Reich (Supercapitalism), secretary of labor under Bill Clinton and former economic
adviser to President Obama, argues that Obama's stimulus package will not catalyze
real recovery because it fails to address 40 years of increasing income inequality.
The lessons are in the roots of and responses to the Great Depression, according to
Reich, who compares the speculation frenzies of the 1920s.1930s with present-day
ones, while showing how Keynesian forerunners like FDR's Federal Reserve Board chair,
Marriner Eccles, diagnosed wealth disparity as the leading stress leading up to the
Depression. By contrast, sharing the gains of an expanding economy with the middle
class brought unprecedented prosperity in the postwar decades, as the majority of
workers earned enough to buy what they produced. Despite occasional muddled analyses
(of the offshoring of industrial production in the 1990s, for example), Reich's thesis
is well argued and frighteningly plausible: without a return to the "basic bargain"
(that workers are also consumers), the "aftershock" of the Great Recession includes
long-term high unemployment and a political backlash--a crisis, he notes with a sort
of grim optimism, that just might be painful enough to encourage necessary structural
reforms.

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