On Topic: The rules of the game

Robert Reich's latest book - an even dozen now, if I'm counting correctly - starts from the premise that, gosh darn it, things simply aren't working.

By 'things” he's talking about a 'pervasive sense of arbitrariness and unfairness” in our economy. Moreover, a good deal of that unease is based in reality, he contends.

Take wages, for example. American take-home pay has 'been stuck in neutral” for 30 years, Reich writes in 'Saving Capitalism: For the Many, Not the Few.”

Another example: We pay more for heaps of things - airfare fees are up even though fuel costs are down; pharmaceutical giants have blocked Medicare from bargaining for cheaper drug prices; 80 percent of Internet users haven't a choice in their service providers, so we pay the most among all advanced nations; and so it goes.

Which is what has brought about Americans' growing pessimism - the author cites a poll that in 2001 concluded 77 percent of us were 'satisfied with opportunities to get ahead by working hard.” But by 2014, that the-sun-will-come-out-tomorrow attitude dipped to 54 percent.

Whose fault is all this? Reich, labor secretary under President Bill Clinton, first blames The System - what we think of as the free market. And the system, he claims, has been rigged.

(What's that George Clooney says in Ocean's 11” about casino gambling - the house always wins?)

Reich looks at the five 'building blocks” of capitalism:

' Property

' Monopoly

' Contract

' Bankruptcy

' Enforcement, by which he means making certain no one plays fast and loose with any of the four above.

He then knocks down each block in turn, noting we have rules governing many of them (so there really isn't a 'free” give and take, as in 'free market,” in these matters), our views on a lot of them have changed over time and, besides, we don't even agree on what constitutes some of these things.

Property is something you own, right? What about slaves? Once upon a time you could, disgusting though that notion is.

What about the human genome? How about a recipe? (Ask Col. Sanders about keeping 'secret” his recipe for Kentucky fried chicken.)

As for monopolies, contracts and bankruptcies, Reich notes we have myriad laws and shifting ethical standards covering whole swathes of issues as to what we should and should not do. We don't allow the (legal) sale of many dangerous drugs, for example, and the Securities and Exchange Commission gets involved when one big company wants to buy or merge with another heavyweight.

You can't just declare bankruptcy to avoid paying your debts. Well, not easily, in any case.

And as for enforcement to prevent or punish cheating, don't get me started. Quick, how many bankers or regulators can you name who've seen the inside of a jail in connection with the mortgage fraud scandals of 2005 and onward? Yeah, exactly.

So much for the 'free” in 'free market” or, for that matter, in 'free enterprise,” Reich scoffs.

He goes on to note that the folk 'who argue most vehemently on behalf of an immutable and rational ‘free market' and against government ‘intrusion' are often the same people who exert disproportionate influence over the market mechanism.”

Moreover, those are the same individuals who alter 'the rules of the game to their own advantage.”

But then, and here's the kicker, Reich says that really, this mess we're in is all our own fault.

See, this isn't so much an economic problem, he reasons, as it is a political one. Once upon a time, America had influential forces to push back against the big-money interests - plenty of strong unions, farm co-ops, local banks, small retailers and local and state-based political parties.

'But all these sources of countervailing power have withered,” he suggests.

Big unions are a shadow of what they once were, small farms have been bought up, Wal-Mart and Amazon.com continue to march onward and the two national political parties 'have morphed into national fund-raising machines.”

The only exception here in Iowa is our plethora of local banks that still dominate over Wall Street brand names.

Simply put, though, those of us not in the top one percent suffer from declining bargaining power, he adds.

Reich points to the presidential campaigns of Donald Trump - 'a wrecking ball” - and Bernie Sanders - 'a rebuilder,” in the author's views - as indicators that maybe Americans might be ready for 'a revolt against the ruling class.”

'We have done so before,” he concludes. 'If history is any guide and common sense has any sway, we will do so again.”

' Michael Chevy Castranova is enterprise and Sunday business editor of The Gazette. (319) 398-5873; michaelchevy.castranova@thegazette.com