by Don Peck
18. According to a survey Robert P. Jones and Daniel Cox, “Old Alignments, Emerging Fault Lines: Religion in the 2010 Election and Beyond,” Pew Public Religion Research Institute, November 2010, 15.
19. Tea Party supporters generally favor Supported by “Polling the Tea Party,” New York Times.
20. The ideal of market freedom Pew Research Center for the People & the Press, “Public Support for Increased Trade, Except With South Korea and China,” November 9, 2010, http://people-press.org/report/673/.
21. If you squint hard enough Lawrence Goodwyn, The Populist Movement (New York: Oxford University Press, 1978), vii.
22. David Frum has noted David Frum, “Post-Tea-Party Nation,” New York Times Magazine, November 12, 2010, http://www.nytimes.com/2010/11/14/magazine/14FOB-idealab-t.html.
23. In his 1951 book Eric Hoffer, The True Believer: Thoughts on the Nature of Mass Movements (New York: Harper & Row, 1951; Perennial Classics, 2002), xi, 26. Citations refer to the Perennial edition.
24. a Penn Schoen Berland poll Andy Barr, “Poll: D.C. Elites a World Apart,” Politico, July 18, 2010, http://www.politico.com/polls/power-and-the-people. (Full results available as a PDF at this URL.)
25. Washington’s political elites Francesca Levy, “America’s 25 Richest Counties,” Forbes, March 4, 2010, http://www.forbes.com/2010/03/04/america-richest-counties-lifestyle-real-estate-wealthy-suburbs.html.
26. In his 2005 paper Martin Gilens, “Inequality and Democratic Responsiveness,” Public Opinion Quarterly 69, no. 5 (special issue, 2005): 778–896; Martin Gilens, conversation with author, 2010.
27. A new free-trade agreement “U.S.–South Korea Trade Deal Largest Since NAFTA,” Associated Press, December 3, 2010.
28. the state of the economy Miller Center of Public Affairs, University of Virginia, “George Herbert Walker Bush, American President: An Online Reference Resource,” http://millercenter.org/president/bush/essays/biography/3. Democrats who decided not to run against George Bush in 1996 included Senator Bill Bradley and Governor Mario Cuomo.
29. But economic conditions Larry Bartels, Unequal Democracy: The Political Economy of the New Gilded Age (Princeton, NJ: Princeton University Press, 2008), 100–104; John B. Judis, “Job One,” New Republic, September 22, 2009, http://www.tnr.com/article/job-one.
30. unemployment doesn’t matter Bartels, Unequal Democracy, 100–120; Seth Masket, conversation with author, December 2010.
31. polling in early 2011 “Romney, Huckabee Even With Obama, Other GOP Hopefuls Trail,” Rasmussen Reports, February 6, 2011; Lydia Saad, “Nameless Republican Ties Obama in 2010 Election Preferences,” Gallup, February 16, 2011.
32. After the 2010 midterms David M. Kennedy, “Throwing the Bums Out for 140 Years,” New York Times, November 6, 2010, http://www.nytimes.com/2010/11/07/opinion/07kennedy.html.
33. Japan’s economy since John B. Judis, “A Lost Generation,” New Republic, November 13, 2010, http://www.tnr.com/article/politics/78890/a-lost-generation.
9: A WAY FORWARD
1. In 1937, as Franklin U.S. Census Bureau, “Historical Statistics of the United States, Colonial Times to 1957,” 1960, 70; Robert McElvaine, The Great Depression: America, 1929–1941 (New York: New York Times Books, 1984), 298.
2. after years of deficits Jodie T. Allen, “How a Different America Responded to the Great Depression,” Pew Research Center, December 14, 2010, http://pewresearch.org/pubs/1810/public-opinion-great-depression-compared-with-now.
3. And so, in 1937 Ibid.; McElvaine, The Great Depression, 297–98, 307.
4. Deficit spending intuitively U.S. Office of Management and Budget, Historical Tables, “Federal Debt at the End of the Year: 1940–2016,” http://www.whitehouse.gov/omb/budget/Historicals.
5. Debt kept rising Richard Auxier, “Reagan’s Recession,” Pew Research Center, December 14, 2010, http://pewresearch.org/pubs/1818/reagan-recession-public-opinion-very-negative.
6. The size of the debt U.S. Office of Management and Budget, Historical Tables, “Federal Debt at the End of the Year: 1940-2016.”
7. Many observers believe Debt Reduction Task Force, “Restoring America’s Future,” Bipartisan Policy Center, November 2010.
8. Yet concerns over Data and analysis provided to author by Marc Goldwein, Policy Director, Committee for a Responsible Federal Budget, by e-mail on March 24, 2011.
9. Jobs are scarce U.S. Bureau of Labor Statistics, “Labor Force Statistics from the Current Population Survey,” accessed March 2011, http://www.bls.gov/cps/.
10. The unemployment rate U.S. Bureau of Labor Statistics, data provided to the author.
11. fears are driven See, for instance, Congressional Budget Office, “The Budget and Economic Outlook: Fiscal Years 2008 to 2018,” January 2008, figure 1-4 (“Projected Federal Spending Over the Long Term”), showing rapid increases in federal spending over the next several decades, driven exclusively by growth in Medicare and Medicaid spending, http://cbo.gov/ftpdocs/89xx/doc8917/Chapter1.5.1.shtml#1070080.
12. we should also focus The economists Ezekiel J. Emanuel and Victor R. Fuchs have described a much broader version of such a plan. See, for example, “Health Care Vouchers—A Proposal for Universal Coverage,” New England Journal of Medicine 352, no. 12 (March 24, 2005), http://www.robert-h-frank.com/PDFs/Emanuel-Fuchs.NEJM.3-24-05.pdf.
13. the city of Camden, New Jersey Christopher Beam, “Officers Down,” Slate, January 19, 2011, http://www.slate.com/id/2281694/.
14. One of the best targets Michael Mandel, “Our Aging Capital Stock,” Mandel on Innovation and Growth (blog), December 14, 2010, http://innovationandgrowth.wordpress.com/2010/12/14/our-aging-capital-stock/.
15. The American Society of Civil Engineers American Society of Civil Engineers, “Report Card for America’s Infrastructure,” 2009, http://www.infrastructurereportcard.org/.
16. Over the past decade McKinsey Global Institute, “Growth and Competitiveness in the United States: The Role of Its Multinational Companies,” June 2010, 45, http://www.mckinsey.com/mgi/publications/
role_of_us_multinational_companies/index.asp.
17. China spends about 9 percent “The Cracks Are Showing,” Economist, June 26, 2008, http://www.economist.com/node/11636517.
18. Not all of this investment Christopher Leinberger, “Here Comes the Neighborhood,” Atlantic, June 2010, http://www.theatlantic.com/magazine/archive/2010/06/here-comes-the-neighborhood/8093/.
19. And targeted expansion 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, Congressional Budget Office, February, 2011, http://cboblog.cbo.gov/?p=1852; Adam Posen, Restoring Japan’s Economic Growth (Washington, DC: Institute for International Economics, 1998).
20. Economic woes are not U.S. Bureau of Labor Statistics, “Local Area Unemployment Statistics: Unemployment Rates for Metropolitan Areas,” December 2010, http://www.bls.gov/web/metro/laummtrk.htm.
21. the ratio of unemployed people 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.
22. the rate of migration William Frey, “Migration Declines Further: Stalling Brain Gains and Ambitions,” Brookings Institution, January 2011, http://www.brookings.edu/opinions/2011/0112_migration_frey.aspx.
23. a 2010 Rutgers University survey 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.
24. The Internet has made it much easier Jens Ludwig and Steven Raphael, “The Mobility Bank: Increasing Residential Mobility to Boost Economic Mobility,” Hamilton Project, October 2010.
&n
bsp; 25. Under the Trade Adjustment Assistance Program Howard Rosen, conversation with author, 2010; see also U.S. Department of Labor, “Trade Adjustment Assistance Fact Sheet,” http://www.doleta.gov/programs/factsht/taa.htm.
26. As a lower-cost alternative Ludwig and Raphael, “The Mobility Bank.”
27. In a 2010 survey by the National Association of Manufacturers Motoko Rich, “Factory Jobs Return, but Employers Find Skills Shortage,” New York Times, July 2, 2010.
28. In some places, what employers need Ibid.
29. many people who lost their job Borie-Holtz, Van Horn, and Zukin, “No End in Sight.”
30. time limits on unemployment benefits Mai Dao and Prakash Loungani, “The Human Cost of Recessions: Assessing It, Reducing It” (IMF Staff Position Note, November 11, 2010), http://www.imf.org/external/pubs/ft/spn/2010/spn1017.pdf, see p. 18 in particular; http://www.politiquessociales.net/IMG/pdf/dp3667.pdf.
31. the comparatively short duration Walter Nicholson and Karen Needels, “Optimal Extended Unemployment Benefits,” Mathematica Policy Research, Inc., October 2004, www3.amherst.edu/~wenicholson/Optimal_UI.APPAM.pdf.
32. Wage insurance wouldn’t Lael Brainard, “Meeting the Challenge of Income Instability,” Testimony to the Joint Economic Committee of the U.S. Congress, February 28, 2007, http://www.brookings.edu/testimony/2007/0228labor_brainard.aspx.
33. the McKinsey Global Institute McKinsey Global Institute, “Growth and Competitiveness.”
34. Yet for all their outsized presence Hearing on the Current Federal Income Tax and the Need for Reform Before the Committee on Ways and Means, U.S. House of Representatives (January 20, 2011; testimony of Martin Sullivan), http://waysandmeans.house.gov/UploadedFiles/
sullivan_written_testimony_WM_Jan_20.pdf.
35. “The value of knowledge capital” Michael Mandel, “A Massive Writedown of U.S. Knowledge Capital,” Mandel on Innovation and Growth (blog), December 13, 2010, http://innovationandgrowth.wordpress.com/2010/12/13/a-massive-writedown-of-u-s-knowledge-capital/.
36. The product cycle Michael Mandel, “Why Isn’t the Innovation Economy Creating More Jobs? Part I,” Mandel on Innovation and Growth (blog), February 22, 2010, http://innovationandgrowth.wordpress.com/2010/02/22/why-isnt-the-innovation-economy-creating-more-jobs-part-i/.
37. Yet in the aughts See, for example, Michael Mandel, “The Failed Promise of Innovation in the U.S.,” Bloomberg Businessweek, June 3, 2009; Edmund Phelps and Leo Tilman, “Wanted: A First National Bank of Innovation,” Harvard Business Review, January/February 2010; Tyler Cowen, The Great Stagnation (New York: Penguin, 2010).
38. Foreign students still flock McKinsey Global Institute, “Growth and Competitiveness,” 40, 41.
39. the Sarbanes-Oxley accounting reforms Phelps and Tilman, “Wanted.”
40. The growth of the Internet Michael Mandel, “The Coming Communications Boom? Jobs, Innovation and Countercyclical Regulatory Policy” (policy memo, Progressive Policy Institute, July 20, 2010), http://www.progressivefix.com/the-coming-communications-boom-jobs-innovation-and-countercyclical-regulatory-policy.
41. In periods of strong growth Ibid.
42. Only about 65,000 H-1B visas McKinsey Global Institute, “Growth and Competitiveness,” 56.
43. One group of venture The StartUp Visa Act is available to view at www.startupvisa.com.
44. A special focus on improving Ron Haskins and Isabel Sawhill, Creating an Opportunity Society (Washington, DC: Brookings Institution, 2009), 149.
45. In The Race Between Education and Technology Claudia Goldin and Lawrence Katz, The Race Between Education and Technology (Cambridge: Belknap Press, 2008), 5, 27, 43, 244, 324.
46. Meanwhile, with remarkable speed Ibid., 43.
47. Over the past thirty years CPS Historical Time Series Tables, “Percent of People 25 Years and Over Who Have Completed High School or College, by Race, Hispanic Origin, and Sex, Selected Years: 1940 to 2009,” U.S. Census Bureau, September 22, 2010.
48. Grants, loans, and tax credits Haskins and Sawhill, Creating an Opportunity Society, 186–87.
49. One recent major study Ibid., 188.
50. Analysis by David Autor David Autor, “The Polarization of Job Opportunities in the U.S. Labor Market,” Center for American Progress, the Hamilton Project, April 2010.
51. While the lion’s share of jobs National Employment Law Project cited by Harold Meyerson in “Business Is Booming,” American Prospect, January 28, 2011, http://prospect.org/cs/articles?article=business_is_booming.
52. As Richard Florida writes Richard Florida, The Great Reset (New York: HarperCollins, 2010), 121–22.
53. Whole Foods Markets Elizabeth Flock, “Whole Foods’ Organic Capitalism,” Forbes, October 20, 2010.
54. American economists on both Edmund S. Phelps, Rewarding Work (Cambridge: Harvard University Press, 2007); Robert Reich, Aftershock: The Next Economy and America’s Future (New York: Knopf, 2010); among others.
55. The Earned Income Tax Credit U.S. Internal Revenue Service, Earned Income Tax Credit Home Page, http://www.irs.gov/individuals/article/0,,id=96406,00.html; Tax Policy Center, “Earned Income Tax Credit Parameters, 1975–2011,” Tax Policy Center, http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?DocID=36&Topic2id=40&Topic3id=42.
56. The panic of 1893 Louise Story, “Income Inequality and Financial Crises,” New York Times, August 21, 2010; David Moss, “Chart: Bank Failures, Regulation, and Inequality in the United States,” Harvard Business School, http://www.tobinproject.org/conference_economic/papers/
BankFailures_ChartwithComments_Moss.pdf.
57. Over time, the United States Tax Foundation, “U.S. Federal Individual Income Tax Rates History, 1913–2011,” January 1, 2011, http://www.taxfoundation.org/publications/show/151.html.
58. Soaking the rich Rosanne Altshuler, Katherine Lim, and Roberton Williams, “Desperately Seeking Revenue” (Tax Policy Center; paper presented January 15, 2010).
59. The former labor secretary Reich, Aftershock, 140.
60. The journalist James Fallows James Fallows, “How America Can Rise Again,” Atlantic, January/February 2010.
ACKNOWLEDGMENTS
In 2010 I wrote a cover story for The Atlantic exploring how high unemployment might change American society if it continued to persist. Soon after it was published, I received a phone call from John Glusman at Crown, suggesting a broader inquiry into the enduring impact that the recession and its aftermath would have on American life. John’s enthusiasm, to a large degree, convinced me to write this book. I am grateful to him for his encouragement and ideas throughout this process, and for his skillful editing.
James Bennet, the editor of The Atlantic, made this book possible by generously granting me several months off to write it, despite the staffing complexities that decision entailed. Special thanks go to James and to all my colleagues at The Atlantic, who helped me in too many ways to count with this book and the magazine article that preceded it. It is a pleasure and an honor to work with such gracious, curious, and committed professionals.
The Woodrow Wilson Center for International Scholars gave me valuable support and a quiet office in which to write. Hallie Detrick, Aleschia Hyde, and Cale Salih provided careful research assistance. Rachael Brown diligently checked thousands of facts contained in the book, conducted invaluable ad hoc research, and helped assemble the endnotes. Janice Cane’s excellent copyediting improved the book’s flow. Patrick Appel and Zoe Pollock, of The Daily Dish, kindly compiled scores of blog entries written by readers in the blog’s recurring feature, “The View from Your Recession,” and helped me follow up with some of those readers. The professional staff at the U.S. Bureau of Labor Statistics was unfailingly helpful in my many requests for assistance in finding employment data.
Dozens of economists, sociologists, historians, and other scholars graciously agreed to speak with me about this book, sharing their research and ideas, and I am grateful to all of them. David Autor, Gary Burtless, Kathryn Ed
in, Maria Kefalas, Edmund Phelps, Heidi Shierholz, and Bradford Wilcox were especially generous with their time. I owe a special intellectual debt to Benjamin Friedman, whose 2005 book, The Moral Consequences of Economic Growth, first opened my eyes to how dramatically—and in some respects, how predictably—societies can change when the economy is anemic for an extended period of time.
I leaned on many friends and associates for advice as I researched and wrote this book. Shannon Brownlee, William Cohan, Clive Crook, James Fallows, Richard Florida, James Gibney, Joshua Green, Simon Johnson, Christopher Leinberger, Christopher Orr, Hanna Rosin, Benjamin Schwarz, and Bradford Wilcox kindly read draft sections or chapters, and the book is better for their comments and critiques. My agent, Raphael Sagalyn, was also an attentive reader, in addition to all the other help he provided.
At its heart, this book is about the millions of people whose lives have gone off course since the crash. In my research and reporting, many people shared painful experiences of unemployment or foreclosure or downward mobility. I am grateful to all of them for their openness. In the main, their stories remind me daily of the pragmatism, flexibility, and personal dignity—even in hardship—that continue to define the American character.
My deepest gratitude goes to my wife, Meghan, for her patience and support throughout the writing of this book; for her many sacrifices (not least at the dinner table, where she endured far too much talk of the recession and its consequences); for her good advice; and for her energy, exuberance, and companionship, which make every day a joy.
About the Author
DON PECK is a national-award-winning writer and a features editor at The Atlantic, where he covers the economy and American society, among other subjects. He lives with his wife, Meghan, in Washington, DC.