America’s economic Crash of 2008 was directed almost universally at Wall Street. In his September release, entitled, Aftershock: The Next Economy And America’s Future, Robert B. Reich argues differently. He believes the real problem is structural: There’s an increasing concentration of wealth at the top, while middle class Americans struggle to maintain a decent standard of living. optimusgeneral
Reich served in three national administrations, most recently as Secretary of Labor under President Clinton. He’s written numerous books, and is a university professor of public policy.
Three stages of modern American capitalism substantiate Reich’s message. The first stage (1870-1929) was one of increasing concentration of income and wealth. Stage two (1947-1975), featured more broadly shared prosperity; and stage three (1980-2010) is one of increasing wealth concentration. Reich says it’s vital for our future to begin a fourth stage where broad-based prosperity reigns.
Reich profiles Marriner Eccles, a business tycoon during the Great Depression. Largely forgotten today, Reich believes Eccle’s analysis of the underlying economic stresses of the Great Depression are relevant to the Crash of 2008. His assumption of a quick national recovery proved wrong, as we know today. President Roosevelt summoned him to Washington DC to share his financial acumen which was based on logic and experience.
Eccles chaired the Federal Reserve Board from 1934 to 1948 (the Eccles Building on Constitution Avenue in Washington DC is his memoriam). History repeats itself today, as there’s a vast accumulation of income among the nation’s wealthiest people. The result is everyone else experiences reduced purchasing power.
The basic bargain gave workers a proportionate share of the fruits of economic growth. Average workers had enough purchasing power to buy what they produced.
The Great Prosperity years (1947-1975), found America as a whole, implementing the basic bargain. Almost everyone who wanted a job could find one with good wages or at least wages that were trending upward. The US government created the conditions for the middle class to fully share in the nation’s prosperity. optimusgeneral