Robert Reich | Aftershock – a synopsis

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Robert Reich Aftershook BookRobert Reich in his book Aftershock describes the deteriorating state of financial affairs for Middle America leading up to the financial meltdown in September 2008.

Much like the crash in 1929 that lead to the great depression, much of it was caused by income disparity in the nation. The chasm between rich and middle class was too wide.

The narrative starts with income disparity in the 1950’s through the first decade of the 21st century. As more and more wealth is concentrated in fewer and fewer people, consuming has to drop. Middle American worker wage stagnation in comparison with the wealthiest Americans and the rate of inflation created a situation where families invest more and more time and energy just to maintain the same standard of living as in the past.

The comparison:

1950’s: A white middle class family could live comfortably, purchase a home and basic necessities on a single income.

1960’s Much the same as the 50’s for whites, but African Americans wanted in on the picture and were fighting for the right to earn the same as their white counterparts.

1970’s Women started going to work in greater numbers, raising family income, although wages remained relatively static to inflation. So now a family was earning more by spending more hours at work.

1980’s High rates of inflation started eating into still stagnating wages. The wealthiest 1% profited, but middle class families struggled to keep up and more women had to go to work, not by choice but of necessity.

1990’s As wages continued to stagnate falling behind the rates of inflation, the middle class increasingly turned to consumer credit to maintain a comfortable living. The cycle of debt was bolstered by rising home values where families could take out more loans with their homes as collateral.

2000’s The cycle of consumer debt continued to increase, families considered it normal to have both spouses working, sometime multiple jobs just to stay afloat. Skyrocketing home values continued to provide greater and greater loan opportunities. Houses were literally becoming ATM machines seen as an inexhaustible supply of cash to pay for daily living expenses and more and more consumables.

Towards the end, families had run out money to service their debt, maxed out their time to work more hours, and therefore could no longer afford to continue consuming, purchasing higher and higher priced homes, leading the whole house of cards to come crashing down.

photo by Richard Morgenstein

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The Pluralist Advocate started out this life in a conservative Military oriented community, and he later moved to that bastion of liberal activism called the San Francisco Bay Area. Having lived both ends of the political spectrum he has a unique understanding of both sides of most issues. He was also very religious growing up, serving as a studying the Christian scriptures and even spending some time as a foreign missionary. He used to think he had all the answers to life's greatest questions, but the more he looks around the world, the more he finds a wide variety of different values that work for different people. This blog is an exploration of thought and consideration from as many points of view as can be held at one time. He now holds the position that truth is found in many different disciplines. You may know the Pluralist Advocate around the web and twitter as brihartwell, or his given name of Brian Hartwell. He hates to be narrowly defined by one title, so as you read these musings you may find things you identify with, and others that you despise. That is good. Please share your reactions to the thoughts here and we will all grow together.