Aftershock: Not the most uplifting first read of the year

5 01 2011

I’m sure that Robert Reich, in the third and final section of Aftershock: The Next Economy and America’s Future meant for his suggestions on how America must move to come out of the Great Recession and back into a period of prosperity to sound uplifting and utterly possible. Would that it were so, but it’s hard to see an upside in the current climate. It’s really a depressing scenario overall and this is the type of book that linger and gnaws at you while you try to sleep the night after reading it.

The good part is that Reich’s a very solid and skilled writer. I find his voice on the radio (he’s a regular on APM’s Marketplace) both charming and grating at the same time and I could hear his voice in my head as I read. This made for a fast read as I was simultaneously carried by the pace of his voice but also by a desire to have it over. Sort of a weird little thing I have. But it is a good read, not nearly as dry as you might expect and very thought-provoking and approachable.

The basic premise and the central assumption that Reich’s operating with is income inequality, which is what he blames for the long-term effect that this recession hopefully won’t, but probably will have. It’s the reason that middle/lower class Americans accumulated so much debt, it’s the reason they lost their homes, and it’s the reason that we’re looking at a jobless recovery. He summarizes it all in one short and succinct paragraph:

The fundamental problem is that Americans no longer have the purchasing power to buy what the U.S. economy is capable of producing. The reason is that a larger and larger portion of total income has been going to the top. What’s broken is the basic bargain linking pay to production. The solution is to remake the bargain. (p. 75)

He makes note that after WWII, economic growth resulted in higher wages and living standards for everyone, including those at the top and he’s drawing off the well-established fact that in the last 30 years or so, only the upper 5% or so of earners has shared in the economic growth of the country. Everyone else’s wages and salaries, adjusting for inflation and what have you, have remained more or less flat. This results in all sorts of problems which he outlines thoroughly.

On the whole, the book is cleanly organized into three sections: an examination of the problem, what will happen if we don’t fix it (spooky), and how we can fix it in his view. Nothing to it, plenty of stuff there to agree with. Plenty of stuff there to disagree with. Ain’t life grand?

For the most part, he makes his assumptions very clearly known and only once or twice does he make a blatantly spurious connection between facts. Maybe nitpicky on my part, but he skirts the edge between correlation and causality a couple times. This is, I might add, something that just about every book I’ve ever seen on the subject does and his are pretty rare and pretty minor. For instance, and I draw this one out just because it stuck out in my mind, he links the dramatic increase in the sales of sleep aids, special mattresses and all sorts of sleeping medications to economic worries of  the middle class. That market, he reports, has increased some 25% or so (I’m not looking up the exact number he quoted, but it’s about there). He qualifies it as saying that that must be due, at least in some part, to economics, which is pretty flimsy. I mean, it must also be due, at least in some part, to the fact that someone convinced Snooki to write a goddamn novel and Simon and Schuster published it (and no, I can’t let it go).

I think it’s a very quick and approachable read. I’m no economist, but I’ll admit before that I’m also not a Wall Street banker and don’t have to be. I’d think if you are a Wall Street banker, you might not like it very much. You might not like it at all, depending on your politics, but he deliberately tries not to make this work into a partisan, finger-pointing debate. He’s keeping it on the real economic philosophy level and I really have to praise it for that. I would say, however, that it was probably not the best read to start off the New Year. New Year’s is supposed to be about hope and frankly, the reality is a bit more daunting even if Reich’s ending is on a very positive note extolling all Americans for being a reasonable people. We’ll have to see, but I do think it’s an interesting and, at least on that level, helpful perspective to have.

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