Hollowed Out: Why the Economy Doesn't Work without a Strong Middle Class

270 Pages·2015·1.937 MB·English

by  David Madland

Praise for Hollowed Out
“ When will we learn that an economy that works just for the wealthy just
doesn’t work? David Madland, one of the nation’s wisest young scholars,
explains with clarity and eloquence why trickle-down economics can’t
keep its promise of rapid growth—and why a more just economy will
provide better results for everyone. This is a truly important book that
should shape our debate for many years to come.”
— E. J. Dionne Jr., Senior Fellow, Brookings Institution, Professor,
McCourt School of Public Policy, Georgetown University, and author
of Our Divided Political Heart: The Battle for the American Idea in an Age of
Discontent
“ David Madland marshals reams of data, economic analysis, and social
science to make a deeply persuasive case for middle-class economics—
not only as a means of achieving sustainable, equitable economic growth,
but as the absolutely crucial foundation of American society. Hollowed Out
patiently walks us through the factors leading to the recent decline in
middle-class income and stability and, crucially, shows how to get the
economy back on the right track.”
— John Podesta, former Counselor to President Barack Obama and former
Chief of Staff to President Bill Clinton
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“ Trickle-down economics is the biggest economic lie ever told, and David
Madland expertly and authoritatively shows us why. Meticulously
researched and thoughtfully argued, Hollowed Out explains in plain
language why growth and prosperity are always built from the middle
out, not the top down. This should be required reading for economic
policymakers.”
— Nick Hanauer, Seattle-based entrepreneur who has helped launch more
than twenty companies, including aQuantive Inc. and Amazon.com
“ The dose is the diff erence between medicine and poison in economics as
in healthcare. Hollowed Out makes the case that US inequality has gone
beyond supply-siders’ medicine for growth to poisoning our economy via
loss of trust, political polarization, debt-driven consumer demand, and
self-perpetuating aristocracy of wealth. Every member of Congress
should read this before voting on the next tax cut for the wealthy.”
—Richard Freeman, Professor of Economics, Harvard University
“ Ideas are a powerful force in politics, and David Madland develops a very
big and important one. Madland shows that the hollowing out of the
American middle class has deeply damaged our economy, and in order to
get back on track we need to make the economy work for everyone, not
just the rich. Hollowed Out provides an important road map for anyone who
wants to understand what is wrong with our economy and what needs to
be done to fi x it.”
—Neera Tanden, President, Center for American Progress
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Hollowed Out
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The publisher gratefully acknowledges the generous support of the
Anne G. Lipow Endowment Fund for Social Justice and Human
Rights of the University of California Press Foundation, which
was established by Stephen M. Silberstein.
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Hollowed Out
Why the Economy Doesn’t Work
without a Strong Middle Class
David Madland
university of california press
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University of California Press, one of the most distin-
guished university presses in the United States, enriches
lives around the world by advancing scholarship in the
humanities, social sciences, and natural sciences. Its
activities are supported by the UC Press Foundation and
by philanthropic contributions from individuals and
institutions. For more information, visit www.ucpress.edu.
University of California Press
Oakland, California
© 2015 by The Regents of the University of California
Library of Congress Cataloging-in-Publication Data
Madland, David, author.
Hollowed out : why the economy doesn’t work without
a strong middle class / David Madland.
p. cm.
Includes bibliographical references and index.
isbn 978-0-520-28164-6 (cloth : alk. paper)
isbn 978-0-520-28652-8 (pbk. : alk. paper)
isbn 978-0-520-96170-8 (ebook)
1. Middle class—United States—Economic
conditions—21st century. 2. Middle class—United
States—Economic policy—21st century.
3. Consumption (Economics)—United States—21st
century. 4. United States—Economic policy—21st
century. 5. United States—Economic conditions—21st
century. I. Title. II. Title: Why the economy doesn’t
work without a strong middle class.
HT690.U6M33 2015
305.5′50973—dc23 2014040833
Manufactured in the United States of America
24 23 22 21 20 19 18 17 16 15
10 9 8 7 6 5 4 3 2 1
In keeping with a commitment to support environmen-
tally responsible and sustainable printing practices, UC
Press has printed this book on Natures Natural, a fi ber
that contains 30% post-consumer waste and meets the
minimum requirements of ansi/niso z39.48–1992 (r 1997)
(Permanence of Paper).
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To Karin, Charlie, and Jasper
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contents
List of Illustrations ix
1. Middle Out vs. Trickle Down
1
2. Trust
28
3. Good Governance
56
4. Stable Consumer Demand
110
5. Human Capital
127
6. Creating a Middle-Class Society
155
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