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The American Dream Is Not Dead (But Populism Could Kill It)
by michael r. strain
templeton, 168 pages, $12.95

In June 2015, Donald Trump rode down a golden escalator and declared, “The American Dream is dead.” Now, nearly five years on, Michael Strain has responded with The American Dream Is Not Dead (But Populism Could Kill It). Touché.

Strain, the director of economic policy studies at the American Enterprise Institute, is one of the leading data-driven skeptics of populism. His approach is valuable. Our discourse ought to be grounded in an accurate set of facts, and Strain marshals plenty in The American Dream Is Not Dead. For example, a reader who may have believed that the average wage of non-supervisory and production workers had fallen since 1990 will learn that, in fact, adjusted for inflation using the Bureau of Economic Analysis’s Personal Consumption Expenditures price index, the group’s average wage has increased by 34 percent. 

But the American Dream is about more than average wage growth. It is about sharing a common life within the families and communities that those wages support. It is the stuff of Rockwell paintings, not Bloomberg columns. Strain fails to see this. His economic metrics are useful for certain purposes, but they should not distract us from rising rates of out-of-wedlock birth, the disappearance of the male breadwinner, and dying communities.

Strain focuses on economic metrics “not because the political and community components are unimportant . . . but because the economic ­component is so central” to the Dream. Yet a recent survey from AEI suggests otherwise. Just under half of respondents thought that having a successful career or a better quality of life than one’s parents was important in their view of the American Dream. Fewer than one in six Americans considered becoming wealthy to be important, whereas twice as many deemed making ­valuable contributions to their community to be. In fact, the two most highly rated factors were not explicitly economic at all. More than four in five prized social and moral dimensions of the Dream—to have a good family life and to have freedom of choice in how one lives. Economics is no doubt central for the economist, but most Americans have different priorities.

Strain paints with a broad brush. A central theme of the book is the need to “zoom out” from “pockets of real struggle” to gain a fuller sense of the American economy and the American Dream. There is, no doubt, value in general economic measures, but they regularly fail to capture important social realities. For instance, Strain cites national job-­creation statistics, noting that long-term unemployment has steadily fallen and that job openings now exceed unemployed workers. But those jobs are being created in fewer and fewer places. According to the Economic Innovation Group, 50 percent of the jobs created in the recovery from the Great Recession accrued to only 2 percent of U.S. counties. 

Whenever the portrait is less than rosy, Strain seems to overlook inconvenient truths and struggles to justify the status quo. In one of the final chapters, he includes a fine analysis of mobility statistics. He cites Harvard economist Raj Chetty’s finding that, from 1940 to 1980, the share of American children who out-earned their parents by age thirty had fallen from just over 90 percent to 50 percent. As he is wont to do, Strain revises Chetty’s data—adjusting for household size here, swapping inflation metrics there—only to find that the second figure increases to 67 percent. The result is no coincidence. As Strain himself notes, the adjusted figures happen to be “much closer to [his] own estimate” of around 75 percent. But none of these figures is cause for optimism. Even in Strain’s estimate, the share of children worse off than their parents more than doubles. Yet the chapter must conclude favorably, so Strain presents a false choice: “If you have to pick between the American Dream of upward mobility being alive or dead,” then you must conclude that “America is upwardly mobile.” The fact that upward mobility has declined is thus obscured.

What gets lost in the positive spin is not only the basic fact of declining mobility, but a richer understanding of opportunity. Strain overlooks Chetty’s groundbreaking insight: Opportunity is powerfully shaped by a child’s social environment. Chetty and his colleagues have found that rates of intergenerational social mobility vary geographically at a granular level—adjacent neighborhoods can have strikingly different levels of mobility—and that the differences are not reduceable to economic conditions. The factors most strongly linked to a neighborhood’s rate of mobility are social: the prevalence of single parenthood and indices of social capital. Even in an economic study of the American Dream, social factors peripheral to economics have a central role to play.

Strain claims not to be Panglossian, but his analysis downplays the true dangers to the American Dream. He laments that the public discourse has “focused on our problems,” devoting one short chapter to discuss the “real challenges” American communities face—a page on men without work and one sentence on deaths of despair, for example. Such challenges, however, “can often be squishy,” and he questions whether popular topics of concern—like loneliness and social isolation—are “really all that bad.”

The message is clear enough: “America is doing better than our biggest problems.” Strain highlights positive top-line, economic statistics. He documents quality-of-life improvements. (“Not long ago, color television was a luxury that most people could not afford.”) But in the last analysis, his thesis rests on the assumption that “our social ­challenges”—including family breakdown, drug addiction, and suicide—should not “be treated as evidence of an overarching general decline.” The only thing about which he is truly pessimistic is pessimism.

Of course, Strain has good reason to be down on pessimism. Without confidence in the American Dream, he might have to revise his policy preferences. Instead, The American Dream Is Not Dead pulls from the same conservative playbook of the last forty years, in which our economic problems—to the extent that they even are problems—stem from a lack of dynamism and growth and our solutions begin with “championing economic growth” and “pursu[ing] a light regulatory regime and low tax rates.” 

To those who wonder why new challenges demand the same solutions, or why top-line figures should allay fear about social crises, Strain offers a familiar explanation: “A rising tide does lift all boats.” If you can show the tide is rising, you need not worry about sinking ships. Aggregate data allows one to suggest that if some are lifted high enough, those at the bottom should be satisfied. 

There is a certain irony in citing data to defend what is, in many ways, a national myth. The American Dream is, no doubt, grounded in truths about the nation’s past—if not its present—but it serves a more important function. Like many such myths, it exists to confer legitimacy to established systems and institutions. We say that the American Dream is available to all because we want to affirm the existing order.

Perhaps the Dream is not dead. But Americans’ faith in it sure seems to be fading. Indeed, the “populist scream” that worries Strain is less a cause than a symptom of that lost faith. Without a common myth to justify the inequalities that have ­characterized—and always will characterize—our economy, it should come as little surprise that segments of the public want to tear it down. 

No amount of aggregate data or talk of “rising tides” is likely to restore that faith. That will require addressing specific challenges rather than celebrating general trends and considering people not as economic agents, but as social and moral—which is to say, political—beings. But in fairness to Strain, that is not the work of an economist. That is the task of politics.

Wells King is research director of American Compass.