Have You Noticed America Is Looking Like a Third World Nation?
by Thom Hartmann | March 15, 2023 - 8:04am
Louise and I got home Saturday from a week with extended family in Central America. On the drive from our rented vacation condo by the Pacific Ocean back to the airport, we passed miles of slums or barrio bajos. Some homes were made from scavenged cinderblock and brick, but most were scrap wood and cardboard with tarps as roofs. Along the rudimentary streets ran ditches filled with raw sewage, and electricity was hijacked from streetlights.
Back in the 1980s, when I was doing international relief work for the German-based Salem organization, I spent months in such places in Uganda, Peru, Kenya, Colombia, Mexico, southern Sudan, Ecuador, Peru, Thailand, India, Sri Lanka, and several other “Third World” countries. At that time, four decades ago, the “slums” in America looked like high-quality housing compared to those countries, with most having electricity, running water, and reliable sewer systems.
But no longer: America has an entirely new type of slum we haven’t seen here since the 1930s, the product of 42 years of the Reagan Revolution. We call them “tent cities,” along with their more upscale neighbors: roadsides lined with old RVs and cars in which desperate or hopeless people live.
Instead of referring to their denizens as slum-dwellers, we call them the “homeless,” and their numbers have grown so large in the past decade of our neoliberal experiment that they signal an undeniable national housing crisis.
America, in other words, is more and more resembling a Third World nation.
Homelessness and slums like these aren’t an accident or act of G-d; they’re the result of intentional policy decisions made by politicians. They reflect the confluence of multiple choices we’ve made as a nation over the past four decades, choices that were sold to us by the morbidly rich with the promise that their increases in wealth would “trickle down” to the rest of us even as they cut services and raised the retirement age to 67.
Historically, the wealth or poverty of a nation has first reflected its natural resource base. Countries with lots of stuff under or growing above the ground that can be exported or used as energy end up with lots of money and, broadly, a healthy society.
A nation sitting on billions of barrels of oil will generally have a wealthier populace (Saudi Arabia, UAE) than one living on scrub brush and desert (South Sudan).
The exception to this is the application of human labor and ingenuity to whatever natural resources may be available. Japan, for example, is a relatively resource-poor nation but has maximized arable land through terraced rice farming and used manufacturing — importing raw materials and exporting finished goods — to create wealth that’s turned it into a First World nation.
America is both resource rich (from arable land to minerals and fuels) and was once the manufacturing floor of the world, producing extraordinary wealth across the land. By the 1950s we were the first large nation in the world to have a middle class made up of more than half its population, largely because of our manufacturing base, supplemented by our resource sectors.
But then Reagan brought America some new ideas, rejecting classical economics — from Adam Smith in 1776 to John Maynard Keynes in the 1930s — and embraced a new system called neoliberalism by its founders, as I lay out in The Hidden History of Neoliberalism: How Reaganism Gutted America.
The theory was that if we just abandoned government regulation and taxation of large companies and the morbidly rich, it would free them up to turbocharge our national prosperity. The newly created wealth, Reagan Republicans told us, would be shared by all.
Of course, that’s not how it worked out.
Instead, neoliberalism has reduced our middle class from almost two-thirds of us in 1980 to fewer than 45 percent of us today; thrown two generations into massive student and healthcare debt; produced a handful of morbidly rich individuals and families; and created a housing crises that rivals the Hoovervilles of the Republican Great Depression.
Reagan promised American workers if they’d go along with his war on organized labor that wages and benefits would go up because companies would no longer be “burdened” with having to work things out with “union bosses.” This new “right to work for less” would, he said, make us all richer.
Instead, cutting union membership from a third of our workers down to around 6 percent of the private workforce has caused wages to stagnate so badly that the standard of living a single full-time worker could provide his family in 1980 now requires at least two full-time workers. While “household income” (the number Republicans love to cite) has risen slightly in the past 42 years, individual income relative to living expenses has collapsed.
Reagan promised us that if we’d stop enforcing anti-trust laws (as he did in 1983) and let giant companies become ever bigger, the increased efficiencies and economies of scale would translate into a widespread prosperity.
Instead, giant monopolistic and oligopolistic corporations have used their increased efficiency to run small- and medium-sized competitors out of business, reducing our urban downtowns and rural cities to ghost towns. The pharaonic wealth produced by these giant corporations is tightly held by their largest investors and senior executives.
Reagan promised us that if we’d just cut the “tax burden” on the wealthiest Americans and our largest and most profitable corporations it would provoke morbidly rich “job creators” to use that extra cash to hire millions more Americans and give everybody a raise.
Instead, billionaires are buying half-billion-dollar super-yachts, private jets, and shooting themselves and their rich buddies into outer space while paying an average 3 percent income tax.
Reagan promised us if we’d just follow Milton Friedman’s advice (when he was secretly being paid off by the real estate lobby) and end rent controls, cut home mortgage subsidies like those through the FHA and VA, and throw our housing markets open to unrestrained speculation and both corporate and foreign ownership, every American could live the American Dream.
Instead, foreign investors and massive hedge funds run by Wall Street billionaires are buying up America’s housing stock and turning it into rental properties, both exploding the price of houses and rents. The clear and measurable result is an epidemic of homelessness and the tent cities I mentioned at the start of this article.
Reagan promised us if we’d just end the “oppressive regulations” designed to keep our food supply safe, our drugs affordable, clean up our air and water, and protect our children from death by firearms the “magic of the free market” would instead provide all those things in spades.
Instead, our food supply is filled with chemicals, microplastics, and heavily processed faux foods that have produced two generations of obesity and related metabolic disorders in children along with an explosion of cancer, birth defects, and other once-rare diseases.
Reagan promised us if we’d just stop funding public schools and stop teaching civics and instead direct that money to private for-profit or church-run voucher and charter schools it would grow the levels of literacy, civic engagement, and healthy political dialogue.
Instead, about half of all American adults cannot read a book written at an eighth-grade level, according to the U.S. Department of Education and the National Institute of Literacy. Only 39 percent of Americans can name all three branches of government, leaving our nation vulnerable to racist white nationalists and fascists wanting to transform the democratic experiment our Founders began with this American republic.
Reagan promised us, as he and George HW Bush were negotiating the GATT/WTO and NAFTA, that if we’d just abandon 191 years of protectionist tariffs and trade policy so American companies could move their manufacturing overseas, we’d see an eruption of high-paying white-collar jobs in technology without having to get grease under our fingernails.
Instead, over 60,000 factories left this nation, moving at least 16 million good-paying and previously unionized manufacturing jobs to mostly China. When I lived and studied in Beijing in late 1986, the country was impoverished. Today, China’s manufacturing sector — built over the past 30+ years by American “free trade” policy with American inventions and technology — is double the manufacturing capacity of the US.
Reagan promised us if we’d just deregulate our media and abandon local ownership requirements for newspapers, radio stations, and TV outlets that we’d end up with a flourishing, diverse, and edifying media sector. He kicked it off by ending enforcement of the Fairness Doctrine in 1987 and Bill Clinton carried it forward with the Telecommunications Act of 1996.
Instead, a small handful of billionaires and rightwing companies own virtually every consequential radio and TV station in the country; most of our local newspapers are bankrupt; more than half of the ones left are owned by a couple of New York-based hedge funds; and hate, lies, and disinformation have proven more effective at driving profits than honest information or concern for the public good so they’ve become an unscrupulous business model on the right.
Reagan promised us if we’d stop blindly trusting our government to do the right thing, a healthy skepticism would make our country’s bureaucracies more efficient. After all, he claimed, there are no truly competent people working in government because, if they were really talented, they’d be out making more money in private industry.
Instead of getting a more efficient government we ended up with an entire political party made up of fascist-tolerant hacks, sellouts, and opportunists anxious to dance to the tune of any billionaire willing to fund their way of life. They now populate the majority of the Supreme Court, the federal court system, control the House of Representatives, and run about half of our states.
Reagan promised us if we’d just drop all those silly regulations on gun ownership and throw the doors open to weapons of war in civilian hands, the result would be “an armed society is a polite society.”
Instead, bullets are the number one killer of our children and the GOP’s answer to “the crisis of our youth” is to ban drag shows.
Reagan promised us if we’d just kill off the “welfare” programs of the New Deal and Great Society, then Americans would no longer be infuriated when a “strapping young buck” was using food stamps to “buy a T-Bone steak,” while “you were waiting in line to buy hamburger.”
Instead, as the social safety net collapsed, poverty became more deeply entrenched and hunger among America’s children has increased since the 1980s.
Years ago, I was up late one night in an Asian city watching financial news on a hotel TV. A young American host was interviewing a very wealthy German businessman at a conference in Singapore.
Amidst questions about the business climate and the conference, the host asked the German businessman what tax rate he was “suffering under” in his home country. As I recall, the businessman said, “A bit over 60 percent, when everything is included.”
“How can you handle that?” asked the host, incredulous.
The German shrugged his shoulders and moved the conversation to another topic.
A few minutes later, the American reporter, still all wound up by the tax question, again asked the businessman how he could possibly live in a country with such a high tax rate on very wealthy and successful people. Again, the German deferred and changed the subject.
The reporter went for a third try. “Why don’t you lead a revolt against those high taxes?” he asked, his tone implying the businessman was badly in need of some good old American rebellion-making.
The German businessman paused for a long moment and then leaned forward, putting his elbows on his knees, his clasped hands in front of him pointing at the reporter as if in prayer.
He stared at the young man for another long moment and then, in the tone of voice an adult uses to correct a spoiled child, said simply, “I don’t want to be a rich man in a poor country.”
There are a few wealthy Americans who understand this. Like the Patriotic Millionaires group, they embrace an opportunity to help our country, often via Democratic politicians.
But the billionaires who fund the Republican Party and own right-wing media think it’s perfectly fine to rip the moral and political guts out of their own nation, condemn its future to severe weather, and turn its people against each other if it helps them fill their money bins.
They’ve funded and facilitated movements like the Tea Party and rightwing paramilitaries, media outlets like Fox “News” and Breitbart, and organizations like the Federalist Society, the Heritage Foundation, and ALEC.
They throw piles of money at Republican politicians, so long as they never stray far from the “deregulate, cut, denigrate” line about American government. They sponsor climate denial, anti-abortion, and pro-death penalty legislation to get enough political power to increase their own profits through buying deregulation.
And, increasingly, Americans of all stripes are realizing this truth.
I’ve lived seven decades in this country, and have literally traveled pretty much everywhere, from hitchhiking from Michigan to San Francisco and back in 1967 to raising a family and living in five different states, to traveling for business to almost every other state.
But it wasn’t until America got seriously whacked, the endpoint of 40 years of austerity politics and Reaganomics combined with the stress of the century’s worst pandemic, that it became absolutely unavoidable.
I’ve never in all that time — and I’ll bet this is true of you, too, regardless of how old you are — seen tent cities growing across our land like the last five years.
Homelessness that can be directly and scientifically tracked back to one primary cause, which was one of the programs of the Reagan Revolution. That was the explosion in the cost of housing driven by parasitic speculators and Wall Street billionaires following widespread Republican deregulation of housing, particularly at state and local levels.
Reagan’s housing policies, which opened the door to slumlords like Jared Kushner, got the interest and involvement of the speculators from the beginning. They really jumped into the real estate market, though, at its bottom in 2008, and now in some parts of the country as many as half of all houses that are offered for sale get sold to speculators or foreign buyers.
America is looking like a third world nation? Yes, some parts of it are. It would be wrong to blame the erroneous conclusions of Mr Hartmann on the fact that he is a progressive liberal which he definitely is. In his third paragraph he gives that away in his reference to Reagan, laying blame to all of this mess at the feet of Reagan's policies. This kind of analysis is faulty because when one starts with an unproven assumption, what follows is a multiplying error, much like what you would have if you started your math problem with the acceptance that 2 plus 2 equals 5. Mr Hartmann may be a bit confused as to cause and effect. I'm sure that many of the millions lifted out of poverty by the boom which followed would differ from his conclusion. But then the left would no doubt find a way to give Carter credit for that like the way Kamala gives Biden credit for being a wonderful leader.