Color of Money Book Club selection: Robert Reich's "Aftershock"

By Michelle Singletary
Washington Post Staff Writer
Saturday, October 2, 2010; 8:57 PM


The next economy

and America's Future

By Robert B. Reich


192 pp. $25

So what are we to do about an economy that is so badly broken?

We have to look at where we've been, figure out what went wrong and be open to new ways of doing things.

That's what Robert B. Reich does in "Aftershock: The Next Economy and America's Future" (Knopf, $25), which is the October selection for the Color of Money Book Club.

But I'm warning you. This isn't the type of book you take to the beach or set by your nightstand, eagerly awaiting the hour when all of the children are in bed. It's academic. And yet Reich's historical look at the economic crisis is a good read.

So, yes, you might roll your eyes at this selection. But focus anyway on Reich's analysis on how to fix our economy.

Reich, secretary of labor under President Bill Clinton and now a professor of public policy at the University of California at Berkeley, provides a thoughtful dialogue about the structural problems that led to the recent recession. Even as things seem to be getting better, the aftershock has only begun, Reich says.

"The future is uncertain, of course, but indications are that the so-called recovery will be anemic," Reich writes. "A large percentage of Americans will remain jobless, or their wages will drop. American consumers will not be able to spend enough to keep the recovery going. Without sufficient customers, businesses will not invest enough to fuel a sustained growth. Foreign markets, especially China, will not buy enough American exports to make up for the shortfall because they will be concerned about their own unemployment.. . . And the U.S. government will not be able to run deficits large or long enough, or keep money cheap enough for a sufficient length of time, to fill the gap."

Has he scared you? Well, let me scare you some more.

Thirty-one states saw increases in both the number and percentage of people in poverty between 2008 and 2009, according to the 2009 American Community Survey recently released by the Census Bureau.

Last year, 11.7 million households reported receiving food stamps.

The percentage of people without health coverage increased in 26 states. Nationwide, nearly two in five renters said their housing costs consumed 35 percent or more of their incomes. When you're spending a high percentage of your net pay on housing, you don't have much room to save.

Reich is concerned about the growing wealth gap. The latest Census Bureau figures found that the top-earning 20 percent of Americans received 49.4 percent of all income generated in the United States. The last time wealth was concentrated this much at the top was just before the Great Depression.

Why is it troublesome that the rich are getting richer? Shouldn't they benefit from their hard work, they might ask?

The problem is, the rich aren't like the majority. "Rich Americans may sometimes be conspicuous consumers, but overall they simply do not spend enough," Reich says.

Reich writes that he could have easily grounded his arguments around morality - that it's unfair for so few to have so much when so many have so little. But he doesn't go there. He wants to prevent a revolt against the rich. He argues that a high concentration of wealth at the top results in less for us all. Unless we address the large inequality, "the inevitable result is a slower economic growth and an economy increasingly susceptible to great booms and terrible busts."

Reich ultimately offers a number of solutions that will no doubt be readily dismissed and despised, chiefly raising taxes on the wealthiest Americans. But his ideas are worth exploring. We have to stem the heavy borrowing for a higher education, he says. So he suggests tuition should be free at all public colleges and universities.

His proposals remind me of something Dr. Phil likes to say when people keep engaging in the same crazy behavior: "How's that working for you?"

The answer is, the economy we have isn't working - not for all of us, anyway.

I'll be hosting a live online chat about this month's book at noon Oct. 28 at Reich will join me to take your questions. Every month, I also randomly select readers who will receive a copy of the featured book, donated by the publisher. For a chance to win a copy of "Aftershock," e-mail with your name and address.

Readers can write to Michelle Singletary c/o The Washington Post, 1150 15th St., N.W., Washington, D.C. 20071. Her e-mail address is Comments and questions are welcome, but due to the volume of mail, personal responses may not be possible. Please also note comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

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