I heard Robert Reich speak on a subscription program – was it a Guardian program? And I was impressed enough to order his book, The System: Who Rigged it, How We Fix It.
Robert B Reich is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkley. He has served in three national administrations and written sixteen books. His articles have appeared in top newspapers and journals. He writes a weekly column for The Guardian and Newsweek. He lives in Berkeley.
Robert B Reich
This book is about what has gone wrong with the American political system, how it has occurred, and what can be done to recover our democracy. Professor Reich says there are three major power shifts which have occurred and, together, they have, over the last forty years transformed the United States from a democracy to an oligarchy, where power is concentrated in the hands of an elite group of very wealthy individuals. The power shift was brought about by corporate raiders who made the shareholder the only stakeholder in publically traded companies. Previously, the employees, the communities in which they were located, their suppliers and customers were also stakeholders. This led to a strict focus on profits, resulting in wage stagnation, loss of union power, off-shoring of production, and, in turn, to tremendous increases in CEO compensation. CEO’s gained tremendous wealth and power. So, Professor Reich says that the first power shift was from stakeholder capitalism to shareholder capitalism, and the second was a shift in bargaining power from large unions to large corporations. And the third shift was unleashing the financial sector (Wall Street) from laws regulation. This meant huge financial rewards for CEO’s, hedge funds, derivatives traders, and others. With vast financial resources available to few people, and with the Supreme Court’s ruling on political campaign finance, it became possible for this limited pool of powerful people to ‘bribe’ politicians with huge contributions to obtain the laws, regulations and taxation they wanted. The top ten percent of Americans became richer, the bottom ninety percent became poorer, with lower quality education, health care and basic infrastructure. Professor Reich argues that it is possible for the ninety percent to act in concert to change the system.
In the book, Professor Reich singles out Jamie Dimon, the CEO of JPMorgan, the huge bank, as an example of an individual who uses his power to change the system. He and many other specific examples populate this book with a host of convincing evidence. A multi-page appendix lists the sources of the evidence. There is also much evidence of the wage, benefits, health care and educational erosion for the ninety percent, including personal examples. The book is written with considerable emotion and conviction.
As accurate and convincing as the book is, I have two minor criticisms of it. It is often repetitive, making the same point repeatedly. It is also not organized like a legal brief, the points are all there, but they tend to get somewhat tangled. Perhaps these ‘faults’ were intentional on the part of the author and his publisher. They intended this book to be an emotional tirade. If so, it is very convincing.