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Aftershock

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Aftershock

The Next Economy and America's Future

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15 Minuten Lesezeit
10 Take-aways
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Was ist drin?

The rich get richer, the poor get poorer, but what about the middle class? Find out why they’re the linchpin to US economic recovery.

Editorial Rating

8

Qualities

  • Innovative

Recommendation

Politicians and pundits like to blame Americans’ excessive debt for plunging the economy into recession in 2008. But middle-class earners had a good reason for borrowing: Their incomes have dropped since 1980, during a period when the US economy’s gains increasingly went to the wealthy. According to former US Secretary of Labor Robert B. Reich, the only way out of the doldrums now is to redress that imbalance and help the middle class resume its role powering the economy. In this book, Reich explores the dire consequences of failing to get workers back to work. Without seeming particularly worried about stirring controversy, he offers his suggestions for restoring the “basic bargain” of shared prosperity: People work and the government supports good jobs backed by a “safety net” of public services. getAbstract recommends Reich’s sobering review to those studying ideas about what’s broken and how to fix it.

Summary

The Rich Got Richer...

Excessive consumer borrowing in the US gets the lion’s share of the blame for the crash and subsequent recession in 2008. True, massive mortgage lending at low rates did contribute to the speculative bubble in real estate, but “high debt is a symptom rather than the cause” of the recession. The growing income disparity between the rich and the middle class is really at fault. Middle-income wages failed to keep up with a growing economy; in fact, “a larger and larger portion of the economy’s winnings had gone to the people at the top.” Borrowing became the only way for most Americans to maintain their living standards.

Income levels historically have swung from concentrations of prosperity among the richest to more even distributions among the working and the wealthy. At the beginning of “modern American capitalism” from 1870 to 1929, wealth consolidated at the top. After the Great Depression and, later, after World War II, prosperity spread around to lift almost everyone. But by the late 1970s, incomes began to coalesce again at the peaks, leaving the poor and middle classes with a smaller share. At that point, “the double whammy” of globalization...

About the Author

Robert B. Reich, a professor of public policy at the University of California, Berkeley, served in three presidential administrations, most recently as Secretary of Labor under Bill Clinton.

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    R. Y. 1 decade ago
    This is written from a liberal big government position that focuses on government intervention as the solution to our economic woes. I just can't see the logic in this position.