Robert Reich’s book Aftershock: The Next Economy and America’s Future is sectioned into three parts. In the first two sections, Reich offers arguments for why America’s growing inequality is bad. The third offers ideas for fixing it.
Part one argues that growing inequality makes it impossible for America’s middle class to consume as much as they produce without going into debt. The reason for the 2008 meltdown, he argues, was not that Americans had merely spent beyond their means or that Wall Street speculators had trashed the economy, though these he argues are true. Rather, “their (middle class Americans) means had not kept up with what the larger economy could and should have been able to provide them.” This is the reason behind the economic collapse.
Part one is the best section of the book. Reich’s analysis is concise, though well supported. The argumentation is spot on. He makes strong points, develops them and supports them without wandering too far from his central thesis. He doesn’t simplify things, but manages to explain them well.
Part two argues that growing inequality will have dangerous social implications if nothing is done to change its direction. This section begins with a thought experiment involving a fictional future party of populist radicals. The argument he makes here is that capitalism has to be saved from itself. If the middle class can’t achieve the things they used to, radicals will harness their populist anger and the end result will be the destruction of the economy and capitalism.
The specifics of this thought experiment are a little silly, though not entirely implausible. It’s also a drawback that he lumps all of the populist anger together into one category. That’s a little insulting to middle class intelligence actually, but maybe he is right. In any case, his main point that capitalism needs to be saved from itself is poignant.
Part three cobbles together a lot of small possible solutions, notably changes to tax codes, getting money out of politics and a complete expansion of medicare.
The drawback to section three is that there isn’t a lot of connection among the small solutions he cobbles together. For the most part, none of them are politically possible either. Reich ends by suggesting that the only real way forward is if corporations and financial elite heed his warning themselves and save capitalism from itself.
The Good: Reich’s analysis of the structural problem under-girding the American economy is spot on. His argument is well supported but concise at only 147 pages.
The Bad: Section two and three of the book simply aren’t as good. Section two is purely speculative. The argument is valid, but the specifics get a little silly. Section three disappoints in its presentation of solutions. Few to none of the solutions are politically feasible.
The Bottom Line: Aftershock is required reading for any progressive wanting to understand the structural economic problem behind the economic meltdown and the barriers to fixing it.