Robert B. Reich - Aftershock: The Next Economy and America′s Future

Public policy expert and former U.S. Secretary of Labor Robert B. Reich discusses the aftermath of the economic crisis in his book "Aftershock: The Next Economy and America′s Future," presented by Harvard Book Store. Although blame has been directed at Wall Street, Reich suggests a different reason for the meltdown, and for a perilous road ahead. He argues that the real problem is structural: it lies in the increasing concentration of income and wealth at the top, and in a middle class that has had to go deeply into debt to maintain a decent standard of living.
More lectures at forum-network.org.
This talk was taped on September 24, 2010.

[@robertsimon5869]

Been downhill for middle class since reagan.

[@daneiladams]

Revolution

[@TradeEmpoweredNow]

What I find very funny is the fact that the housing bubble was created through interventionist government programs and regulations that Reich supported. Outlawing of redlining, Fanny and Freddy requiring banks write a certain percentage of subprimes and then guaranteeing them thus removing any risk the banks had in writing them. Not all bubbles are created by government. But the housing bubble was and Reich was a huge supporter of it.

[@TradeEmpoweredNow]

LOL. That is just simply not true. Job creation does not rest in the middle class. The 1% consists of everyone making roughly 350K and up. There are very few (if any) job creators making 50k a year. But that is beside the point. You don't raise peoples standard of living by stealing money (and it is stealing) from one group of people and giving it to another. If you did that to your neighbor they would put you in jail. A man/woman is entitled to what they earn even if the gap is huge.

[@ltlwatcher]

It's Liberty AND Justice for All. American Libertarians miss the "Justice for All" part. I don't consider the widening of income inequality "Justice for All".

[@MariaFlores-zx7tq]

We know the problem, we need a solution the question is: WHAT WE CAN DO?

[@GenerationX1984]

Rich people don't mean to hurt the middle class. The rich are suffering from affluenza. :P

[@johansenjuwp]

think about this, do you think the rich people running the corporations will raise your wages out of the kindness of their hearts? please note that the corporations are still posting nice profits. second do you think companies will begin producing "widgets" and hiring more people to produce those "widgets", if there is no demand for the "widgets"? thirdly do you think with all the lobbying power that the rich hold are fighting for your interests or theirs?

[@AussieEnigma777]

The prosperity of the 60s was when single income families were still prevalent. (my parents) but at this point China was just beginning. From the 70s to the 90s it has been unrelenting growth and supplanting your manufacturing jobs. So their prosperity has overtaken and caused your demise. Your Unions have continually clammered for more nails in your economic coffin..and the burial is about to take place.

[@Floxflow]

With great wealth comes great responsibility huh

[@johnsmith9782]

+johan erik theodor clemmesen LOL, yes, Buffet and Gates are giving the majority of their wealth back to whoever/whatever, upon their death's, so they say. Then everything should be just fine. Looks to me though, that the Walton's are going to keep all of theirs. sigh.

[@vbboyd]

We live in a different times than we do in the 1920's-30's. Government spending through stimulus projects and other avenues works fine under normal circumstances. But today's economy is a far cry from what it used to be back in the 1920's-30's. Today the jobs that would drive the aggregate consumer demand to stimulate the economy that would create wealth and prosperity in our country have now been massively outsourced and sent to cheap/slave labor countries all around the world namely cheap/slave labor countries like China, India and Mexico. So in effect the stimulus policies of government spending like what was seen during the 1930's-40's won't work anymore, because simply put there is nothing to stimulate. The plants, factories, and businesses that create the middle class jobs that could be used drive up aggregate consumer demand and just about every other job you could imagine has been sent overseas to cheap labor countries around the world. According to the US BLS, the US economy is totally incapable of creating jobs that don't fall into the category of domestic non-tradeable services, i.e. jobs that can't be outsourced to cheap/slave labor countries around the world such as bartender, waitress or cashier at ToysRUs and Walmart. So in effect government stimulus packages and legislative initiatives have no impact or the impact of such policies is greatly reduced and muted.

[@robertjackson4121]

Food filth fetching sex work can't be exported. Corp welfare in Seattle nags made Bezos worth $134 billion in 20 years. Pensions health care real estate , savings from 7% to .025%. Wall Street casino . college is $ 120k for $50k job. Only 20% whites 1 jobs women 65% 2. Home equity $2.4 trillion 3. Hours + 350 HR / dual jobs Wages flat USA economy double top 1% got 23.5% in 2002

[@johnkomlos1202]

To find out more about economics in this vain see see johnkomlos.com/

[@johnsmith9782]

+John Komlos It's vein John, not vain. You shot your cred between the eyes with that poor syntax.

[@AussieEnigma777]

Dr Reich...you woffle on about the non manufacturing services sector (SEIU) open to unionization..why? aah. because the manufacturing Unions priced themSELVES out of Jobs lost to the more competitive South and that bit you said in your vid about 'private equity'.. and 'who pays' for the lack of tax revenue.. "we do we do"... welll guess what. when unionized SEIU services crank up wages .. 'who pays' ?? err. WE DO WE DO.. get it? the consumers of services.

[@AussieEnigma777]

Sorry Dr Reich..it was the Wagner act (Collective bargaining) that almost destroyed Wisconsin were it not for the "Messiah" Scott Walker. The 'collective bargaining' degenerated into a Union/Demobrat orgy of mutual stimulation and reward until the State of W was almost bankrupt.. so I'm starting to see your 'partisan' political attitude now! (which translates into vested interest for you and your clan?)

[@floorted]

They is a lot of misspelliers on hear commenting. What a bunch of morans!

[@KbcBerlin]

Ha ha :-)

[@ising4u2qt]

KbcBerlin ha ha again and again. It's spelled HERE!

[@KbcBerlin]

***** There seem to be a an anal retentive spelling fetishist here. He should spend more time lining up their school trophies, and stop bothering sane people. Roll on a context spell check.

[@floorted]

LOL I no, I was missspell'n as humor...get it?

[@floorted]

"hear" "morans"...

[@yangliu2037]

Donald Trump as predicted

[@amityadav101]

he is joke alright.

[@tarzeesays1201]

Is he a hobbit?

[@zarplex2003]

He's certainly not regulating middle income growth. He wants the growth of the wealthiest individuals to be regulated. Understanding that the middle class is actually where the job creators are and not the wealthiest 1% (despite what corporate propagandists say), it is incumbent upon us to reasonably redistribute this wealth from the wealthiest 1% to the middle class so that we can create more jobs, increase liquidity, and increase money going into R&D so that we remain globally competitive.

[@frederickdavila1070]

Comments here seem do nothing, but point fingers and blame. How would you know if he is wrong or right? For those who say he is wrong. Are you a renowned economist with a wealth of experience? If so please voice a solution. At least he has solutions. This not communism or socialism or fascism. It is an economic discussion. He is only pointing out that history is repeating itself. Haven't we heard this phrase before. Is anyone learning this? Please!

[@TradeEmpoweredNow]

They won't raise them out of the kindness of their heart. They raise them because they need workers and their is a shortage of qualified applicants. Nobody is fighting for your interest. An economy runs best when people pursue their individual self interest. There is a lot wrong with what Reich is talking about here and I don't have enough room to retort. But the answer is not forcing or regulating middle income growth.

[@dan3510]

No mention of those golden parachutes, and lack of consequences for predatory lending. Flood the market with cash bail out and loans while allowing CEOs to retain multimillion dollar bonuses. Meanwhile, no bail outs for this middle class that we keep talking about saving. No offering of interest only payments just to get through it all. Banks like PNC calling in notes in full on demand while at the same taking government bailout money.

[@nthperson]

The one aspect of our economic system that Robert Reich has failed to identify as a cause of income and wealth concentration, and the boom-to-bust cycles we experience is the role of our systems of land tenure and taxation. Our experience in the U.S. was actually forecasted by Adam Smith in 1776. Smith's analysis demonstrated that the privatization of this rental income transfers societal wealth to individuals. This is a fundamental redistribution of wealth from producers to a rentier elite. Smith advised societies to tax rent to pay for public goods and services. John Stuart Mill urged a more moderate form of this public policy. Henry George at the end of the 19th century picked up the cause, arguing there was sufficient rent to pay for all public goods and services and thereby eliminate the need for the taxation of earned income flows, of the buildings, machinery and other capital goods we produce, and of our commerce. IF we have followed the advice of Smith, Mill, George (and others who continued to make these same arguments even as our politicians embraced one or the other economic ideologies) we would now have a labor and capital goods basis for private property. No longer would our economy and our society be plagued by land speculation because land prices would be brought down and remain low. Land markets would be competitive in the same way that markets for labor and capital goods are competitive. All of the destructive outcomes described by Robert Reich would never have occurred. Sadly, nothing that has been done since the 2007 crash will prevent another crash of our credit-fueled, speculation driven land markets. I urge Robert Reich to revisit Henry George's analysis of political economy. Or, if a more modern treatment of the same dynamics is desired, read Mason Gaffney's book, "After the Crash."

[@blaqrose4832]

I remember when everyone wanted to come to America. Now everyone is heading to China. Meanwhile the Chinese are learning English. Gr8. And the world goes round ..

[@stressbelden5869]

This pilgrimage to China. Never heard of it. Just who is moving to China?

[@BoqPrecision]

...corporate capital

[@zarplex2003]

What you're suggesting are not new ideas either. Your ideas were floating around even longer before Marriner Eccles wrote extensively about why the Great Depression happened. No one here is suggesting that we should tax the rich to the point where there is no incentive to work hard. However, we are definitely suggesting that we have already gone beyond the bounds of reason with the benefits that we have given to the super wealthy. Income inequality is where it was at in the 1920s.

[@robertoorsi3203]

One of the main points seems to be: why can the US not have the same kind of national solidarity it had in the 1950s and 1960s? Probably too much "diversity" undermines the idea of belonging to the same political community, hence diminishing solidarity.

[@alexanderberkowitz535]

Roberto Orsi to be honest i agree with you and thats why properly racially integrating our society is probably the highest priority for us right now. everything else would be easier afterwards

[@GenerationX1984]

Comments load in a separate window now? Man, does KZbin suck!

[@tiffsaver]

Many economists are on the right track as to the source of our problems, mainly the FED and multinational corporations making record profits at our expense. But as long as they control the purse strings in the halls of congress, how do we (the lower 99%) ever hope to enact legislation to curb their continuing abuses?

[@FroggyJumps747]

The daily show? Anyone?

[@heyupmeduck]

He makes very good points about reformist politics vs. reactive politics, under the current political situation. It's obvious which side is currently winning; and why that is... Reactive politics - because it's easier for most people to understand, and a reformist politics hasn't a.) properly made its case, or b.) achieved the lobby of the most powerful interests, who are still locked into game-theory and a neoliberal mindset.

[@pasak1987]

trees don't make sound if you don't hear em right?

[@ddhts]

I did not listen intently to every word of this, but my criticism of RBR is that he simply really does not have a true economic solution. It's much more a political sol'n, and this makes sense, given his background. He slams some great men, but in actuality does not have a viable ECONOMIC sol'n to achieve the greater distribution of wealth he seeks. In a free society, you will always, always have a disparity in wealth & distribution, no matter what type of non-authoratarian policies you may implement. As you gradually implement artificial controls, you will 'disperse' the economy and cause an internal decline. Very simple. Yes, there are micro and macro coping mechs, but they ultimately will swing or help reverse the cycle. For sure, he has a lot of interesting observations, but he is not really looking forward on how people will 'work for pay'--what the future will be. Tedious labor is a thing of the past. We will be forced to become more 'technical', more intelligent (at programming, engineering, etc.) whether we like it or not. That should be obvious, especially for someone in his social and academic circle--well, he is actually not that familiar with the working world as he projects himself to be. Hello, Bob, please wake up, and grow out of your childish socialist mindset. That is 'what you have'--scary early Russian style socialism, which never worked, nor will it. In the end, the economic forces at work will always be far more powerful than the political currents or conscious mindset of the 'politicians' and those who appoint them--their believe otherwise is just a function of their arrogance. Refer to 1700's economist Adam Smith: even in a perfect democracy without the ups and downs of annoying social inequities, people's economic interests determine their long term economic paths and destiny. I could go on, but these basic principles seem lost to over-reaching politicians, which is exactly what RBR really is. I did not hear any discussion of economic trends/effects/reactions, just the political 'reactions' which he derided and yet ironically what he is proposing. Take his last question answer, for instance: how do you really explain how it is so terrible to move more industrial base to the 'south', where the wages are lower. Naturally that helps a whole swathe of working people, but Bob doesn't even 'get that' simple point. Wow. Concluding words though make sense of his nonsense: "..you are my friends, and PLEASE buy a book--thank you!" I am sure he meant that in the best possible way.

[@JohnDefalque]

I wish the US would annex Canada so we could also enjoy 2nd amendment rights and freedoms!

[@vex6559]

yes yes...the middle class....leave the poor behind...just the middle!

[@saleemisgod]

Yes the working poor and the plain old poor don't matter.