The book entitled: “Evil Geniuses: The Unmaking of America: A Recent History” by Kurt Andersen is a must-read book for anyone interested in a theory supported by both opinion and evidence about four decades of orchestrated change in the U.S. society that have led to dramatic increases in wealth among the very wealthy while leaving much of the rest of the US population in a state of financial stagnation. By way of contrast, the author points out that the results in the US differ from results in the European Union (EU).
The author begins with the quotation: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”—LOUIS BRANDEIS
While much of the book focuses on 1980-2020, the author states: “Evil Geniuses chronicles the quite deliberate reengineering of our economy and society since the 1960s by a highly rational confederacy of the rich, the right, and big business.” Andersen goes on to state: “It was the example of New York investment bankers, earning gigantic salaries for doing essentially nothing—knowing the right people, talking smoothly, showing up at closings—that encouraged businesspeople out in the rest of America to feel entitled to smoke-and-mirrors cash bonanzas of their own.”
The author, Andersen, states: “This is not the America in which we grew up,” I wrote. By which I meant America of the several very prosperous decades after World War II, when “the income share of the superrich was reasonably cut back, by more than half. The rich were still plenty rich, and American capitalism worked fine.” I wrote about how, since the 1980s, “the piece of the income pie taken each year by the rich has become as hugely disproportionate as it was in the 1920s,”
The author asks: “So how did big business and the very rich and their political allies and enablers manage to convince enough Americans in the 1970s and ’80s that the comfortable economic rules and expectations we’d had in place for half of the twentieth century were obsolete and should be replaced by an older set of assumptions and protocols?”
Andersen, explains accomplishments under FDR’s leadership as: “In 1940, the year Social Security benefits started, three-quarters of Americans sixty-five and older lived in poverty; by 1980 the average retiree was getting the equivalent of $ 14,000 a year from the federal government, a universal basic income for the old. … Blue Cross (1929) and Blue Shield (1939) were founded as national nonprofit associations to provide inexpensive medical insurance at one rate for anybody who wanted to sign up, regardless of their age or health or how they earned a living.*”
Speaking to times before the 1980’s, the author states: “From the 1940s through the ’70s—when our richest citizens were paying rates of 70 and 80 and 90 percent on the millionth dollars they earned each year—U.S. productivity and GDP per person and median household income after inflation all doubled.
“Productivity isn’t everything,” the Nobel Prize–winning economist Paul Krugman has written, “but in the long run it is almost everything. A country’s ability to raise its standard of living depends almost entirely on its ability to raise its output per worker.””
As for conservative leaders, the author states: “Milton Friedman, an avatar of that ultra-conservative economic strain the same age as Goldwater, was one of his advisers when he was the Republican nominee, the most right-wing nominee ever. He proposed cutting personal and corporate income taxes by 25 percent for starters, scrapping new and imminent socialist programs like Medicare and food stamps, keeping Social Security from getting any more generous, and ending “this cancerous growth of the federal government.””
The book has several examples of leaders of political parties doing what many might not have expected, for example: “Nixon also significantly enlarged the U.S. welfare state, making cost-of-living increases in Social Security automatic, creating an entirely new benefit for disabled workers, and expanding the food stamp program. … Nixon proposed a universal health insurance plan not unlike Obama’s Affordable Care Act, which Republicans forty years later would call socialism. Still more remarkably, his administration pushed a grand welfare reform plan that would have provided a guaranteed basic family income equal to around $ 16,000, thereby tripling the number of Americans receiving public assistance and quadrupling federal social welfare spending altogether.*” And, moreover, “It seemed that while the forward progressive momentum occasionally slowed, it would never permanently stop or move backward.”
But Andersen points out countervailing pressures, stating: “When push really comes to shove, business owners’ need to make profit will inevitably count for more than any duty they feel to employees, customers, or society.
Asked in a class in the late 1970s at Harvard Business School about a hypothetical CEO who discovers his product could kill customers, young Jeff Skilling said he “would keep making and selling the product. … (Two decades later as CEO of the big energy company Enron, Skilling was the main organizer of the vast financial fraud that destroyed the company and for which he served twelve years in prison.)”
With fascinating insight into history, the author states: “Powell proposed waging this war on four fronts—in academia, the media, politics, and the legal system—and doing so with unheard-of budgets and ferocity. … Three months after Powell submitted his master plan to the U.S. Chamber of Commerce, he was nominated by Nixon and quickly confirmed as a U.S. Supreme Court justice.” And “According to the New Yorker journalist Jane Mayer in her important 2016 book Dark Money, the Powell Memo “electrified the Right, prompting a new breed of wealthy ultraconservatives to weaponize their philanthropic giving in order to fight a multifront war of influence over American political thought.””
As to the impact of the Powell memo, the author writes: “The rich young right-winger Charles Koch, who’d recently taken over his family oil company in Kansas, was also a close reader of the memo. … in a 1974 speech Charles Koch gave to business executives in Dallas, he quoted its final line—“ As the Powell Memorandum points out,” he said, without further explanation, “ ‘business and the enterprise system are in trouble, and the hour is late.’ ””
The author goes on to state: “The newly militant capitalists, superrich industrial heirs, and leaders of the largest corporations promptly began executing a version of Powell’s plan— The goal was to create a powerful counter-Establishment. What they accomplished in a decade was astonishing. It astonished even them.”
As to the business rationale, the author states: “As an operator of oil refineries, Koch Industries was now under permanent scrutiny by the new EPA. Coors faced suits and boycotts for racial discrimination and a sudden gigantic federal estate tax liability. The Olin Corporation was one of the largest manufacturers of the pesticide DDT—which the EPA had just banned. … David Koch was explicit about this long-game strategy of donating large sums over many years to a large number of new right-wing nonprofits. His goal was to minimize the role of government and to maximize the role of the private economy….the absolutely direct effect of the Kochs’ political donations was to maximize their income and wealth, and to minimize the taxes they paid.”
The alternative view as Andersen writes: “For anyone else to benefit, what Democrats since the Depression had called trickle-down economics also had to operate—that is, the supply-side tax cuts (and deregulation) would have to make businesses boom and rich people profit so gloriously that some of that money trickled down to produce jobs and better paychecks for the little people.
“Supply side economics,” the political journalist Sidney Blumenthal wrote in his remarkably good 1986 book The Rise of the Counter-Establishment: The Conservative Ascent to Political Power, “was a theology spawned almost overnight”
It was a work of evil genius.
Andersen writes: “Harvard had two young superstars of the libertarian right on its faculty, the philosopher Robert Nozick and the economist Martin Feldstein.*
Nozick’s 1974 book Anarchy, State, and Utopia argued that anything beyond minimal governmental activity, such as redistributing any money from rich people to poor people, is immoral—and won the National Book Award. … Feldstein was skeptical of Social Security and government unemployment benefits and even generous health insurance provided by employers. … the Business Roundtable was born. … Organized labor had had its run, and now it was time for organized capital to give it a serious go.” The author goes on to state: “Once a large majority of Americans came to believe that the federal government was uninspiring or incompetent or corrupt or evil, as they rapidly had over the previous decade, it was going to be a lot easier for the economic right to persuade people that regulating big business and taxing the rich were just plain wrong.”
About changes, Andersen writes: “In the 1980s the Koch groups started producing papers and articles and advertisements arguing the Koch line—against labor unions, against expanded Medicare and Medicaid, against the findings of climate science about global warming. … And actually writing laws. … It’s in the nature of tax codes and federal regulations, complicated and esoteric, to permit big change to occur quietly. … Citizens don’t notice this kind of malign neglect, so they don’t get angry about it. … Social Security taxes are a prime example of this kind of unnoticeable drift effect, a way that the richest have made out better than everyone else for the last four decades.”
The author writes of changes, stating: “Some Key Changes in the 1980s Good for the Financial Industry … The long-standing federal prohibition on companies buying their own stock, meant to prevent share price manipulation, is repealed. … Some Key Changes in the 1980s Good for Rich People in General … The top income tax rate on the richest is reduced from 70 percent to 28 percent. … Some Key Changes in the 1980s Bad for Americans in General ,,, The United States experiences the fastest and biggest increase in income inequality between the 1920s and 2020. …Median household income stagnates and median wages decline. … The federal minimum wage is frozen for the entire decade, longer than ever, which translates to an effective pay cut of one-third for America’s lowest-paid workers.”
Addressing the courts, judges and legal issues, Andersen writes: “It was like the Friedman Doctrine, which turned a reasonable capitalist truism (profits are essential) into a simple-minded, unhinged, socially destructive monomania (only profits matter). … he wrote in his incredibly influential 1978 book on the subject, The Antitrust Paradox. “What is the point of the law—what are its goals?” His too-simple answer, true to a too-simple Chicago School free-market vision: maximizing economic efficiency in the system exclusively and by any means necessary.” And goes on to state: “The speed and effectiveness of the movement’s spread was remarkable. Its founders had spent decades laying its groundwork, so how did the 1980s blitz of law schools happen? It was thanks in large part to the Olin Foundation, which gave Harvard Law its biggest donation ever, the equivalent of $ 44 million, to create the John M.
Olin Center for Law, Economics, and Business.”
Andersen explains, leveraged buyout and the rise of the financial sector explaining the impact of free markets unregulated by government, for example: “As I was beginning this book in 2017, I noticed that big, familiar retail chains were all going under—Toys “R” Us, Payless, The Limited, Gymboree, and many more. Then I noticed that each of them had been subjected to a leveraged buyout, finally choked and smothered by debt piled on by temporary private equity owners.” And goes on to explain cashing out assets of defined benefit pensions for 401(k) defined contribution savings and the challenges to other well known companies like Simmons, stating explicitly: “Over the next two decades, Simmons was sold and resold a half-dozen more times, going private and public again and again, accumulating more and more debt,
In the course of the 2009 bankruptcy to reorganize the company, a quarter of the workforce was cut loose, more than a thousand employees, and people who’d bought the company’s bonds were out hundreds of millions.
Between its first leveraged buyout and its (first) bankruptcy, Simmons’s succession of short-term financial-firm owners sucked $ 1 billion out of the company in fees and profits.”
Andersen captures in a nutshell the corporate changes: “Back in 1981, the official scripture of the Business Roundtable, the big business politburo, still held that “corporations have a responsibility, first of all, to make available to the public quality goods and services at fair prices” and to “provide jobs, and build the economy.” … In the 1990s the Business Roundtable doctrine was amended accordingly, professing the new faith that the point of a business enterprise “is to generate economic returns to its owners,” period,” The author goes on to discuss the methods that Jack Welch of GE used to make GE financially successful.
The author goes on to explain the angst: “Almost 3 million U.S. manufacturing jobs disappeared in just three years. … By the end of the century, U.S. factories were producing two-thirds more things than they had in 1980, but they were doing so with a third fewer workers. … Between 1990 and the early 2000s, the annual value of things made in China and bought by Americans increased twelvefold. Many millions of U.S. factory jobs were “offshored” during the 1990s and early 2000s, many of them to China.. … for the first time, most Americans’ incomes essentially flatlined for forty years. Instead of everyone, rich and middle and poor, all becoming more prosperous simultaneously, only the incomes of a lucky top fifth kept rising as they had in the past. Around 1980, the Great Uncoupling of the rich from the rest began.”
Andersen points out other constraints on labor by big business: “shockingly, noncompetes have come to be used just as much to prevent a $ 10-an-hour fry cook at Los Pollos Hermanos from quitting to work for $ 10.75 at Popeyes. Of all American workers making less than $ 40,000 a year, one in eight are bound by noncompete agreements.”
As to pensions, Andersen states: “American businesses began routinely offering in the 1950s was a fixed pension, … But then came the 1980s. I mentioned earlier how the tax code tweak 401( k), … But this innovation also provided a cost-cutting financial bonanza to employers. … “The great lie is that the 401( k) was capable of replacing the old system of pensions,” most American workers don’t even have a 401( k) or an IRA or any other retirement account.”
Insightfully, the author writes: ““Political equality,” FDR said in 1936, is “meaningless in the face of economic inequality.” In what he pitched as a Second Bill of Rights, he proposed guaranteeing all Americans “the right to earn enough” for “a decent living” and “a decent home” and to have “adequate medical care” paid for with “a tax [on] all unreasonable profits, both individual and corporate.” That was 1944, Peak Leftism for Democrats on economics. …The faction that was now dominant in the Democratic Party had been pushing for a more centrist economic and social welfare policy since the 1970s, but the Republican Party after 1980 had no comparable moderating faction—which in a two-party system meant that Democrats kept moving toward a center that kept moving to the right.”
Andersen states: “In their epic world history Why Nations Fail, an MIT economist and a University of Chicago political scientist explore what has distinguished, over aeons, the poor countries that stay poor from the ones that become fully developed. The basic conclusion is that successful countries keep their greedy elites from exercising too much control of their economies and governments.”
Andersen also goes on to write: “As the Nobel economist Joseph Stiglitz says, although “since the mid-1970s the rules of the economic game have been rewritten” all over the world to “advantage the rich and disadvantage the rest,” the rules went much “further in this perverse direction in the U.S. than in other developed countries—even though the rules in the U.S. were already less favorable to workers.” … From 1980 to 2015 in western Europe, the share of national income that went to the half of people below the median dipped from 24 to 22 percent—while in America the share going to the nonrich half has plummeted from 20 to 12 percent. Meanwhile the income share going to the richest western Europeans, the top 1 percent, has crept up from 10 to 12 percent—while in America it doubled to around 20 percent. … in exceptional America the more real-life-relevant median income—the amount of money going to the person who earns more than the poor half and less than the rich half—has hardly budged for decades. Meanwhile, since 2000 in Canada and the U.K., for instance, the median income has gone up 20 percent or more, and by similar amounts in Europe.
Then, of course, there’s healthcare. … In every international ranking of healthcare quality, the United States is low, from twenty-eighth to thirty-seventh place.
now people in the other countries live three to five years longer on average than Americans.”
The book “Evil Geniuses …” by Kurt Andersen contains many other topics including, for example, discussions of automation and dealing with change and in particular, Climate Change and the response by big business to the scientific findings; the book is worth purchasing and reading to better understand how 1980 to 2020 have brought the US to its current financial situation.
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Evil Geniuses chronicles the quite deliberate reengineering of our economy and society since the 1960s by a highly rational confederacy of the rich, the right, and big business.Highlighted by 988 Kindle readers- As it turned out, the 1980s were the ’30s but in reverse: instead of a fast-acting New Deal, a time-release Raw Deal.Highlighted by 856 Kindle readers
- The political right rode in on that floodtide of nostalgia, and then, ironically, the old-time every-man-for-himself political economy they reinstalled, less fair and less secure, drove people deeper into their various nostalgic havens for solace.Highlighted by 824 Kindle readers
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Well Worth the Time to Read this Book
It was a journey reading this book, but worth the time. Most of us have a poor understanding of economics and capitalism. We grew up getting by, participating in our own culture, work, and family. We hardly noticed that we are living in a time of extreme political economics and political capitalism.Kurt Andersen has written a wonderfully useful book to educate us about the unmaking of America. The main subject of the book is the excessive power granted to big business starting in the 1970s. The book provides detailed information on free-market political economics in America and the many evil geniuses that made it happen.Andersen explains how our downfall began with a complete restructuring of our political economy. Topics such as supply-side economics, tax cuts, deregulation, anti-trust enforcement, labor, law, and everything imaginable to benefit the rich and big business. Those in control told us that big business and greed are good, big government is bad.The theme of nostalgia and cultural nostalgia was woven throughout the book illustrating how we long for the past, and what nostalgia does to us by shaping our present.The review of history from the 1960s to the present made me think: where was I when all this happened. I like most people have been ideologically inconsistent and ignorant of what was happening to our economy. Read this book to find out what we missed the past 40 years and to see how things have come together looking back through history.I especially liked Part One - A Brief History of America through the 1960s. The 1970s and 1980s are discussed in much detail with background information and quotes from the evil geniuses that led us astray.The conclusion of the book is simply: do we move forward toward a better more equitable society or do we remain in some sort of stasis. Hopefully, the pendulum will start to move from the right to the center.388 pages of text; plus, introduction, bibliography, and an especially useful index. Recommended.
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John A.
A fascinating tale of the USA’s 40 year slide into a social, political and economic dystopia!
Reviewed in the United Kingdom on September 16, 2020
