How rapacious capitalism transformed one Ohio city from the American dream to a nightmare
This shows the problem with capitalism and should put paid to any idea that the free market will regulate itself for the good of everyone (“consumers can choose what to buy!” “inferior producers will be selected against!” “it’s all good”) is shown the be a jejune fantasy more appropriate to a teenager full of ideas than an adult with real-world experience. (I am not a Libertarian, as you see.)
Laura Miller reviews a book for Slate:
Brian Alexander’s Glass House belongs to a new and still fairly accidental genre: the on-the-ground Trump explainer, a nonfiction book illuminating the desperation driving white small-town Americans, as told by a native son. The vanguard title in this pack is J.D. Vance’s surprise success Hillbilly Elegy, a portrait of the dysfunctional, self-defeating working-class white culture in Appalachia and Rust Belt Ohio, published last spring. Although Vance mostly avoided making political recommendations, he’s a conservative and a regular contributor to National Review and has been knocked, somewhat unfairly, as an unmitigated bootstrapper. Glass House’s subtitle, The 1 Percent Economy and the Shattering of an All-American Town, hints at the book’s difference from its best-selling predecessor. Alexander’s book is less personal, less tortured, a work of journalism far more willing to indict forces larger than the stubborn, delusional pride of the white working class. This book hunts bigger game.
Alexander grew up in Lancaster, Ohio, a town celebrated in a 1947 Forbesarticle as the quintessential American town, the “epitome and apogee,” as Alexander puts it, “of the American free enterprise system.” The magazine’s founder and editor-in-chief B.C. Forbes (father of Malcolm) held up Lancaster as a shining paragon of what the nation could achieve without the meddling of “left wingers,” although his belief that union activity there had been subdued was incorrect. Lancaster had a pretty, historic downtown (Civil War generals William Tecumseh Sherman and Thomas Ewing were born there), and a thriving civic culture fostered by the glassmaking industry, in particular a glassware company called Anchor Hocking. In Glass House, Alexander begins by tracing the history of a young couple who moved to Lancaster two years after the Forbes story ran. The young man took a sales job at Anchor then moved up in the company, while his wife volunteered to raise funds for the hospital and campaigned for levies to build new public schools. Back then, Lancaster parents felt no qualms about letting their kids run around on their own recognizance. Anchor Hocking vice presidents drank alongside factory workers in Old Bill Bailey’s tavern. People worked at Anchor Hocking for 40 years and retired on sound pensions. Lancaster, Alexander writes, “really was about as close to the clichéd image of the all-American town as you could get, outside of a Hollywood movie set.”
It is also, as a local saying has it, “the whitest town in America.” The Ku Klux Klan, during its resurgence in the 1920s, had a thriving presence there, although with hardly any blacks to terrorize, it had to content itself with harassing Catholics. This also meant that when Lancaster—like so many Middle American small towns—began to collapse economically in the late 20th century, its citizens didn’t have a racial scapegoat at hand. Today, Anchor Hocking is a ghost of its former self, although it’s still hobbling along. Gaunt, tattooed drug addicts roam Lancaster’s streets in pajama pants. Old-timers deeply wedded to the idea that Lancaster is a town specially endowed with the essence of American decency tell themselves that the riff-raff consists of “outsiders” drawn by the (fictional) bounty of Lancaster’s social services. The cops and aimless young people Alexander profiles in depth in Glass House can testify otherwise. The head of Lancaster’s Major Crimes Unit begins to cry while telling Alexander about fending off the pleas of distraught families while arresting people he played high-school football with.
Glass House reads like an odd—and oddly satisfying—fusion of George Packer’s The Unwinding and one of Michael Lewis’ real-life financial thrillers. Alexander pings back and forth between portraits of despairing and bewildered Lancastrians and the labyrinthine corporate history of Anchor Hocking. Unlike many other heartland industries, glass manufacturing, by virtue of the fragility and weight of its product, has some built-in resistance to outsourcing and imports. Anchor itself has remained a viable economic enterprise, at least in theory, throughout its history. But beginning in the 1980s, the company fell victim to a near-fatal combination of bad management and private-equity financiers emboldened by the new Reagan administration’s embrace of unfettered free-market capitalism. First, the company became the target of “greenmail” by corporate raider Carl Icahn. (Greenmailers stealthily buy up stock in sleepy companies, then threaten to make trouble unless they are bought out at a premium.) Icahn’s gambit inspired an Anchor executive to capture a division of the company in a leveraged buyout and relocate it to Tampa, forcing many of its employees to choose between their jobs and their community.
What followed was a long, complicated, and sickening ballet of financial sleight-of-hand in which one investment firm after another bought Anchor with borrowed money then loaded the debt back onto the company, pushing it to the brink of bankruptcy (and, on one occasion, over the brink). Aiming to quickly flip the company at a profit, Anchor’s various owners forced cost-cutting measures and concessions from the union. They neglected vital renovations and repairs to the manufacturing plant, a dangerous omission when it comes to machines designed to work with molten glass. Anchor’s facilities became increasingly out-of-date and incapable of making items it had once profitably produced. Pensions were replaced with 401(k)s, and eventually employer contributions to those accounts dwindled to nothing. Employees’ portion of their health insurance premiums ballooned to the point that many could no longer afford to make them. (One of Alexander’s sources estimates that some workers would have seen their take-home pay reduced to $10,000 per year if they bought into the health plan.)
Private-equity vampires didn’t just suck all the value out of Anchor to line their own pockets. They also casually . . .
And read as well how automakers knew the Takata airbags were dangerous, but hid the fact. And think back (for my older readers) to Ralph Nader’s Unsafe at Any Speed and how safety had to be legislated in the the automobile, piece by piece, because unless forced by law, automakers would not do a single damn thing. It added to the cost (and thus cut those dollars directly out of profits), it also wasn’t popular: people didn’t actually want it, particularly because automakers charged more (to recover the grearer costs). The government steps in, sets minimal safety stands to protect the public and promote the general welfare, automakers reluctantly do it (the president of General Motors actually in testimony to a Congressional committee said that collapsible steering wheel was impossible because it would have to work for a frail 90-lb woman and also for a 300-lb linebacker. Impossible. The committee was unimpressed, the legislation passed, and one year later GM had a collapsible steering wheel.
As individuals, the residents of Lancaster lacked the power to fight the corporate owners and managers. But that’s one reason we have a government: to level the playing field and fight on behalf of the public against the power of the corporation. And you can see what a problem it is when the corporations control the power that is supposed to regulate them. And it gets worse, as we’ve seen. I do not think the Trump administration is a step in the right direction; rather it is the best indication so far of where we’re headed. “Papers, please.”
And a new authoritarian government will have powers Stalin could never have dreamed of: it will have, for example, your order history from Amazon, your viewing history from Netflix, and all your Facebook data (which is already being sold: the authoritarian government can just buy it, effectively outsourcing all the spying, prying, and investigation of individuals to build a dossier on each. It has more than ever. From Wired:
Then, the researchers created an algorithm and fed it with every respondent’s personality scores, as well as their “Likes,” to which subjects voluntarily gave researchers access. The researchers only included “Likes” that respondents shared with at least 20 other respondents. That enabled the model to connect certain “Likes” to certain personality traits. If, for instance, several people who liked Snooki on Facebook also scored high in the extroverted category, the system would learn that Snooki lovers are more outgoing. The more “Likes” the system saw, the better its judgment became.
In the end, the researchers found that with information on just ten Facebook “Likes,” the algorithm was more accurate than the average person’s colleague. With 150 “Likes,” it could outsmart people’s families, and with 300 “Likes,” it could best a person’s spouse.
What’s more . . .
So fairly soon, I imagine, “Papers, please” will be no longer needed: it’ll all be on-line and available on the smartphones government enforcement personnel carry. And most adults now seem to carry a smartphone: instant data collection, network mapping (known associates, etc.), location, and so on.
It’s going to be yuge!