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UFPPC ( — 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 edition
published September 2010.

[Thesis. "Concentration of income and Ch. 3: The Basic Bargain. Eccles and
wealth at the top continues to be the Keynes understood the connection
crux of America's economic predicament. between income and demand (28-31).
. . . The answer . . . is to reorganize the
American economy so that its benefits Ch. 4: How Concentrated Income at
are more widely shared, as they were the Top Hurts the Economy. The
decades ago" (2)] problem: the rich don't spend enough
Introduction: The Pendulum. . The
alternative to the solution above is Ch. 5: Why Policymakers Obsess
"deepening discontent (and its ever About the Financial Economy Instead
nastier politics)" (3). Reich predicts a of About the Real One. Many
weak recovery (3-4). Around 1980 policymakers are biased toward finance
deregulation and privatization were because their own experience blinds
embraced, creating problems which have them to the real economy (38-43).
been patched up by temporary
expedients rather than the fundamental Ch. 6: The Great Prosperity : 1947-
reforms they require (4-7). 1975. The federal government ended
the Great Depression by "actively
PART 1: THE BROKEN BARGAIN creat[ing] the conditions for the middle
class to fully share in the nation's
Ch. 1: Eccles's Insight. Marriner prosperity" (44; emphasis in original).
Eccles, chairman of the Federal Reserve The means: reorganization of work,
Board (1934-1948), realized that increasing workers' bargaining power,
widening inequality chokes off prosperity increasing Americans' economic security,
by undermining mass consumption (11- providing low-cost mortgages, widening
18). access to higher education, and defense
spending (45-50).
Ch. 2: Parallels. The larger lesson of
the Great Depression went unlearned: Ch. 7: How We Got Ourselves into
"that when the distribution of income the Same Mess Again. During the
gets too far out of whack, the economy Clinton administrations, Greenspan's
needs to be reorganized so the broad insistence on cutting the deficit choked
middle class has enough buying power to off economic structural change (50-52).
rejuvenate the economy over the longer The problem is pay, not jobs (52-54).
term" (19). Analysis of income statistics The reason the pendulum failed to swing
1913-2007 along the lines of the 2006 back: power (lobbyists, campaign
paper by Piketty and Saez, "The financing, etc.) (54-60).
Evolution of Top Incomes" (20-25). The
Great Depression produced a new Ch. 8: How Americans Kept Buying
economic order, but the Great Recession Anyway: The Three Coping
has not (25-27). Mechanisms. Reich argues Americans
lived as if they were earning the higher
incomes they in fact might have had by
borrowing, working longer, and spending PART III: THE BARGAIN RESTORED
savings (60-64).
Ch. 1: What Should Be Done: A New
Ch. 9: The Future without Coping Deal for the Middle Class. Rather
Mechanisms. But these mechanisms than making a moral argument, Reich
can no longer avail (64-69). appeals to economics and politics (127-
28). Proposals: a reverse income tax, a
Ch. 10: Why China Won't Save Us. carbon tax, higher marginal tax rates for
The notion that Chinese demand will lift the wealthy, introduction of a
the U.S. economy is wishful thinking (69- reemployment system, school vouchers
74). based on family income, college loans
linked to subsequent earnings, Medicare
Ch. 11: No Return to Normal. Given for all, investment in public goods like
current conditions, the U.S. economy libraries and public transportation,
cannot return to normal (75-76). campaign finance reform (129-40).

PART II: BACKLASH Ch. 2: How It Could Get Done. So far
the Obama administration has not been
Ch. 1: The 2020 Election. Imagines able to address economic and political
the victory of an isolationist anti-big reform (141-43). Enlightened business
business, anti-big government leaders may embrace change (143-45).
Independence Party, with disastrous Optimism that Americans will embrace
economic consequences (79-81). reform rather than reaction (145-56).

Ch. 2: The Politics of Economics, Acknowledgments. Colleagues in
2010-2020. How the economy could dialogue, students, assistant, "my
tank (82-84). partner, Perian Flaherty," and agent.

Ch. 3: Why Can't We Be Content with Notes. 13 pp.
Less? The notion that we could learn to
be happy with less is seductive and Index. 12 pp.
partly true (85-89).
About the Author. Robert Reich was
Ch. 4: The Pain of Economic Loss. secretary of labor under Clinton. He is
But loss has more of an impact Chancellor's Professor of Public Policy at
psychologically than gain (89-92). UC Berkeley. He is the author of a dozen
books, most notably The Work of
Ch. 5: Adding Insult to Injury. Nations.
Growing inequality produces frustration
and resentment (92-100). [Additional information. Robert
Reich was born (with Fairbanks disease
Ch. 6: Outrage at a Rigged Game. —he is 4' 10-1/2" tall) on June 24, 1946,
Most intolerable and infuriating of all is in Scranton, PA. In 1968 he graduated
the sense that the game is rigged (101- summa cum laude from Dartmouth and
14). was a Rhodes Scholar. He holds a J.D.
from Yale Law School. After clerking for
Ch. 7: The Politics of Anger. These Judge Frank M. Coffin on the U.S. Circuit
factors will produce a nasty politics of Court of Appeals for the First Circuit, he
which the Tea Party is a harbinger (114- was assistant to U.S. Solicitor General
23). Robert Bork (1974-1976) and served in
the Carter administration at the Federal
Trade Commission. From 1980 to 1992 [Critique. Reich srtives for accessibility,
he taught at Harvard's Kennedy School, and his text is conversational, easy to
where he wrote a number of influential read, reassuring, upbeat, and concise.
books and articles. The Work of Nations As a result, his analysis can seem
(1991) argued that "human capital" was simplistic. Where is there evidence of
more important than financial capital. the "basic bargain" he keeps talking
Reich headed Bill Clinton's economic about, for example? — The terms of
transition team and served as secretary analysis are determinedly within
of labor 1993-1997. He is a prominent mainstream parameters. No mention
critic of the financialization of the U.S. here of plutocracy, militarism, media
economy. In 2007 Reich was concentration, and imperialism. —
commencement speaker at Pacific Reich's criticisms are offered in discreet
Lutheran University. In 2008 the Wall fashion, sparing obvious culprits like the
Street Journal ranked him 6th in a list of GOP, doubtless in order not to alienate
"influential business thinkers."] readers.]