It Could Happen Here, Bruce Judson's Blog

The ideas in my book have attracted considerable discussion and debate. Recently, David Jones, the President and CEO of the Community Service Society of New York, wrote an article in the Huffington Post, titled What’s Keeping Me Up at Night, which was based on the how many of my ideas are now materializing in our society. It’s a valuable look at how the ideas in the book provide a lens for making sense of many of the things happening in the nation today:

It may seem odd, but the latest terrorist attack on a Northwest Airlines flight to Detroit is not what’s got me worried. What’s got to me is a very short book by a senior faculty fellow at the Yale School of Management titled It Could Happen Here (HarperCollins Publishers, 2009). The author, Bruce Judson, argues that American democracy is at risk not because of outside attack but because a 30-year rise in income inequality is leading the nation toward political instability and/or revolution. The strongest part of his argument is that income inequality has reached unheard of levels, with the top 10 percent of American families receiving nearly 50 percent of all U.S. household income, the largest level of income inequality ever officially recorded!

So why lose sleep over this kind of thing? Because now when the Community Service Society does polls about low-income working families in New York City (over three million people), signs of what the author is talking about are emerging across virtually every demographic. Our latest survey, The Unheard Third 2009, reveals job losses at unprecedented levels, and hunger and lack of health care escalating fast. Savings for a majority are almost nonexistent. And after welfare reform, our safety net programs are woefully underfunded to handle the fallout of the “Great Recession.”

What’s also evident in Congress and on the street is a generalized anger among the bedrock of the Democratic Party, particularly the Congressional Black Caucus, that the bailout of big banks and large financial institutions in the first stimulus may have saved the financial system, but seems to have only a small effect on bringing the unemployment rate down, particularly for low-wage workers. Black voters won’t turn against the Obama administration but, having led nonpartisan voter registrations a number of times in my career, I’m deeply concerned that it will be difficult if not impossible to motivate first time voters — particularly young people in urban America — to get registered and vote in the numbers that helped the president win his first term. And I would be hard pressed to make the case for why they should.

Unemployment rates for black men without a high school diploma have now enter territory never seen in my lifetime, over 24 percent, and that doesn’t count those who have given up trying to find work. So with Wall Street coming back strong, with only a slight moderation in bonuses, a lot of hard-working people of all races and regions are going to see high rates of unemployment and lower wages for years to come and, as Judson posits, they’re going to want to blame someone – some party or some group.

So we may sneer at “tea baggers,” anti-immigrant zealots, and “birthers,” but we better take what they represent very seriously. The country and its political parties have to be very careful not to play with the explosive mixture of unheard of levels of income inequality and significant racial and demographic shifts because these have the potential of doing what the Northwest underwear bomber never could — seriously undermine a democracy that we thought was bullet-proof.

The Republican Party’s partisan closing of ranks on health care, and its efforts to tear down any bipartisan effort, even if it threatens the county’s well being, seems to be matched by Democrats’ seemingly tone deaf response to the general suffering going on among the working poor of all races. Perhaps we should add rapid job creation and WPA programs to our list of what we should be looking for, along with long waits for body scans at the airport.

This was a fascinating interview on the Progressive Radio Network with Gary Null. In the interview, Gary read from a recent article by Elizabeth Warren on the collapse of our middle class and then asked me to comment.

It’s fascinating to see the different receptions the ideas in the book receive from interviews with different beliefs about how our society could, and should function. No surprise. But, fascinating nonetheles. You can click the picture to hear a podcast of the interview:

To mark the 80th Anniversary of the Great Crash of ‘29, Lynn Parramore, the editor of the New Deal 2.0 Blog at the Roosevelt Institute “asked 15 progressive thinkers to write about lessons learned and what lies ahead.” She concluded that, “Together, their reflections constitute a New Agenda for America — a message of how the ideals of a fair society should apply to the economic and social policies of our time.”

The Huffington Post featured this “New Agenda For America” on its front page and posted a giant graphic on the front page of the Business Section.

I was honored to be included in this list of distinguished Progressive thinkers, and a copy of my article, which originally appeared on the New Deal 2.0 Web site, appears below:

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Today, we have the highest level of income inequality in our nation’s recorded history. We must address the structural flaws in our economy that created, and continue to widen, this divide. History teaches that extreme inequality leads to political instability. We cannot assume that we are immune.

In President Obama’s words, the middle class is experiencing “the American Dream in reverse.” Rising long-term joblessness and the possibility of 13 million foreclosures (more than one in every four American mortgages) create the potential for the former middle class to move from frustration to anger — an anger sparked by reduced circumstances and the belief that they have been treated unfairly.

With each job loss or foreclosure, another family — now on a down-ward spiral — potentially loses its faith in our basic economic system and our basic system of governance. America’s ongoing vitality requires that people trust that these systems work, and that our democracy is self-correcting. With rising income inequality, this trust is now at risk.

America has never been a nation of haves and have nots. If the gulf widens, it’s hard to imagine that our future will be marked either by a healthy economy or a healthy democracy.

The only other time in our nation’s recorded history that income inequality approached current levels was 1928, just before the Great Crash. The New Deal eliminated the excesses of an unsustainable system. It was not easy then, and it will not be easy now. But, it is essential.

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The transcript below raises an increasingly important issue: All of the discussion of economic inequality essentially presumes that people continue to view the existing economic system as legitimate. As foreclosures rise, jobs disappear, and the divide between the have’s and have not’s increases, our ability to take this for granted becomes far less certain.

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Last week, It Could Happen Here was the subject of a 45-minute segment of Tom Asbrook’s OnPoint, which airs nationally on NPR. To demonstrate, how inequality can divide a nation, It Could Happen Here, which is a nonfiction book, opens with a fictional scenario involving American terrorists who threaten the nation with dirty bombs demanding an end to foreclosures by “vulture banks,” and free access to healthcare and higher education for all. Tom Ashbrook asked hard questions about this scenario. I said to him think of a laid off engineer who works with radioactivity to create medical devices…

Here’s the transcript of the discussion:

BRUCE JUDSON: First off, here’s a flash point for you. In the scenario, in the fictional scenario, I talk about…It is very easy to imagine that an engineer, or someone else with the necessary knowledge who works on, let’s say, medical devices and has used radioactivity to create a better world…. to save lives, is laid off. You can imagine that he suddenly is facing foreclosure. He’s an educated person unable to put his kids through college.

A few minutes later the show took calls. The show received a chilling call from an out of work nuclear engineer–who had helped to build 13 nuclear power plants but had not worked in two years. You can read the transcript of his call below, or click to listen to his call here.

Click player below to listen to out of work Nuclear Engineer:

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TOM ASHBROOK: Certainly inequality’s a big issue. Let me get a call right here from New London, Connecticut. And

Don. Hi, Don. You’re on the air.

CALLER: Hi.

TOM ASHBROOK: Hi.

CALLER: I think you should be listening to this guy, Judson. I’m an unemployed nuclear engineer. I’ve worked on 13 nuclear power plants. Making a dirty bomb is not a big deal. I’m not going to go out and tell everybody now to do it, but I’m just saying things like that can happen. And it sounds like you’re just being dismissive of all his ideas and what he’s saying. Because there’s a lot of anger out here, and there are a lot of people who feel that the American Dream is slipping away from them, they don’t have a chance. And the only entrepreneurial opportunity for them is to sell drugs and to be an outlaw. It’s happening.

TOM ASHBROOK: [OVERLAPPING] I hear you, [PH] Don. We’ve got Bruce on for an hour. So, I can’t say we’re not listening to him. But let me ask you, you’ve got a lot of expertise in your field, nuclear engineering. But does that mean you’re unhappy if you’re unemployed? Do you really feel like the country’s ready to revolt?

CALLER: I’m not an expert in revolution, and I don’t really know how they happen. All I know is I’m 60 years old. There’s not a lot of people who want to hire a nuclear engineer who’s 60 years old. And there are a lot of people out there like me who are out there who, you know, once you have so much gray hair, you’re out of here. And there’s just a lot of people that are just not happy with the way that the country’s going right now.
And I don’t know…where it’s going to take it, or what’s going to be its spark, or what’s going to be the event. But people feel like there’s just no way to climb out of the hole. Like there’s just nothing that’s going to get them out. This attitude, that I’ve seen, over 60 years, I’ve never seen anything like it. It scares me.

TOM ASHBROOK: Up against it. And with an education, a particular education. Don, thank you for your call.

You can listen to the full OnPoint segment by clicking the player below:

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In It Could Happen Here the terrorists, the American for Economic Equality, communicate with the nation, and educate America about economic inequality through a Website, located at www.A-E-E.org. This fictional Web site actually exists, as described in the book. Through the lens of the fictional terrorist group, it links to serious articles and videos on issues associated with economic inequality.  It also provides the back-story for the formation of the terrorist group (which does not appear in the book). An engineer who creates medical devices using nuclear materials is laid-off, unable to find work, faces foreclosure, can’t afford to send his children to college, and snaps.  While the URL for the site is on the book, the site was not publicly available at the time of the OnPoint interview.

In today’s New York Times column Safety Nets for the Rich, Bob Herbert, details our emerging have and have not society, where two-thirds of  the entire income gains of the nation between 2002 and 2007 went to the top 1% of Americans. Herbert writes:

And we still don’t seem to have learned the proper lessons. We’ve allowed so many people to fall into the terrible abyss of unemployment that no one — not the Obama administration, not the labor unions and most certainly no one in the Republican Party — has a clue about how to put them back to work.

Meanwhile, Wall Street is living it up. I’m amazed at how passive the population has remained in the face of this sustained outrage.

Unfortunately if we do not change course, Herbert’s amazement may end in circumstances that we do not want to contemplate.  We are witnessing the unfolding of a chain of dangerous events associated with our collapsing middle class and increasingly two-tier economy. Sadly, the dynamics outlined in It Could Happen Here that lead to political instability are occurring  with increasing ferocity. More on this in my next post..

This review of It Could Happen Here appeared in the October 16, 2009 issue of Too Much, the online newsletter of the the Council on International and Public Affairs, a nonprofit research and education group based in New York City.

Last week’s headlines about Wall Street’s latest bonus windfalls once again raise a question most basic: How much greed at the top before America says enough? How much more before some Americans, incensed by the contrast between that greed and their daily struggle to get by, take matters — rashly — into their own hands?

Might we see, someday soon, unemployed nuclear engineers threatening America with radioactive dirty bombs? Might we experience a home-grown “terrorist act” that ends up collapsing the United States we we know it?

Bruce Judson thinks we might — and we would be wise to listen to his warning.

“History teaches that there are limits to the extent of acceptable economic inequality in any society,” this senior faculty fellow at Yale University’s business school writes in his chilling new book, It Could Happen Here. “We have moved beyond these limits.”

Judson’s slim new volume imagines what might happen if a small group of Americans – infuriated by the demise of the American dream — decided “to use extreme and abhorrent methods to voice its rage.” This gripping and plausible foray into futuristic fiction then segues into a well-argued, totally nonfiction brief against present-day America’s extreme — and growing — inequality.

The brief reads well. A lawyer by training and an entrepreneur by career, Judson knows first-hand how big money gets made in America today. The super rich do not awe him. But their impact does scare him.

America’s intense concentration of wealth and income over the last three decades, Judson explains, has undermined our middle class economic security. Some eight to ten million families, he notes, now face foreclosure. And nearly 80 percent of America’s middle class households lack enough in savings “to survive more than three months at three-quarters of their current spending.”

“If millions of people — who believe their anger is justified — lose their homes, jobs, retirements, and dreams, can we realistically expect continued loyalty to our system?” Judson asks. “In particular, how will angry people react if they feel their lives have been unfairly ruined for the benefit of a small number of people at the top?”

Judson, a self-described “ardent capitalist” and “patriot,” considers It Could Happen Here “a wake-up call” for a “dysfunctional democracy.” The Great Recession, he believes, constitutes just “the first of the dangerous perils that face the nation as a result of unsustainable economic inequality.”

We obviously need to recover from recession, Judson readily acknowledges, as soon as we can. But economic recovery by itself, he stresses, won’t reverse the dynamics — and dangers — that our current inequality creates: “We have been placing untenable stress on the middle class for too long, through boom times and recessions, for economic recovery to be the only answer to our ills.”

The reversal we need, Judson goes on to note, “will require a far more radical realignment of the way wealth is distributed within the society.”

What might that realignment entail? It Could Happen Here outlines, in broad strokes, an answer. But Judson offers no step-by-step gameplan for change. He aims instead to jolt, to help a confused and frustrated America understand what we endanger when we let wealth cascade year after year into precious few pockets. At that task he succeeds.

Read this book and see for yourself. Even better, give this book to friends and family who need to see what you already do.

Sam Pizzigati is the Editor of Too Much, and an associate fellow at the Institute for Policy Studies in Washington, D.C. Last year, he played an active role on the team that generated The Nation magazine’s special issue on extreme inequality, which issue recently won the 2009 Sidney Hillman Prize for magazine journalism.