the Bumps, There’s No End in Sight,” National Geographic 213, no. 5, (May 2008), 177. 60. The Economist, July 1, 2011, 15. 61. Fareed Zakaria, “China’s New Parochialism,” Time, July 14, 2011, 26. 62. “Beefed Up Burgernomics,” The Economist, August 5, 2011, 70.

Chapter 7 1. Karina Frayter, “IBM to Laid-Off: Want a Job in India?” CNN Money, Febru- ary 5, 2009, http://money.cnn.com/2009/02/05/news/companies/ ibm_jobs/index.htm. 2. “The Other Elephant,” The Economist, November 12, 2010, 82. 3. “Damned If You Do,” The Economist, May 6, 2006, 15. 4. Bureau of Labor Statistics, “International Comparisons of Hourly Com- pensation Costs in Manufacturing, 2010,” US Department of Labor, http://www.bls.gov/news.release/pdf/ichcc.pdf. 5. Diana Farrell, ed., “Off Shore: Understanding the Emerging Global Label Market,” McKinsey Global Institute— Critical Trends in Economics and Management (Boston: Harvard Business School Press, 2006), 15. 6. Farrell, “Off Shore,” 58. 7. Ian Buruma, “China: Is the West Being Overtaken by the Rest?” The New Yorker, April 21, 2008, 126. 8. William Pesek, “Toilet Paper at $80 Tames $1.3 Trillion Tiger,” Bloom- berg Business Week, October 12, 2010, 3– 15. 9. Clyde Prestowitz, Three Billion New Capitalists (New York: Basic Books, 2005), 102. 10. Nina Hachigian and Mona Sutphen, The Next American Century: How the U.S. Can Thrive as Other Powers Rise (New York: Simon and Schus- ter, 2008), 16. 11. Prestowitz, Three Billion New Capitalists, 102. 12. William Grimes, “The Power and the Potential of India’s Economic Change,” Books of the Times, January 17, 2007. 13. “ Consumers: The Coming Boom,” The Economist, May 11, 2007, 55. 14. “The Himalayas of Hiring,” The Economist, August 13, 2010, 76. 15. Ibid. 16. “The Other Elephant,” The Economist, November 12, 2010. 17. “A Bumpier but Freer Road,” The Economist, October 8, 2010, 75. 186 The Shrinking American Middle Class

18. “Contest of the Century,” The Economist, August 27, 2010, 9. 19. Grimes, “Power and Potential.” 20. “A Himalayan Rivalry,” The Economist, August 27, 2010, 17. 21. Anand Giridharadas, “A Pocket-Size Leveler in an Outsize Land,” The New York Times, Week In Review, May 10, 2009, WK 3. 22. Grimes, “Power and Potential.” 23. “Uncaging the Lions,” The Economist, June 18, 2010, 76. 24. “Demographic Baggage,” The Economist, August 31, 2007, 41. 25. “A Himalayan Rivalry,” The Economist, August 27, 2010, 20. 26. “The Democracy Tax Is Rising,” The Economist, December 19, 2008, 15. 27. Ibid. 28. The Economist, June 13, 2008, 30. 29. “The Battle for Brainpower: The World Is Our Oyster,” The Economist, October 13, 2006, 9. 30. Prestowitz, Three Billion New Capitalists, 99. 31. Brent Staples, “The Country Can Learn a Lesson from These Students,” The New York Times, December 6, 2010. 32. Rob Atkinson, “Understanding the Offshore Challenge,” Policy Report, Progressive Policy Institute, May 28, 2004, 7, http://www.dlc.org/ documents/Offshoring_0504.pdf. 33. “The Battle for Brainpower,” The Economist, 9. 34. “The Other Elephant,” The Economist, November 12, 2010, 82. 35. Ibid. 36. “The Magic of Diaspora,” The Economist, November 25, 2011, 13. 37. Karan Israni, “: American Students Lagging Behind Their Counterparts from Bangalore,” Firstain.com, September 16, 2010, http:// www.firstain.com/index.php/2010/09/16/barack-obama-american- students-lagging-behind-their-counterparts-from-bangalore-india. 38. Farrell, “Off Shoring,” 30. 39. Jharkhand Ranchi, “NGO Survey Points to Primary Lesson Loopholes,” Hindustan Times, March 28, 2009, http://www.asercentre.org. 40. “Creaking, Groaning,” The Economist, December 19, 2008, 12. 41. Ibid. 42. “Battling the Babu Raj,” The Economist, March 14, 2008, 28. 43. Arvind Panagarriya, India’s Turn: Understanding the Economic Transfor- mation (London: Oxford University Press, 2008), 237. 44. “Creaking, Groaning,” 4. 45. Adam Roberts, “How Fast Can They Go?” The Economist (London: 2012), 72. 46. Jagdish Bhagwati, Arvind Panagariya, and T. N. Srinivasan, “The Mud- dles over Outsourcing,” Journal of Economic Perspective 18, no. 4 (Fall 2004): 93– 114. 47. Alan Blinder and Jagdish Bhagwati, Offshoring of American Jobs: What Response from US Economic Policy? The Alvin Hansen Symposium on Public Policy— Harvard University (Cambridge: MIT Press, 2009): 115. Notes 187

48. Prestowitz, Three Billion New Capitalists, 102. 49. Gary Gereffi, Vivek Wadhwa, and Ben Rissing, “Framing the Engineering Outsourcing Debate: Comparing the Quantity and Quality of Engineer- ing Graduates in the United States, India, and China,” Paper prepared for SASE 2006 Conference, Trier, Germany, June 30–July 2, 2006. 50. Farrell, “Off Shoring,” 15. 51. “The New Titans,” The Economist, September 16, 2006, 14. 52. Tamar Lewin, “Once a Leader, U.S. Lags in College Degrees,” The New York Times, July 23, 2010. 53. Jon Swartz, “Tech Talents from India, Other Countries Leaving Silicon Valley,” USA Today, May 5, 2011, http://www.usatoday.com/tech/ news/2011-05-10-tech-talents-leave-silicon-valley_n.htm. 54. Oliver Ryan, “India’s Top Export: Headed Back Home?” Fortune, June 13, 2005, http://money.cnn.com/magazines/fortune/fortune _archive/2005/06/13/8262543/index.htm. 55. Arvind Panagarriya, India: The Emerging Giant (London: Oxford Uni- versity Press, 2008), 94. 56. “The Rich and the Rest,” The Economist, January 28, 2011, 97. 57. Ibid. 58. “India’s Guangdong,” The Economist, July 15, 2011, 37. 59. “India’s Economy: The Half Finished Revolution,” The Economist, July 29, 2011, 58.

Chapter 8 1. Thomas Friedman, “The New Untouchables,” The New York Times, October 21, 2009, 2. 2. Fareed Zakaria, “A Flight Plan for the American Economy,” Time, June 5, 2011, 35. 3. Joel Kotkin, “The End of Upward Mobility,” Newsweek, January 26, 2009, 64. 4. “The Race Is Not Always to the Richest,” The Economist, December 14, 2007, 69. 5. “Taming Leviathan,” The Economist, March 25, 2011, 13. 6. Bennett Harrison and Barry Bluestone, The Great U-Turn: Corpo- rate Restructuring and the Polarizing of America (New York: Basic Books), 242. 7. Stephan J. Schwegler, “Academic Freedom and the Disclaimer Affidavit of the National Defense Education Act: The Response of Higher Educa- tion” (dissertation, Teacher’s College, , 1982): 19. 8. Gerhard Peters and John T. Woolley, “Richard Nixon: Special Message to the Congress on ,” The American Presidency Proj- ect, March 3, 1970, http://www.presidency.ucsb.edu/ws/?pid=2895. 188 The Shrinking American Middle Class

9. US Department of Education, “A Nation at Risk: The Imperative for Educational Reform, A Report to the Nation and the Secretary of Edu- cation,” National Commission on Excellence in Education, 1983. 10. George H.W. Bush, “State of the Union Address, January 31, 1990,” http://www.infoplease.com/t/hist/state-of-the-union/202.html. 11. The OECD Programme for International Student Assessment (PISA), Organization for Economic Co-operation and Development 2010, http://www.pisa.oecd.org. 12. The OECD Programme for International Student Assessment (PISA), Organization for Economic Co-operation and Development 2000, http://www.pisa.oecd.org. 13. Jason Koebler, “National High School Graduation Rates Improve,” US News and World Report, June 13, 2011. 14. Stephen Dinan, “Largest- Ever Federal Payroll to Hit 2.15 Million,” Washington Times, February 2, 2010. 15. Joe Klein, The Natural: The Misunderstood Presidency of Bill Clinton (New York: Doubleday, 2003), 159– 60. 16. Bill Clinton, My Life (New York: First Vintage Books, 2004), 843. 17. Bill Clinton, Between Hope and History (New York: Random House, 1996), 44. 18. Lisa Graham Keegan, “’s Message to Oregon: Charter Schools Now!” Cascade Policy Institute, cascadepolicy.org/pdf/edref/keegan .htm; “Bill Clinton on Education,” OnTheIssues, http://www .issues2000.org/celeb/Bill_Clinton_Education.htm. 19. “Final Exam,” The Economist, March 25, 2011, 39. 20. “Obama’s ‘Race to the Top’: Who’ll Blink First: The Unions, or the White House?” The Wall Street Journal, July 30, 2009, http://online.wsj .com/article/SB10001424052970204886304574308442726348678 .html. 21. Paul Hill, “Spending Money When It Is Not Clear What Works,” Pea- body Journal of Education 83, no. 2 (2008): 238– 58. 22. Margaret Spellings, “Building on Results: A Blue Print for Strengthening the No Child Left Behind Act,” US Department of Education, January 2007, http://www2.ed.gov/policy/elsec/leg/nclb/buildingonresults.pdf. 23. “Don’t Know Much about History,” The Economist, February 25, 2011, 36. 24. Supreme Court Justice Louis D. Brandeis, Dissenting Opinion: New State Ice Co. v. Liebmann (285 U.S. 262), 1932. 25. “Obama’s ‘Race to the Top’: Who’ll Blink First: The Unions, or the White House?” The Wall Street Journal, July 30, 2009, http://online.wsj.com/ article/SB10001424052970204886304574308442726348678.html. 26. Ibid. 27. Nina Hachigian and Mona Sutphen, The Next American Century: How the U.S. Can Thrive as Other Powers Rise (New York: Simon and Schus- ter, 2008), 129. Notes 189

28. W. Haney, “Evidence on Education under NCLB (and How Florida Boosted NAEP Scores and Reduced the Race Gap),” Paper presented at the Hechinger Institute “Broad Seminar for K-12 Reporters,” Grace Dodge Hall, Teachers College, Columbia University, New York City, September 8–10, 2006. Retrieved June 7, 2007. http://www.bc.edu/ research/nbetpp/statements/nbr6.pdf. 29. “Still at Risk,” The Economist, 2008, 20. 30. Kim Severson, “Systematic Cheating Is Found in Atlanta’s School Sys- tem,” The New York Times, July 5, 2011, http://www.nytimes.com/ 2011/07/06/education/06atlanta.html. 31. Ibid. 32. “Low Marks All Around,” The Economist, July 22, 2011, 32. 33. “Taming Leviathan,” The Economist, March 25, 2011, 13. 34. “The Few: The Global Campus,” The Economist, January 28, 2011, 14. 35. David Wessel, “Big U.S. Firms Shift Hiring Abroad: Work Forces Shrink at Home, Sharpening Debate on Economic Impact of Globalization,” The Wall Street Journal, April 19, 2011. 36. Don Peck, “Can the Middle Class Be Saved?” The Atlantic, September 2011, 60. 37. Arianna Huffington, Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream (New York: Crown, 2010), 114. 38. Ibid., 118.

Chapter 9 1. “Marathon Machine,” The Economist, November 25, 2011, 84. 2. Adam Davidson, “When Did the Rules Change?” The New York Times Magazine, November 27, 2011, 18. 3. Andrew Rice, “Life on the Line,” The New York Times, July 31, 2011, 25. 4. Ibid. 5. “Schumpeter: Uncaging the Lions,” The Economist, June 12, 2010, 76. 6. “India’s Economy: The Half Finished Revolution”, The Economist, July 29, 2011, 58. 7. Michael Spence, “The Impact of Globalization on Income and Employ- ment,” Foreign Affairs 90, no. 4, (July/August 2011): 36. 8. Clyde Prestowitz, Three Billion New Capitalists (New York: Basic Books: 2005), 148. 9. James Owen, “Evolution Less Accepted in U.S. than Other Western Countries, Study Finds,” National Geographic News, August 10, 2006. 10. Alessandra Stanley, “An ABC Documentary Lands in U.F.O. Territory,” The New York Times, February 24, 2005. 11. Lewis Uchitelle, “The Wage That Meant Middle Class,” The New York Times, April 20, 2008. 12. “Fat Cats and Corporate Jets,” The Economist, July 15, 2011, 32. 190 The Shrinking American Middle Class

13. The New York Times, June 23, 2011. 14. “Fat Cats and Corporate Jets,” The Economist, July 15, 2011, 32. 15. “Average Hourly and Weekly Earnings in Current and Constant (1982) Dollars, by Private Industry Group, 1970–2007,” U.S. Bureau of Labor Statistics, Employment and Earnings Monthly. http://www.census.gov/ compendia/statab/cats/income_expenditures_poverty_wealth.html. 16. Spence, “Impact of Globalization,” 40. 17. Louise Bamfield and Tim Horton, “Understanding Attitudes to Tack- ling Economic Inequality,” Joseph Rowntree Foundation, June 22, 2009, http://www.jrf.org.uk/publications/attitudes-economic-inequality.

Chapter 10 1. “Briefing China’s Labour Market: The Next China,” The Economist, August 6, 2010, 49. 2. Ibid. 3. Robert Whaples, “Do Economists Agree on Anything? Yes!” The Econo- mists’ Voice 3, no. 9 (2006), http://www.degruyter.com/view/j/ev. 4. Rana Foroohar, “What Ever Happened to Upward Mobility?” Time, November 14, 2011, 29. 5. Ibid., 28. 6. “Germany’s Economy,” The Economist, November 18, 2011, 57. 7. Steven Capozzola, “What Can the U.S. Learn from a High-Wage Export Powerhouse like Germany?” (Campaign for America’s Future, July 21, 2011), http://www.ourfuture.org/blog-entry/2011072921/ what-can-us-learn-high-wage-export-powerhouse-germany. 8. Bill Clinton, Back to Work: Why We Need Smart Government for a Strong Economy (New York: Knopf, 2011), 131. 9. Adam Cohen, “Case Study: Jobless Discrimination? When Firms Won’t Even Consider,” Time, May 23, 2011. 10. Juliet Schor, “Plenitude: Exit Ramp to Sustainability,” Yes Magazine, August 9, 2010, 9. 11. Steven Capozzola, “What Can the U.S. Learn from a High-Wage Export Powerhouse like Germany?” (Campaign for America’s Future, July 21, 2011), http://www.ourfuture.org/blog-entry/2011072921/ what-can-us-learn-high-wage-export-powerhouse-germany. 12. “Kurzarbeit— A German Achievement,” RTT News, May 7, 2010, Edito- rial. RTTNews.com, http://www.rttnews.com/1296996/kurzarbeit-a -german-achievement.aspx. 13. Clinton, Back to Work, 177. 14. Motoko Rich, “Factory Jobs Return, but Employers Find Skills Short- age,” The New York Times, July 1, 2010. 15. “Manufacturers to Be Hit with Skill Shortage Due to Retiring Baby Boomers,” AccountingWeb.com, September 13, 2011, http://www Notes 191

.accountingweb.com/topic/cfo/manufacturers-be-hit-skill-shortage -due-retiring-baby-boomers. 16. Szu Ping Chan, “How well do apprenticeships work?” The Telegraph, June 9, 2011. 17. “Left Behind,” The Economist, September 16, 2011, 76. 18. “Recessions and the Young,” The Economist, November 25, 2011, 62. 19. Edward P. Glaeser, “Good Bye, Golden Years,” The New York Times, November 20, 2011, 1. 20. “Vocational Training: America’s Misplaced Disdain for Vocational Edu- cation,” The Economist, June 25, 2010, 34. 21. Fareed Zakaria, “When Will We Learn?” Time, November 14, 2011, 44. 22. The OECD Programme for International Student Assessment (PISA), Organization for Economic Co-operation and Development 2010, http://www.pisa.oecd.org. 23. The OECD Programme for International Student Assessment (PISA), Organization for Economic Co-operation and Development 2000, http://www.pisa.oecd.org. 24. Arianna Huffington, Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream (New York: Crown, 2010), 115. 25. Zakaria, “When Will We Learn?” 44. 26. Clinton, Back to Work, 99. 27. Zakaria, “When Will We Learn?” 42. 28. Huffington, Third World America, 118. 29. Thomas Friedman, “How about Better Parents,” The New York Times, November 20, 2011, 11. 30. Clinton, Back to Work, 180. 31. Congressional Record— Senate S7039, June 5, 2007, C- SPAN Video Library. 32. Thomas Friedman, “A Gift for Grads: Start- Ups,” The New York Times, June 8, 2010 33. “Beefed Up Burgernomics,” The Economist, August 5, 2011, 70. 34. “China’s Economy,” The Economist, November 25, 2011, 44. 35. “Of Emperors and Kings,” The Economist, November 18, 2011, 71. 36. Roselyn Hsueh, China’s Regulatory State, A New Strategy for Globaliza- tion (Ithaca: Cornell Press, 2011). 37. Clinton, Back to Work, 170. 38. Hiroko Tabuchi, “Japan’s Farmers Oppose Pacific Free- Trade Talks,” The New York Times, November 11, 2010. 39. “Free Trade in the Pacific,” The Economist, November 25, 2011, 18. 40. Clinton, Back to Work, 106. 192 The Shrinking American Middle Class

Chapter 11 1. Arianna Huffington, Third World America: How Our Politicians Are Abandoning the Middle Class and Betraying the American Dream (New York: Crown, 2010), 130. 2. Ibid., 129. 3. Citizens United versus Federal Election Commission (558 U.S. 08– 205) (2010). 4. Derek Thompson, “$480: The Price Rick Perry Paid for Each Iowa Cau- cus Vote,” The Atlantic, January 4, 2012. 5. Campaign Finance Institute, “The Cost of Winning an Election, 1986- 2008 (in nominal and 2008 dollars),” Vital Statistics on Congress, http://www.cfinst.org/data/pdf/VitalStats_t1.pdf. 6. “Spare a Dime,” The Economist, April 10, 2009, 12. 7. Thomas E. Mann, “Money in the 2008 Elections: Bad News or Good?” Brookings Institution Press, July 1, 2008, http://www.brookings.edu/ opinions/2008/0701_publicfinance_mann.aspx. 8. National Commission on Fiscal Responsibility and Reform, “The Moment of Truth: Report of the National Commission on Fis- cal Responsibility and Reform,” December 2010, http://www .fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/ TheMomentofTruth12_1_2010.pdf. 9. Zachary A. Goldfarb, “S&P Downgrades U.S. Credit Rating for First Time,” The Washington Post, August 6, 2011. 10. John Dean, Conservatives without Conscience (New York: Viking, 2006), 132. 11. Ibid. 12. “The Congressional Elections: Pyongyang on the Potomac?” September 16, 2004, http://www.economist.com/node/3203239. 13. “Taming Leviathan,” The Economist, March 25, 2011, 9. 14. Meagan McArdle, “How Rich Is Warren Buffett’s Secretary?” Atlantic Magazine, January 26, 2012, http://www.theatlantic.com/business/ archive/2012/01/how-rich-is-warren-buffetts-secretary/252056. 15. John McCormack, “GE Filed 57000-Page Tax Return, Paid No Taxes on $14 Billion in Profits,” The Weekly Standard, November 17, 2011, http:// www.weeklystandard.com/blogs/ge-filed-57000-page-tax-return -paid-no-taxes-14-billion-profits_609137.html. 16. David Kocieniaewski, “Tax Benefits on Options as a Windfall for Busi- ness,” The New York Times, December 30, 2011. 17. Ibid. 18. Nelson D. Schwartz and Louise Story, “Pay of Hedge Fund Managers Roared Back Last Year,” The New York Times, March 31, 2010. 19. Don Peck, “Can the Middle Class Be Saved?” The Atlantic, September 2011, 78. 20. Kevin Phillips, The Politics of Rich and Poor (New York: Random House, 1990), 83. Notes 193

21. Jonathan Weisman, Washington Post, August 13, 2004. 22. David Sirota, Hostile Takeover (New York: Crown, 2006), 21. 23. David Cay Johnston, “Stroke the Rich/IRS Has Become a Subsidy Sys- tem for Super- Wealthy,” San Francisco Chronicle, April 11, 2004. 24. Samantha Stainburn, “House GOP to introduce 2013 budget that includes major tax,” Globalpost, March 19, 2012, http://www.globalpost .com/dispatch/news/regions/americas/united-states/120319/house -gop-budget-tax-reform-paul-ryan-video. 25. Robert S. McIntyre, “Concerning Proposals for a Flat-Rate Consump- tion Tax Before the Joint Economic Committee,” NewsHour Online, May 17, 1995, http://www.pbs.org/newshour/bb/congress/anti-flat_ tax.html. 26. Chris Koenig, “Lord Harcourt Fell Victim to a Tax He Levied,” Oxford Times, June 8, 2011. 27. Steven Shapin, “Man with a Plan: Herbert Spencer’s Theory of Every- thing,” The New Yorker, August 13, 2007, 75. 28. David Kocieniewski, “Legacy for One Billionaire: Death, but No Taxes,” The New York Times, June 8, 2010. 29. “Inheritance and Estate Taxes News,” The New York Times, Decem- ber 13, 2011, http://topics.nytimes.com/top/reference/timestopics/ subjects/i/inheritance_and_estate_taxes/index.html. 30. Edmund L. Andrews, “Death Tax? Double Tax? For Most, It’s No Tax,” The New York Times, August 14, 2005. 31. Stuart Taylor, “Gay Marriage and the Estate Tax,” The Atlantic, June 13, 2006. 32. “Death and Taxes: Gilding the Elite,” The Economist, June 19, 2006, 25. 33. “Inheritance and Estate Taxes News,” The New York Times, Decem- ber 13, 2011, http://topics.nytimes.com/top/reference/timestopics/ subjects/i/inheritance_and_estate_taxes/index.html. 34. Michael Kinsley, “The Least We Can Do,” The Atlantic, October, 2010. 35. Catalina Camia, “Gingrich Renews Food Stamp Attack on Obama,” USA Today, December 7, 2011. 36. “The Middle- Class Agenda,” The New York Times, December 19, 2011. 37. Teresa Tritch, “Reading Between the Poverty Lines,” The New York Times, November 20, 2011, 10. 38. Peck, “Middle Class,” 76. 39. “What Do You Do When You Reach the Top?” The Economist, Novem- ber 18, 2011, 99. 40. US Census Bureau, “Median Household Income for States: 2008 and 2009, American Community Surveys” (ACS BR/09–2) http://media.nj .com/business_impact/other/median-income-report.pdf. 41. OECD, Growing Unequal? Income Distribution and Poverty in OECD Countries (Paris: OECD, 2008). 42. Ibid. 194 The Shrinking American Middle Class

43. “What Do You Do When You Reach the Top?” The Economist, Novem- ber 18, 2011, 81. 44. Chad Nilsson, “Virtual Employee,” August 31, 2011, http://www .whoischadnilsson.com/virtual-employee/virtual-employee. 45. Francis Fukuyama, “The Future of History: Can Liberal Democracy Sur- vive the Decline of the Middle Class?” Foreign Affairs 91, no. 1 (Janu- ary/February 2012): 53. 46. Jeff Madrick, “What He Would Do,” The New York Times, December 11, 2011. 47. Quote by Arnold Joseph Toynbee, http://www.goodreads.com/ quotes/show/139696. Selected Bibliography

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Accenture, 106 Center for Disease Control, 34 AIG, 156 Chiang Kai- Shek, 72 Alesina, Alberto, 30 Chinese Academy of Science, 74 American Jobs Act, 148, 154 Chinese colleges, 3, 63, 128 Apollo hospitals, 49 Chinese Communist Party, 58, 68, Atlantic (magazine), 44, 129, 166 72, 74, 94 Atlas Shrugged, 12 Chinese workers, 3, 55, 67, 86, 96, 102, 132 Bangalore, 50, 62, 104– 7 Chongqing, 87– 88 Barrett, Craig, 7 Bartlett, Bruce, 18 Churchill, Winston, 164 Baumol, William, 56 Cisco, 5, 48, 105– 6 Bear Stearns, 81 Citigroup, 27, 50, 82 Bhagwati, Jagdish, 109 Clinton, William, 121– 23, 145, Blinder, Alan, 4– 5, 26, 45, 46, 48, 147, 151, 167 56, 61, 109 Cold War, 40 Bonaparte, Napolean, 67 college- educated workers, 7, 39, 61, Boston Consulting Group, 106 115 BRIC, 54, 80, 93 Congressional Budget Office, 26 British Medical Journal, 35 Congress Party, 112– 13 British Raj, 111 Containerization, 59, 133 Brookings Institution, 74, 142, 156 Cultural Revolution, 72 Buck, Pearl, 72 Buffet, Warren, 21, 160– 64, 166 Dean, John, 159 Bureau of Labor Statistics, 40, 54 Democracy in America, 11 Bush, George H. W., 121 Deng Xiaoping, 58, 67, 72, 75, 76, Bush, George W., 31, 123, 163 business process offshoring, 47, 60, 79, 102, 112 100, 102 Denmark, 23, 31, 32 Business Week, 44 Department of Education, 118– 19, 123, 126 Carter, Jimmy, 118, 119 De Tocqueville, Alexis, 11 Census Bureau, 8, 18, 19, 167 Diamond, Jared, 90 198 Index

Earned Income Tax Credit (EITC), GI Bill, 62, 116, 122 167 Gilligan, James, 33 Economist, 17– 19, 25, 27, 39, 47, Gini Index, 22, 23, 25, 28, 138, 61, 75, 80, 95– 97, 104, 108, 167, 168 113, 123, 132– 52, 159– 65, globalization, 1, 2, 4, 26, 27, 50, 168 56, 61, 72, 105, 106, 143, 168 Eisenhower, Dwight, 117, 126, global workforce, 3, 60 129, 135– 38, 163 Goldman Sachs, 3, 50, 54, 71, 80, Erwin, Douglas, 56 103 European Union (EU), 23, 29, 44, Gomory, Ralph, 56 68, 75, 89 Great Britain, 31, 32, 147 Greenspan, Alan, 12, 15 factor equalization theorem, 55, 85, Gross, Bill, 148 136 Fannie Mae, 82 Harvard Kennedy School, 4, 129 Farrell, Diana, 110 hedge funds, 20, 137, 139, 162, 166 Financial Times, 71, 91, 100 Hildebrandt International, 48 Finland, 155 Hira, Anil, 57 Fiorina, Carly, 48 Hira, Ron, 57 food stamps, 166 Hobbes, Thomas, 32 Forbes, 4, 19, 42 Hsieh and Pugh, 33 foreign direct investment, 76, 103 Huffington, Arianna, 150 Fountainhead, The, 12 Huffy bicycle, 67, 70, 141 France, Anatole, 15 Hu Jintao, 73, 97 Freddie Mac, 82 Hukou, 86 Freeman, Richard, 61, 63 free trade, 2, 4, 41, 42, 53, 55, 56, IBM, 1, 5, 47, 48, 55, 56, 99, 105, 132, 141 106, 110 Friedman, Milton, 13, 14 Indian Institute of Technology, 106, Friedman, Thomas, 152 107 frugal innovation, 106 India workers, 56, 61, 103, 104, Fukuyama, Francis, 8, 168 109, 134 Infosys, 104, 106, 107 Gallop Poll, 136 inheritance tax, 164– 67 Gandhi, Indira, 59, 112 Internet, 6, 41, 60, 106, 134, 168 Gandhi, Mohandus, 112 Iron Rice Bowl, 74 Gandhi, Rajiv, 112 Gates, Bill, 111, 148 Japan, 16, 17, 18, 28, 34, 35, 53, General Agreement on Trade and 58, 62, 68, 71, 75, 76, 103, Tariffs (GATT), 59 104, 116, 153 General Electric, 5, 49, 81, 104, Jencks, Christopher, 128 105, 106, 161 Johnson, Lyndon Baines (LBJ), General Motors, 69, 45, 55, 69 117, 118, 163 Georgia Works, 148 Johnston, David Cay, 163 Index 199

Karmazin, Mel, 161, 162 Nixon, Richard, 12, 40, 57– 59, Kennedy, John F., 18, 117 118, 159, 163 Kennedy, Ted, 123 Nobel Prize winners, 12, 13, 14, 56, Keynes, John Maynard, 12– 14 64, 87, 137 Kinsley, Michael, 166 No Child Left Behind, 123– 26 Krugman, Paul, 14, 26, 56, 64 North American Free Trade Kuomintang, 72 Agreement (NAFTA), 2, 41, Kurzabeit, 145 55, 132 Norway, 31 Lawrence, Robert, 4– 5, 45 Obama, Barack, 1, 20, 40, 107, Macaque monkies, 33– 34 115, 125, 135, 148, 149, 154, Maersk, Emma, 59 157, 158, 165, 169 Majluf, Luis, 54 offshore outsourcing, 2, 4, 5, 27, Mankiw, Gregory, 41– 42 41, 43, 45, 50, 54, 57, 115, Manmohan Singh, 58– 59, 102, 131 112– 13 Organisation for Economic Mao Zedong, 58– 59, 72– 73, 82 Cooperation and Development maquiladoras, 132 (OECD), 2, 7, 9, 16, 17, 18, market exchange rate, 45, 71 22, 29, 35, 36, 54, 64, 116, Marshall Plan, 53 136, 149, 151 Martin, Hans Peter, 64 McCain- Feingold Act, 155 Perot, Ross, 2, 41, 131 McCain, John, 157 Perotti, Roberto, 30 McKinsey Consulting Group, 43, Pew Research Center, 8 57, 80, 100, 129, 134 Phillips, Kevin, 163 median income, 18 Prestowitz, Clyde, 56, 60, 101 medical tourism, 46, 49 Programme for International Meredith, Robin, 4, 42 Student Assessment (PISA), 6, Mexico, 18, 22, 35, 41, 55, 132 48, 116, 121, 125, 126, 129, , 48, 62 135, 149– 151 Minxin Pei, 94 protectionism, 56, 141 Mirage of Social Justice, The, 12 purchase power parity, 2, 45, 71, 80 Morgan Stanley, 62, 103 Pu Yi, 72 Mughals, 111 Quetelet, Adolphe, 32, 36 National Education Association (NEA), 122 Race against the Machine, 1 “Nation at Risk, A,” 119– 22, 126 Race to the Top, 125–27, 149 Nehru, Jawaharal, 59, 112 Rand, Ayn, 12 Newsweek, 27, 39, 61, 115 Reagan, Ronald, 12, 13, 14, 15, New York Times, 4, 18, 20, 31, 42, 25, 26, 28, 56, 118, 119, 121, 44, 46, 49, 50, 64, 69, 89, 93, 123, 126, 163 127, 132, 137, 145, 161– 66 regressive taxes, 20, 162, 163, 166 200 Index relative deprivation, 32, 33, 36 Sweden, 17, 22, 28, 32, 168 reverse innovation, 106 Rise of Islam, 41 Tata Nano, 44, 105 Rivkin, Jan, 5 TCS, 106 Rockefeller, John D., 164 telecommunications, 41, 60 Roosevelt, Theodore, 164 Texas Instruments, 105 Thatcher, Margaret, 13, 28 Sachs, Jeffrey, 17, 73 Thurow, Lester, 77 Sawhill, Isabel, 142 Schumpeter, Joseph, 57 ultimatum game, 37, 38 sea turtles, 74, 110 Siemens, 143, 146 Vidal, Gore, 37 Silicon Valley, 100, 104, 106 Von Hayek, Frederick, 12– 14 Simpson- Bowles Commission, 157, 158 Wal- Mart, 59, 60, 67, 68, 70, 76 Smoot- Hawley Act, 56, 141 Watson, 1 social mobility, 31 Wen Jiabao, 94, 97 South Korea, 149, 153 Wipro, 105 Spencer, Herbert, 13, 164 , 33, 43, 88, 89, 100, Sputnik, 7, 117, 149 101, 108 STEM fields, 151, 152 World Economic Forum, 153 Stiglitz, Joseph, 87, 137 World Health Organization, 88 Stillwell, General Joe, 87, 88 World Trade Organziation (WTO), Summers, Lawrence, 1, 40, 41 55, 56, 76, 06 Sun Yat Sen, 72 surrogate mothers, 46, 47 Zakaria, Fareed, 79, 85, 115, 149