We're Not Victims, Thank You
By Karl Zinsmeister

I was "downsized" out of a job by a financially ailing organization six months after I got married. My wife was four months pregnant. I had just bought a house.

It was one of the best things that ever happened to me.

That’s because I used the dislocation to launch myself as a self-employed writer. I free-lanced on my own for the next eight years. It was a very tough road financially (I never came close to matching my salaried income in any of those years)—but it got me established in an extremely competitive profession. Would I have had the nerve to jump off the diving board if I hadn’t been pushed? I think so, but probably not as quickly. Absent the nudge, it certainly would have been easy to put off such a risky move.

My story is not at all unusual. A large proportion of middle-level workers who lose their jobs through downsizing end up employing themselves in their own businesses. One can be sure that over the next year there will be lots of small operations set up in northern New Jersey and across the rest of the country by the men and women released from at&t. There will also be little boosts felt at hundreds of existing firms as they sign up ex-at&t people possessing just the skills they’ve been looking for. Already, high-tech firms like Cypress Semiconductor are crowing about the mini-bonanza these newly available workers represent to competitors who are hiring. While some tough decisions will have to be made, we know that most rehired job losers do as well (or better) financially and otherwise in their new position as they did in their old.

I’m not suggesting that the more management downsizings that take place the merrier we’ll be. I merely note that there are advantages to both individual workers and the nation as a whole associated with living in an economy where there is lots of new activity and job flow. Workplaces where every position is securely frozen in time would not only be inefficient, they would be oppressive.

Can coping with a dynamic workplace sometimes be painful? Sure. But most of the political speeches and wailing news stories being printed and broadcast today are grossly misleading in two ways. First, they badly exaggerate the frequency, nature, and severity of economic dislocations. The New York Times refers to "an unrelenting angst that is shattering people’s notions of work and self and the very promise of tomorrow." Newsweek runs menacing mugshots of business leaders under the headlines "Corporate Killers" and "The Hit Men." Business Week says today’s economy is "a high-wire act for everyone." Labor Secretary Robert Reich argues that "there is something terribly wrong, terribly un-American about the fact that the economy’s prosperity is bypassing...most full-time workers." He writes in the Washington Times that "the growth in inequality and the precariousness of the middle class are stunningly obvious."

Oh really? I invite the Secretary, and all other readers, to look over the evidence we have assembled in Indicators and the articles starting on pages 26, 35, and 40. A great many errors of fact are currently floating around on this subject; in fact, most of the claims about today’s American economy being unproductive, unfair, or otherwise in trouble are just bunk.

I’ve documented the improvements in American living standards fairly methodically in recent issues of this magazine, so for our purposes here I’ll just note that the proportion of national income controlled by the bottom 20 percent of U.S. families, the middle 60 percent, and the top 20 percent is the same as it was in 1950. During the last decade the middle class has shrunk a bit, but not because it is growing poorer. Rather, a substantial number of formerly middle-class families have graduated into the upper income brackets.

Overflowing all around us are hints of this. Consider, for instance, that more than 200,000 personal watercraft were purchased by American families in 1995—a 41 percent increase over 1994. The average length of these boats was 16’ 9", and the average cost was $5,722. Record purchases of appliances, the rising size of homes, more vacation trips, and many other indicators point in this same direction. Middle classes being bypassed on the road to prosperity do not buy trinkets such as these.

Even more grating than the factual truthlessness of today’s economic conventional wisdom is the way it portrays the working men and women of this country. The main message is that today’s Americans are fragile. Vulnerable. Buffeted by cruel, worldly winds. Helpless victims, through and through. Someone’s got to save the poor dears. Preferably someone powerful, like a big, avuncular corporation, or a warm-hearted national politician who feels their pain.

For an example of this, go to your local library and read the sappy New York Times series that we criticize in our lead feature story (page 26). One of the Times victims is a family living in a $700,000 six-bedroom house in a gated island community, now facing the terror of scaling back to a four-bedroom place in another gated community. Another pawn got a year’s severance pay when he was downsized out of a job. But that was nearly three years ago, and he is still beating the bushes for a decent replacement position, so he’s had to tap into his $300,000 savings account to keep up appearances. He juggles his mix of mutual funds, stocks, and bonds, "trying to squeeze out every penny." He’s also pinching expenses, sometimes sharing rides to work with his wife because "the transmission in the Mercedes slips so badly." Another man, dislodged from a job in Dayton when his company was taken over, rebounded into a new position in Gainesville, Florida, but suffers the indignity of having to commute there every week—flying his own plane.

Astonished by the Times’ taste in victims, I could only think, as I read these tales, of the joke about the yuppie who crashes in a rainstorm and crawls out of the wreckage moaning that "my bmw is ruined! Ruined!" "At least you’re alive, man. Be thankful," consoles an onlooker. "Oh, but my bmw," he sobs. Then the woman notices his arm has been severed at the elbow. "Good heavens, man, you’re hurt!" she cries. The man takes one look at his wound and screams, "Aauuugh! My Rolex!"

One of the more galling aspects of today’s hullaballoo is that there should be so much more squawking over economic adjustments now (when it is mostly managers who are being let go) than in times past (when it was more often hourly workers who had to find new jobs). As Jonathan Marshall notes on page 28, much of this is just media myopia: "The victims of job loss these days are white-collar professionals on the two coasts—the sort of people journalists in major media centers know and relate to." What must the average autoworker in Flint, Michigan, who lived through 20 percent unemployment to get his industry back on track, think of the press wailing over today’s comparatively modest realignments?

The big conglomerate corporations of the 1950s to 1970s may appear to have offered perfect security to workers, but that is an illusion. As many people lost their jobs then as now (see page 18). And think of what those sluggish, bureaucratic corporations produced: Clunky black at&t phones with service that hardly improved at all over a whole generation. Junky, chrome-drizzled cars that were more expensive to run, less well built, and dirtier than anything we have now. And lots of other cookie-cutter products and services that didn’t satisfy personal needs or extend human options nearly as well as today’s companies manage to.

One of the things about this year’s presidential primary that surprised and disappointed me was the willingness of some Republicans to buy heavily into this view of American workers as victims in need of shelter. They seemed oblivious to the fact that such an interpretation of the world leads inevitably to statism. The economics long favored by the Left, and recently favored by the Buchananites, would have frail U.S. farmers and steelworkers and phone company managers looked after by either big government or big mama corporations operating under government fiat. Whatever happened to the quaint concepts of self-reliance, adaptability, and competing to win? I’m sorry, but at&t isn’t anyone’s mother. It’s a business. If you want someone to love, clothe, and protect you forever, look somewhere other than the workplace.

As we mull this question of worker insecurity, perhaps we could keep in mind that we’re talking about grown-ups here, people sprung from forebears who defined disaster not as having to live in four bedrooms instead of six, but as having a cloud of grasshoppers eat next year’s food supply while it was standing in the field, when the nearest civilization was two hundred hostile miles on foot. This view of American sturdiness is not just nostalgia. Today as in the past, when Americans are asked to choose between a secure, static world and a freer world where there is more risk but also more opportunity, most will choose freedom. Note on page 21 how starkly we differ from the Japanese on this. We are the land of the free precisely because we have been the home of the brave.

Dynamic change has always been the norm in America—just as stasis has been the norm for most other human societies of the last 10,000 years. In 1949, experts forecast that "computers in the future may weigh no more than 1.5 tons." It is mainly thanks to a bunch of restless Americans that they weigh a heck of a lot less than 1.5 tons today. It is easy, especially for those lacking imagination, to look upon the bubbling cauldron where the future is being smelted and see not fresh creation, but only turmoil. It is equally easy to look at a snapshot of one’s own era and conclude that all the doors are closed, that tomorrow’s winners will be exactly the same as today’s.

In a country like ours, such views are ignorant. Many readers will be aware that the Dow Jones Industrial Average is a hundred years old this year. But are you aware that of the 12 blue-chip companies included in the original average, only one (General Electric) has survived? The rest either went out of business or merged into some other enterprise. Likewise, of the 100 largest companies in America at the close of World War I, only 22 continue on that list today.

Or look at American dynamism from the perspective of individuals. Obviously it is enormously easier to stay rich than to become rich. So how many of the people on the Forbes magazine tally of America’s 400 wealthiest individuals do you suppose inherited their fortune? Try 82. The other four out of five are self-made.

The decline of the mighty is always big news. What often evades the headline writer is the good news of the rise of economic newcomers. People worry when they hear that tens of thousands of workers will be released by Bell companies. What they never hear about is that other companies, often smaller ones, are adding workers every week. Over the past two years alone, the telecommunications industry in America has created 100,000 jobs, and it’s estimated that 3.4 million more will be created over the next decade thanks to deregulation. Most of those Bell people are going to be just fine.

Admittedly, living in a system of dynamic change and renewal can sometimes require steely nerves and brave hearts. But the alternative is far grimmer. If Chrysler had not shed thousands of jobs more than a decade ago, it would have gone bankrupt and left all of its employees in the lurch. Instead, it downsized, allowing the company to rebound and prosper to the point where over the last five years the company has added more than 15,000 hourly workers.

In any case, in a country with an unemployment rate of five-percent-plus-change, it seems more than a little hysterical for the newspapers to be talking about economic "trauma," "loss of identity," and "the guilt that psychologists label survivor’s syndrome" (supposedly rampant today among people who haven’t been killed, er, I mean laid off). The New York Times portrays Dayton, Ohio, in the wake of ncr layoffs as a ruined shell. Only later is it revealed that the unemployment rate in the county is just 4.8 percent.

Having to pull cash out of your six-figure investment account to fix the Mercedes sounds like a drag. We’re pretty confident, though, that the laid-off executives profiled by the Times aren’t living on mashed turnips this month, even if the reporter who collected their stories does inform us that he tested his "high threshold for tears" in the process.

As economics writer Robert Samuelson noted in one of his searing responses to the Times series (extracts reprinted in this issue), what spawned these stories "is a contemporary consciousness, shared by many journalists, that assumes that people are entitled to life without worries, setbacks, or conflicts—and that anything less is a ‘crisis’ and a ‘big story.’" The day we get ourselves into the position where "every personal angst or societal defect merits public sympathy and maybe a governmental solution," Samuelson recognizes, we will become paralyzed, and cease to exist as a bold people.

The two minor themes of this issue fit with the major topic in several complementary ways. Our first side-theme, connected to the opening of the Summer Olympics in Atlanta, is sports. In a variety of personal stories we look at the ways that participation in sports can train us in moral living—sometimes by negative example as much as positive. The first lesson of sports is that when you fall down, you get up. And when you fall down again, you get up again. Occasionally you will be knocked down. And then it is most important of all that you get up. Athletic activity forces us to face hard truths about ourselves. Either you sank the jumpshot at the buzzer or you didn’t; sports will quickly cure a lack of reality. These kinds of lessons are directly relevant to what I have been talking about in my previous paragraphs. They encourage precisely the kinds of behavior that make citizens self-reliant, productive, and independent in the economic sphere.

The third theme of this issue is Russia—which is this month in the midst of some monumental choices about its future. In four articles plus a fascinating collection of polls we provide some strong hints as to where this critical friend-and-foe is heading. Russia stands at a political crossroads. She also stands at a critical economic crossroads. The Russian privatization program has been one of the most successful in Eastern Europe, and leaves the nation poised for what our correspondents Richard Layard and John Parker predict could be the globe’s biggest economic boom of the next generation. But first a few critical hurdles must be passed.

One is simple fatalism and lack of initiative. The awful incentive structure of communism, plus its literal elimination of Russia’s kulaks and other entrepreneurial types, deepened this problem, but it pre-dates Bolshevism. Recall the economic dithering in Chekhov’s The Cherry Orchard, where superstitious serfs and ineffectual aristocrats and intellectuals dream vaporously of inheritances or lottery wins that will pull their financial chestnuts out of the fire.

Another dangerous hurdle facing the Russians is their traditional envy of success in others. There is an old joke about a Russian peasant who, upon learning he is to die the next day, is asked to name the one pleasure he would like to experience in his last hours on earth. "To watch my neighbor’s barn burn down," he answers. Another of many similar tales is repeated by my colleague Michael Novak: God appears to a babushka to say that she will be granted any one wish, but that her neighbor will get twice of the same. Her instant request: that one of her eyes be poked out. In such folk stories is a great deal of national psychology recorded.

As we in America hear new voices stoking class resentments, feeding fear of competition, and starting visceral arguments over income inequalities, we might think about Russian envy and fatalism, and where it has led them. For while Bolshevism is the final stop for the train of economic jealousy, there are many gloomy intermediate stations all the way down the line.

Let me close on a brighter note: I live in a very liberal college town, and one of the groups marching in a parade I attended with my family this week was the local chapter of the Democratic Socialists of America. Yes, they were all sporting placards, and, yes, they were chanting economic slogans. But what was more interesting to me was that almost every one of them had gray hair. Without making too much of this little indicator, I will note that the high point of class agitation and economic envy in this country came in the 1930s. Perhaps as the Marxist era fades into the past, we will hear fewer clichés about the "economic injustice" of America, and see less agitation on behalf of financial leveling carried out by the state.

Or at least we can hope.