Reich is a professor at the University of California, Berkeley, a past Secretary of Labor in the Clinton administration, and author of about a dozen books on public policy and the American economy. In Aftershock: The Next Economy and America's Future he argues that the current recession, while perhaps sparked by a housing bubble, is really due to a more fundamental problem – that the American middle class can no longer afford to buy as much as the American economy can produce. And this, he argues, is due to the increasing concentration of wealth in the hands of a few. As he points out, in the late 1970’s the richest 1% of the country controlled 9% of the wealth, while in 2007 that same 1% controlled 23.5% of the nation’s wealth, a ratio last seen in 1928, just before the Great Depression.
He argues the liberal position for stronger labor unions and tighter government control, but also for better education and job retraining and a more equitable distribution of corporate profits. While I tend to share the conservative suspicions of government effectiveness, his arguments about the pernicious effects of income inequality on the economy are persuasive. Certainly it is clear that part of our government's current problem is that it is unduly influenced by big money, whether from labor unions or corporations or special interest groups. And no one missed the fact that in the recent bailout, Wall Street brokers and bank CEOs (the very people whose poor decisions brought on the recession) got their huge bonuses while the rest of the country suffered.
So I have to say that this book made me re-examine some of my moderately conservative beliefs. Certainly large unearned inequities of any sort lead eventually to civil and political unrest, and sometimes to outright revolution, so one has to take his arguments seriously.
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