Money Watch

Sunday, September 16, 2007

Stepping back from narrow debates, several new books try to illuminate the broad economic forces behind rising inequality, tax cuts, immigration and public planning.

-- Alan Cooperman and Carlos Lozada


The Transformation of Business, Democracy, and Everyday Life

By Robert B. Reich

Knopf. 272 pp. $25

Do capitalism and democracy go hand-in-hand? Not always, says former Labor secretary Robert B. Reich. Since the mid-1970s, the stock market has surged, productivity has risen and prices for many goods have fallen in inflation-adjusted dollars. But Reich argues that democracy has weakened. Inequalities have ballooned, and traditional means of keeping them in check (progressive income taxes, good public schools and healthy trade unions) have eroded.

Reich blames what he calls "supercapitalism," in which companies compete globally to give consumers lower prices and investors higher returns. Large corporations, he says, have less economic power than in the past. As consumers and investors, most Americans benefit from the intensifying competition. But as citizens, we're losing ground, and the reason, Reich says, is that supercapitalism has "spilled over into politics," as hard-pressed companies seek favors from government.

-- A.C.


The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics

By Jonathan Chait

Houghton Mifflin. 294 pp. $25

Just a few decades ago, many Republicans worried deeply about deficits and inflation, and relatively little about tax cuts. "People who advocate only cutting taxes live in a dream world," Bob Dole, long the archetype of commonsense conservatism, said in 1982.

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