We’re all familiar with the depressing statistics. Over three years with unemployment above 8%. A dropping labor-force participation rate. Persistently large and growing trade deficits. A collapse in family net-worth and family incomes. A lack of opportunity for America’s young people. Year after year after year of trillion-plus deficits. Social Security and Medicare going bankrupt even faster than expected.
An undercurrent of this election — one the Romney campaign has grasped — is the debate about whether to accept as normal the past decade’s hollowing out of the middle class and the downgrading of prosperity. The “new normal” is one of skyrocketing gains for the few and treading water for the many and a stagnation in growth for the economy as a whole. This outcome is not necessarily the result of free markets (indeed, it has taken considerable government intervention to arrive at the current state), and it also imperils long-term growth: the rich may have absorbed almost all the economic gains of the president’s anemic recovery, but the economic pie is smaller than it could have been.