Michael: A 2014 Princeton study found that the preferences of the average American have a 'near-zero, statistically non-significant impact' on public policy. Zero. Meanwhile, the desires of economic elites and business groups? They become law. That's not a conspiracy theory; it's data. Kevin: Near-zero? That's… bleak. It’s like shouting into a hurricane. You feel the wind, you know you’re making noise, but the storm doesn’t care. It’s going where it’s going. Michael: Exactly. And that staggering fact is the backdrop for the book we’re diving into today: The System: Who Rigged It, How We Fix It by Robert B. Reich. Kevin: And Reich is the perfect person to write this. He's not just an academic; he was the U.S. Secretary of Labor under Clinton. He’s seen the system from the absolute inside, which gives his critique a ton of weight. Michael: He’s been in the rooms where these decisions are made. And he opens the book with a story about being on the phone with one of the most powerful men in the world, a man who runs one of those very rooms. Kevin: Oh, this sounds like it’s going to be juicy. Let’s get into it.

Michael: So, Reich is at his desk at UC Berkeley when he gets an unexpected phone call. On the other end is Jamie Dimon, the CEO of JPMorgan Chase, arguably the most powerful banker in the world. Kevin: Wow. Okay. I’m guessing it wasn’t a social call to catch up on old times. Michael: Not exactly. Dimon is upset. Reich had been publicly critical of him, and Dimon called to complain. He spends several minutes defending himself, his bank, and his patriotism, at one point famously saying he’s “a patriot before I’m the CEO of JPMorgan.” Kevin: That’s a heck of a line. He’s basically saying, "I love my country, stop picking on me." But what’s Reich’s beef with him? Is he saying Dimon is a bad guy? Michael: This is the crucial point of the whole book. Reich says Dimon isn't necessarily a bad guy. He might be well-intentioned. The problem is that he’s a product, and a beneficiary, of a system that is fundamentally rigged. He’s so deep inside it that he can’t see the bars of his own gilded cage. Kevin: Hold on, what does that mean, he can't see it? He’s a brilliant guy. Is he being willfully blind, or does he genuinely believe the system works? Michael: Reich argues it’s a form of self-delusion that the powerful adopt. Dimon acknowledges problems like income inequality and failing schools. He even champions corporate social responsibility. But he never connects those problems to the immense concentration of wealth and power at the top—power that he himself wields. He talks about fixing the "parts" of the machine, but never questions the machine's fundamental design. Kevin: Because the machine is working perfectly for him. It’s spitting out billions for JPMorgan and a $31 million paycheck for him. Why would he want to mess with the design? Michael: That's the core contradiction. And this is where Reich lands his first big punch. He argues the great divide in America today is no longer Left versus Right, or Democrat versus Republican. It’s Democracy versus Oligarchy. Kevin: Oligarchy. That’s a strong word. It sounds like something out of ancient Greece or modern-day Russia. What does he mean by that in the American context? Michael: He defines it simply: a system where a very small number of people with immense wealth use that wealth to gain political power, and then use that political power to create rules that give them even more wealth. It’s a self-perpetuating loop. And what’s fascinating is that this isn't just a left-wing talking point. Reich quotes a chorus of voices from across the political spectrum all saying the same thing. Kevin: Like who? Michael: In 2016, Donald Trump stood at the Republican convention and said, "Big business, elite media, and major donors are lining up behind my opponent because they know she will keep our rigged system in place." Kevin: Wow. Trump himself. Michael: Then you have Elizabeth Warren saying, "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." Even the climate activist Greta Thunberg says, "If solutions within the system are so impossible to find, then maybe we should change the system itself." Kevin: So everyone agrees the house is crooked, they just disagree on who the crooked carpenter is. Michael: Precisely. Reich’s point is that the anger is real and justified. The system is rigged. The phone call with Dimon is the perfect microcosm: a powerful man who insists he's a patriot, all while leading an institution that benefits from and perpetuates the very rigging that undermines the country he claims to love. He’s a symptom of the disease. Kevin: That’s a powerful frame. So if the system is rigged, how exactly did it get that way? It wasn't always this extreme, was it? I feel like there was a time when a single income could support a family. What changed?

Michael: That’s the perfect question, and it leads to Reich’s second major idea: the mechanics of the rigging. He argues it happened through a "vicious cycle." As wealth concentrated at the top, that money bought political leverage. That leverage was then used to change the rules of the market, which funneled even more wealth to the top. Kevin: So it’s like a game where one player gets to rewrite the rules every time they win, making it impossible for anyone else to catch up. But what rules are we talking about? People talk about the "free market" like it's a law of nature, like gravity. Michael: And Reich says that’s the biggest myth of all. The "free market" doesn't exist in nature. It's a human creation, a set of rules established by government. Rules about property, monopoly, contracts, bankruptcy. The real question is: who gets to write those rules, and for whose benefit? Kevin: Okay, that makes sense. The market isn't a jungle; it's a garden with walls and fences and rules about who gets to plant what. Michael: A perfect analogy. And Reich argues that the biggest rule change, the one that truly unleashed this vicious cycle, was the shift in the purpose of the corporation itself. Before the 1980s, we had what was called "stakeholder capitalism." Kevin: Hold on, "stakeholder capitalism" sounds like corporate jargon. What did that actually look like for a regular worker back then? Michael: It meant that corporations believed they had a responsibility not just to their shareholders, but to all their stakeholders: their employees, their customers, and the communities where they operated. In 1951, the chairman of Standard Oil said management’s job was to maintain an "equitable and working balance" among all these groups. CEOs were paid about 20 times the average worker, not over 300 times like today. Kevin: So it was a different social contract. The company had a sense of loyalty to its people and its town. What happened? Michael: In a word: raiders. The 1980s saw the rise of shareholder capitalism, championed by corporate raiders like Carl Icahn. Their philosophy was simple and brutal: the only purpose of a corporation is to maximize shareholder value. Anything else is a waste of money. Kevin: And how did they enforce that philosophy? Michael: Through hostile takeovers. Reich tells the story of Icahn’s raid on Trans World Airlines, TWA, in 1985. It’s a tragic case study. TWA was a legacy airline, a bit bloated but a stable employer for thousands. Icahn saw it as an undervalued pile of assets. Michael: He took control, loaded the company with over $500 million in debt, and then began to systematically strip it bare to pay himself and other investors. He sold off TWA’s most valuable routes. But the most telling part was his fight with the flight attendants' union. Kevin: What happened there? Michael: He demanded massive pay cuts. The flight attendants, who were mostly women, went on strike. Icahn’s argument in the press was that they didn't deserve to be paid as much as male pilots or mechanics because they weren't the "primary breadwinners." He was using a social prejudice to justify breaking the union and extracting more cash. Kevin: That's just predatory. It's like the company was a living thing, and he was just a parasite draining its life for a quick payday. What happened to TWA? Michael: It was left a hollowed-out shell. It stumbled through bankruptcies for years and eventually disappeared. But Carl Icahn walked away with nearly half a billion dollars. He took the value that had been built up over decades by thousands of workers and transferred it directly into his own pocket. Kevin: And this wasn't just a one-off, was it? This became the new model for American business. Michael: It became the gospel. Jack Welch at GE got the nickname "Neutron Jack" because he’d fire so many people the buildings were left standing but the people were gone. The goal was always the same: cut costs, especially labor costs, to boost the stock price. And this directly created the vicious cycle. As profits soared, the stock market boomed. But who owns the stock market? Kevin: The rich. Michael: Exactly. The richest 10% of Americans own 80% of all shares. So this entire economic model was designed to take money from workers' paychecks and put it into the portfolios of the wealthy. It wasn't an accident. It was a design. And over decades, this design has created a deep, simmering anger in the country. Kevin: Which brings us to the "Furies." That sounds ominous.

Michael: It is. Reich uses the term "The Furies" from Greek mythology—spirits of vengeance—to describe the raw, anti-establishment anger that he found bubbling up all across America. In 2015, he traveled through the Rust Belt, talking to people he’d met 20 years earlier as Secretary of Labor. Kevin: What was different this time? Michael: The frustration had curdled into fury. Twenty years ago, people were anxious. Now, they were enraged. They felt betrayed. They used the term "rigged system" over and over. They talked about losing their jobs, their homes in the 2008 crash, their pensions. They saw Wall Street get bailed out while they got foreclosure notices. They felt the American dream was a joke, and they were the punchline. Kevin: And that anger is a powerful political force. It’s like a wildfire looking for a spark. Michael: And in 2016, it found two sparks: Bernie Sanders on the left and Donald Trump on the right. Both were anti-establishment. Both railed against a rigged system. They tapped into that same well of fury. Reich argues that Trump’s victory wasn't primarily about racism or xenophobia, though he certainly used those tools. The root cause was economic despair and a feeling of profound betrayal by the elites of both parties. Kevin: So what's the answer? How do you fight a bully that big, a system that seems all-powerful? Does Reich offer any real hope, or is it all just a diagnosis of a terminal illness? Michael: He offers hope, but it’s a demanding kind of hope. It’s not passive. He ends the book with a very personal story. As a child, Reich was very short due to a genetic condition, and he was relentlessly bullied. Every day, a bigger kid would corner him and take his lunch money. Kevin: That’s awful. Michael: For a long time, he just endured it. He felt powerless. But one day, something snapped. He decided he wasn't going to take it anymore. The next time the bully came for him, Reich fought back. He didn't win the fight in a physical sense, but he won something more important. The bully was so surprised that he backed off and never bothered him again. Kevin: He changed the dynamic. He refused to be a victim. Michael: Exactly. And Reich uses this as a metaphor for the American people. The oligarchy is the bully. It uses its size and power to intimidate, to make average people feel small and powerless. It tells them, "Don't mess with the system. You can't win." Kevin: But Reich is saying we can. Michael: He’s saying we must. The solution isn't about finding a slightly nicer CEO or a slightly less corrupt politician. It’s about citizens banding together—a broad coalition of the working class, the middle class, and the poor, across racial and political lines—and fighting back. It's about demanding fundamental changes to the rules: getting big money out of politics, strengthening unions, breaking up monopolies, and making the wealthy pay their fair share. It’s about reclaiming power.

Michael: So we started with a powerful CEO who can't see the system he runs, moved to the mechanics of how that system was rewired to benefit people like him, and ended with the raw anger of those left behind. The whole book is a journey from diagnosis to a call to arms. Kevin: It really makes you ask: are we just players in a game with rigged rules, or can we actually become the rule-makers again? Reich seems to believe we can. He’s not selling cynicism; he’s selling a very tough brand of optimism. Michael: He closes with a direct address to Jamie Dimon, saying, "You are not a bad man... but you have a moral duty not to use your political power to stop the movement toward a more just system." It’s a plea for the powerful to step aside and let democracy do its work. Kevin: And if they don't step aside? Michael: Then, like the bully on the playground, they need to be confronted. Reich's final message is that democracy will prevail, but only if we fight for it. Kevin: That's a powerful and, honestly, a necessary message right now. It reframes the debate entirely. It’s not about choosing a team, red or blue. It’s about choosing a system: democracy or oligarchy. Michael: And that's a question every single one of us has a stake in answering. We'd love to hear what you think. Does this 'democracy vs. oligarchy' frame resonate with you? Let us know. Michael: This is Aibrary, signing off.