Robert Reich
A Realist's Guide to the American System
Part 1: Dimon and the enshittification of everything
Robert Reich
Jul 31, 2026
Friends,
I’m devoting the next several Fridays to what I’m calling a “Realist’s Guide to the American System.” If you hadn’t noticed, almost everything’s going to hell.
Why? Trump is horrendous, but he isn’t causing all the failures of that system. He’s a consequence of that system. Think of him as a boil on its backside — an infected pustule on the giant ass of the American system. The boil would have become infected eventually because of deeper flaws in how the system has evolved.
The best way of beginning is to introduce you to Jamie Dimon.
Jamie Dimon
In the spring of 2018, Jamie Dimon phoned me at my office at the University of California, Berkeley. I had criticized him publicly, and he was not pleased. He sounded off on the phone for several minutes without stopping.
Dimon has a great deal of influence over the system. He heads the largest bank on Wall Street, JPMorganChase, which survived the 2008 financial crisis better than any other big bank. After the crisis, The New York Times gave Dimon the back-handed compliment of being “America’s least-hated banker.” He has also headed the Business Roundtable, a lobbying group of the most powerful CEOs in America. He is featured regularly on cable news and in the business press. His opinions carry significant weight on Capitol Hill.
Dimon describes himself as “a patriot before I’m the CEO of JPMorgan.” He is a lifelong Democrat. He admirably speaks out about the injustices and inequalities of contemporary America. He is not just talk. He has pushed his bank to invest in poor cities and to create better opportunities for the disadvantaged.
I believe he’s sincere. But he is awash in self-delusion, a condition especially dangerous in people who have significant power over others.
Dimon doesn’t see how he has contributed to the mess we’re in. He doesn’t acknowledge the inconsistencies between his preferred self-image as “patriot first” and his roles as CEO of America’s largest bank and former chairman of the Business Roundtable. He doesn’t understand how he has hijacked the system.
Dimon is emblematic of an abdication of public responsibility to maintain the health of our political-economic system at a moment when a comparative few at the top have more power over it than at any time in over a century.
They have used their power to give themselves unprecedented wealth, which has bought them even more power. They have justified their wealth and power as being in the interest of the public, but the public has been shafted.
Dimon is among the most capable of American CEOs, adept at promoting and defending his corporation. He also understands some of the failings of the system and has called for some useful reforms. If he weren’t running JPMorgan, someone else would be, and probably not doing so nearly as well.
Nonetheless, a big part of Dimon’s job is to siphon off the gains of the economy for the benefit of a few at the top. As he does this, he’s eroding trust in the system. He’s undermining democracy.
This is how we got into the quagmire we’re in. Dimon is simply playing his part in the current system as it has evolved. He’s responding to how incentives within the system are designed.
To the extent Dimon or others like him are blameworthy, the fault lies in their unwillingness to buck these incentives in order to change the system for the well-being of the vast majority.
This may be an unrealistically high bar. Dimon has no legal obligation to reach it. But I believe he has a moral duty to try to change the laws and incentives so no one ever again can become as rich and powerful as he and his fellow CEOs at the Business Roundtable and as other major financiers on Wall Street. He has a moral obligation to ensure that the American system is no longer rigged in favor of people like him.
I’ll return to Dimon next week, but right now I want to talk about the consequences of all this.
The enshittification of America
Millions of Americans, whether on the left or right of the political spectrum, know something has gone profoundly wrong.
The concentration of wealth in America has created a political system in which the super-rich can buy Congress and the presidency, an education system in which they can buy admission to college for their children, a healthcare system in which they can buy care others can’t, and a justice system in which they can buy their way out of jail.
Almost everyone else has been hurled into a dystopia of bureaucratic arbitrariness, corporate greed, and the legal and financial sinkholes that have become hallmarks of modern American life.
The term “enshittification” was coined in 2022 by novelist Cory Doctorow to describe the declining quality of almost everything. Monopolistic corporations are charging more for the products they sell and cutting back on services. Stuff breaks more often than it used to. Government is being starved of tax money to provide even the most basic of public services.
The whole system seems to be collapsing in on itself.
The word “enshittification” has been officially incorporated into major lexicons like the Merriam-Webster dictionary because of people’s increasingly common experience of being crapped on by big corporations, big hospitals, big energy, and big insurance, and of being bogged down in seemingly endless legal quagmires of corporate and government bureaucracies. As the New Yorker put it, we live in the “Age of Enshittification.”
The advent of AI has highlighted the possibility of mass unemployment and also the growing impossibility of boosting workers’ share of both corporate and national income.
The oligarchs who are now spending hundreds of billions of dollars developing AI — with funds funneled to them by Jamie Dimon and others on Wall Street — have done everything in their power to keep workers’ wages low, prevent them from organizing or joining unions, and stop them from having more political power, and they’re now funding campaigns to protect their fortunes against higher taxes on capital income and wealth.
This mammoth, systemic dysfunction is generating a great deal of heat — anger, frustration, and outrage. That anger is a major reason why Trump became president, twice (even though he has further enshittified America and much of the world).
Heat in any system signals potential change. Like tectonic plates causing earthquakes and volcanoes as they crash into each other, heat is a sign of underlying tumult. In today’s America, the status quo is unsustainable. Subterranean tensions are building.
Trump exploited those tensions for his own malignant ends. But even if Trump is replaced by someone who’s noble, humble, and talented, and who cares more about America than himself — in other words, someone who’s the opposite of Trump — we’d still be in trouble.
The system is out of whack. It needs fundamental change.
The 16 Realities
If you want to understand why the American system has become so dysfunctional, and what you might do to help it to meet the needs of average people, you need to reassess many of your likely assumptions about it.
1. First, forget politics as you’ve come to see it as electoral contests between Democrats and Republicans. Think power. The underlying contest is between a small minority who have gained power over the system, and the vast majority who have little or none.
2. Forget what you may have learned about the choice between the “free market” and government. A market cannot exist without a government to organize and enforce it. The important question is whom the market has been organized to serve.
3. For the same reason, don’t try to separate economics from politics. They’re two sides of the same issue. (Be suspicious of anyone who tries to separate them.)
4. Forget the standard economic goals of higher growth and greater efficiency. The issue is who benefits from more growth and efficiency.
5. Don’t be dazzled by “corporate social responsibility.” Most of it is public relations. Corporations won’t voluntarily sacrifice shareholder returns unless laws require them to. Even then, be skeptical of laws unless they’re enforced and backed by big penalties. Large corporations and the super-rich ignore laws when the penalties for violating them are small relative to the gains for breaking them. Fines are then simply very manageable costs of doing business.
6. Don’t assume that we’re locked in a battle between capitalism and socialism. We already have socialism — for the very rich. Most Americans are subject to harsh capitalism.
7. Don’t define “national competitiveness” as the profitability of large American corporations. Those corporations are now global, with no allegiance to America. Real national competitiveness lies in the productivity of the American people — which depends on their education, their health, and the infrastructure linking them together.
8. You can also forget the ups and downs of the business cycle. Focus instead on systemic changes that have caused the wealth and power of a few to dramatically increase during the last 40 years at the expense of the many.
9. Forget the old idea that corporations succeed by becoming better, cheaper, or faster than their competitors. They now succeed mainly by increasing their monopoly power.
10. Forget any traditional definition of finance. Think instead of a giant gambling casino in which bets are made on large flows of money, and bets are made on those bets (called derivatives). The biggest winners have better inside-information than anyone else.
11. Don’t assume the system is stable. It moves through vicious spirals and virtuous cycles. We are now in a vicious spiral. The challenge is to turn the vicious into the virtuous.
12. Don’t believe the system is a meritocracy in which ability and hard work are necessarily rewarded. Today the most important predictor of someone’s future income and wealth is the income and wealth of the family they’re born into.
13. Don’t separate race from class. Racial discrimination is aggravating class divides, and wider inequality is worsening racial divides.
14. Think systemically. Most people’s incomes haven’t risen for four decades, and they are becoming less economically secure. Meanwhile, climate change is intensifying competition for arable land and potable water around the world, generating larger flows of refugees and immigrants. Together they allow demagogues to fuel bigotry by blaming immigrants for the stagnant incomes and economic insecurity.
15. Don’t confuse attractive policy proposals with changes in the system as a whole. Even if enacted, such proposals at most mitigate systemic problems. Solving those systemic problems requires altering the allocation of power.
Power
16. Most importantly, you need to understand the nature of power — who possesses it and why, how it is wielded, and for what purposes.
Power is the ability to direct or influence the behavior of others. On a large scale, power is the capacity to set the public agenda — to frame big choices, to influence legislators, and to get laws enacted or prevent them from being enacted, to assert one’s will on the world.
Power has been leached out of conventional discussions about what is occurring. Power doesn’t show up in standard economics texts, finance courses, or even political science and law. But you cannot comprehend today’s system without confronting power head on. It is the most important subterranean force.
Power is exercised through big Wall Street banks, global corporations, the executive and legislative branches of government, the Federal Reserve and the Supreme Court, the military, elite universities, and the media (including social media as organized by Big Tech).
But these institutions don’t wield power on their own. Particular people have outsized influence over them. They include CEOs like Jamie Dimon, large investors, hedge fund and private-equity managers, media moguls, key lobbying groups like the Business Roundtable, and major donors to political candidates and universities.
To comprehend the nature of their influence over the system you need to understand the role of wealth. In the system we now have, power and wealth are inseparable. Great wealth flows from great power; great power depends on great wealth. Wealth and power have become one and the same.
I don’t intend for these underlying realities to make you more cynical about the system or resigned to its intransigence. To the contrary, the first step toward changing the system is to understand it.
If we cannot comprehend the truth, we become entrapped in conventional falsehoods and false choices, unable to envision new possibilities. Seeing the system for what it is will empower you to join with others to change it for the better.
Please join me next Friday when I’ll continue this discussion. I look forward to reading your comments.
Iran warns it has a “comprehensive plan” to respond to potential US-Israeli attacks, including strikes on Israeli vital infrastructure and US energy sites in the region, Iranian media reports. LIVE updates:
http://aje.news/790x4c See less
Spain sends over 48,000 migrants back to Morocco from Ceuta; dozens dead
MFers all over the world sending the dispossessed to their doom.
People ticking off America's lost wars rarely include Korea, giving the impression we must have won. Technically it never ended.
Eisenhower’s deal was properly called an armistice. The Korean Armistice Agreement (signed July 27, 1953, at Panmunjom) was a military ceasefire that suspended open hostilities, created the Demilitarized Zone (DMZ) roughly along the existing front lines near the 38th parallel, and set up mechanisms to supervise the truce and handle prisoners of war. It was explicitly a military document signed by commanders of the United Nations Command (primarily the U.S.), the Korean People’s Army, and the Chinese People’s Volunteers—not a political peace treaty between governments.
unc.mil
No formal peace treaty followed (Geneva talks in 1954 failed), so the Korean Peninsula remains technically in a state of war under the armistice framework. This matches the definition of an armistice: a halt to fighting while leaving the underlying conflict unresolved. President Eisenhower, who took office in January 1953 after campaigning on ending the war, helped push negotiations to a close through increased military pressure, diplomatic signals (including hints about possible escalation or nuclear options), and the changed environment after Stalin’s death in March 1953. South Korean President Syngman Rhee initially resisted but was pressured into accepting it.
archives.gov
Neither side was clearly “winning” by mid-1953; the war was a costly stalemate. After the dramatic swings of 1950–early 1951 (North Korean invasion nearly conquering the South, UN/U.S. counteroffensive nearly taking the North, then Chinese intervention pushing UN forces back), the front stabilized near the original 38th parallel by mid-1951. From then until the armistice, fighting consisted mainly of localized battles for hills and outposts (e.g., Bloody Ridge, Heartbreak Ridge, and later 1953 Chinese offensives), heavy artillery exchanges, and attrition, with little permanent territorial change.
history.army.mil
UN/U.S./South Korean forces held air and naval superiority and better mobility/logistics in open warfare, while Chinese and North Korean forces had large manpower reserves, strong defensive fortifications, and built up artillery stockpiles during the static phase. By early–mid 1953, both sides fielded hundreds of thousands of troops along a heavily fortified ~200 km front (roughly comparable strength in theater when including reserves), making a decisive breakthrough unlikely without massive escalation. Casualties continued on both sides with no strategic breakthroughs. The armistice essentially froze the lines close to where the war began, reflecting mutual exhaustion and recognition that neither could force a political victory at acceptable cost.
anzacportal.dva.gov.au
In short, it was correctly termed an armistice because that is exactly what it was—a military truce, not a peace settlement—and the battlefield situation at the time was a bloody deadlock rather than one side holding a clear winning position.
Al Jazeera English
BREAKING: An Israeli court has frozen far-right National Security Minister Itamar Ben-Gvir's plan to place crocodiles around Ketziot Prison, which holds Palestinian inmates, following a petition by animal rights group 'Let the Animals Live.'
They woulf have plenty of food for the gators - All free, - CMT
@cmturner,
Not human rights that take precedence, crocodile rights.
Veteran Democratic strategist James Carville threatened to leave the Democratic Party on Sunday if far-left Twitch streamer and self-described socialist Hasan Piker becomes a leading voice within it, saying the two would never share the same political party.
Please please please
Breaking news: Abdul El-Sayed has defeated Haley Stevens in a high-stakes Democratic Senate primary in Michigan, a significant victory for the party’s progressive leftwing.
https://ft.trib.al/KekmcHt
There are some good moves like this. Likely not enough to rescue the Democratic party.
Robert Reich
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Friends,
I used to think the major tradeoff was between “guns and butter” — between defending the nation and attending to our most pressing social needs.
That view put the federal budget at the center of debate. And it assumed a zero-sum game in which the more we spent on the military, the less we had for the poor. As Ike said in 1953, “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.”
But that old zero-sum game isn’t the biggest cost Trump is imposing on us.
Yes, Trump’s war in Iran and the $1.5 trillion he wants for the Defense Department next year will make it harder for us to meet the nation’s other needs. As will the dramatic cuts he’s made or proposed in public health, education, Medicaid and Medicare, and nutrition assistance.
Yet the biggest cost is the cost of doing nothing about three worsening crises that threaten the very survival of America and the world: climate change, AI, and widening inequality.
Almost all Americans — indeed, most human beings — are now subject to the escalating costs of climate change. How much more evidence do we need?
This summer has been a living hell. Wildfires have forced around 60,000 people to evacuate parts of Washington state, destroying hundreds of buildings and leaving thousands without power. Fires in Canada turned the skies orange and the air foul across a large part of the eastern United States. Millions of lives have been threatened by a deadly heat dome.
Even if Trump weren’t worsening climate change by subsidizing fossil fuels, simply doing nothing would be shameful enough because the crisis is growing so fast. Years ago, climate scientists predicted exactly what’s occurring right now. Trump’s lack of leadership — no, his outright sabotaging of global efforts to stop the planet from becoming uninhabitable — is one of the worst sins of his sinful regime.
AI’s dangers are also now upon us.
If you believe that humans are in total control of AI, you haven’t been paying attention. Recently, at least two of OpenAI’s models escaped a sealed testing environment and broke into the servers of another AI company. The AI models “reasoned” that the solutions to a cybersecurity test were on that other company’s servers, so the models snuck onto the internet and hacked into the other company’s solutions.
This is chilling. The possibility of AI models escaping human control to do horrendous damage to human life is growing exponentially. Here again, the Trump regime’s inaction is a huge cost that’s soaring by the day.
My candidate for the third existential threat is wealth inequality, which is also out of control. Billionaire wealth is surging to monarchical heights while the wages of the typical American aren’t even keeping up with price increases — meaning that most of us are getting poorer.
The problem isn’t inequality per se. It’s the consequences of inequality — especially widening corruption. Billionaires are using their wealth to bribe politicians to reduce their tax rates (which are already lower than most Americans face) and to stop lawmakers from regulating fossil fuels or AI.
Full circle.
Of course, there are still guns-versus-butter issues. Federal budget priorities are important. America faces a yawning budget deficit and can’t possibly do everything that needs to be done. Dollars spent on the military are literally taking food from America’s hungry.
Yet on the largest existential crises of our time, where the costs of inaction are rising to frightening levels, the solutions don’t require extraordinary government expenditure. They require thoughtful environmental and AI regulations, and far higher taxes on the wealthy.
Democrats and progressives running for Congress, governorships, and other positions must speak out loudly and clearly about the rapidly rising costs of inaction on climate change, AI, and inequality.
Demand action. Educate the public. Condemn the Trump regime and its backers — Big Oil, AI, and the billionaire class — for threatening the very survival of humans on the Earth.
The Nation Magazine
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National Security Presidential Memorandum-7 is now the administration’s sharpest tool for criminalizing left political organizing. It directs a 10-agency Joint Terrorism Task Force apparatus—including the FBI, DHS, the IRS, and the Treasury’s Terrorism and Financial Intelligence office—to investigate and prosecute what it calls “domestic terrorism and organized political violence,” with targets defined broadly enough to include anyone whose motivations involve “anti-Americanism, anti-capitalism,” or views that differ from the government’s on immigration, race, and gender. It pursues not just individuals but networks, funders, nonprofits, or even anyone who shows up to a protest.
The people NSPM-7 names as terrorists imagine a world with fewer cages in it, a place where no one can be disappeared from a parking lot or shot while driving with their toddler in the back seat. The government calls that extremism. The world its authors defend—where masked agents shoot bystanders, where 2 million people sit in cells, where insulin is rationed, and corporations poison our water and air—is called moderation. It isn’t. It is the most radical proposition in American life: that this much cruelty is a reasonable amount, and it survives only as long as we agree to fear the people who refuse it. In Minneapolis, the morning after federal agents broke down the organizers’ doors, their neighbors came out with whistles. They followed the agents down the street. By evening, there were groceries on the defendants’ porches, and someone was already fixing the door. Read more from Hannah Riley Fernandez:
Cenk Uygur
AIPAC is doubling down in Michigan. They're going to give tens of millions to
@MikeRogersForMI
. Haley Stevens and Mike Rogers are from different parties, but AIPAC only cares they both serve Israel. This is how uniparty works for donor class while pretending to be on your side.
Shaun King
shaunking
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3h
She is a United States congresswoman.
If ANY elected official said this EXACT SAME THING, but said “Jews” instead of “Muslims” they’d be put out of Congress.
They’d never be leaders again.
The media would actually mention it.
Instead it doesn’t even make the news.
Quote
Rep. Nancy Mace
RepNancyMace
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15h
Every single Muslim holding public office in America is a trojan horse, and a threat to both national security and our republic.
We refuse to be silent.
Jacobin magazine
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The years-old joke goes that centrists fight the Left harder than they fight Donald Trump.
It’s no longer a joke: after “rolling over and playing dead” after 2024, centrists like Third Way are now coming back alive — to fight against socialism.
Al Jazeera English
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BREAKING: The Secretary of Iran's National Security Council says that the US must release frozen Iranian assets unconditionally, lift the sanctions and pay compensation for the two recent wars it waged against us.
Courier Texas
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Federal contractors broke ground inside Big Bend National Park on August 6, beginning construction of border barriers along the Rio Grande in one of the most remote and ecologically significant landscapes in Texas and the United States.
The construction marks the first time in American history the federal government has built inside a national park after waiving the environmental laws designed to protect it.
@cmturner,
There was anarticle in the Guardian about Iran's tactics short term.
All the animus they had towards America has now coalesced around Trump.
It's personal, and keeping the war/talks dragging on until the midterms is a deliberate policy.
@izzythepush,
Could be. They definitely don't plan to give in to Trump. They want the US out of the whole region. The US seems to be shifting its presence. I have read a number of times they are building a new base right at the border of Gaza. But nobody mentions it when discussing this stuff.
