Jeff Hirsh Read: October 2020
Inspiration: Robert Reich made an appearance on the news and I was interested to learn more about his background
Summary
Written with the help of ChatGPT, below is a brief summary to understand what is covered in the book.
“The System”, published in 2020 by author, political economist and former Secretary of Labor Robert Reich, discusses the ways in which the current economic and political system in the United States is rigged in favor of the wealthy and powerful, and how this has led to increasing income inequality and the erosion of the middle class. He argues that the concentration of wealth and power in the hands of a few has allowed them to manipulate the system to their advantage, and that this has led to a decline in opportunity and mobility for the average person. Reich proposes a number of solutions to address these issues, including reforms to the political system, campaign finance, and the tax code, as well as measures to increase economic opportunity and mobility for all people.
Unedited Notes
Direct from my original book log, below are my unedited notes (abbreviations and misspellings included) to show how I take notes as I read.
America is between oligarchy and democracy, 25k individual were 40% of donations last elections, oligarchy not seen like this since rockefeller/jp morgan/mellon, JPM Dimon most outspoken about change but biggest financer of climate change by a third (named “worlds worst banker of climate change”), Dimon known for max fees also, socialism is term used every time try to help american people, socialism for rich means not held accountable, harsh capitalism for poor means at risk for events no control over or no safety net, Dimon and JPM spend millions lobbying congress and support dems and repubs, most money spent to water down Dodd Frank after 2010 so continue risky bets, 2012 JPM London Whale show same issues exist (sloppy, risky), JPM and other banks hire past congressmen and treasury staff, JPM found to hire children of China elite to win deals, CEOs have power to get republicans to stand up to Trump via stopping funding but don’t and stay quiet, among OECD the US has lowest min wage as % median wage (34% vs france and britain 50%+), pre 1980s CEOs worked way up in company and live in community and only earn modest sums so not solely care about stock price and short term profits, then LBOs start in 80s and turn to efficiency and max shareholder wealth, Yale’s Robert Bork in 80s speak of economies of scale to fend off antitrust, 1980s Sandy Weill and Dimon break down Glass Steagall for sake of international competitiveness (Schumer, Greenspan buy in), Glass Steagall separate investment banks and deposit taking institutions, about 60% of all household wealth today is inherited (new aristocracy not taxed), Amazon and Bezos wouldn’t be as rich without patents and lack of antimonopoly law, large corps and rich people have changed rules of the game and buy politicians to grow wealth unlike any other nation (CEO pay up from 20x to 300x typical employee), unionization down from 35% in 50s to 6% now lead to wages down as no bargaining power, dog whistle politics uses racially coded language to exploit prejudices of white americans, white trump supporters not racist—more so frustrated with stagnant wages and jobs and corporate power that left them behind (vote trump as antiestablishment which was a lie though), overregulate bottom bc harder to regulate top (e.g you shoot endangered pelican you go to jail, company kills by poisoning fish let off easy), democrats lost the working class as a whole (e.g. obama restore confidence in financial mkts not overhaul banking, people left behind and angry at job loss with free trade too), CEOs like trump bc divisiveness take attention away from corporate power and bottom 90% can’t come together
