The system Who rigged it, how we fix it

Review by Choice Review

In this brief but provocative book, Reich outlines several dramatic and socially destructive changes underway in the US political economy: the rise of stockholder power, the decline of unionism, increasing oligopoly, and the deregulation of financial institutions. These phenomena reflect and contribute to growing inequality and diminished democracy. Reich focuses in particular on JP Morgan Chase's Jamie Dimon during the Obama administration. Through a revealing sketch of Dimon's contradictory role, combining professed sympathy for the marginalized and continued protection of business privileges, Reich describes the ongoing battle between oligarchy and democracy. Offering important insights about the customary behavior of mainstream business lobbies, Reich is optimistic that democracy will rebound, even though no guarantee of the equilibrating effect of a pendulum obtains. A common theme in Reich's books is bullying of the weak by the powerful. Recalling his own youthful experiences with bullying, he recounts the moment when he first fought back, calling President Trump the "bully in chief." A nice touch is Reich's personal note at the conclusion, inviting Dimon to join him as an advocate for democracy over oligarchy in politics and business councils. As unlikely as this is, it would be a good thing to see a new generation of business reformers devote energy to democratic renewal. Summing Up: Recommended. All readers. --David Carroll Jacobs, American University

Copyright American Library Association, used with permission.

---

Review by Booklist Review

One can "game the system" or "buck the system," but what, exactly, is this system that is, as Reich avers, so rigged? And who, exactly, is doing the rigging? When economic and political infrastructures intersect, those in power tend to be those with the most money. Since the onset of the Trump administration, the term "oligarch" has catapulted into the American lexicon. Most people associate the term with Russians of extraordinary wealth who run that country at Putin's bidding and to their own great benefit. Can't happen here, right? Wrong, says Reich, who uses JPMorgan Chase CEO Jamie Dimon as the poster child for American oligarchy. These uber-rich moguls have an outsized influence on government influence which actually puts democracy at risk, as they advocate for corporate practices that promote profitability, while penalizing workers and undermine the economy by sending jobs overseas and profits offshore. A prolific author and expert in the field of public policy, Reich (The Common Good, 2018) is a passionate and profound advocate for the financial rights of all Americans.

From Booklist, Copyright (c) American Library Association. Used with permission.

---

Review by Publisher's Weekly Review

In this incisive critique, former U.S. secretary of labor Reich (The Common Good) argues that America's political and economic system has "become tilted ever more in the direction of moneyed interests that have exerted disproportionate influence over it, while average workers have steadily lost bargaining leverage." He identifies three major developments over the past four decades: a shift from "stakeholder capitalism" to "shareholder capitalism," in which business decisions are gauged only by the profits they generate; the transfer of bargaining power from unions to corporations; and financial deregulation that have allowed some to reap huge profits, while the weight of financial risk is borne by average people. These changes have empowered a small economic elite to translate massive wealth into political clout, securing policies that enable them to accumulate more money and power. Reich forcefully critiques J.P. Morgan CEO Jamie Dimon's endorsement of "corporate social responsibility" as a vastly insufficient answer to the perils of crony capitalism, which he credits for widespread populist anger that has found its outlet in xenophobia and authoritarianism. The cure, Reich believes, is a multiethnic, multiracial coalition recommitted to the work of citizenship and a more equitable reallocation of power. Though Reich gives undue credit to the social virtues of mid-century corporate leaders, his critique of the current system is evidence-based and authoritative. This call-to-action will resonate with progressive readers. (Mar.)

(c) Copyright PWxyz, LLC. All rights reserved

---

Review by Library Journal Review

In his latest book, former U.S. secretary of labor and best-selling author Reich (Carmel P. Friesen Professor of Public Policy, Univ. of California, Berkeley; Saving Capitalism) continues examining the American economy, and how its current structure is unfair to most. Similar to his previous works Beyond Outrage and The Common Good, Reich contends that there is a growing sentiment among Americans that the system is, indeed, rigged in favor of the wealthy and politically powerful--what is often called an oligarchy. Unlike his other works, here Reich takes aim at those who claim to support the middle-class, while at the same time accumulating vast amounts of wealth for themselves, such as JP Morgan Chase. Though Reich has made similar points in previous works, he is still an excellent writer skilled at addressing inequality in an accessible way. His writing style is engaging, and his arguments are supported by facts from his years studying and teaching courses in public policy and economics. VERDICT Another excellent book from Reich that all libraries will want to have in their collections.--Ed Goedeken, Iowa State Univ. Lib., Ames

(c) Copyright Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.

---

Review by Kirkus Book Review

The bestselling author presents his case that severe income inequality is the leading factor eroding American democracy. After serving as the secretary of labor for Bill Clinton, Reich became a professor, frequent commentator on our ailing political system, and author of such bestsellers as Locked in the Cabinet, The Common Good, and Supercapitalism. In his latest, he urges all Americans outside the wealthiest 1% to stop thinking in terms of left vs. right or Democrat vs. Republican. Instead, writes the author, the crucial battle is Oligarchy vs. Democracy. The oligarchs, no matter what they say publicly about promoting democracy within a vigorous capitalistic economy, care almost exclusively about expanding their wealth. The accumulation of such wealth, writes Reich, has destroyed the middle class and offers nothing but misery to minimum wage workers. Throughout the narrative, the author relies heavily on the career of Jamie Dimon to illustrate his theories. Dimon, the CEO and chairman of JPMorgan Chase, presents himself as an enlightened supporter of the Democratic Party as well as a philanthropist actively seeking to reduce income inequality. Digging deeper, Reich argues that Dimon, while perhaps sincere in his own mind, is just another enabler of oligarchy. That enabling occurs not only via his too-big-to-fail bank, but also through Dimon's leadership of the Business Roundtable, a lobbying organization consisting of the most powerful chief executives in the U.S. By opposing government regulation of industry and pushing for corporate tax cuts, Dimon and his fellow BR board members demonstrate their disdain for any legislation that might increase income equality among all socio-economic levels. As the author incisively shows, while opposing a safety net for the needy, corporate leaders regularly accept socialism for the extremely wealthy through government bailouts, an unfair tax code, and other measures. In various passages, Reich explains how the oligarchs have helped create and then bolster Donald Trump and his supporters. Much-needed, readably concise political and economic analysis. Copyright (c) Kirkus Reviews, used with permission.

Copyright (c) Kirkus Reviews, used with permission.

---

Millions of Americans, whether on the left or the right of the political spectrum, know something has gone profoundly wrong. "Right now, we have a system that favors those who can pay for access and outcomes. That's how you explain an economy that is rigged to corporations and to the very wealthiest," said Beto O'Rourke at the first Democratic presidential candidates' debate in 2019.  "When you've got a government, when you've got an economy that does great for those with money and isn't doing great for everyone else, that is corruption, pure and simple," said Senator Elizabeth Warren at the same forum. "Big business, elite media, and major donors are lining up behind the campaign of my opponent because they know she will keep our rigged system in place," said Donald Trump in his acceptance speech at the Republican convention in 2016.  "If solutions within the system are so impossible to find, then maybe we should change the system itself," said sixteen- year-old climate activist Greta Thunberg. As New York  magazine's Frank Rich put it: "Everything in the country is broken. Not just Washington, which failed to prevent the financial catastrophe and has done little to protect us from the next, but also race relations, health care, education, institutional religion, law enforcement, the physical infrastructure, the news media, the bedrock virtues of civility and com- munity. Nearly everything has turned to crap, it seems, except Peak TV (for those who can afford it)." He might have added the environment and our democracy.  The concentration of wealth in America has created an education system in which the super-rich can buy admission to college for their children, a political system in which they can buy Congress and the presidency, a health-care system in which they can buy care that others can't, and a justice system in which they can buy their way out of jail. Almost everyone else has been hurled into a dystopia of bureaucratic arbitrari- ness, corporate indifference, and legal and financial sinkholes that have become the hallmarks of modern American life.  This mammoth, systemic dysfunction is generating a great deal of heat--anger, upset, frustration, and outrage. Heat in any system signals potential change. Like tectonic plates that cause earthquakes and volcanoes as they crash into each other, heat is a sign of underlying tumult. In today's America, the status quo is unsustainable. Subterranean tensions are building.  If you want to understand where the system is now and what you might do to help move it in a more humane direction, you will need to look beneath its surface and reassess many of your assumptions.  First, forget politics as you've come to see it, as electoral contests between Democrats and Republicans. Think power. The underlying contest is between a small minority who have gained power over the system and the vast majority who have little or none.  Don't assume that a U.S. president or any other head of state unilaterally makes big decisions. Look at the people who enable and encourage those decisions, and whose interests those decisions serve.  Forget what you may have learned about the choice between the "free market" and government. A market cannot exist without a government to organize and enforce it. The important question is whom the market has been organized to serve.  Forget the standard economic goals of higher growth and greater efficiency. The issue is who benefits from more growth and efficiency.  Don't be dazzled by "corporate social responsibility." Most of it is public relations. Corporations won't voluntarily sacrifice shareholder returns unless laws require them to do so. Even then, be skeptical of laws unless they're enforced and backed by big penalties. Large corporations and the super-rich ignore laws when the penalties for violating them are small relative to the gains for breaking them. Fines are then simply a very manageable cost of doing business.  Don't assume that we're locked in a battle between capitalism and socialism. We already have socialism--for the very rich. Most Americans are subject to harsh capitalism.  Don't define "national competitiveness" as the profitability of large American corporations. Those corporations are now global, with no allegiance to America. Real national competitiveness lies in the productivity of the American people--which depends on their education, health, and the infrastructure that links them together.  You can also forget the ups and downs of the business cycle. Focus instead on systemic changes that have caused the wealth and power of a few to dramatically increase during the last forty years at the expense of the many.  Forget the old idea that corporations succeed by becoming better, cheaper, or faster than their competitors. They now succeed mainly by increasing their monopoly power.  Forget any traditional definition of finance. Think instead of a giant gambling casino in which bets are made on large flows of money, and bets are made on those bets (called derivatives). The biggest winners are those who have better inside information than anyone else.  Don't confuse attractive policy proposals with changes in the system as a whole. Even if enacted, such proposals at most mitigate systemic problems. Solving those systemic problems requires altering the allocation of power.  Don't assume the system is stable. It moves through vicious spirals and virtuous cycles. We are now in a vicious spiral. The challenge is to make it virtuous.  Don't believe the system is a meritocracy in which ability and hard work are necessarily rewarded. Today the most important predictor of someone's future income and wealth is the income and wealth of the family they're born into.  Don't separate race from class. Racial discrimination is aggravating class divides, and wider inequality is worsening racial divides.  Think systematically . Most people's incomes haven't risen for four decades and they are becoming less economically secure. Meanwhile, climate change is intensifying competition for arable land and potable water around the world, generating larger flows of refugees and immigrants. Together these facts allow demagogues to fuel bigotry by blaming immigrants for the stagnant incomes and economic insecurity.  Most important, you will need to understand the nature of power--who possesses it and why, how it is wielded, and for what purposes. Power is the ability to direct or influence the behavior of others. On a large scale, power is the capacity to set the public agenda--to frame big choices, to influence legislators, and to get laws enacted or prevent them from being enacted, to assert one's will on the world.  Power has been leached out of conventional discussions about what is occurring. Power doesn't show up in standard economics texts, finance courses, or even political science and law. But you cannot comprehend today's system without con- fronting power head on. It is the most important subterranean force.  Power is exercised through institutions--big Wall Street banks, global corporations, the executive and legislative branches of government, the Federal Reserve and the Supreme Court, the military, elite universities, and the media (including social media as organized by Big Tech).  But these institutions don't wield power on their own. Particular people have outsized influence over them. They include CEOs like Jamie Dimon, large investors, hedge fund and private equity managers, media moguls, key lobbying groups like the Business Roundtable, and major donors to political candidates and universities. As Greta Thunberg observes, "If every- one is guilty then no one is to blame. And someone is to blame. Some people--some companies and some decision-makers in particular--have known exactly what priceless values they are sacrificing to continue making unimaginable amounts of money."  To comprehend the nature of these decision makers' influence over the system, you'll need to understand the role of wealth. In the system we now have, power and wealth are inseparable. Great wealth flows from great power; great power depends on great wealth. Wealth and power have become one and the same.  I don't intend for these underlying realities to make you more cynical about the system or resigned to its intransigence. To the contrary, the first step to changing the system is to understand it. If we cannot comprehend the truth, we become entrapped in conventional falsehoods and false choices, unable to envision new possibilities. Seeing the system for what it is will empower you to join with others to change it for the better.  Excerpted from The System: Who Rigged It, How We Fix It by Robert B. Reich All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.

---