The Pendulum:Robert Reich and "Aftershock"

The introductory chapter in Robert Reich's new book"Aftershock"(2010,2011) begins with the hope that the economic future will swing back to prosperity for all as it did from 1947-1975.He believes concentration of income and wealth at the top continues to be the crux of America's economic predicament.The economy,according to Reich,will not be strong again until we address this problem.Reactionay politics and social upheaval will be our new pathway if we don't rearrange the amount of money the lower and middle class earns.Reich clams that a pendulum signifies a nation "in it together" or one where the individual goes it alone.We are in the later swing and have been since 1975 when wages began to stagnate for most of America and high income earners increased their assets to enormous heights.

The future is uncertain to Reich and he believes the so-called recovery from the great recession to be anemic for some time.Joblessness will remain for a large percentage of Americans or wages will drop.Either combination slows down the recovery because consumers will not be able to spend enough to keep the recovery going.The lack of sufficient customers will diminish investments that fuel a sustained period of growth.Countries like China will not buy enough American exports to make up for the shortfall because they are concerned with their own unemployment problems.They need to fuel their own economies.The U.S. government will not be able to run deficits large or long enough or keep cheap money sufficient for a long length of time to fill in the purchasing gap.

From 2001-2007,the American economy was running on drained savings,borrowed money through re-financing and credit cards.Families were working more than any nation on earth to make a decent salary but those hours and benefits were at the limit.The underlying problem emerged in the 1980's when the middle class started to be hit with global competition and labor-replacing technologies.Rather than strengthening the safety nets,empowering labor unions,improving education and job training,the nation turned in the opposite direction.Political leaders started to reflect the prevailing faith in the all-knowing free market.They embraced deregulation and privatization,attacked unions,cut taxes on the wealthy and shredded the safety net.The result for most Americans were stagnant wages,increased job security and a steadily widening inequality.

High individual and government debt,claims Reich, is a symptom instead of the cause of our current financial crises.Politicians have escalated the debt problem because they believe in short term fixes instead of tackling  the fundamental problem of wealth redistribution to increase purchasing power to the majority of our population(they spend more of their income).The rich,through political contributions,control the agenda in Congress to keep the disproportional affluence consistent and maintained.

More to come from"Aftershock" in the near future.