the selling out and betrayal of the middle class is no accident. It's intentional. I interview America's two most honored investigative journalists about the details of that betrayal.
INTERVIEW with: Donald L. Barlett and James B. Steele are the nation's most honored investigative reporting team, and authors of the New York Times bestseller America: What Went Wrong ?
This is part one of a two part interview
thanks to Don Caldarazzo for help with transcript checking.
The audio for this podcast is here.
speaker 1 Rob Kall, Interviewer
Speaker 2/ Donald L. Barlett, Interviewee
Speaker 3/ James B. Steele, Interviewee
Rob Kall: My guests tonight are Donald Barlett. And James Steele.
They're the authors of "Betrayal of the American Dream", a new book that is just... really kicks butt. Donald Barlett and James Steele are the nation's most honored investigative reporting team, and they're authors of the New York Times bestseller "America: What Went Wrong?" They've worked together for more than forty years, first at the Philadelphia Inquirer (1971--1997), then at Time magazine (1997--2006), and now Vanity Fair.
Welcome to the show!
James Steele: Great to be with you, Rob.
Donald Barlett: Good to be with you.
Rob Kall: So because there are two of you, maybe you can identify who's speaking first. Just say your first name. Okay? [James agreeing in background]
Okay so I'd like to.. in your book you talk about how in your previous book America: What Went Wrong?, you were accused of being alarmists, and that you actually under-describe what was going to happen and how bad things were going to be. Now, you're describing that, with this devastation of the American Dream and the middle class, there could be a hundred million casualties.
So I think I'd like to start by just getting in depth some definitions of wealth and the middle class, so we can get some baselines.
Donald Barlett: Well, you know everybody has their own definition, but you got to just work within some numbers.
Basically what we did was, we said thirty five to eighty five thousand [$35-85k], this is a job income, would constitute the heart of the middle class. Now an extended middle class might run up to a hundred and fifteen thousand [$115k], maybe a little bit more than that, because if you're working and living in New York that's not going to be a whole lot of money. And so you got to take into account the different sections of the country, but basically it's at thirty five to eighty five thousand [$35-85k], is the heart of the middle class, and then an extended middle class up to a hundred and ten, fifteen thousand [$110-115k].
And all that is really, we took the definition we used for the first book, America: What Went Wrong?, adjusted the salaries for inflation, and that's what we ended up with.
And some people will say that $35 thousand that's not a lot of money, and it's not, but if you're living in a small town in Oklahoma, Missouri, or even Ohio, you can have a middle class lifestyle with that. You can own a home, you can help certainly send your kids to college, and get by.
Rob Kall: And what percentage of the population is middle class?
Donald Barlett: Well you know this is" [laughing] now you're really getting tricky, because a lot of people, everyone likes to say they're middle class, and that's part of the problem. Even the richest of the rich like to say they're not, "we're middle class!" But it is the bulk of the population, would fall into that category.
James Steele: You know there's new definitions now on who's poor in this country.
Donald Barlett: And this is more interesting, actually.
James Steele: And which really raises all kinds of questions about who's fallen out of the middle class.
Rob Kall: Okay. Who's poor?
James Steele: I'm sorry, who's?
Rob Kall: Okay. Who's poor?
Donald Barlett: Well, the poverty numbers just came out, and you know you wind up with the, whatever it is, forty, fifty million people now in poverty. The poor is usually labelled.. you're considered two hundred percent of the poverty level, that poverty number. And the poverty number is a pretty grim number.
The critics will say, "well, wait a minute. People did they" they have a television set, they have a cell phone, and you're calling them poor?' But, and this is true, the definition can't remain the same, can't be held constant through the decades. It really has to change. It's true that someone labelled as poor at the turn of the Eighteen Hundreds [1800s] to the Nineteen Hundreds [1900s], didn't have many extras, but that's not the case today. And nor could they survive today without them.
Rob Kall: But I can't seem to nail you down on a percentage of Americans who are middle class now. Compare that to, say the peak that you cite in Nineteen Seventy Nine . Of jobs in America,are there any percentages or numbers that you can throw at us, that would give some context?
James Steele: We have in the book, and if...
Donald Barlett: I can't put my finger on it.
James Steele: And it's" I think we use the term forty five million in the book. I think it's 45 million in the book that we consider the heart of the middle class. And the fact that the middle class is shrinking, I mean there's"
Donald Barlett: There's no debate on that.
James Steele: In fact there's a recent survey by the Pew Foundation, that's got an awful lot of ink. And more people fell out of middle class in the last ten years than any other time in American history. So the fact that, you know the middle class is hurting, shrinking, I think is pretty widely established at this point.
Rob Kall: Okay. When you say that 45 million number, that's the number of people who have tax returns, I think? Not..
James Steele: Right.
Rob Kall: Not" it doesn't count families or children?
James Steele: That's with everything. Yeah.
Rob Kall: [inaudible in background 06.57] I think more than a 100
James Steele: That would be more than... That's right, it would be more than 45.
Rob Kall: Okay.
James Steele: Million persons, it would be families. In some cases it would be an individual. Other cases, a couple. Another case is a family with kids. Right?
Rob Kall: When we talked about the middle class, we talked about the poor. Now what makes us wealthy? The wealthy people? The rich? The.. Your...
James Steele: We talk about" the only month we really quantify in the book are what IRS calls the "richest American'. "The 400 richest tax payers." And we make the point in the book that in the mid '50s the richest Americans paid 51% of their income in federal taxes. By 2007 on the edge of the meltdown, that percentage was down to 16%. And that's the richest ones. I mean there's obviously tons of very, very wealthy people who aren't in that top 400. But that's one quantifiable group that shows very dramatically how taxes have lowered floors to the very wealthiest in this country.
Rob Kall: Now I wanted to ask you about this, because back in the '50s when Dwight Eisenhower was President, there was a 92% tax category.
Donald Barlett: That's exactly right. [James inaudible in background]
Rob Kall: Now what's the story with that? Where does that fit in?
James Steele: Here's how it fits in. Years ago, and for many, many years, the personal income tax in this country had graduated rates. So that you had multiple rates. And the more you made, the more you paid on that last segment of your income. And that's why things were so much different then than now! I mean right now people making, I think it's around $375k, $380k, that last segment of their income, well that top rate, 35%, is the same as somebody making $50 million dollars a year. That's what's different now, then what used to be back in the days of Eisenhower. In Eisenhower, you paid more and more as you went up and up, and in that category. You very often hear comments from Conservatives that there was a "discouragement to work." Well there's absolutely no evidence of that in terms of employment numbers. You will hear some person here or there say, "it's not worth my time because I'm going to pay this tax." But the real story was, people continued to work and they paid their taxes. That's why back in the '50s, you had your overall effective rate, 51% for the richest, and why now it's so low because the taxes have been progressively cut for years and years. So young people have no idea of how the rates used to be so different. And the amazing thing about them is that they were not discouraged. They were not discouraging the economic activity, but I mean we had some of the most robust economic times in this country's history in the '50s, '60s, and into the '70s, when rates were much, much higher than they are today.
Rob Kall: Right. Now I've already digressed from my plan. So I want to get back to it.
James Steele: Okay! [laughing]
Rob Kall: You talk about taxes in the book, but I want to start out by just asking you a basic overall question. The title of the book is "The Betrayal of the American Dream," and includes a drawing or a picture of the words on paper, "American Dream Hurt!," with holes in them, crumbling and falling apart. And I think it's a very apt metaphor, that graphic that you've created for the cover, or whoever has created it. So I want to ask you, what was your goal in writing this book? What did you hope to accomplish with it?
flickr image by OWScoverage
James Steele: We wanted to show what has.. [aside: I'm sorry we're not announcing ourselves. This is Jim Steele] We wanted to show in the book that what is happening to people, middle class people, is not some accident, that it is not some result of global economic forces which is the way very often a lot of the economists portray this stuff. The goal
of the book was to show that increasing economic strain that so many people are under, is really man-made. It's policies. You know, policies and taxes to trade, the de-regulation, had been implemented over the last few decades, that are really squeezing middle class Americans. The things that had either been enacted, or where Congress in some cases has refused to act to change things that were counter productive to their interests. So we never set out with like an abstract like what we're going to prove, but because we had written about the middle class, off and on, for many, many years we followed these issues for a long time. And we've been observing a lot of the economic numbers so we know, sort of generally knew what's happened. We hear from people that we've talked to in the past. I mean who among us doesn't know somebody whose kid has graduated from college, can't get a job, or back home living because there's no work out there. I mean who doesn't know somebody who's lost a pension, or had their employment trimmed and they've had to change their whole lifestyle. I mean who doesn't know a middle aged person who's lost a job. Maybe they found another one, but they're making two thirds of what they used to make. I mean everybody knows this has happened, and I think these, we're observing this, we were hearing from people about it, so we knew what's been in the works for a long time.
The second part of it was people progressively, or not 'progressively,' people were increasingly e-mailing us on our website over the last few years, "you've got to go back and look at what's happening in the American economy!" These are just average people. What's happening in their work, what's happening in their standard of living. And these letters, these e-mails were coming from all over the country, California, mid-West, East Coast. And that, coupled with what we had observed, and with some of the hypocrisy we saw there in politics, we thought it's time to go back and revisit a lot of these issues. So that was the goal as much as anything.
Rob Kall: And it looks like you've broken your book into analyzing the different ways that the middle class and the American Dream have been under assault, and undermined and eroded. De-regulation, globalization, free trade, and the loss, exporting of jobs outside the United States, the tax system that advantages the rich, multi-national corporations, the end of retirement, phantom jobs--not sure what that is. Can you kind of walk us through some of these. Starting with globalization, because that's one that frankly I believe is one of the biggest betrayals of America by both parties. It started with Bill Clinton signing the World Trade Organization agreement, as far as I knew, but maybe you can tell us more about it.
James Steele: Well, you're absolutely right on it. It actually went back before Clinton. It actually goes back to the '60s and '70s, particularly the '70s when we just basically threw open our doors and said to other countries "you can import here. And we'll charge you little, if anything, in terms of duties because we want to encourage your economies, because we want to develop, you know, with more products developed abroad." And it was part of a foreign policy. But a lot of it was a way to start tamping down wages to this country. Multi-national corporations early on realizing the opportunity for them if they were to start sending work abroad. You can bring it back in with little duties. Little tariffs. And everybody said... Here's what everybody said: and here was the betrayal! Everybody said, "Yes, some of our jobs will go offshore, but this will open up more opportunities here for us to export. And we will" some of the drudge jobs in manufacture will go offshore, but the smart ones will stay here, the higher end ones. And that's the evolution of the economy. We will" yeah they'll be some disruptions, but overall it's going to be best for the country!" That was the betrayal. That was the song that economists, politicians, corporate heads, all of them continued to sing that song. And that goes back decades now.
And it's just not true, because you can see it in what's happened to wages. I mean wages, manufacturing wages, are holding them stagnant for many years, and manufacturing wages in this country are lower than many, many countries around the globe. And yet people, a lot of people persist in this idea that high union wages drove these jobs offshore. That wasn't it at all. It was the opportunity to make more money because of those deals abroad. So that betrayed the people, and we think betrayed the country.
Donald Barlett: [aside: This is Don] You can actually.. Jim indicated the '70s were really the critical decade, and you can actually go back to 1975. That was the last year that this country had a trade surplus. And all anyone can talk about today is the budget deficit. But the budget deficit isn't costing us jobs, it's the trade deficit that cost us jobs. We have had thirty six, now into our thirty seventh consecutive year of trade deficits, which have resulted in the erosion of millions of jobs in this country. I mean last year, 2011, was three quarters of a trillion dollar trade deficit. And there is no focus on this at all. Nobody even talks about it and yet this deficit is the one that is resulting in the elimination of jobs. And it's not just the elimination of all the jobs that are being created, for the most part with certain exceptions, but for the most part, paying less money, in some cases a lot less money than the jobs that they're replacing. So what this means is, that you're going to have this ongoing thing in which people, the good paying jobs are going to disappear. They're going to be replaced more and more with lower paying jobs. That in turn affects the amount of income tax collected, which you know, affects the budget deficit, and more importantly affects social security. So the trade deficit really is at the heart of this country's economic problems, and no one wants to deal with it.
Rob Kall: Well, there's another aspect too, which is totally ignored, and that is, that for at least a hundred years a good portion of the expenses of the United States government was paid for by tariffs.
Donald Barlett: Right.
Rob Kall: Duty..
James Steele: [interjecting] Exactly!
Rob Kall: ..is coming in, and once we started signing all these trading agreements we gave away all of that income for a couple of hundred multi- national corporations.
Donald Barlett: [interjecting] Exactly!
Rob Kall: Because that's really what the problem is, it's not like small business benefits from these globalization trade deals. The companies that benefit are the same ones that are setting up offices overseas and then writing off the expenses obtained for the move to overseas.
Donald Barlett: You make a really important point there, that it's these large global corporations that are benefiting. You know sometimes, and I'm guilty of this, we talk about corporations as though they are a monolithic model, and they're not. You make a very important point. It's the international global corporations that derive all of the benefits from what's going on in the economy now. You know, the domestic corporations are in truth being hammered. They have no way to hide their income, and they have no way to avoid their taxes, so they're paying maximum, near maximum tax rates, and they're getting none of the benefits from this global economy, I mean, none of the benefits. They all float to the international corporations.
James Steele: [Jim Steele here] And to add to that, not only do these companies not get any benefit, but because the multi nationals benefit from being able to shift their factories offshore and to bring the goods back in duty free, they become strong opponents of any legislation or activity of the government that might be interpreted as protectionist or trying to bolster domestic industry. So as a result of that, when there's a domestic industry that is then impacted very negatively by imports, they get no support from the big guys, because it's in the interest of the big guys to just keep that door open as wide as it can. The best example of this, we've got this in the book, is the printed circuit board industry. Circuit Boards are the heart of all digital devices. They're the brain inside cell phones, iPads, computers, you name it. That industry began in the United States, in the early "50s outside of Chicago. And it's typical of so many things about this country. Things are embedded here and industry gets started, but in the last fifteen to twenty years low cost imports from mainly Asia, began to systematically erode that industry. And it wasn't just a matter of cheap labor. In some cases with Korea and China, it was a matter of government supporting various companies that then proceeded to try to hammer domestic US industry. That industry here in this country then went to Washington over and over again. And you see this. I, we don't care who's in the White House, whether it's Republican or Democrat, doesn't make any difference, and said, "look, we've got a problem here. You really need to do something about this kind of unfair competition, where people subsidize the workforce, where they subsidize the industry itself, and then send it over here." And people who had these plants over here, said "Look, I'm not getting subsidiaries from anybody. I'm just trying to keep my work force employed, paying decent wages and building a product that we've known how to build for years and years. But I can't compete on something like this coming in' And so what happened, they get no help at all. And they get no help at all, partly because of the big guys who don't want any restrictions at all on free trade, because that hammers them. That crimps their ability to ship work offshore, and to bring the products back duty free.
Rob Kall: Now you tell another story in the book, about the Rose industry. Now what impressed me about that, was that even before the globalization trade agreements went into place, it literally, Federal agencies were setting up the industry to be wiped out. Could you talk about that?
James Steele: [Jim Steele here] That is one of the stories that really got to us, because this is typical of what this country was about for so long. Almost any community of any size, in many parts of the country, had greenhouses where they grew roses. In some places it was more conducive to them than others, but these are small businesses that Don was talking about earlier. I mean they were all over the country. But what happened was, going back to the '70s, the State department and other agencies got it in their mind, that wouldn't it be great if they could talk these Colombian farmers who were growing coca, drugs, into growing roses instead. So they began to.. and they also saw that this would be a way to take a poor country and kind of develop some of its industry and so forth. So here you have the American tax dollars going into pilot programs through the State department to encourage the growth of an industry in Columbia. Now, if that industry had been to develop roses in Columbia, to sell them in the domestic market there, that's fine. But it wasn't. It was to create an industry that would then export those roses to the US and we would buy them. The State department made sure that the tariffs were low, gave them all kinds of loans so that they could almost create an industrialized process. So as a result of this, roses began to be growing in the high plains of Columbia. They would pick these things, load them onto big jet transports, fly them to Miami. From Miami they're dispersed all over the country. And in the space of about twenty years, the American rose industry was destroyed. I mean there's virtually almost no rose greenhouses anywhere in the country any more. I mean you can find a couple here and there, but once they were common everywhere...
Rob Kall: Yeah. Your book says that 90% of them have gone.
James Steele: The..
Rob Kall: And I know that here in Pennsylvania we have a couple of decent sized ones, but it's a rare thing.
James Steele: It's a rare thing, and sometimes they've cultivated a kind of rose that somebody has an affection for, but it's very hard to compete with the kind of industry that our own government created that ran folks out of business here.
Rob Kall: [interjecting] I got..
James Steele: And that's just typical of what a lot of our polices have been. They've been very short sighted, nobody thought them through, and in some cases there were other reasons behind them other than just"
Rob Kall: I would think that maybe if you're trying to persuade cocaine growers to grow something else, that this would be subsumed under the drug war, which is another huge mistake that really..
James Steele: Right
Donald Barlett: Absolutely!
Rob Kall: ..to get involved. aside: I just need to do a Station ID]
[If you're in the middle of the show, just coming in, I'm interviewing Donald Barlett and James Steele, the authors of an incredible book, "Betrayal of the American Dream']
I have to say gentlemen, that this book really does a superb job of going through, with evidence and explanations, just how the government and the elected officials in this country, have betrayed. It's not a matter of an accident. It's not a mistake. They have literally sold out the American middle class. Would you agree that that [inaudible 27:17]
Donald Barlett: That's a really good way of phasing it. Because that's exactly what has happened. They have sold out the middle class in this country.
Rob Kall: And now..
Donald Barlett: And where's it going to lead. Well, you can probably pretty well imagine that in fifteen, twenty years from now..
Rob Kall: Well last year I interviewed Arianna Huffington. She wrote a book called "Third World America." and described how we're well on our way there. And I think your book, perhaps without using that term, also describes all the different ways that American workers and the middle class are just having the American Dream stolen out from under them.
James Steele: Rob, you're so right on this. [Jim Steele here] In fact it's interesting you would say what you just did, because there's actually a quote in the book from a manager of a plant in a little town in Missouri. These are the kinds of towns where people are socially conservative, and you know they're not radical or rabble-rousers in any way. But I never forget the interview with her, because she was one and they had a little plant there that had a couple of hundred women in it. And the women did a lot of piece work for greeting cards, or Hallmark cards and they would like put ribbons on these things. And one day the jobs are shipped to China. Well, here was a woman who'd worked there fifteen plus years, and was kind of a mid level manager, and she was making around $34 thousand a year, a whopping salary. The women on the production line were like in the mid $20s (thousands), you know,another case of those great high paid American work force that's driving jobs offshore. I'm being facetious, of course! But anyway, at the end of the interview this woman, just as solid and good as she could be in every way. She said, "what"' and this quote is in the book. She said, "what is this country going to be like in a few years? I mean are we going to be living in huts, like they do in Africa or elsewhere?" You know, no running water, none of the facilities that you normally associate with a developed society. And we encountered variations of that story over and over again across the country. People know what's going on. They're very upset. They see the trajectory is down and they cannot understand why Washington, why the folks who run this country aren't paying attention to them because they can kind of see where we're going. If the folks in Washington can't or won't face them. Folks do know what's happening.
Rob Kall: Seems like there is.. you write in your last chapter, about the story of the American Dream, but it seems like it depends also heavily upon legislation. Does that? And getting laws to be enforced?
James Steele: Yes. And [Jim Steele Here] obviously it would require a shift in Congress, needless to say in fact. As an intro though, almost [inaudible 30:25]
Rob Kall: More of a volcanic explosion or a major earthquake?
Donald Barlett: Yes.
James Steele: Yes. [laughing] You'd have something on that calibre, that would perhaps wake people up just to what's going on. In fact we speculate, that maybe things are just going to have to get a lot worse before anything might be done, but there was some Senator recently, who is no longer in the Senate, who was asked if he missed Congress. And he said yes he did, but he didn't miss this Congress. Because of the [Rob laughing in background] kinds of problems that this much is foisting on the country. So, and there's a lot of people know, and we encountered around the country an awful lot of what we would call self-help groups. I spent some time with some veterans down in Florida who were very upset at what's going on at the national level. They're say the problem is that the deficit, the problem is we're not figuring out ways to get this country going again. And what they're trying to do, is within their limited means and within what's within their grasp, they're trying to figure out some small industries, some small non-profit enterprises that can provide some work and provide some opportunity. It's like they've given up on Washington for the simplest kinds of things that the government is to be able to do. So a lot of people know or are trying to do things like this. We think that's great, but we feel though that ultimately you've still got to have some things at a national level though, because we are a national country. It's a national economy. And unless we figure out some ways to stimulate that and to create jobs, all of these other efforts, while a help, are still going to fall short.
Rob Kall: Do you see that on the horizon with the current Congress and the candidates running in this election cycle, that they have any intention at all of doing anything for the middle class?
Donald Barlett: Oh.
Rob Kall: A handful of people, maybe like Frank Sanders and Sherrod Brown. [James inaudible in the background] A couple of others?
Donald Barlett: Yeah, you got to..
James Steele: You've got a handful of people, you're right. But... And you've always had that. But the problem is, unless you've got a critical mass of them, it's not going to go anywhere. And we don't see that, unless there's some mystery candidates out there, we don't know about somewhere else in the country. We're just not sure.
Donald Barlett: And you've really got a sense of that by just listening. Everybody continues to be obsessed with the budget deficit. And this isn't to say the budget deficit is irrelevant. It isn't. It does need to be dealt with, but it is not the critical issue today, nor will it be tomorrow, nor next year, or the year after that. The critical issue is this trade deficit in getting jobs that pay serious wages. Because there are other things that are happening in the economy that are going to just... that exacerbate what's going on now. And one of them is, increasingly, more and more, and this is on the factory floor in manufacturing jobs, more and more work is being done, one, by robots, and two, for the longest time robots were concentrated on doing one repetitive job over and over. Now they're doing two, and three, and four jobs. And this is going to have an enormous impact as that process moves from one industry to another. So it's just, not just a case of trade. We've got other problems out there that are resulting in the loss of jobs that need to be dealt with. And that's a little different because you don't want to curtail that kind of creativity, but it means we've got to come up with some other jobs to keep people working.
James Steele: We also make the point in the book that adds to what Don's saying in terms of the deficit. The budget deficit is not, should not really be our prime focus here. I mean, because companies are not re-investing, or are investing in the wrong places, like abroad. We need to invest in this country. I mean something more than this rather modest Stimulus that Obama put forth early in his term. And we have a whole section on it. I mean the country, the infrastructure of the country is falling apart. And this has been happening for decades. That has to do with the country's future. It's not just whether the bridge is safe or not. Everybody agrees that the infrastructure investment has a ripple effect, and creates jobs throughout the economy. So, we think we should be spending more in a whole series of areas like that, and not just roads, and sewers and waterlines, and things like that. But high technology, that works. That's also part of infrastructure, but again as Don was mentioning everybody's so obsessed by the deficit. The deficit hawks [are] running everything, but nobody can spend a thing. We ask people, and the book talks about this. Imagine if these deficit hawks had been in charge of things about 1942 and war breaks out. Military comes in and says we need a thousand bombers. Well, these guys would give them a hundred. I mean if the Navy came in and says we need five hundred ships. These guys would give them fifty. And you know, this is a crisis out there. This is a crisis of not creating jobs. And something needs to be done to stimulate this economy. Beyond this immediate period...
Donald Barlett: [Interjecting] And what the Federal reserve is doing is not going to solve this problem. I mean it will keep interest rates low, but that isn't doing anybody any good other than the few people at the top.
James Steele: They're doing this now, partly in lieu of the fact [that] Congress is doing nothing. I mean that's one of the things that's going on, because nothing else is being done to try and stimulate the country. They're doing this, but that isn't really the way we should be going. We should be figuring out ways to really directly stimulate the economy. Not just..
Rob Kall: Okay.
James Steele: Not just expand the money supply.
Rob Kall: I want to take a little side trip here. Two areas! Three areas! One, I call this show, the "Bottom-Up Radio Show' because I believe we're transitioning from a top down to a bottom up world, and the top down powers are fighting their hardest, most brutally to hold onto what they have. So I'd like to get a perspective of your work and your writing from the idea of "Top Down" and "Bottom Up." Let's start with that.
James Steele: Okay.
Donald Barlett: Well, the Top Down, there's no question. That is why, this is one of the reason we have the largest concentration of wealth in this country since the "Robber Baron" era. I mean it's just breathtaking how much money is controlled by those comparatively few people at the top. Before... Neither one of us likes to talk numbers unless we have them in front of us, but, the middle class number you were asking about, now $35 thousand to $85 thousand income range, and that's income from a job. It's not an investment income. There were" thirty four  million individuals and families that, they represented thirty percent of the more than a hundred and sixteen  million tax returns filed by working Americans. The largest number of that group, fifty eight  million, fell below our definition of middle class. They're not.. 58 million aren't even in the middle class. And you see this happening because now you're hearing this phase over and over from some people, saying "the middle class are now the new poor!" And that in some ways is very, very true. They do not have the resources to live like middle class people did thirty or forty years ago.
Rob Kall: And what about my.. What I say about how the Top Down powers are cranking up..
Donald Barlett: Well..
Rob Kall: " they're hold onto, and grab more and more.
James Steele: Here's an example of the Top Down... steal here: Look at the kind of money just that some of these folks are putting out there. We cite the Koch brothers in the book. But even since the book came out, one of their non profit identities has announced that they're going to pump millions and millions of dollars into the electoral campaigns in the so called "swing states." States like Pennsylvania, Ohio, and Florida. And in the case of Pennsylvania, their whole pitch is going to be that Obama's a deficit President. Well, you may not like Obama, there may be something about his policies you don't like. The "deficit President?" I mean the deficit President was a locomotive running through this economy by the time he took over. Which means it was going to pick up steam. Secondly, you have the economy in a melt down, which means your tax revenues are going to fall off, which is going to further add to the deficit. Thirdly, rather than implementing really significant broad based programs to put money in the economy, there's really nothing beyond the Stimulus Bill which was roundly and strongly criticized by various deficit hawks. But here you go, you've got two brothers together worth what $50 billion in their various Foundations. They can pump money into this campaign to try to change peoples' lives? I mean is that what democracy is about? So the point you made a minute ago about how they're going to hold tenaciously to this, is so true. The question is, is there going to be enough counter billing, advertising and power to discredit that effort. And that's what we're worried about, because very often in some recent previous elections it's been very influential in shaping peoples' vote, very often not to vote in what turns out to be not their best interest.
Rob Kall: Can you talk a little bit about how those ultra wealthy are influencing government and policy and regulation, and taxes, that they hold onto and grab even more from the middle class and the poor?
James Steele: [Jim Steele] What they do in part, and this is one of the things that was kind of interesting to us when we did the book. So many of the foundations that spew out a line of reasoning that says "minimum wage is bad; de-regulation good; and unrestricted free trade good for the country.. low taxes or no taxes, best in all situations." Most of those foundations are non profits date from the '70s. It's very interesting. They were not, a whole lot of them, years before that. And they all got up to speed with their in-house scholars and scientists, and they turn out their position papers that look very scholarly. And a lot of the media has picked up a lot of this stuff as though some of these arguments are shared evenly around the country, when in fact many of the positions advocated by these think tanks really only benefits a tiny sliver of the population. But because of that, it's contributed to this notion that these are widely discussed and widely debated issues. And a lot of the media, our business unfortunately, has succumbed to this and picked it up as though these things are really bona fide discussions when in fact they're, most of them are bogus. And affect, and really do not affect the great mass of people. But that's affected our legislators, that's affected a lot of public opinion, and it's ultimately, we think, a very pivotal factor in dismantling the middle class. Putting pressure.
Rob Kall: All right, let's talk about the media. I want to talk about your experience. Now you are highly honored and celebrated journalists. I'd like to get some advice from you for writers nowadays. There are a lot of bloggers, there are a lot of amateur writers out there. How can people, who have a lot of time because they're out of work, or because they're passionately caring and interested in this" how can they learn from your experience? What advice would you give them as writers and journalists?
James Steele: [Jim Steele here] We have always, and this hasn't really changed" we've always suggested that unfortunately people have to kind of connect the dots. There's no one place that you're going to see everything. But you just [have] to be informed, because information comes in so many different directions, you really have to try to pull some of that together. And you know, that's what our business ought to do more of. That's what Don and I tried to do over the years. We've tried to connect those dots on a lot of these big issues. But more of it needs to be done. And the problem now in some ways, it's almost a blizzard of information that people half the time don't know what to go to, what to look at, what to believe. And the internet is both a marvellous creature, but also the purveyor of a lot of nonsense. So it's in some ways harder then ever to connect the dots than the old days. But it's still what has to be done to know what's happened.
Donald Barlett: And one good sign out there is the investigative reporting today, some of it is the best it's ever been. And contrary to what people like to think. There's always been investigative reporting, but it was very little of it for, you know, most of the life of journalism. It's really only come of age since the "70s, and as bad as things are in journalism right now, there's some remarkable investigative reporting going on. And somehow this has got to be further expanded, you know, that's for, you know, people to figure out how to do. But what it does show you, is that the potential is there. We just have to find a way to get people to do it.
James Steele: And in the way we did this"
Rob Kall: [inaudible 46:12]
James Steele: The way we did this project is a perfect example of how things are changing. Years ago it would be your newspaper and maybe a couple of other people on the paper, but Don and I partnered with a non-profit Foundation, based in an American university in Washington D.C. They provided some of the research help. And also as a vehicle to start posting some of the researchers, we went along, which then led us to some of the people whose interviews are in the book. That's the kind of collaborative thing that would have been unheard of, really ten years ago, twenty years ago.
Rob Kall: Can you describe that in more detail. That's very interesting!
James Steele: Well, what's happened with the shrinkage of a lot of newspapers and magazines, is that many non-profit entities have grown up around the country. An old friend of ours, by the name of Chuck [Charles] Lewis founded one twenty-seven  years ago, called the "Centre for Public Integrity' in Washington. Chuck later went on to take a sabbatical of his own, and end up teaching in an American university. And then there founded another entity there called the "Investigative Reporting Workshop'. And that's the one we partnered with on this project. But in addition to that, those there are four to five dozen of these non-profits around the country now. Some of them are on a State-wide basis" former reporters for newspapers who've gotten enough foundation money that
they're providing this. "ProPublica' in New York is an example of a national one, that actually won a Pulitzer Prize this year with another entity which I can't remember. So, the idea, you know there's a lot going on, and a lot of it is just going to take a different shape than it did in the past. And nobody knows how this whole non-profit will eventually shape out. Which ones will survive, which ones won't. What kind of a business model is ever going to be there that will support them. The field remains in tremendous turmoil in that sense. But we feel, and as Don said, that there's a lot of great reporting going on, and the public wants this, the public needs it, and we're hopeful that this will continue in one form or another, just not the way we've seen it in the past.
Rob Kall: Who do you see as doing some of that great investigative reporting now? What are the names, and organizations or publishers?
Donald Barlett: I think Jim mentioned one of the more prominent ones is "ProPublica'. And he just retired, I think, but the man running it was" he had come over from the Wall Street Journal. So there are people in each of these organizations, with, you know, real journalism credentials.
James Steele: [interjecting] I mean the biggest surprise of all in some ways is the New York Times. The New York Times a few years ago didn't even use the word investigation, but the New York Times today and for several years now, has done more investigative reporting than any time in their history. Walt Bogdanich is a friend of ours, he's done a lot of the great pharmaceutical reporting for the Times, on the bad drugs coming out of China. Walt did an outstanding piece on railroad crossings, and how railroads cover up the mistakes they'd made because they don't properly have the signals at these crossings and people die. I mean there's a dozen people at the Times, and there's some really good people at the Washington Post as well. So I mean there's a lot of good folks around. The reason really" I'll tell you where we see this as much as anything. One of us judges a journalism contest and the interests comes in, and it's amazing what's going on out there.
Rob Kall: What's the journalism contest?
James Steele: I've judged one called "Investigative Reporters and Editors'. But then Don and I, Arizona State University, named an award for us for in-depth journalism called "The Barlett & Steele Award'. We don't judge it, but every year we see what the entries are. And every year
there's four to five dozen entries of some really sophisticated, amazing reporting across a whole range of different topics from abuses by State agencies taking care of the elderly to" one of the pieces that won a few years ago was out of Florida, where the Miami Herald had taken databases for real estate.. licensed real estate" I'm sorry they were mortgage brokers in Florida, they took that database and then they took the State criminal database, and they ran the two together and they found out thousands of people selling mortgages, peddling mortgages in Florida were actually ex-cons. [laughing] Is that amazing? Yeah, I mean that's the kind of story you would never have, you wouldn't have even heard about a few years ago, because of part of the technology makes it possible. Very ambitious!
Rob Kall: Whoa! Could you let me ask you this, that you are the judge on one contest, the Investigative Reporters and Editorial" Editors journalism contest?
James Steele: And we've judged others.
Rob Kall: What is that? And, others? Okay. So what is some of the criteria that you look for, in identifying excellence and winners?
James Steele: Clarity. The way the story is put forth.
Donald Barlett: [interjecting] And obstacles that had to be overcome in getting it.
James Steele: And was the energy worth being expended for this topic? And I'll tell, you some of these things are really hard to judge because boy, the really good stuff is, it's a tough issue because a lot of good stuff is being done. Most of it is at the local and what we call the regional. There's not as much at the national level that we would like to see. But in a lot of regional things it's fine. I mean the Philadelphia Enquirer's series last year on violence in schools was an exceptional piece of work, and it was a combination of interviews, human stories backed up by raw data about what was really going on. So, there's a lot of good work going on now. And a lot of committed people in journalism. Journalism's has always been a calling, that's never changed, and that never will change. I don't think anybody knows just all the ways it's going to be a showcased in the future.
Rob Kall: What do you mean, it's a "calling'?
James Steele: Well, it's hard work, and it's always long hours"
Donald Barlett: Let me put it this way"
James Steele: "the actual rewards, and now you have a situation where salaries for so many people have been rolled back from what they were just a few years ago. So the ones in journalism now are a testament in a way, that those of us maybe twenty years ago weren't. We weren't having our salaries rolled back. Maybe they weren't increasing at the rate we wanted, but it's a totally different ballgame out there right now.
Rob Kall: I think I totally agree with you. I mean for a lot of people, there are hundreds of thousands, if not millions of people, who are blogging who are not getting paid anything. Now"
James Steele: Exactly.
Rob Kall: "part of the reason I'm asking you on this, is I publish OpEdNews.com. If you Google "liberal news', then search for that, it comes up first. And we just past our hundred and fifty thousand [150,000 ] items published mark.
James Steele: Excellent!
Rob Kall: And so I have a thousand"
Donald Barlett: That's pretty impressive.
Rob Kall: It blows my mind! [James laughing in background] But I have thousands of writers who care a lot. So what I'm trying to get from you as well, is advice to them... Let's say they care about an issue. Let's say they see that there's something that just doesn't look right. We publish a lot by whistleblowers, for example. As an investigative journalist, what advice would you give them on how to address attacking this story from the beginning?
James Steele: Well it'd would be a couple of different things, but I suppose the first one, try and put yourself in that story. Now I don't mean person, but try to imagine if you were reading this story what you would want to know, and what you would want to find. And the basic model Don and I have from Day One, is just tell the reader or viewer, whatever it happened to be, something they don't know. I mean there's such widespread dodge on so many things done now. What can you tell them that's new? And keep concentrating on that. Sometimes it's just a matter of your view of it, it may be slightly different based on your analysis of the facts. But that's the heart of it. We also, in our case we've been very interested in issues of economic fairness. I mean how does this play out to the average person? And what can you can do" what we do to shed a little light on something that up to that point has been in some kind of darkness.
Rob Kall: It seems to me"
Donald Barlett: [interjecting] And what are corporations' executives saying! What are public officials saying! What are those people telling the population at large, and how does that square with what's really taking place? You can never go wrong doing that. We seem to be in a period of unprecedented hypocrisy. Elections have always been" had their critical moment. But anymore, it's like, candidates are just outdoing each other to see how hypocritical they can become.
Rob Kall: It seems like one of the things that you do routinely in your writing, in your book, is you weave together statistics and the kind of facts that you get from government reporting agencies and polls, and then tie that in with anecdotal interviews with real people.
Donald Barlett: Exactly.
James Steele: We've always tried to do this. I mean some stories haven't leant themselves to that, but most of them about the economy always do, because this is the life people are leading and what's happening to them just goes to the heart of all of these broad topics. And it also makes the story real in the way that nothing in our own language can make so real. So we always strive for that, and a big part of the work and everything we've done, is finding the people. For every name you see in a book, there's probably about ten others that have been interviewed, and for various reasons weren't in there. But that's also"
Rob Kall: How do you find them?
James Steele: Random ways.
Donald Barlett: There's no single way.
James Steele: No. We found some peoples' names, we found some names in bankruptcy court claims. People whose health care had been taken away. And a lot of the people, the names for this book, showed up in Labor Department filings. They'd lost their jobs because of imports or various trade issues. It's a very cumbersome process to get those petitions, and they're called "trade adjustment assistance petition'. And we've gotten many of those over the years. That's when other litigation, here and there, shows up beyond. And then one thing helped us this time, because of the collaboration with American University, the workshop down there. When we posted these things online, we urged people to contact us, and we heard from a lot of people that way. People who turned out to be very good interviews in some cases. So it's just like Don said, it's a range of things and it's quite often very hard to find folks. But they're the heart of every one of these stories.
Rob Kall: Right last question, and then we've got to wrap up. 'Occupy Wall Street'. Where do you see that figuring into the picture that you've painted?
James Steele: Well, their issues are really a lot of the issues of the book. I mean in terms of the one percent, and you know Don and I actually wrote about the one-percenters back in the mid "90s, before this thing got really popular. So we understand who those folks are. We tend not to go along with the bottom 99, we don't do the one percent versus the 99 percent. We've always talked about the bottom 90 percent. And it's the only reason for that is the folks between 90 percent and 99 percent are still, they're not doing too badly. It's really the bottom 90 percent at this point that we're most worried about. So, I mean it's a slight distinction, that's the reason we make it so. You know, a lot of the issues they've highlighted have been very, very real issues, and it's hard to tell what it has done for the consciousness of the country other than just make people aware of them. And where that we go from here we don't know, but certainly on the concentration of wealth, and what's happening to just average people, we're very, very sympathetic to what they've talked about.
Rob Kall: And what's your website?
James Steele: It's just www.barlettandsteele.com
Rob Kall: Okay.
James Steele: And it's just all one word. No "t' in Barlett of course. Just B-A-R-L-E-T-T. And Steele, S-T-E-E-L-E.
Rob Kall: Okay. Thank you so much.
Rob Kall is editor-in-chief, publisher and site architect of OpEdNews.com, President of Futurehealth, Inc, and an inventor. He hosts the Rob Kall Bottom Up Radio Show, aired in the Metro Philly area on AM 1360, WNJC. Over 200 podcasts are archived for downloading here, or can be accessed from iTunes. Rob is also published regularly on the Huffingtonpost.com
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