Treasury Secretary Scott Bessent mocked Robert Reich on Wednesday, accusing the former labor secretary of obscuring evidence that lower-income Americans are gaining ground in the Trump economy.
“Once again, the professor has come up short,” Bessent wrote on X, an apparent reference to the title of Reich’s latest memoir, Coming Up Short. “His latest screed is an impressive display of economic prestidigitation.”
Reich’s title refers to his own diminutive stature. Reich has said he is less than five feet tall.
The exchange grew out of Bessent’s recent declaration that the “K-shaped economy” was over. The term describes an economy in which affluent households prosper while lower-income households fall behind.
Reich challenged that claim by pointing to weakness among lower-income customers at McDonald’s. Bessent responded that the restaurant chain’s problem was competition from Burger King.
Reich then published a nearly 2,000-word open letter accusing Bessent of misreading the economy. He argued that lower-income workers continue to struggle with inflation while affluent households benefit from rising stock prices. He cited corporate executives who have described financially strained consumers, along with estimates showing that wealthy households account for a growing share of total spending.
“Real wages may be growing slightly more for low income than high income,” Reich acknowledged, before arguing that stock-market gains continued to favor the wealthy.
Bessent seized on that concession.
“He concedes that wages are growing faster for low-income workers and then attempts to bury that dispositive fact beneath nearly 2,000 words,” Bessent wrote.
Recent Bank of America research also supports Bessent’s description of a narrowing divide in consumer spending.
A July 28 report from Bank of America economists was titled “Three reasons the K has closed.” Using aggregated credit- and debit-card transactions, the bank found that spending growth excluding gasoline was no longer K-shaped. Lower-income households had recorded slightly stronger year-over-year spending growth than higher-income households for two consecutive weeks.
Bank of America said the reversal likely reflected stronger job growth or reduced tax withholding under President Trump’s One Big Beautiful Bill, along with lower gasoline prices in June and favorable year-earlier comparisons.
A follow-up report released Aug. 11 found that the reversal had persisted. In each of the four weeks through Aug. 1, total card-spending growth was stronger among lower-income households than among higher-income households.
In the latest week, spending was up 4.8 percent from a year earlier among lower-income households, compared with 4.2 percent for middle-income households and 4.3 percent for higher-income households.
The bank said the change could not be explained solely by gasoline prices. Spending growth excluding gasoline was also stronger among lower-income households, while spending excluding both gasoline and groceries was roughly even at the lower and higher ends. The gap in discretionary spending continued to close.
Bank of America described the emerging pattern as a move “from ‘K’ to ‘C,’” with lower-income spending remaining solid as higher-income spending cooled modestly.
The bank’s income categories divide households into thirds based on estimated income. Its figures measure changes in card spending per household rather than the absolute amount spent, which remains higher among wealthier households.
Bessent also invoked the controversy surrounding Reich’s 1997 memoir, Locked in the Cabinet, which was criticized for dialogue and scenes disputed by people portrayed in the book. The paperback edition revised or removed a number of passages. Reich added a preamble warning readers that most quotations should be treated as paraphrases and acknowledging that memory was fallible. The Washington Post reported at the time that the book had been “skewered for inaccuracies, misquotations and fabrications.”
“Burger King appears not to be the only one who peddles ‘Whoppers,’” Bessent wrote. He added that, because he did not like “punching down,” this would be his last response to Reich.
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