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Reich - Aftershock (2010) - Synopsis

Reich - Aftershock (2010) - Synopsis

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Published by Mark K. Jensen
Synopsis of Robert B. Reich, Aftershock: The Next Economy and America's Future (Knopf, September 2010; Vintage paperback April 2011). -- Discussed at Digging Deeper (www.ufppc.org) on May 2, 2011.
Synopsis of Robert B. Reich, Aftershock: The Next Economy and America's Future (Knopf, September 2010; Vintage paperback April 2011). -- Discussed at Digging Deeper (www.ufppc.org) on May 2, 2011.

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Published by: Mark K. Jensen on May 02, 2011
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UFPPC (www.ufppc.org) — Digging Deeper CLVIII: May 2, 2011, 7:00 p.m. 
Robert Reich,
 Aftershock: The Next Economy and America's Future
(New York:Vintage Books/Random House, April 2011). Original Knopf editionpublished September 2010.
"Concentration of income andwealth at the top continues to be thecrux of America's economic predicament.. . . The answer . . . is to reorganize theAmerican economy so that its benefitsare more widely shared, as they weredecades ago" (2)]
Introduction: The Pendulum.
. Thealternative to the solution above is"deepening discontent (and its evernastier politics)" (3). Reich predicts aweak recovery (3-4). Around 1980deregulation and privatization wereembraced, creating problems which havebeen patched up by temporaryexpedients rather than the fundamentalreforms they require (4-7).
PART 1: THE BROKEN BARGAINCh. 1: Eccles's Insight.
MarrinerEccles, chairman of the Federal ReserveBoard (1934-1948), realized thatwidening inequality chokes off prosperityby undermining mass consumption (11-18).
Ch. 2: Parallels.
The larger lesson of the Great Depression went unlearned:"that when the distribution of incomegets too far out of whack, the economyneeds to be reorganized so the broadmiddle class has enough buying power torejuvenate the economy over the longerterm" (19). Analysis of income statistics1913-2007 along the lines of the 2006paper by Piketty and Saez, "TheEvolution of Top Incomes" (20-25). TheGreat Depression produced a neweconomic order, but the Great Recessionhas not (25-27).
Ch. 3: The Basic Bargain.
Eccles andKeynes understood the connectionbetween income and demand (28-31).
Ch. 4: How Concentrated Income atthe Top Hurts the Economy.
Theproblem: the rich don't spend enough(32-38).
Ch. 5: Why Policymakers ObsessAbout the Financial Economy Insteadof About the Real One.
Manypolicymakers are biased toward financebecause their own experience blindsthem to the real economy (38-43).
Ch. 6: The Great Prosperity : 1947-1975.
The federal government endedthe Great Depression by "activelycreat[ing] the
for the middleclass to fully share in the nation'sprosperity" (44; emphasis in original). The means: reorganization of work,increasing workers' bargaining power,increasing Americans' economic security,providing low-cost mortgages, wideningaccess to higher education, and defensespending (45-50).
Ch. 7: How We Got Ourselves intothe Same Mess Again.
During theClinton administrations, Greenspan'sinsistence on cutting the deficit chokedoff economic structural change (50-52). The problem is pay, not jobs (52-54). The reason the pendulum failed to swingback: power (lobbyists, campaignfinancing, etc.) (54-60).
Ch. 8: How Americans Kept BuyingAnyway: The Three CopingMechanisms.
Reich argues Americanslived as if they were earning the higherincomes they in fact might have had by
borrowing, working longer, and spendingsavings (60-64).
Ch. 9: The Future without CopingMechanisms.
But these mechanismscan no longer avail (64-69).
Ch. 10: Why China Won't Save Us.
 The notion that Chinese demand will liftthe U.S. economy is wishful thinking (69-74).
Ch. 11: No Return to Normal.
Givencurrent conditions, the U.S. economycannot return to normal (75-76).
PART II: BACKLASHCh. 1: The 2020 Election.
Imaginesthe victory of an isolationist anti-bigbusiness, anti-big governmentIndependence Party, with disastrouseconomic consequences (79-81).
Ch. 2: The Politics of Economics,2010-2020.
How the economy couldtank (82-84).
Ch. 3: Why Can't We Be Content withLess?
The notion that we could learn tobe happy with less is seductive andpartly true (85-89).
Ch. 4: The Pain of Economic Loss.
But loss has more of an impactpsychologically than gain (89-92).
Ch. 5: Adding Insult to Injury.
Growing inequality produces frustrationand resentment (92-100).
Ch. 6: Outrage at a Rigged Game.
Most intolerable and infuriating of all isthe sense that the game is rigged (101-14).
Ch. 7: The Politics of Anger.
Thesefactors will produce a nasty politics of which the Tea Party is a harbinger (114-23).
PART III: THE BARGAIN RESTOREDCh. 1: What Should Be Done: A NewDeal for the Middle Class.
Ratherthan making a moral argument, Reichappeals to economics and politics (127-28). Proposals: a reverse income tax, acarbon tax, higher marginal tax rates forthe wealthy, introduction of areemployment system, school vouchersbased on family income, college loanslinked to subsequent earnings, Medicarefor all, investment in public goods likelibraries and public transportation,campaign finance reform (129-40).
Ch. 2: How It Could Get Done.
So farthe Obama administration has not beenable to address economic and politicalreform (141-43). Enlightened businessleaders may embrace change (143-45).Optimism that Americans will embracereform rather than reaction (145-56).
Colleagues indialogue, students, assistant, "mypartner, Perian Flaherty," and agent.
13 pp.
12 pp.
About the Author.
Robert Reich
wassecretary of labor under Clinton. He isChancellor's Professor of Public Policy atUC Berkeley. He is the author of a dozenbooks, most notably
The Work of Nations.
Additional information. RobertReich
was born (with Fairbanks disease—he is 4' 10-1/2" tall) on June 24, 1946,in Scranton, PA. In 1968 he graduated
summa cum laude
from Dartmouth andwas a Rhodes Scholar. He holds a J.D.from Yale Law School. After clerking for Judge Frank M. Coffin on the U.S. CircuitCourt of Appeals for the First Circuit, hewas assistant to U.S. Solicitor GeneralRobert Bork (1974-1976) and served inthe Carter administration at the Federal

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