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  • The American Dream vs. The Gospel of Wealth: The Fight for a Productive Middle-Class Economy
  • John Smart
Norton Garfinkle . The American Dream vs. The Gospel of Wealth: The Fight for a Productive Middle-Class Economy. New Haven, Conn.: Yale University Press, 2006. ix + 230 pp. ISBN 0-300-10860-5, $22.00 (cloth).

The essential argument of Norton Garfinkle's book is that the American economic policy history can be understood as a struggle between [End Page 196] those who believe that economic growth is best achieved when Washington's objective is to protect and extend the interests of the middle-class against those who say that the American economy is stronger, when national policy allows the richest Americans to pursue their interests fully. Garfinkle is firmly in the middle-class camp. This book begins with a look at the Bush years since 2000 and then switches to an historical account over several chapters covering the American economic history from the colonial period. The book finishes with a set of statements about what Garfinkle notices as the way forward for American policy makers.

Garfinkle notices two “radically divergent programs” (vii) at the heart of the US economic policy. The American Dream holds that economic growth and political stability can best be “achieved by supporting income growth and income security of middle-class families” (vii). The Gospel of Wealth deems that “providing maximum financial rewards to the most successful businessmen is the way to maintain high economic growth to benefit all Americans” (vii). American Dream advocates want a progressive tax system, whereas Gospel of Wealth advocates want a regressive tax system.

The basic case is, perhaps, reiterated too many times in the opening pages, leading the reader to think initially that the argument is simplistic. And, when a writer sets out only two main points for consideration, we are doubly apprehensive. We need not have worried. The historical chapters, which make up the bulk of the book, present the evidence for the author's case in a sophisticated and detailed manner. Chapter Six, the longest and best chapter in the book, begins with\AQ{Q1}Please spell out this abbreviation at the first instance.Y FDR and ends with Jimmy Carter. We get an interesting account of Keynes's influence on American policy in the 1930s and 1940s and of how economists later attempted to make Keynesianism do things for which it was not designed, leading to the unacceptable deficits of the 1960s and 1970s. Scholarly conventions are respected throughout the book. There are fifteen pages of endnotes and a useful statistical appendix.

Garfinkle's historical approach is good, but limited, better in what he says about a twentieth-century policy than about a nineteenth-century economic thinking. In Garfinkle's account, Abraham Lincoln is presented as a groundbreaking nineteenth-century thinker on economics, but Karl Marx is not mentioned at all. Why not? What about those forces in American history who thought that the working class and its interests should be the major beneficiaries of economy policy choices? Garfinkle's account might be balanced off by rereading Barbara Ehrenreich's grittier 2005 study, Bait and Switch: The (Futile) Pursuit of the American Dream. [End Page 197]

The final two chapters come back to Bush and what Garfinkle notices as the best way forward for American policy makers. He examines carefully the empirical evidence advanced for the claim that tax cuts for upper income earners lead to an increase in investment and capital formation. He argues that the evidence is sparse and unconvincing; demand-side policy solutions hold more promise for economic growth. For Garfinkle, the winner-take-all model of tax policy used by the Bush administration since the year 2000 has harmed the US reputation abroad. The American Dream model, pursued by Lincoln and later by Roosevelt in the New Deal, is true to the Declaration of Independence and the Bill of Rights, while the winner-take-all model is not. Other nations notice the United States diverging from its original admirable goals as a society and are not as willing to follow the US leadership in the world.

Garfinkle, a former Amherst economics professor and...

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