Robert B. Reich

In addition to what I already know and like about Robert Reich, whom I consider to be a man of intellect and integrity, I was delighted to read about snippets of history which had not interested me before and also about Reich’s personal life. I enjoyed the pictures peppered throughout this book because they brought the narrative alive in a way that words alone could not.

Reich used his childhood experience of being bullied for his short stature to formulate methods for his personal show more survival. In this memoir, he used his past resistance techniques to that experience to explain how to resist injustice in a larger context.

One thing that struck me as I began reading this book was about other difficult times faced by the United States well before either of the two Trump administrations. We as a nation were able to rebound from those times of adversity stronger and better. That gives me hope that my nation can be healed from all the damage and pain it is now experiencing. May that time come soon!

There’s a line in the next to last chapter of this book where Robert Reich wrote, “I couldn’t imagine not teaching”. I guess so because that is exactly what he has done on every page of this book. I hope this book is widely read among Americans (and others) as we struggle in getting back to making our country into a “more perfect union”.

I loved reading Reich's memoir because his America was also my America due to our closeness in age. I especially loved the last chapter about old age. All I could do was identify with what he said and laugh because I always do those same “old age” things.

This book always felt as if a friend were talking to me. I am going to miss picking up this book at odd times to read a little more about understanding why our country is the way it is today. Reich told it all in a calm, teacherly way. I thank him so much for having written this book. show less

Reich takes a nuanced view of economics which challenged my thinking and eventually won me over (although I wish he would have given more in the way of solutions than the final fifteen pages).

Although I disagree with him on several points, I am agreement with the thesis of his book: namely, that the citizen has been overwhelmed by the consumer and investor, and hence, democracy is in danger of being subordinated to the economy (more so than it already has). The end result is the monolithic show more supercapitalism we all toil under.

The accepted ways of dealing with corporations (lauding good corporate stewardship, boycotting bad actors, etc.) are provincial and myopic because the underlying structure of supercapitalism remains in place. If one villain falls, another will simply arise in its place. Yet his analysis seems obtuse at times; for instance, he ignores the role played by unions in forming the type of informed citizens he seems to desire that can hedge against corporate excess.

I believe the failure of unions to adapt to international corporatism is what has led to the unchecked capitalism that plagues us. If there are sweatshops in Timbuktu using child labor, why aren't American unions there, helping to build relationships with communities and promote reforms? Aside from the fact that they have been eviscerated, the unions are preoccupied with "American jobs," not understanding that they strengthen the long-term interests of the American worker by bringing his international cousin into the fold. (It reminds me of the early union efforts that neglected women and people of color -- divisions happily exploited by greedy industrialists.)

If economic exploitation doesn't honor national boundaries, neither should the instruments to fight it.

The rational market crowd -- among whose number Reich is counted -- tell us these sweatshops are necessary (and beneficial) to developing countries and therefore desirable. The truth is that transnational corporations own the political infrastructure of these economies (or, in the case of places like China, support the despotic regime in place), where labor activists are openly repressed because they threaten to upset shareholder returns. (For the record, I favor behavioral economics.)

The final third of the book shows a less nuanced Reich, wherein he ultimately (and rightly) rails against the legal fiction of corporate "personhood." He also proposes taxing returns earned from investments as personal income and removing corporate money from politics, both necessary and noble solutions if the Republic is to survive as a representation of citizen interests rather than investor and consumer interests. show less

At under 200 pages, this book is too short. It is divided into three parts. Part I presents a good but still too complicated version of the rising inequality in American society. Reich's account will be familiar to readers of Paul Krugman or Elizabeth Warren. Middle class Americans have to work harder and more to keep up in the rat race (Reich's three coping strategies: women entering the workforce, working longer hours, drawing down savings/increasing debts), while public safety nets are show more weakening and healthcare and catastrophic risks are privatized. The classic promise "if you work hard, you will succeed" doesn't work any more. A tiny minority, the plutocracy, cashes in all the benefits and prevents a more equitable distribution of income. Reich calls this the bargain broken.

Part II is titled "backlash" and deals with political and populist reactions to part I. He starts with a rather implausible 2020 presidential election victory of a Palinesque Independence Party candidate (against candidates Chelsea Clinton and George P. Bush). Anger created out of a lower standard of living and less shopping possibilities while the plutocrats resume to bathe in money . Here it is where I part company with Reich's analysis. Populist anger against the rich is unlikely in the United States of America. Firstly, the corporations control all media. Secondly, the peasants have totally bought the plutocracy's framing. Just like medieval serfs or Third World citizens only revolt(ed) in times of famine or existential crisis but never questioned the layers of society, America's current popular unrest does not target the plutocracy but even weaker economic parties (such as immigrants or foreign companies). Thus the backlash is inflicted on the wrong actors. Longstanding limping democracies such as Italy and Argentina show that inequality persists despite popular anger.

In part III, Reich develops a sensible, textbook-like plan of economic measures to curb inequality. In an ideal world, his plan would be adopted the next day. Reich has to appeal to the Democrats, their ideals and their longterm self-interest to undertake the transformation process. Unfortunately, the sweet melody of money is much more alluring to most politicians than Reich's message. Reich does not even have the ear of the Democratic Party. I venture that the writing of this book was mainly triggered because Reich could not get his message through in private. He should have used an additional fifty pages to sketch a winning strategy for his message.

Currently, the economic analysis of the rising US inequality is getting better. Out of Krugman, Moore, Taibbi, Reich and Warren, a common narrative is emerging. It still needs sharpening to survive against the reptilian brain explanations of his opponents. The next step is creating organizations to sustain and amplify the message. Unfortunately, this runs against the Bowling Alone trend of diminishing social capital. The message has to reach and capture the suburbs to be successful. Finally, politicians need reliable populist support to stay on message and prevent their co-optation by the plutocracy. As long as these elements are not in place, Reich's vision remains a dream and the United States will continue to drift. show less

As a country, we focus obsessively on the conflict between the political left and right, but what good is this doing us when politicians from both sides embrace the same oligarchic ideology? This is the question explored by Robert B. Reich in his latest book, The System: Who Rigged It, How We Fix It.

Reich shows how the current political-economic system in the United States is infused with incentives for bad behavior. This starts with large corporations, whose executives are forced to show more maximize short-term profits for shareholders at all costs (to prevent hostile takeovers and to secure their own jobs and salaries). This is typically accomplished by shifting costs from shareholders onto other stakeholders, for example by laying off workers, moving operations overseas, or polluting the environment—all behaviors we should fully expect based on current incentives.

In essence, here’s what we’ve done: we’ve created massive legal entities (corporations) with a single-minded objective to maximize profits and then released them out into the world with few regulations and little oversight. Should we then be surprised to find that this has left a trail of devastation in its wake (layoffs, worker disillusionment, climate change, growing inequality, public health issues, financial crises, etc.)?

But we’ve done even more than this: we’ve also given those same amoral profit-maximizing monstrosities the power to infuse massive amounts of funds into the political process to buy candidates and engage in self-interested political lobbying, with the goal of further reducing regulations and taxes and further increasing their own power. Since the only goal of corporate management is the enhancement of profit, we can surmise that corporations are making these political contributions as investments, and not as political expressions of their genuine interest to promote the common good. As Reich wrote:

“When JPMorgan and other big corporations donated to the Republican Party in the 2016 elections in anticipation of a giant tax cut if Republicans won, their donations were also investments, and they paid off big...GE contributed $20 million and will get back $16 billion in tax savings. Chevron donated $13 million and received $9 billion. Not even a sizzling economy can deliver anything close to the returns on political investments.”

Politicians are likewise incentivized to bend to the will of corporations for campaign contributions and also for lucrative positions in those very firms once they leave Washington. And so big business has, in this way, infiltrated Washington and initiated a vicious cycle of concentrated wealth and power. This has resulted in America’s own unique brand of socialism: upward redistribution from the poor and middle class to the rich.

How else to explain the fact that the government bailed out the largest banks from reckless and idiodic decisions but did not likewise provide relief for homeowners and students struggling with mortgages and college debt? (Students still cannot eliminate student debt even through bankruptcy proceedings.) And how to explain the fact that, over the last four decades, corporate taxes have been slashed and yet middle-class wages have remained stagnant while top incomes have soared? As Reich wrote:

“Between 1999 and 2018, the United States economy grew 48 percent, but the typical household’s income did not grow at all, and the bottom half of America ended up with less wealth than it had before the financial crisis. The richest 1 percent, however, ended up twice as much wealth as it had before the financial crisis, and the richest 0.1 percent, with three times as much.”

So much for trickle-down economics.

Here’s what any rational reading of the numbers tells us has happened: the money corporations have saved from reduced taxes has gone to the wealthy at the expense of tax revenue that could have funded public goods that everyone would have benefited from (healthcare, education, infrastructure, basic research). This is a simple case of upward redistribution and socialism for the rich—and harsh capitalism for everyone else.

The reader might object that it is corporations that provide our products, services, and standards of living, but, as Reich points out, innovation is not stifled by progressive taxation. Reich correctly points out that Jeff Bezos, for example, would be equally motivated to innovate for 50 million dollars rather than 100 billion. Wealth taxes would ensure that the funds that would otherwise accumulate at the top make their way down for the benefit of everyone else.

Of course, it doesn’t help that the public is easily conned into believing that policies which benefit the wealthy will actually benefit themselves. An entire ideology of market fundamentalism (the modern equivalent of the divine right of kings) and “trickle-down” economics has been fabricated and widely disseminated just for that purpose. It runs so deep that even apparently liberally-minded democrats—like the CEO of JPMorgan, Jamie Dimon—believe it. But, as in Dimon’s case, this is probably just an instance of self-delusion. As Reich demonstrates throughout the book, what Dimon says and how he behaves are two entirely different things. For example, Dimon claims that he’s a “Patriot before a CEO” and identifies as a Democrat concerned for the common good, but then publicly supports Trump’s corporate tax cuts (i.e., gifts to the wealthy).

In regard to Trump’s tax cuts, these did not stop large corporations from continuing to maximize the bottom line at the expense of employees, by the way. For example, Walmart, in 2019, despite saving $2 billion courtesy of Trump’s tax cuts, laid off 570 workers while spending $20 billion buying back stock to enrich wealthy investors and boost executive pay.

The bottom line is that income inequality is growing, the middle class is shrinking, and executive pay is skyrocketing, and claiming that this can all be blamed on immigrants is beyond stupid. So how do we really solve the problem and restore democracy from corporate capture? As Reich points out, the solutions already exist: universal healthcare and education, more funding for basic research and infrastructure, and steeper progressive income and wealth taxes to pay for it all—not to mention overturning Citizens United and broader campaign finance reform.

The question is, if the solutions exist, why do we consistently fail to implement them? The reason is, simply put, that the American oligarchy spends endless sums of money convincing us that the outcomes of the market—which it has rigged in its favor—are natural and inevitable, just as European monarchs used to tell its subjects that their vast amounts of wealth were decreed by God.

The only path forward is through the solidarity of the working class and its ability to resist the divide-and-conquer rhetoric of the oligarchy (currently led by Trump), who wants us fighting each other instead of them. As Reich wrote:

“Ultimately, these trends in America, as elsewhere, can be reversed only if the vast majority, whose incomes have stagnated and whose wealth has failed to increase, join together to demand fundamental change. The most important political competition over the next decades will not be between the right and left or between Republicans and Democrats. It will be between a majority of Americans who have been losing ground and an economic elite that refuses to recognize or respond to the majority’s growing distress.” show less