A Different Ponzi Scheme

The Big Squeeze
Tough Times for the American Worker
Steven Greenhouse
Anchor, $14.95, 384 pp.

If nothing else, our current economic crisis has exposed the financial system’s rotten core. The various claims of efficiency, dynamism, and innovation spouted by its most ardent boosters were, it turns out, simply a façade hiding unbridled greed, unethical lending, and unfathomable financial assets. The fallout has been widespread and the pain acute—lost jobs, lost savings, and lost houses—with more to come. And while the system’s collapse has been quick and dramatic, the problems were brewing for a while in the form of legal changes and deregulation that began decades ago.

It would be remarkable if structural economic decay were limited to the financial sector alone. It turns out that it is not. The light shined by Steven Greenhouse’s new book, The Big Squeeze: Tough Times for the American Worker, reveals a labor market rife with the ill treatment of workers, a market that conjures up Dickens and the worse excesses of the industrial revolution. Hard times indeed.

Things were not always this way. In the two decades after World War II, the economy grew, productivity increased, and workers throughout the income distribution reaped proportional shares of the benefits. But starting in the 1970s, the economy followed a new direction. The fruits of expanding output increasingly and disproportionately went to those with the highest incomes. Meanwhile, it became harder for the average...

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About the Author

Robert DeFina is a professor in the Sociology Department at Villanova University. His teaching and research interests include labor markets, poverty, and social inequality. He is co-editor of the Journal of Catholic Social Thought.