by Don Peck
We should not underestimate the size of the challenge the United States faces in the coming decades. But nor should we underestimate the resourcefulness of the American people in meeting it—through private invention and decisive government action, through continuing competition tempered by mutual support. The journalist James Fallows has observed that worrying over national decline is a time-honored American pastime frequently in vogue since the very foundation of the republic. Cycles of crisis and renewal appear throughout our history; at critical moments, we have always found the courage to fix what was broken in our politics, our economy, and our society.
Can we find the national courage to do that again today, though it surely means sacrifice? Can we still discern a national interest above our personal ones? Amid the strains and fissiparous forces of a new, global era, can we still find ways to mix and balance liberty with justice, self-interest with cooperation? If we are to remain one nation, in any meaningful sense of the word, we must.
NOTES
1: NOT YOUR FATHER’S RECESSION
1. The Great Recession ended National Bureau of Economic Research, “Report by the Business Cycle Dating Committee,” September 20, 2010, http://www.nber.org/cycles/sept2010.html5.
2. It was the decade’s second Bureau of Economic Analysis, “Table 1.1.6. Real Gross Domestic Product, Chained Dollars,” U.S. Department of Commerce, April 28, 2011.
3. The average house S&P/Case-Shiller Home Price Indices, U.S. National Index Levels, Standard & Poor’s; Social & Demographic Trends Project, “How the Great Recession Has Changed Life in America,” Pew Research Center (June 30, 2010), 31; Jesse Bricker, Brian Bucks, et al., “Surveying the Aftermath of the Storm: Changes in Family Finances from 2007 to 2009,” Board of Governors of the Federal Reserve System, March 2011.
4. The Dow, from peak to trough Gerald P. Dwyer, “Stock Prices and the Financial Crisis,” Federal Reserve Bank of Atlanta, September 2009.
5. One hundred and sixty-five commercial banks Federal Deposit Insurance Corporation, “Failures and Assistance Transactions: 2007–2009,” http://www2.fdic.gov/hsob/HSOBSummaryRpt.asp?BegYear=2009&EndYear=2007&State=1.
6. “I think the unemployment rate” Tom Raum, “Higher Jobless Rates Could Be Here to Stay,” Associated Press, October, 19, 2009.
7. What few jobs National Employment Law Project, “A Year of Unbalanced Growth: Industries, Wages, and the First 12 Months of Job Growth After the Recession,” February 2011.
8. Inevitably, the rhythm of life Joe Rojas-Burke, “Does Our Health Actually Get Better in Some Ways During a Down Economy?” Oregonian (Portland), April 22, 2009; National Highway Traffic Safety Administration, “National Statistics,” www.fars.nhtsa.dot.gov/main/index.aspx; Pierre Brochu et al., “The ‘Trendiness’ of Sleep: An Empirical Investigation into the Cyclical Nature of Sleep Time” (working paper 0909E, Department of Economics, University of Ottawa, 2009); Benjamin Schwarz, “Life in (and After) Our Great Recession,” Atlantic, October 2009.
9. Pop songs become Terry F. Pettijohn and Donald F. Sacco, “The Language of Lyrics: An Analysis of Popular Billboard Songs Across Conditions of Social and Economic Threat,” Journal of Language and Social Psychology 28, no. 3 (September 2009): 297–311.
10. Fewer weddings have been celebrated “Births, Marriages, Divorces, and Deaths: Provisional Data for 2009,” National Vital Statistics Reports 58, no. 25 (August 2010), http://www.cdc.gov/nchs/data/nvsr/nvsr58/nvsr58_25.pdf; National Center for Children in Poverty, http://www.nccp.org/.
11. Bewilderment … has filled Peter S. Goodman, “Despite Signs of Recovery, Chronic Joblessness Rises,” New York Times, February 20, 2010; Emily Yoffe, “The Visit That Never Ends,” Slate, December 21, 2010, http://www.slate.com/id/2277569/.
12. “There’s no end to this” Peter S. Goodman, “Real Estate in Cape Coral, Florida, Is Far from a Recovery,” New York Times, January 2, 2010.
13. Part of the answer stems Carmen M. Reinhart and Kenneth S. Rogoff, “The Aftermath of Financial Crises,” American Economic Review 99, no. 2 (May 2009): 466–72, http://www.nber.org/papers/w14656.pdf.
14. the housing bubble distorted Michael Mandel, “Why We Struggle: Too Much Housing, Too Little Information Technology,” Mandel on Innovation and Growth (blog), August 29, 2010, http://innovationandgrowth.wordpress.com/2010/08/29/why-we-struggle-too-much-housing-too-little-information-technology/.
15. The construction, real-estate Bureau of Economic Analysis, “Value Added by Industry as a Percentage of Gross Domestic Product,” U.S. Department of Commerce, 2010.
16. the ten years prior David Leonhardt, “A Decade with No Income Gains,” New York Times, September 10, 2009.
17. Housing is … the largest asset Edward N. Wolff, “Recent Trends in Household Wealth in the United States: Rising Debt and the Middle-Class Squeeze—An Update to 2007” (working paper 589, Levy Economics Institute of Bard College, March 2010), http://www.levyinstitute.org/pubs/wp_589.pdf.
18. more families have lost Justin Lahart, “The Great Recession: A Downturn Sized Up,” Wall Street Journal, July 28, 2009. 17 Nationwide, nearly one in four houses Zillow.com, “Real Estate Market Report,” February 9, 2011, http://zillow.mediaroom.com/index.php?s=159&item=221.
19. one in seven mortgages Mortgage Bankers Association, “National Delinquency Survey,” 2007 and 2010.
20. And it is by no means clear Gary Shilling, “Here’s Why House Prices Will Now Drop Another 20%,” Business Insider, October 5, 2010, http://www.businessinsider.com/gary-shilling-house-prices#.
21. The ratio of household debt to disposable income Reuven Glick and Kevin J. Lansing, “Consumers and the Economy, Part I: Household Credit and Personal Saving” (economic letter, Federal Reserve Bank of San Francisco, January 10, 2011), http://www.frbsf.org/publications/economics/letter/2011/el2011-01.html.
22. as Raghuram Rajan Raghuram Rajan, Fault Lines: How Hidden Fractures Still Threaten the World Economy (Princeton, NJ: Princeton University Press, 2010).
23. exports make up only Bureau of Economic Analysis, “Table 1.1.5. Gross Domestic Product,” U.S. Department of Commerce, March 18, 2011.
24. One big reason The CBO estimates full-time equivalent job savings of between 1.8 and 5 million, and a boost to real GDP of between 1.1 and 3.5 percent. See Congressional Budget Office, “Estimated Impact of ARRA on Employment and Economic Output from October 2010 Through December 2010,” Director’s Blog, February 2011, http://cboblog.cbo.gov/?p=1852.
25. with federal government debt Martin Crutsinger, “Obama Sends Congress $3.73 Trillion Budget,” Associated Press, February 14, 2011.
26. 55 percent of American workers Social & Demographic Trends Project, “How the Great Recession Has Changed Life in America,” i.
27. In January 2011 U.S. Bureau of Labor Statistics, “Employment Situation Summary,” January 2010; U.S. Bureau of Labor Statistics, “Labor Force Statistics From the Current Population Survey: Average Weeks Unemployed,” January 2010.
28. Unemployment benefits have been Arthur Delany, “3.9 Million Americans Ran Out of Unemployment Benefits in 2010: Report,” Huffington Post, February 10, 2011, http://www.huffingtonpost.com/2011/02/10/2010-unemployment-benefits-exhausted_n_820957.html.
29. In February 2011 Heidi Shierholz, “February Rebounds, but Road to Jobs Recovery Remains Years Long,” Economic Policy Institute, March 4, 2011.
30. According to Andrew Oswald Andrew Oswald, conversation with author, 2009.
31. one attendee, Gus Poulos Gus Poulos, conversation with author, 2009.
32. A 2010 study Debbie Borie-Holtz, Carl Van Horn, and Cliff Zukin, “No End in Sight: The Agony of Prolonged Unemployment” (paper, Rutgers University, May 2010), available at http://www.scribd.com/doc/32165839/Work-Trends-May-2010-No-End-in-Sight-The-Agony-of-Prolonged-Unemployment.
33. a White House study Peter Baker, “The White House Looks for Work,” New York Times Magazine, January 19, 2011.
34. As the end of 2010 approached in e-mai
l message to author, “Economic Projections of Federal Reserve Governors and Reserve Bank Presidents,” Board of Governors of the Federal Reserve, November 2010; Neil Irwin, “Fed Lowers Economic Expectations for 2011,” Washington Post, November 23, 2010.
35. If the labor recovery Heidi Shierholz (Economic Policy Institute), conversation with author, 2009; David Leonhardt, “In the Rearview, a Year That Fizzled,” New York Times, December 28, 2010.
36. Jobs came back more slowly Josh Bivens and Heidi Shierholz, “For Job Seekers, No Recovery in Sight,” EPI Briefing Paper 259, Economic Policy Institute, March 31, 2010.
37. American workers never U.S. Bureau of Labor Statistics, “Labor Force Statistics,” Current Population Survey.
38. the economy sits Heidi Shierholz, “February Rebounds.”
39. More than half of all the jobs Social & Demographic Trends Project, “How the Great Recession Has Changed Life in America,” 20.
40. “In a sense” Gary Burtless (Brookings Institution), conversation with author, 2009.
41. the phone maker Sony Ericsson Laura Bassett, “Disturbing Job Ads: ‘The Unemployed Will Not Be Considered,’ ” Huffington Post, June 4, 2010, http://www.huffingtonpost.com/2010/06/04/disturbing-job-ads-the-un_n_600665.html; Chris Isidore, “Looking for Work? Unemployed Need Not Apply,” CNNMoney.com, June 16, 2010, http://money.cnn.com/2010/06/16/news/economy/
unemployed_need_not_apply/index.htm.
42. The blight of high unemployment Laurence Ball, “Hysteresis in Unemployment: Old and New Evidence” (working paper 14818, National Bureau of Economic Research, March 2009).
43. The number of active militias Southern Poverty Law Center, “Active Patriot Groups in the United States in 2010,” Intelligence Report (Spring 2011); Southern Poverty Law Center, “Active Patriot Groups in the United States in 2007,” Intelligence Report (Spring 2008).
44. Business profits approached Catherine Rampell, “Corporate Profits Were the Highest on Record Last Quarter,” New York Times, November 23, 2010, http://www.nytimes.com/2010/11/24/business/economy/24econ.html.
2: THE TWO-SPEED SOCIETY
1. But some of the entries Andrew Sullivan, “The View from Your Recession,” Daily Dish (blog), Atlantic, May 13, 2009, http://andrewsullivan.theatlantic.com/the_daily_dish/2009/05/the-vi.html.
2. Another writer noted March 17, 2009, http://andrewsullivan.theatlantic.com/the_daily_dish/2009/03/the-view-fro-45.html; January 18, 2010, http://andrewsullivan.theatlantic.com/the_daily_dish/2010/01/the-vi.html, supplemented by conversation with author.
3. Among others writing in March 4, 2009, http://andrewsullivan.theatlantic.com/the_daily_dish/2009/03/the-view-fro-11.html; February 28, 2009, http://www.andrewsullivan.theatlantic.com/the_daily_dish/2009/02/the-view-fro-38.html; March 3, 2009, http://andrewsullivan.theatlantic.com/the_daily_dish/2009/03/the-view-from-4.html.
4. One unmistakable pattern April 6, 2009, http://andrewsullivan.theatlantic.com/the_daily_dish/2009/04/the-view-from-your-recession-2.html.
5. In March 2011, the unemployment rate U.S. Bureau of Labor Statistics, e-mail message to author, April 2011. Findings are based on the Current Population Survey.
6. job postings in February 2011 Juju.com, “Job Search Difficulty Index,” February 2011, http://www.job-search-engine.com/press/Juju-Releases-Job-Search-Difficulty-Index-for-Major-Cities-February-2011.
7. wages were essentially flat Edward Glaeser, “The Information Economy Powers Wage Increases,” Economix (blog), New York Times, October 26, 2010, http://economix.blogs.nytimes.com/2010/10/26/the-information-economy-powers-wage-increases/.
8. A 2010 Pew Research Center study Social & Demographic Trends Project, “How the Great Recession Has Changed Life in America,” Pew Research Center (June 30, 2010), 34.
9. The recession has even proved Anna Turner, “Jobs Crisis Fact Sheet,” Economic Policy Institute, 2010; Hanna Rosin, “The End of Men,” Atlantic, July/August 2010, http://www.theatlantic.com/magazine/archive/2010/07/the-end-of-men/8135/.
10. men have reported Social & Demographic Trends Project, “How the Great Recession Has Changed Life in America,” 59.
11. “The Great Recession has quantitatively” David Autor, “The Polarization of Job Opportunities in the U.S. Labor Market: Implications for Employment and Earnings,” Center for American Progress and Hamilton Project, April 2010, 2–9.
12. “Technology has changed the game” Jack Welch quoted in Fareed Zakaria, “How to Restore the American Dream,” Time, October 21, 2010, http://www.time.com/time/nation/article/
0,8599,2026776,00.html#ixzz161WL283S.
13. the total number of people U.S. Bureau of Labor Statistics, “Employment, Hours, and Earnings From the Current Employment Statistics Survey (National),” 2011.
14. the United States was the second-largest CIA World Factbook staff, e-mail message to author, January 5, 2011.
15. Alan Blinder estimated Alan Blinder, “How Many U.S. Jobs Might Be Offshorable?” (working paper 142, Center for Economic Policy Studies, Princeton University, March 2007).
16. job losses hit America International Monetary Fund and International Labor Organization, “The Challenges of Growth, Employment and Social Cohesion,” September 2010, 7, 44.
17. it has come back down International Monetary Fund, World Economic Outlook Database, October 2010, http://www.imf.org/external/pubs/ft/weo/2010/02/weodata/index.aspx
18. “I think [a middle-class life]” Michael Luo, “Months After Plant Closed, Many Still Struggling,” New York Times, February 9, 2009.
19. more than half of the nation’s Analysis by Emmanuel Saez and Thomas Piketty in “Income Inequality in the United States, 1913–1998,” Quarterly Journal of Economics 118, no. 1 (2003): 1–39, updated at http://www.econ.berkeley.edu/~saez/; updated tables and figures, “Table A6: Top Fractiles Income Levels (Including Capital Gains) in the United States,” July 2010, http://www.econ.berkeley.edu/~saez/.
20. the rise of the super-elite U.S. Bureau of Labor Statistics, “College Enrollment and Work Activity of 2002 High School Graduates,” June 25, 2003.
21. incomes for college graduates David Leonhardt, “Education Still Pays,” Economy (blog), New York Times, January 20, 2011, http://economix.blogs.nytimes.com/2011/01/20/education-still-pays/.
22. college graduates make up U.S. Census Bureau, “2005–2009 American Community Survey 5-Year Estimates: Educational Attainment,” 2010.
23. family income U.S. Census Bureau, “Percent Distribution of Families, by Selected Characteristics Within Income Quintile and Top 5 Percent in 2009,” Current Population Survey 2010: Annual Social and Economic Supplement, 2010.
24. The share of the male population Michael Greenstone and Adam Looney, “The Problem with Men: A Look at Long-Term Employment Trends,” Up Front (blog), Brookings Institution, December 2, 2010, http://www.brookings.edu/opinions/2010/1203_jobs_greenstone_looney.aspx.
25. for every two men Rosin, “The End of Men.”
26. women earned more Paul Wiseman, “Young, Single, Childless Women Out-Earn Male Counterparts,” USA Today, September 2, 2010.
27. It’s the opposite trend U.S. Bureau of Labor Statistics, “International Comparisons of Annual Labor Force Statistics, Adjusted to U.S. Concepts, 10 Countries, 1970–2009: Table 2-11. Employment-Population Ratios for Men,” http://www.bls.gov/fls/flscomparelf/employment.htm#table2_11.
28. more than 18 percent of men U.S. Bureau of Labor Statistics, “Labor Force Statistics From the Current Population Survey: Employment-Population Ratio—Men,” 2011.
29. the urban theorist Richard Florida Richard Florida, “Where the Brains Are,” Atlantic, October 2006, http://www.theatlantic.com/magazine/print/2006/10/where-the-brains-are/5202/.
30. A 2010 Brookings Institution report Brookings Institution, “The State of Metropolitan America,” May 2009, 107–8, 135.
31. roughly as many college graduates Aaron Renn, “College Degree Density Revisited,” The Urbanophile (blog), December 5, 2010, http:/
/www.urbanophile.com/2010/12/05/college-degree-density-revisited/.
32. Powerful economic forces Bill Bishop, The Big Sort (New York: Houghton Mifflin, 2008), 130–35.
33. “superstar cities” Joseph Gyourko, Christopher Mayer, and Todd Sinai, “Superstar Cities” (National Bureau of Economic Research Working Paper 12355, July 2006).
34. The housing bust has revealed James R. Follain, “A Study of Real Estate Markets in Declining Cities,” Research Institute for Housing America, December 2010.
35. In a Brookings Institution “Bachelor’s degree attainment, age 25 and over,” State of Metropolitan America Indicator Map, Brookings Institution, http://www.brookings.edu/metro/StateOfMetroAmerica/Map.aspx#/?subject=4&ind=30&dist=1_0&data=Percent&year=
2009&geo=metro&zoom=0&x=0&y=0.
3: TWO DEPRESSIONS AND A LONG MALAISE
1. “the public features” Alexander Keyssar, Out of Work: The First Century of Unemployment in Massachusetts (New York: Cambridge University Press, 1986), 57.
2. Deflation was a fixture Benjamin Friedman, The Moral Consequences of Economic Growth (New York: Knopf, 2005), 116.
3. the availability of jobs Robert Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000), 360. 43 Income inequality was Friedman, The Moral Consequences of Economic Growth, 112.
4. Charles Spaur estimated Putnam, Bowling Alone, 370.
5. perhaps half of America’s families Friedman, The Moral Consequences of Economic Growth, 117–18.
6. Unemployment became Keyssar, Out of Work, 9, 23–31.
7. Some of these critics … Atlantic Monthly December 1878, quoted in ibid., 19.
8. To feed themselves Ibid., 162.
9. unemployment stood Ibid., 308–11.
10. job loss was hardest Ibid., 95–96.
11. “My oldest girl” Ibid., 173–74.
12. a group of white nativists Putnam, Bowling Alone, 375; Friedman, The Moral Consequences of Economic Growth, 126.