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How the Self-Help Industry Hustles America

Positive thinking is not going to cure massive inequality or Wall Street predation.
 
 
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For all the howls of rage from plutocrats like Tom Perkins and Ken Langone over possible tax rate increases, there has been relatively little public anger about the increasing wealth disparity in the United States — especially compared to the past.

During the Progressive era in the early 20th century and the Great Depression, we saw violent strikes and marches on Washington. These days, we have an army of sometimes-intemperate bloggers and a labor movement so bereft the United Auto Workers union recently failed to mobilize workers in a Volkswagen factory in Chattanooga, Tennessee. Occupy Wall Street, meanwhile, is now a distant memory, even as more than half of all Americans say they believe the nation remains in an economic recession.

So what changed? Kathleen Geier speculates in the Washington Monthly that the mainstream media no longer reflects the values of the working class. That’s true, but it’s more complicated than that. In fact, the media reflects our values all too well.

We’re a nation founded on the Protestant work ethic. Our forefathers came to America with the idea that diligent efforts and thrift demonstrated both godliness and virtue — and would result in worldly success.

The self-help industry is the modern secular version of our grounding myth. It’s a $10 billion annual business that sells its services by claiming there is almost no problem — from weight loss to financial struggles — that can’t be overcome with grit, determination and willpower.

So if you fail in your goal or fall behind: It’s your own fault.

Self-help now has international appeal. But it still holds greatest sway in the United States where, as Thomas Frank recently noted in Salon, positive thinking is “the great American tradition.”  Post 2008,   Time magazine dubbed CNBC personal finance guru Suze Orman the “Queen of the Crisis” and radio show moneyman Dave Ramsey achieved new heights of popularity by telling Americans they are “stupid” when it comes to handling their money.

Take a look at American attitudes toward mortgages and credit. During the real estate bubble, people were lectured by everyone from bankers to elected officials to self-appointed pundits to buy homes with whatever money they could rustle up.

“The single greatest barrier to first-time home ownership,” President George W. Bush observed in 2002, is a high down payment.” Government programs soon kept pace with Wall Street in offering no-money-down home loans. Easy credit was offered to almost anyone who wanted to own their own abode. Books appeared on the bestseller lists with titles like The Automatic Millionaire Homeowner. Federal Reserve Chairman Alan Greenspan told home-buyers to give up on conventional 30-year fixed mortgages and sign up for exotic adjustable-rate loans instead.

When the real estate market went south and the economy crashed, who did we believe should take responsibility for the mess? Well, as Dean Starkman noted in a recent New Republic article, twice as many people blamed the 2008 economic crisis on home-buyers who borrowed too much money, rather than Wall Street and the financial services sector, according to a 2010 poll.

Then there’s day-to-day budgeting. We’re routinely excoriated for purchasing lattes, smartphones and other supposed luxury items. These are, after all, actions within our control.

Unfortunately, they are not the actions driving our financial woes. That would be the soaring costs of healthcare, housing and education — things that go all but unmentioned by the self-help industry. So does the fact, as Paul Krugman blogged recently, that real hourly wages for 60 percent of men have fallen, not risen, since 1973.