Chapter 1: Coming Up in the Great American Middle Class

ASK NOT

The memories remain stark and vivid in my mind. I was 20, a college student studying history and government at Texas Christian University. I was in a special place, my hometown of Fort Worth, with a special person, my future wife of 54 years. I had met Jeanne at a student government meeting, and that cold and drizzly morning was our very first date. I picked her up at 7:00 a.m. and drove several miles from her parents’ upscale neighborhood to downtown Fort Worth. I parked my Chevy Corvair as close as I could to the Texas Hotel, and fumbled with my umbrella, not wanting my date to get her hair wet.

Weaving our way through a crowd of several thousand excited people, we managed to get within a long baseball throw of the speaker’s platform. I cannot say that I remember much of what President Kennedy said on the morning of November 22, 1963. There was a lot of noise and the public address system was not very good. But I can remember how I felt. As the President spoke, the words I had memorized from his famed inaugural speech in 1961 ran through my mind:

“Ask not what your country can do for you, but what you can do for your country.”

That morning in Fort Worth, the President put the world on notice that “the torch [had] been passed to a new generation of Americans, born in this century, tempered by war, disciplined by a hard and bitter peace, proud of our ancient heritage, and unwilling to witness or permit the slow undoing of those human rights to which this nation has always been committed.” The words spoke to me then, and now.

President Kennedy defined patriotism in a new and inspiring way. His was a patriotism that called on us to mobilize and make America better. To me, John F. Kennedy embodied a nation of hope and confidence—the hope that America would continue to overcome whatever challenges might come our way, and the confidence that no matter what the obstacles, we would succeed. Seeing the young and active president in person, I did not need any more persuading. I bought in and I wanted to be a part of it. Despite the dark sky and drizzle, the morning of November 22^nd could not have been brighter for me and my wife-to-be.

After the speech, I took Jeanne back to TCU, and I went to class. I left the campus at 11:55 a.m. and met a friend at his apartment for lunch. We made ourselves sandwiches, poured a couple beers, and turned on the television. Then we heard the news. As Walter Cronkite told the world about President Kennedy’s assassination in Dallas, a short drive away, we sat in shocked disbelief. The tragic news would end America’s age of unbounded optimism.

WHEN PUBLIC SCHOOLS WERE GOOD

Looking back, it is easy to understand why I believed so fervently in America’s future. On that morning, no goal seemed beyond our ambition. The only limit to achievement was our national will, and will was in plentiful supply. After all, we had survived the Great Depression, won World War II, and spearheaded the noblest example of a post-war peace plan in history. Manufacturing, technology, global trade, and the rise of the American middle class had created the largest and most powerful economy in the world.

For families in the American suburbs, the 1950s and early 1960s were prosperous decades. Middle-class households were on a definite upswing, and each year seemed better than the year before. College educations were affordable, and well-paying jobs were plentiful. Our dads could earn good livings as gas station or grocery store owners, as bankers or bookkeepers, as auto or steelworkers, and as teachers, firemen or policemen. Households could manage on a single income, so moms were able stay home to rear kids. The only barrier to working was the unwillingness to work, and everybody I knew was more than willing.

Before the post-war economic boom took off, however, times were rough for millions of Americans, including my family. My father was a military veteran who served on the European front during World War II, fighting in the Normandy invasion against the Axis nations. After Daddy returned to Texas, he went to work for a federal government agency in Midland before moving us to Fort Worth to work for the U.S. Veterans Administration.

It was right after the war, so we lived with other families in temporary government housing. There were communal showers and bathrooms, and no electrical appliances. It looked like a military camp without the soldiers and barbed wire. The rundown military barracks lost their roofs during fierce windstorms, and I still can remember Daddy trying to hold on to the ceiling during one of those storms. We did not consider ourselves poor. This was just the way that people lived after World War II. It was almost like living out of a suitcase. It was hard on my mother, but she was used to that.

My mother, Louise Hinkel Moon, came from a hardworking and prosperous South Texas ranching family. The Hinkels were sturdy peasant stock who had emigrated two generations earlier from Germany. After a couple of moves, they settled in the early 1920s smack dab in the middle of La Salle County near Cotulla, a dusty old railroad stop and small agricultural town about 60 miles north of Laredo. Moving to La Salle County in the early 1920s meant that the Hinkels would have to live in a tent for several months while they dug a 20-feet-deep, brick-lined cistern to store rainwater. After completing the cistern, the Hinkels built a small wooden farmhouse and barn from lumber that they trucked in from Corpus Christi over 150 miles away. Life was not easy for the Hinkels.

During the 1920s and 1930s, the Hinkels eked out a living as ranchers raising cattle, chickens, goats, and hogs. It was tough, but they survived the Great Depression years with a lot of hard work, even adding two more sections to the original family homestead. My mother, the first in her family to go to college, graduated from Southwest Texas State Teachers College in San Marcos, Texas (a few years after its most famous graduate, President Lyndon B. Johnson).

When I was four years old, we moved into our first house. It was a small, wood-frame residence—all of two bedrooms, one bathroom, and 850 square feet—at the base of Seminary Hill, near the Southwestern Baptist Theological Seminary in southwest Fort Worth. I can still remember my mother sitting on her new bed and mattress, the only furniture in that empty house. She was so proud to have her own house and her very own “Hollywood” bed. In the post-war era, moving into that house was the start of our middle-class American Dream. Fifteen years later, we moved to an air-conditioned, brick house in Wedgewood, a neighborhood several notches above the old one. I still can remember the thrill of sleeping in an air-conditioned house!

My parents were not rich but their love and support were well above average. This put me and my younger brother, Bill, on equal ground with the children of the well-off who had much more money and far more privileges than the kids of a schoolteacher and a government worker from a lower-middle-class neighborhood. So, in some important ways, we were blessed with the same opportunities for upward mobility as the wealthier kids. For me and other children of modest backgrounds, education equaled opportunity.

In Fort Worth, we had plenty of public schools (B.H. Carroll Elementary, Rosemount Junior High, and Paschal High School) that prepared the willing and hardworking with the tools to take full advantage of college and beyond. In Paschal High, the rich kids bragged about going to Rice University and Ivy League schools, but there were plenty of affordable state universities and colleges for the rest of us. Any high-school graduate with a summer job or part-time job could get all the higher education they could stand, with little or no debt after graduation.

In the early 1960s, I attended TCU on what I called a “Sears & Roebuck scholarship.” When I was not studying, I worked as a stock boy for minimum wage. With free room and board at my folks’ home, I could earn my bachelor’s and master’s degrees in government with no debt.

Before going to law school, I served in the U.S. Air Force as an intelligence officer during the Cold War. I supervised the preparation of target folders on old Soviet Union military and industrial targets for our B-52 bombers. I am very proud of my service. The military took a kid from barely the right side of the railroad tracks and helped him take his first steps toward being a man.

Money in law school was a challenge, but I was fortunate to graduate from the University of Texas School of Law in two and a half years with no debt. For the cash-strapped college graduates of today, let me repeat: I earned three degrees with no debt, thanks to help from my wife, Jeanne, who worked as a receptionist/typist at the local paint store, and the GI Bill of Rights, which helped military veterans with education and housing costs. My tuition and books came to $150 a semester—surely the best deal in education on the planet. As much as I appreciated the boost from our government and generous taxpayers then, I appreciate it even more now, 50 years later.

CLIMBING THE GREASY POLE

After the military and law school, I spent the next 40 years building my career. For me, the path to success was not linear. With each new job, I started at the bottom. Rather than climbing a straight career ladder, it was like climbing up a greasy pole on which I would make a little progress, and then slip backwards. Every time I finally got enough feel for what I was doing, I would resume the climb upward, usually to slip back down a little before pulling myself back up. Learning to climb a greasy pole can be a great life experience if you make the climb. Luckily, I made it high enough.

In my first job out of law school, I worked as a legislative aide and later as a political campaign aide to the late Wayne Connally, former state senator, Texas lieutenant gubernatorial candidate, and younger brother of the late John Connally, former Texas governor and U.S. Treasury Secretary. Working in the wild-and-wooly Texas Legislature, and on a major statewide political campaign, provided me with practical insight into the world of politics and public policy that no academic degree can confer. Learning how things work in practice, as opposed to theory, proved an invaluable lesson in policymaking.

When Connally lost his race, I got a job as an attorney with the Internal Revenue Service in Philadelphia, Pennsylvania. As a native Texan, I was a fish out of water in Philly, but after a year and half, I landed a job as an enforcement attorney with the Securities & Exchange Commission in its Fort Worth Office. Later, I was promoted to chief enforcement attorney and then to assistant regional administrator for the Houston office.

While with the SEC, I worked on some big cases. I saw how fraud and manipulation affected the capital markets, and I saw that if you accept that kind of behavior, you are taking money from the good guys and giving it to the bad guys. If the market is left to the law of the jungle, those who cheat will beat out those who play by the rules, and instead of money being allocated based on effort and innovation, it will be allocated based on lies and deceit. Real capitalism abhors lying and cheating, but without regulations that prevent them, capitalism can degenerate into theft. As an SEC enforcement attorney, it was my job to stop lying and cheating in the capital markets. In fact, my role there remains the favorite of my career.

After working in the government, I spent three decades in private practice as a public finance lawyer and partner at law firms in Dallas, including my solo practice in 1996. In public finance, I worked with cities, states, and public agencies to raise billions of dollars in the municipal bond market to finance projects such as schools, hospitals, housing, office buildings, manufacturing plants, and college dorms. In doing municipal bond deals, I worked closely with local, state, and national-level politicians; commercial and investment bankers; auditors and accountants; Wall Street analysts; and business executives of all kinds. As a legal insider and a government regulator, I saw firsthand how power and money worked.

Deal-making has taught me how government and private business work from the inside out and how they relate to capitalism. Success in private business depends on getting an edge. Any edge in business based on effort and innovation makes capitalism work better, but any edge in business based on cheating corrupts capitalism. Speaking as a veteran of both government and private business, capitalism works best when cheating is kept to a minimum.

KEEPING THE AMERICAN DREAM ALIVE

A half-century of life experience after November 22, 1963 has sobered my thinking on many topics, but one conviction has remained constant: my belief in JFK’s famous call to action to our nation, “Ask not what your country can do for you, but what you can do for your country.” How could it be otherwise? America made it possible for me to lead the life of my choice. The only limit to achieving my aspirations was my ability and my industriousness. As sappy as it may sound to cynics, I have truly lived my version of the American Dream.

However, in recent years, globalization, technological innovation, and the up-and-down economy have taken their toll on our national psyche and our pocketbooks. Recessions and stock market crashes, mass layoffs of the American workforce, fierce competition from foreign companies, and other factors have led to the long and steady decline of the middle class—the driving economic force of our nation. All this makes it harder for a middle-class kid today to have the same faith in the future that my generation had in the early 1960s.

Many of today’s upper-middle-class consumers and homeowners are the children of middle-income and low-income families of the 1950s and 1960s. Many of my generation took advantage of a great public education and easy accessibility to college to have successful careers that made their parents proud. Unfortunately, many of the well-paying, middle-class jobs of the post-World War II era have faded into history. Nowadays, students and workers must be smarter and better educated than ever before to get ahead. Hard work and smarts may make them good night managers at fast-food restaurants, but without good educations and specialized skills, this generation has little or no chance of landing a job capable of supporting a family while also saving for college.

Regrettably, just as college has become more critical for economic success, it has become far more expensive. Only the children of the rich can graduate without financial help from the federal government or the universities. Children of low-income and middle-income families are losing out, and they will find themselves sinking lower on the income rung for decades to come.

A divided America in which millions have lost hope in their future would mean a country incapable of making the political changes necessary to maintain its status as an economic, political, and military superpower. In a world of American decline, American exceptionalism will only be a fading memory for those who remember a better day. Only by preserving the American Dream for all who are willing to work can America avoid economic decline and a resulting splintered political landscape.

Just a half-century after America’s golden economic era, the middle class could become an endangered species—a lost economic generation. Restoring the spirit of upward mobility that is the American Dream is among America’s most critical challenges for the future. We still have an opportunity to turn this around, but it will be up to us citizens to learn about the forces that are defining our present and near future, and to take the actions necessary to mitigate the effects before it is too late. Tax policy—what the level of taxes will be and who will pay them—will play a leading role in what kind of future America’s middle class can expect.