Explores the familiar assessments of contemporary American mainstream (rightist) economic and social policy thinking initiated by Reagan and Thatcher in the 1980s. The author supports the diagnosis that unbridled pursuit of private gain is weakening the social contract, in America and the capitalist part of the world. His prescriptions for mitigating the negative effects of this unregulated pursuit of private profit, as outlined in the final chapter 'A New Deal for the Middle Class', include : a 'reverse income tax' or 'wage supplement' to put spending money back into tha hands of the least well-off; a carbon tax on fossil fuels; higher marginal tax rates on the wealthy; a 'reemployment system' that will help people who lose their jobs to get back into the jobs market; school vouchers based on family income; lightening the burden of college loans so that the less wealthy are not deterred from seeking higher education; Medicare for all; a sizeable increase in public goods like public transportation, public parks, museums, librarries; reducing the role of money in politics. The whole picture is one of Social Democracy as developed in Western Europe, in contrast to the unfettered private financial capitalism of the Reagan-Thatcher axis. ( )

another solid entry from Reich, somewhat dated (as expected), still one of my favorite authors writing on politics and economics ( )

This is one of the books I have collected during my four-year stay in New York. These years were very difficult for me and I was plagued by a sense of deep disappointment with the dissonance between my image of America and the reality I lived every day. Even in affluent New York, you can see that things are going wrong for the majority of the working-class, you can see the growing divide between Walmart shoppers and the clients of 5th Avenue, it is not pretty.
I tried to understand all this by accumulating books on the subject of the financial crisis and the mortgage fiasco. I had a nascent interest in economical theory that I never developed because as worker in the giant mill of the city I had too much to worry about, and never any time to think. In comparison to most Americans I had a cushy and well-paid job, but the unease of living in this human mill permeated my soul and I had to escape to preserve my sanity. Now I catch up with my reading and learn about the source of my unease.

This book gives an excellent idea about what is happening in the American economy. It even gives a dire prediction about the rise of populism (a version of which has indeed come true in the Trump presidency). What is put forward here is that the state must keep a basic bargain with its working class. They need to be able always to buy what they produce. Because oncethe working-class are unable to do so, having exhausted their coping strategies and sources of credit, the economy will also stop growing. Higher taxes for the rich are not a punishment, they have to be applied to the advantage of everyone including the rich who will make bigger profits in a growing economy. The middle class is the engine that keeps the economy running, buying products and services, so by curtailing their spending power and limiting it to paying for necessities like healthcare and education the market will face an inevitable slowdown. It is a very potent idea and I think it has its merit. I have anecdotal evidence from comparing Berlin to New York. ( )

After-Shock, The Next Economy and America’s Future, by Robert Reich (pp 146). This is, I believe, the only book I’ve read on economics, but Reich’s economics-for-idiots style made this a good place to start. He is the former Labor Secretary under Bill Clinton and is currently a professor at U of California at Berkeley. Much of the book is his take on the Great Recession of 2008, its causes, comparisons of economic conditions in other periods of the modern U.S. economy, and—as the subtitle states—ways the government can tackle what he sees as flaws in the U.S. economy, including a number of specific new policies. As you can guess, his findings and suggested solutions are likely to be attractive to the left and heretical to the right. I believe his basic premise is that we are in an economic fix in large part because of the widening gap between top earners and the middle & lower classes (meaning you and me). The current gap, arguably an abyss, mirrors similar statistics prior to the Great Depression. As wages have stagnated—-a decades long trend—the middle class no longer consumes at previous rates despite aggressive and arguably unhealthy borrowing. One significant impact of less buying power of the vast majority of Americans means they can buy only a fraction of this nation’s capacity to produce. That means they (we) are no longer capable of sustaining economic growth; our buying is no longer pumping the economy like it did when wages were higher and growing. One result of the concentration of money in the megarich is reduced domestic spending because the wealthy buy far less as a percentage of earnings than the rest of us. The middle class spend most of what we earn out of necessity, so if our share of the economy is smaller (and it is now much smaller), and we can pump far fewer dollars into that same economy. No surprise, Reich takes great exception to the conditions that led to the most recent and catastrophic recession, including a largely unregulated Wall Street and the concentration of banking in institutions. Why does that matter? Because when those banks and investors that are too big to fail crash, they are bailed out by the taxpayers (increasingly the lower wage masses), which means the wealthy are insulated from the negative impact of their own failures and the people least able to afford it bear the burden. (This is my unsophisticated takeaway.) The solutions Reich offers are ways to restore balance in the economy and to narrow, not close, the gap. You can read the book for those proposed solutions that go beyond higher tax rates for big business that has thrived while wage earners suffer.

This was a surprisingly interesting book, though I had to take it slowly to keep from frying my brain. ( )

Readers can tell that Robert Reich is a college teacher; it shows in this book. He is very good at explaining exactly what happened to the economy in this current climate and why it happened. More importantly, he outlines very well what will happen unless this nation and its people decide on some serious, substantial, meaningful changes. And yet, this is a short book, which makes it pretty easy to read. What I found fascinating is that what is happening is not really new for one. We faced a lot of this during the Great Depression. In some ways, the situation is the same, but the names and players have changed, so to speak.

The problem is not one of Americans simply having spent past their means, which they did. This is not to be denied. The real problem is their wages have not kept up with the times, and employers and the wealthy have broken the social contract where we all pay fairly and gain benefit from shared prosperity. When you have billionaires like Warren Buffet actually saying that he should be taxed a lot more, that is a hint of Professor Reich's argument. I found myself making a lot of little notes, which you can see in my reading updates for this book for the book offers some good points and a lot to think about. The potential scenario of an "Independence Party" candidate winning the White House along with Congress should scare the daylights out of people not matter what side of the political spectrum you are in. And yet, we get a very good explanation of how it will happen if things keep going at the same pace as well as how to avoid, which is the option that will take work. Many passages in this book caught my eye, but I think the one I want to share with readers right away is this one:

On page 145: "If nothing is done to counter present trends, the major fault line in American politics will no longer be between Democrats and Republicans, liberals and conservatives. It will be between the 'establishment'--political insiders, power brokers, the heads of American business, Wall Street, and the mainstream media--and an increasingly mad-as-hell populace determined to 'take back America' from them."

Now, take a guess who is going to "win" if the current crop of greedy, hate-and-fear mongering powers manage to keep on manipulating the angry and willfully ignorant. It does not look good, and maybe that is why I did not give this book five stars. I don't necessarily share Dr. Reich's optimism at the end of the book. However, overall, this is one book worth reading. ( )