Some interesting points here. He really does nail some things, but there are holes that need to be plugged. And at least one of the holes in his thesis is, well, gaping.
But Reich fails to acknowledge that the "1947 to 1977" period he holds up as the "Great Prosperity" was not a sustainable phenomenon. To wit, here's one quote:
During three decades from 1947 to 1977, the nation implemented what might be called a basic bargain with American workers. Employers paid them enough to buy what they produced. Mass production and mass consumption proved perfect complements. Almost everyone who wanted a job could find one with good wages, or at least wages that were trending upward.
Let's think back to 1947. OK, most of us here can't really remember 1947 that well if at all, but we can look at history. Global industry in 1947? No emerging markets had emerged yet. Pretty much all other major manufacturing powers were severely damaged in the war. In addition, these infrastructures had to be rebuilt. So who was in the enviable position of providing a lion's share of the world's manufactured goods, with very little competition, for many years until Europe was rebuilt, Japan because a manufacturing power and later other cheap-labor emerging markets emerged? AND who got the business of rebuilding the world in 1947?
For the most part, Reich picks a time period in which American industry was almost the "only game in town." Of course business will be strong then, of course labor will get a better deal when the factories had trouble hiring enough warm bodies to meet an entire world's demand (and well before "offshoring" manufacturing was remotely an option on a large scale). It was possible for business to meet that "basic bargain" in such an environment.
Let's also look at the products of 1947 versus, say, the 1980s through today. Increasingly, the goods are based in information and software. A piece of software isn't like an automobile. If demand for automobiles goes up tenfold, you have to hire almost 10x as many people to build them. If a single piece of software has sales rising tenfold, you don't need to hire 10x the programmers to "build" it -- once built, you may have to hire a few more sales and support folks (again, increasingly in 'cheap labor' economies) but not much else. So the goods produced today are unlikely to see labor demand scale with consumer demand.
Reich does make some good points, and there are things we can and should do to better defend the middle class from further erosion to globalization, both in terms of international trade laws and domestic labor laws. And those at the top of the economic food chain are, in many cases, better off than ever when the middle class clearly isn't. (Long term, history shows this to be a dangerous combination with respect to keeping the national order.) But to suggest that it's remotely possible to restore the "Great Prosperity" of the 1947-1977 period given the change in the world economy and massive global competition that didn't much exist shortly after WW2 is, well, fantasy land thinking. The global economic situation that existed for a while after WW2 is what helped fuel the ridiculously prosperous and unprecedented sweetheart deal for the American middle class, and I think Reich misses the boat in not acknowledging that much of that global demand for American goods in that period simply can not be replicated today by *any* government policy regardless of ideological leaning.
He also says this:
But contrary to popular mythology, trade and technology have not reduced the overall number of American jobs.
IMO, a half truth. On an absolute level, there are more jobs than just about ever. However, in terms of jobs per job seeker, we *are* considerably reduced from the peak -- not to mention that the high demand for jobs and the relatively low employer demand for domestic labor has a downward push on real wages. Again, there are policies that can be pursued to soften this blow, but I think Reich is on the funny stuff if he really thinks the post-WW2 "perfect storm" for American industry and labor is remotely sustainable or repeatable. It's not the number of jobs that's important; it's the percentage of decent jobs per job seeker that matter most.
Having said all that, I do think public policy has increasingly sold out to large corporations, and often to the detriment of consumers, small businesses and middle/working class labor. And while it *may* have been true that "what's good for GM is good for America" 50 years ago, it's not so true any more. What's good for large corporations today is good for shareholders, executive bonuses and sometimes the cheap-labor countries where they are moving many of the jobs -- rarely U.S labor. Corporate prosperity "trickles down" to labor a lot more in tight job markets than in crappy ones like we have now. Indeed, I know quite a few corporate employees for several different companies which have posted record profits in the last couple of years, but haven't given out raises in 3-5 years.