Robert Reich as a type of thinker

Reich makes a valuable case for studying interventionist knowledges because he is a certain type of interventionist thinker, which we might describe as party-aligned individuals who write primarily for broad audiences via trade press books and magazines, or at least for Washington DC, “beltway” audiences, including via more specialized journals like Foreign Affairs and National Affairs.Footnote ⁵ In reality, a great deal of public discussion that shapes policy agendas takes place outside of formal, academic knowledge creation, in such venues as the op-ed sections of newspapers, over radio waves, and other non-academic spaces of civil society. On the right, we can think of the figures who initially wrote for The National Review and The Public Interest journal as well as more recently, Yuval Levin. I believe Reich is such a figure for the mainstream Democratic left. Often these thinkers have some academic training but are not and do not write as academic experts. They write to shape public ideas and policy choices.

Reich’s earlier career as a public intellectual with mainstream, even centrist, Democratic Party predilections in the 1980s and 1990s may be obscure, or even confusing, to readers today, who may primarily know Reich’s work only after his leftward turn in the first decade of this century, and especially after the 2008 financial crisis. His intellectual background is difficult to reconstruct, both because his personal papers are not yet available for research and because he often did not cite the thinkers who were influencing him. Moreover, as a popular communicator, he often wrote in genres where there were no citations at all. Throughout his academic career, he has worked in government or public policy schools, beginning with Harvard University’s Kennedy School of Government, where he taught from the early 1980s until he entered the Clinton administration in 1992. After leaving the administration in 1996, he returned to publishing, first as a professor at Brandeis University’s Heller School for Social Policy and Management and then, after 2006, as a professor at University of California, Berkeley’s Goldman School for Public Policy. Reich has few academic publications, but some publications in the 1980s suggest that he was influenced by several public administration thinkers as well as political philosophers, especially of a communitarian bent.Footnote ⁶ He also appears to have followed writing on business and economics. He put forward ideas, for example, close to Harvard Business School professor of strategy Michael Porter’s and economist Paul Romer’s ideas about the importance of human capital for innovation and economic growth. But his lack of citations make it impossible, at this point in time, to clearly delineate his intellectual milieu.

Throughout his career, Reich has been influential with certain circles of Democratic Party and culturally-left thinking, including, as we will see, his 1980s work on “industrial policy” and his 1990s stint as Secretary of Labor. In 1990, Reich co-founded and acted as chairman of the editorial board of American Prospect magazine, with Princeton University sociology professor Paul Starr, journalist Robert Kuttner, and Brandeis University professor of law and social policy Deborah Stone, and an impressive list of mostly left-leaning intellectual luminaries on its editorial board and board of sponsors. The magazine founders stated that its explicit goal was putting forward a self-described liberal political philosophy, in the twentieth century sense of that term, which includes state intervention in and support for economic development. It also includes, as the founders put it, “social insurance, trade unionism, and Keynesian macroeconomic management as well as expanded political participation” (Reich, Kuttner, and Starr, [1989] Reference Reich, Kuttner and Starr2015). Since the beginning of this century, Reich has written several books that have been reviewed in major national publications, like the New York Times, and he has been the subject of two documentary films, Inequality for All (2013) and Saving Capitalism (2017). Today, he remains a popular figure with significant reach, including on TikTok where he has 976,700 followers.

What most interests me in this paper are the kinds of procedures that undergird the interventionist arguments of the type Reich put forward in his popular writings, though the word “procedure” probably suggests something more formal than it actually is. As we will see in greater detail below, Reich often engaged in what can be thought of as a form of light or near-futurism or prophecy, and in one book, he, perhaps half-jokingly, refers to himself as a “soothsayer” (Reich Reference Reich1989, xiii). In some ways, this puts Reich close to the kinds of business world “futurists” that have been excellently described by scholars like Devon Powers (Reference Powers2019) and Jenny Andersson (Reference Andersson2018). But, in a section of the prospectus for American Prospect magazine titled, “Trends and Their Implications,” Reich, Paul Starr and Robert Kuttner explicitly distanced their project from such futurism, writing, “This will not be a journal of forecasting and futurology, but it will be concerned with the political implications of trends in our economy, environment, population, and society” (Reich, Kuttner, and Starr [1989] Reference Reich, Kuttner and Starr2015). The prospectus authors went on to explain that understanding trends was essential “to clarify the collective burdens and opportunities that the future holds out before us.” In his work, Reich selectively drew on published quantitative findings cast as trends. He synthesized these findings in a qualitative manner that usually involved predicting where society was headed. Then, finally, he suggested policy interventions based on these synthetic projections. None of this was formally tested in any way; it involved synthesis rooted in feeling and judgment. With this description in mind, we can likely identify other thinkers and works of media that fit it.

In a series of writings in the mid-to-late 1980s, Reich offered explicit reflections on the role of his kind of thinking, which in some places he described as “mythic,” and which he often connected to the need for a new, often self-described “liberal,” “public philosophy.”Footnote ⁷ In his book, Tales of a New America: The Anxious Liberal’s Guide to the Future, Reich built on philosophers, like Ernst Cassirer and Alisdair MacIntyre, to put forward his vision of mythic think or, as he put it, the “myth-based morality tales” that he saw himself as telling. “These tales,” he wrote, “embody our public philosophy. They constitute a set of orienting ideas…. The stories interpret and explain reality and teach us what is expected of us in light of that reality” (Reich Reference Reich1987, 7). Reich argued that contemporary economic and social changes were undermining a core set of American myths, which, as a result, were no longer useful and were getting in the way. New myths were needed, and we can see Reich’s writings as an attempt to furnish them. While it may not fully explain the mysterious means by which public thinkers synthesize and circulate ideas, the notion of a “new myth” does suggest how thinkers pull together what they perceive to be the best-available social science into knowledge that they take to be an adequate basis for action. As we will see, such mythic thinking not only floats about through civil society, but often comes to act as the very foundation for interventionist action in the executive branch, and likely other political branches too.

But perhaps viewing Reich’s work as mythic, in his capacities as both a popular writer and a cabinet secretary, also allows us to understand its limits. As we will see, throughout his career, Reich appears to have repeatedly missed important social and economic realities and trends that would have, at least partly, undermined his positions. Reich, like many if not all people, felt the need to make sense of the world around him, and the picture he developed became a deep sense, or habitual perception, of the world rooted in his identity. But sometimes this sense led him astray by encouraging him to discount or altogether miss trends that ran counter to it.Footnote ⁸ Perhaps most of all, as we will see below, Reich became the victim of technology bubble thinking in the 1990s. In their book on technology bubbles, Bubbles and Crashes: The Boom and Bust of Technological Innovation (Reference Goldfarb and Kirsch2019), Brent Goldfarb and David Kirsch examine how individuals—often because they are naïve and ignorant—fall prey to unrealistic narratives about present reality and where trends are headed. Goldfarb’s and Kirsch’s reflections on technology bubbles are also fitting because, as we will see, Reich’s and others’ ideas of “the New Economy” were deeply intertwined with ideas of technological change and the speculative technology bubble that would lead to the dot com bust. Yet, this was not just a case of a single individual whose thoughts were partly wrong, because this individual had significant influence in policy-making and agenda-setting. His thoughts were taken to be an adequate foundation for interventionist knowledge. And as we will see, he was far from the only individual in the Clinton administration who fell prey to limited information, interest-shaped interpretations, and seductive stories about the state of the world.

From “industrial policy” to “the New Economy”

When Bill Clinton and Al Gore promised to pour between ten and twenty billion dollars a year into “Lifetime Learning” programs, including worker retraining, in their campaign speeches and 1992 book, Putting People First: How We Can All Change America, they were giving voice to a line of thinking that had been born a decade previously, around the idea of industrial policy. The United States had much older traditions for thinking about how government could help improve industry, including progressive era discussions of helping out “sick industries” in the 1920s (Hart Reference Hart1998). But industrial policy, which was seen as a European import when it briefly became part of the Carter administration in the late 1970s, differed from those earlier traditions in several ways. The most important was that it was a Democratic Party response to perceived US industrial decline, cast as an alternative to ascendant Republican free market ideologies (Graham Reference Graham1994, 38).

After departing the Carter administration and becoming a lecturer at the Kennedy School of Government, Reich quickly became the primary voice of industrial policy in the United States, followed closely by economist and MIT professor Lester Thurow. A few intellectual trends in the 1970s and early 1980s influenced Reich’s writings on industrial policy, and some became permanent fixtures in his thinking. The first was studies of and worries about the decline of American industry, a great deal of which was taking place in seminar rooms at both Harvard and MIT. The thinking in these two institutions shared two aspects: first, it focused on Western Europe (eventually on Germany in particular) and especially on Japan—not only as rising economic rivals, but also as fonts of interventionist policy ideas and ways of reforming individual corporations. These writings on industrial decline and the hopes of turning American corporations around often arose from business schools and were intimately connected to business consulting. Business schools may not traditionally be seen as fonts of knowledge in histories of science, but in fact, ideas coming out of business schools became increasingly influential during this period for interventions in both government and business.

Another general intellectual trend that became an essential part of Reich’s thinking is what we might call near-futurism. Throughout his career, the titles of Reich’s books suggest an ability to predict the future as well as aspirations to shape it.Footnote ⁹ Because Reich was focused on the role of technological change in reshaping the economy, his work sometimes bore similarities to sociologist Daniel Bell’s writings on “post-industrial society” and futurist Alvin Toffler’s prognostications in books like Future Shock (1970) and The Third Wave (1980). Although Reich made no explicit reference to the kinds of trend analyses and futurism increasingly prominent in business worlds during this period, his writings fit against that background and market of ideas (Andersson Reference Andersson2018; Powers Reference Powers2019).

It was in these contexts that, in the early-to-mid-1980s, on top of slews of articles, Reich published three books on industrial policy: first, with business consultant Ira Magaziner, Minding America’s Business: The Decline and Rise of the American Economy (Reference Magaziner and Reich1982); second, The Next American Frontier (Reference Reich1983); and third, with John Donahue, New Deals: The Chrysler Revival and the American System (Reference Reich and Donohue1985).Footnote ¹⁰ In both his book with Magaziner and his other writings from the early 1980s, Reich took on the perspective of a business consultant.Footnote ¹¹ Just as consultants led executives to identify which parts of firms were high-value and worth fostering, Reich argued that policy-makers should identify high-value industries that were worth preserving and promoting through a variety of means, including industrial subsidies, steering private investment, promoting R&D, investing in worker training and helping individuals who face dislocation from decline, and limited protectionism. Again and again, Reich defined this position in opposition to conservative ones, particularly of the free market variety. Indeed, the word “market(s)” played very little role in Reich’s own thinking and publications, at least through the 1990s.

A close reading of the introduction of The Next American Frontier, titled “Two Cultures,” gives a sense of Reich’s routines of research, thinking, and writing. The book begins by noting America’s economic decline since the 1970s, “marked by growing unemployment, mounting business failures, and falling productivity” (Reich Reference Reich1983, 3). It asserts that this decline arose from a view Americans had about their roles as citizens and economic actors, which it describes as the “Two Cultures” cited in the chapter’s title. Reich thus casts a divide between, on the one hand, politics and government, and, on the other hand, business and economics. The first “realm” deals with social justice; the second, with prosperity. Reich argues that this divide between the two cultures may have even been beneficial during the rise of large corporations focused on mass production of standardized goods (Reich Reference Reich1983, 11). Though it allowed businesses to focus single-mindedly on efficiency, Reich claims that improvement only worked when “the United States was largely isolated and economically unrivaled” (ibid.). Now things were changing. Japan and Western Europe, especially West Germany, were rising as rivals because of their different political economies, which were not divided into two cultures. If the United States wanted to improve and succeed in what the last part of the book calls “The Era of Human Capital,” it would need to overcome the divide between the two cultures and use government to foster industry, especially by encouraging it to invest in people’s skills.

Reich sets out a historical narrative, which covers the period from the founding of the US colonies to the 1980s, over thirteen pages without a single citation. Then, via a series of seven footnotes over a little less than a page, he cites a series of publications to demonstrate that America was declining relative to other nations (Reich Reference Reich1983, 16–7). These cited publications—mostly reports from the Organization of Economic Co-Operation and Development (OECD), the International Monetary Fund (IMF), United Nations (UN), and the American Enterprise Institute (AEI)—and the facts about the United States are meant to demonstrate rising inequality, flagging industrial output, declining gross domestic product, rising unemployment, lower life expectancy, and higher pollution output relative to other industrial nations.

Reich follows these facts by stating that progress in Japan and Europe and decline in the United States requires “no convoluted explanations,” adding that “for largely historical reasons these countries are organized for economic adaptation[, a]nd for largely historical reasons America is not” (Reich Reference Reich1983, 17). But this causal argument is not well supported by the introduction or other chapters in the book. Other problems are also perceptible. Later in the book, Reich writes, “America could take several immediate steps to help shift into higher-valued production” (Reich Reference Reich1983, 239). But as Paul Krugman pointed out a decade later in an extended criticism of Reich and industrial policy thinking, the highest-valued production in the nation was in maligned industries, such as, highest of all, cigarette manufacturing and, second, petroleum refining, not the high-tech, “flexible-production” enterprises Reich tended to celebrate (Krugman Reference Krugman1994, 261–2).

The Democratic Party briefly considered adding industrial policy to its official platform. US Democratic presidential candidate Walter Mondale is said to have told his wife, “This’ll do it for the Democrats,” after reading Reich’s The New American Frontier. More important for the longer-term influences of these ideas, a group of younger Democratic legislators, including Gary Hart, Tim Wirth, Richard Gephardt, and Al Gore, became enamored with the general gist of industrial policy (Krugman Reference Krugman1994, 249; Geismer Reference Geismer2022, 32–4).

Soon, however, industrial policy met with heavy criticism (Graham Reference Graham1994, 69). Both conservatives and organized labor went after it immediately (Geismer Reference Geismer2022, 32–3). Moreover, at a meeting of the US Federal Reserve at Jackson Hole, Wyoming in August 1983, economists, including Lawrence Summers and Paul Krugman, both young at the time, went on the attack against industrial policy as violating basic economic thinking. Summers said industrial policy amounted to chiropractors’ “false hopes of miracle cures” which deterred “the search for real solutions” (Summers Reference Summers1983, 80). Krugman told listeners to file Magaziner’s and Reich’s Minding America’s Business under the category of “popular misconception” (Krugman Reference Krugman1994, 255). These and other criticisms appear to have made their mark. Walter Mondale must have decided that industrial policy was not working for the Democrats, because he did not run on the idea in his failed 1984 campaign, nor did the next Democratic presidential candidate, Michael Dukakis, run on it in 1988. The notion appears to have withered in Democratic Party circles—it died on the vine—but aspects of it would continue to live on and be reborn in the Clinton administration.

Reich began moving away from focusing on mature but struggling large industries in the mid-to-late 1980s, soon after the Democratic Party fell away from explicit talk of industrial policy. I sense a shift in Reich’s thinking in a small report he wrote for the National Education Association in 1988, titled, “Education and the Next Economy.” Reich’s emphasis on the need for collaboration and new kinds of education focused on things like creativity, problem-solving, “experiential learning,” and “learning to learn.”Footnote ¹² The “next economy,” he argued, would “require that we do in our schools what we must do in our business enterprises: push responsibility downward towards teachers and students; invite continuous, incremental innovation at all levels; foster collaboration among parents, teachers, principals, community groups, and the private sector; and encourage flexibility” (Reich Reference Reich1988b, 21).

The evolution of Reich’s thinking in the late 1980s and 1990s fits into other intellectual trends of that moment: away from the issues of the 1970s, like inflation, wage-price spirals, and industrial stagnation, and towards a renewed focus on growth, now with an emphasis on human capital. Perhaps most important is how the notion of human capital became interwoven with growth economics in the 1980s, particularly through the thought of Paul Romer, who would eventually win a Nobel Prize for his work on the topic. The basic idea was that investment in education and training led individuals to create more new ideas, which led to innovation, which eventually led to economic growth (Romer Reference Romer1990).

Picking up on these fashionable topics, Reich’s thinking culminated in his 1991 book, The Work of Nations. In it, Reich attempted to project what skills would be the most important in the coming century and to provide a vision for ensuring that American workers got those skills. Once again, this vision included an active role for the state. Reich continued to focus on “high-value” enterprises, which he tended to envision as existing industries using a variety of technologies to increase productivity. What was new in Reich’s picture was what he called “symbolic analysts,” which were professional roles focused on “problem-solving, problem-identifying, and strategic-brokering” (Reich Reference Reich1991, 177). Reich argued that symbolic analyst jobs were the quickest growing in the economy and also typically high-paying. In many ways, the notion is Reich’s own version of the “knowledge economy,” a term that was taking off at the time but played no major role in Reich’s writings. While information and communication technologies played some role in his understanding and representation of symbolic analysts, this was not yet a vision of digital technologies transforming the economy and work.

Parts of The Work of Nations, especially its focus on human capital and job training, were lifted into Clinton and Gore’s 1992 campaign book, Putting People First. Indeed, journalist Bob Woodward claims that the motto “putting people first” was an attempt by Clinton and Gore’s ghostwriters to put Reich’s beloved “human capital theory” into plain English (Woodward Reference Woodward1994, 34-5). Clinton and Gore advocated using federal spending to create new and enhance existing federal training programs. For example, among other policies, Putting People First proposed the creation of a “national apprenticeship-style program” to bring together “business, labor, and education leaders,” likely modelled on German training programs that Reich and others were so enamored with then and later (Clinton and Gore Reference Clinton and Gore1992, 87). As we have seen, the impetus to refocus on federal training programs in this way had evolved from earlier discussions of industrial policy, and the explicit goal continued to be for Democrats to chart a different path than what Republicans had put forward under Reagan and Bush. But the goal had shifted from reforming American industry to preparing and retraining workers for what Reich increasingly liked to call “tomorrow’s jobs.”

Reich’s Reemployment Act as (failed) interventionist knowledge

After Clinton and Gore won the election, Reich became a member of their transition team, leading work on the coming administration’s economic policies. Soon Clinton asked Reich to become Secretary of Labor. According to Reich’s memoirs, even before Clinton was sworn in, Reich worried that obsessions over government debt, which Clinton and Gore had promised to decrease, would undermine the social programs the pair had also promised during the campaign. These fears became realities almost immediately, which, for the study of interventionist knowledge, serves as a reminder that realpolitik often strongly shapes the boundaries of desired action.

Time and again in his memoirs, Reich represents tensions within the administration (Reich Reference Reich1998, 63). On the one side were members who pushed for social policies and at least some federal spending, including Reich as well as economist Laura Tyson, who was chairman of the Council of Economic Advisors and also had a background in industrial policy thinking. On the other side, constantly bringing up concerns about debt and the need to balance the budget, were politician Lloyd Bentsen, head of the Treasury department; economist Alice Rivlin, deputy to Leon Panetta at the Office of Management and Budget; lawyer and banker Robert Rubin, Chairman of the National Economic Council, and Federal Reserve chairman Alan Greenspan. For a variety of reasons, which other historians have examined in depth, these anti-debt forces within the Clinton administration won, much to Reich’s and Clinton’s chagrin (Lichtenstein and Stein Reference Lichtenstein and Stein2023).

Yet, though Reich’s proposals were ultimately doomed, the Clinton administration did work to promote his ideas, and here Reich’s ideas crossed the line from being mere analysis to entering the fray of the politics of enacting interventionist knowledges. By far the most Reichian initiative the Clinton administration ever put significant energy into was the now-forgotten Reemployment Act of 1994, a bill the administration proposed and lobbied heavily for throughout the year. The concept of “re-employment” was driven by Reich and Clinton’s understanding of how the US economy was changing. The basic idea became a kind of mantra for the administration: traditional unemployment insurance in the United States, Reich and soon others argued, was aimed at helping workers who are laid off during cyclical downturns make ends meet until they can be rehired into the same industries. But this dynamic, they claimed, was changing because of three factors: technological change, corporate restructuring, and global trade. In this context, the administration argued, federal policy needed to transition from unemployment insurance to forms of support for re-employment, which was taken to mean shifting into new industries and sectors.

As we examine how the Reemployment Act developed as an (ultimately failed) form of interventionist knowledge, it is helpful to keep in mind some important facts that Reich’s analysis missed. Doing so will help us better understand the mythic nature of policy thinking in the Clinton White House. Time and again throughout the mid-1990s, and at least up through his 2000 book, The Future of Success: Working and Living in the New Economy, Reich’s writings and speeches highlighted the theme of new jobs requiring new kinds of technical skills. A slide that he used to promote the Reemployment Act was titled “Where the New Jobs Are” and contained the following list: technical sales support, technical marketing, laboratory technicians (including health), factory technicians, and technical/clerical.Footnote ¹³ But this is not what publications out of Reich’s own Bureau of Labor Statistics (BLS) were showing. A 1995 bureau report drawing on data up through 1994 projected that the fastest growing occupations in the United States from 1994–2005 would be two different kinds of home health aides, a stressful low wage job that was also the fastest growing job category between 1983–1994.Footnote ¹⁴ Only a few of the projected job categories came close to the kinds of technical jobs requiring “new skills” that Reich so admired and so often played up. Many more of the projected fastest growing occupations were low wage jobs. And the BLS was right about this: it is precisely what happened over the coming decades. Reich’s favored story missed this trend completely. Moreover, Lichtenstein and Stein show in their book on the Clinton administration that several enterprises Reich identified as innovative in his books and speeches went bankrupt or disappeared within a few years of his celebration of them. In sum, when Reich so confidently imagined enjoining Kirkland to “Join us in preparing people for tomorrow’s jobs,” he did not actually know what tomorrow’s jobs would be, nor did he know what tomorrow’s businesses would be.Footnote ¹⁵

Reich was working on the basic idea of the Reemployment Act by August 1993, four months before the Clinton White House made it a public proposal. By that time, Reich’s interventionist prescriptions had become even more interventionist than they had been in the early 1980s. In his 1983 book, The Next American Frontier, Reich had envisioned developing human capital in the nation by using a mixture of subsidies, tax breaks, and other incentives to induce firms to invest in training workers. By 1993, he seemingly had come to believe that only direct federal investment in training programs would get the job done.

Reich’s work and thinking on the Reemployment Act can be divided into three parts. Two of the parts were centered in social scientific data. The first was a series of reports on the long-term unemployed and so-called “displaced workers,” though Reich’s reading of the data was at least contentious and perhaps simply wrong. The second was research on what made federal- and state-funded training effective. The third part was a myth, a story about “the new economy,” which linked those two bodies of data but seemed to have little evidence of its own beyond anecdotes.

The social scientific literature on “displaced workers” and the politics of knowledge surrounding the term had a longer and deeper history than debates in the 1990s. The term “displaced worker” was quite old, going back at least to the 1920s, and was often associated with debates about whether technological change was leading to unemployment (Woirol Reference Woirol1996, 30–2 and 78–9). In the 1980s, in the shadow of industrial troubles and layoffs that had given rise to talk of “deindustrialization” and “industrial policy,” BLS staff members created a new survey to capture the number and experiences of “displaced workers,” which they defined as workers who had lost their jobs because of “a plant closing, an employer going out of business, a layoff from which (the worker in question) was not recalled or other similar reasons” (Flaim and Sehgal Reference Flaim and Sehgal1985, 4). The new survey was added as a supplement to the Bureau of the Census’ Current Population Survey, one of the oldest and most famous social and economic surveys in US history, with roots going back to attempts to measure unemployment in the Great Depression. Many other publications in the 1980s and 1990s contributed to the period’s overall discourse of displaced workers (Lovell Reference Lovell1986).

Two reports on reemployment that came out of Reich’s Department of Labor in 1993 and 1994 took a 1993 Congressional Budget Office (CBO) report, “Displaced Workers: Trends in the 1980s and Implications for the Future,” as a key text. The 1993 CBO report used the BLS’s displaced worker surveys, running every two years from 1984 through 1992, to examine trends throughout the 1980s and early 1990s and to make some forecasts about the future. Interestingly, the CBO report made much more measured claims than those of Reich’s Department of Labor, which was using this and other publications to argue that a real shift was underway in the economy. While the CBO report did recognize some shifts in permanent layoffs—for example, white-collar workers were increasingly facing these whereas they used to be more centered in blue-collar work—it also noted that such layoffs were “fairly common even in a healthy labor market” and that “displaced workers themselves have changed relatively little despite the sectoral changes in displacement” (Ross and Smith Reference Ross and Smith1993, 5).

This picture of relative normality was not the one coming out of the Department of Labor. In December 1993, it published a report titled, “The Changing Labor Market and the Need for a Reemployment Response.” In every possible way, except superficial differences typical of government publications, such as being filled with bullet points, it reads like a Reich book or essay. In many ways, it was just as synthetic and based on a sense of how things were shifting, which highlights how mythic thinking permeates not only popular books but also sometimes government reports. The report drew on publications from the CBO, the National Bureau of Economic Research, the Brookings Institution think tank, economics articles, and perhaps most of all, from uncited data from the Department of Labor and its BLS. The report highlighted the new survey data about how more workers not expecting to go back to their old jobs, increasing numbers of long-term unemployment among those laid off, and other figures that supported a vision of an economy undergoing transformation. Yet, attention to detail uncovers that the report sometimes strained to make its own case. For example, its authors felt the need to specify that “as a proportion of workers, however, these displaced worker measures were somewhat lower than in the early 1980s” (US Department of Labor 1993, 3). In other words, as a percentage of the workforce, there were fewer displaced workers in the early 1990s than there had been a decade earlier.

The second body of social scientific data upon which Reich drew were studies of what made training programs successful. In this case, Reich also used his role as labor secretary to do something he had not done previously or since: conduct new research. In February, Reich held a Department of Labor conference titled “Building a Reemployment System: What is Working in America,” at which Clinton formally announced the bill now named the Reemployment Act of 1994. The gathering drew together the leaders of training programs, which were perceived to be successful, from at least thirteen states in the nation.Footnote ¹⁶ The leaders discussed how their organizations worked and what they attributed their success to. Reich and others also conducted site visits to the offices of many of these programs. In April, the Department of Labor built on the “What is Working?” gatherings and site visits to publish a report titled, “Reemployment Services: A Review of Their Effectiveness.” While the report emphasized that few publications on training programs lived up to the ideals of “random-assignment experimental studies,” labor department staff did attempt to “cover all of the empirical studies in this area” (US Department of Labor 1994, 278). The report detailed several findings that became administration talking points for the rest of the year.

So, on the one hand, Reich had studies of “displaced workers,” and, on the other hand, he had research on what made training programs effective. The connective tissue that Reich used to link these two bodies of data was the myth of “the new economy.” It is at this moment that we see the exact phrase “the new economy” emerge in in the Clinton administration records. It fills documents from the administration’s Reemployment Act. Yet, the phrase had not yet taken on the capitalized, proper name form (“the New Economy”) that it would assume in later administration publications and gatherings. To use Reich’s definition of mythic tales in public thinking, “the new economy” was a story that acted as “a set of orienting ideas” that helped “explain reality and teach us what is expected of us in light of that reality.” In a letter to the House Ways and Means Committee, which was approved by several executive branch agencies, Clinton urged members to enact the legislation, writing, “The Reemployment Act, as part of a lifetime learning system, tells our workers that—whatever the new economy brings—they will be ready.”Footnote ¹⁷ Moreover, this was the moment wherein “the new economy” became increasingly tied to changing information technologies, though not nearly as dramatically as later when the two things were taken to be one.

Reich also weighed in on these topics. In May 1994, he drafted an essay the administration hoped would be published in the New York Times, though it apparently never was. The essay, and other statements Reich made around the Reemployment Act, started from a seeming paradox: the US economy had recovered from the recession of 1991–1992, and though initially the end of that recession had led one observer to coin the term “jobless recovery,” by 1994, unemployment was at its lowest point in decades. Yet, millions of Americans said they could not find jobs, anecdotally employers said they could not find the skilled workers, and long-term unemployment was at its highest level since the government had begun keeping records on it. Reich believed the answer to this puzzle lay in the mismatch of skills.Footnote ¹⁸ At the time, economists had already begun to worry that unemployment levels were getting too low and might begin to induce inflation. But Reich suggested in the essay that the skills mismatch in the economy was so deep and powerful that the so-called “natural rate of unemployment” might be decreased without inducing inflation if workers got the training they needed.Footnote ¹⁹ In this way, Reich argued, reemployment programs would both help workers and boost growth. As Reich concluded, “By easing the transition for all Americans from the old economy to the new, we can simultaneously combat inflation and continue aggressively to create more and better jobs for all our people.”

One thing that stands out in Reich’s public pronouncements about the Reemployment Act and “the new economy” was how little data he had to support his picture of how the economy was changing. As a communicator, Reich liked to highlight numbers that supported his case when he had them, but his tales of “the new economy” rarely featured such supporting evidence. Often, he would turn to anecdotes, say, for example, that as Secretary of Labor he traveled the country talking to business leaders who were telling him that they were having trouble finding workers with the skills they required. His May 1994 unpublished letter to the New York Times stated, “Many employers are having trouble finding the workers they need—the kind of conditions that eventually kindle inflation worries,” but he provided no evidence for the claim. His apparent lack of evidence did not deter him from, for example, telling members of the Senate that a series of technical jobs were the fastest growing occupations in the United States, or arguing in public that the disconnect between needed and available skills explained both the hardship businesses were experiencing and the suffering of workers. There is also clear evidence that some people were skeptical about Reich’s narrative about “the new economy.” In December 1993, the Washington Post’s editorial board published a piece supporting the soon to be announced Reemployment Act plans, which it said “make good sense.” However, it went on, “They do so almost independently of the elaborate rationale the administration has constructed for them—the view that unemployment now is somehow different from in the past, which not everyone fully accepts” (Washington Post 1993).

Clinton announced the Reemployment Act, without naming it in his 1994 State of the Union Address and in his proposed budget published a month later, in language that mirrored Reich’s own speeches and Labor Department publications.Footnote ²⁰ The President announced his plan to “literally transform our outdated unemployment system” by “streamlining today’s patchwork of training programs.”Footnote ²¹ As Clinton put it in the State of the Union, “Re-employment, not unemployment, must become the centerpiece of our economic renewal.” In March, Clinton and Reich announced details of the bill, which was meant to last five years and, according to White House estimates, would cost $13 billion. The act would provide a “comprehensive program for worker adjustment,” which included reemployment insurance for displaced workers and a national grant program to fund state programs.Footnote ²²

As soon as the bill was announced, media coverage noted both that “the legislation’s prospects in Congress are believed to be questionable this year” and that, because of budget constraints, the proposal “drastically scaled back Reich’s initial ideas that would, essentially, have given every American worker an entitlement to federally supported job training”Footnote ²³ (Lauter Reference Lauter1994). Still, the Clinton Administration explicitly made the Reemployment Act of 1994 one of its major policy initiatives for that year, and included the law in short lists of major domestic and economic initiatives.Footnote ²⁴ Archival records of the Clinton Library make clear that the administration invested serious effort in coordinating and lobbying for the bill, including a series of hearings and regional roundtables on it around the country.Footnote ²⁵ The administration had several cabinet level secretaries writing op-eds, taking part in media roundtables, and leaning on legislators, labor unions, business leaders, nonprofit organizations, and other pressure and special interest groups.Footnote ²⁶ Eventually hundreds of individuals and organizations, including both Republican and Democratic legislators, governors, unions, business leaders, signed on to support the bill.

If the Reemployment Act always faced headwinds, by midyear the bill was in doldrums. A June memo from Clinton’s Special Assistant for Policy Coordination put it bluntly, “The greatest problem facing the REA is not intense opposition, but the lack of intense support. The Administration—rather than any constituency—is the engine driving it.”Footnote ²⁷ The act had come from within the administration, more specifically from Reich’s mind. In a political system highly dependent on the desires and pressures of interest groups, it had no external champion. No one loved it. Put another way, while many figures in the Clinton administration and beyond were invested in the myth of “the new economy,” no interest groups were invested in the idea that training programs were the answer to problems of “the new economy.”

It is unclear from available records exactly when the Reemployment Act died. But then again, organizations often move on from initiatives without holding a formal funeral service. A likely culprit in the bill’s demise was how soundly Newt Gingrich and the Republicans defeated the Democratic Party in the midterm elections in November 1994, an event that upended many White House plans. The Clinton administration largely moved on from reemployment training and would only later pass an attenuated version of the Reemployment Act as the Workforce Investment Act of 1998, an achievement that was largely overshadowed by the Lewinsky scandal (Baker Reference Baker1998).