Log cabin to White House? Not any more
The State We're In, Will Hutton's explosive analysis of the British economy, caused a storm and became an instant bestseller seven years ago. Now, in The World We're In, he turns his attention to the global picture. In this exclusive extract he argues that the US can no longer lay claim to being the land of opportunity

America is the most unequal society in the industrialised West. The richest 20 per cent of Americans earn nine times more than the poorest 20 per cent, a scale of inequality half as great again as in Japan, Germany and France. At the very top of American society, incomes and wealth have reached stupendous proportions. The country boasts some three million millionaires, and the richest 1 per cent of the population hold 38 per cent of its wealth, a concentration more marked than in any comparable country.

This inequality is the most brutal fact of American life. Nor is it excused by more mobility and opportunity than other societies, America's great conceit. The reality is that US society is polarising and its social arteries hardening. The sumptuousness and bleakness of the respective lifestyles of rich and poor represent a scale of difference in opportunity and wealth that is almost medieval - and a standing offence to the American expectation that everyone has the opportunity for life, liberty and happiness.
[read more]

thanks to Cursor

----------

What Europe can teach Uncle Sam
In the second extract from his eagerly awaited new book, Will Hutton reveals why the American economic miracle is not all it seems

The story of Boeing is a salutary lesson. In the mid 1960s its organisational reason to be was clear. This was a company dedicated to technological excellence and building the best planes in the world - and it did. In the mid 1960s it embarked on the then vastly ambitious project to build the 747, the jumbo jet - in effect betting the company on a vastly expensive technological risk. Boeing pulled it off, but not before laying off 60% of its workers and risking bankruptcy before its first sale of a jumbo. As it reaped the rewards, in 1987 corporate raider Texan T Boone Pickens came along, an apostle of southern raw capitalism, a Reagan supporter and founder of the US Shareholders Association which is committed to putting profits first. Like other raiders, his objective was to dismantle large organisations, stripping them of cash and assets in order to unlock "value" and so make a profit as long the disposal proceeds were greater than the purchase price.

Pickens was seen off, but Boeing was never the same again. Plans for new planes were frozen, R&D spending was slashed and close to 50,000 workers were laid off in an attempt to prevent another takeover bid or corporate raid. Throughout the 90s, Boeing's object has been on building rapid earnings growth rather than developing new planes; its reason to be has become the maximisation of shareholder value, allowing it to develop businesses outside aerospace - but so losing organisational focus.
[read more]

thanks to Doc Searls

I know something of Boeing — I worked there for 25 years. (Laid off once and quit four times.) I started out in 1965 and it was, as Will describes, a focused airplane company. That's what we were about — building airplanes. Now it is maximizing shareholder value. The people buying the airplanes are not the number one customer — the shareholders are. It's insane.