Fears that the United States is on the cusp of a Japanese-style "lost decade" are grossly overstated: We've already had it—from 2000-2010. Sure, the last two years of the decade were defined by a cataclysm of historic proportions that almost made us forget the bad news of the prior eight years.
In addressing the economic meltdown, we embraced remarkable policy responses that addressed the cataclysm but did not deal with the much deeper and more troubling crisis of our already ended lost decade. We confronted the immediate catastrophe, but not the trend line. That trend line is the cause of the justifiable anxiety of the American public.
We resolved the cataclysm by shoveling gobs of money into the financial services sector, consolidating it into a few too-big-to-fail federally guaranteed entities. But we did little or nothing to confront the job loss, income stagnation, and consequential security loss felt by the middle class, dating not just to 2008, but much further back.
Consider these data (the most recent available), which explain the fear in the middle class:
Median family income:
Percentage of population in work force:
Percentage of population in poverty:
U.S.-global trade deficit:
2000 (first six months): $180 billion
2010 (first six months): $247 billion
Trade deficit with China:
2000 (first six months): $44 billion
2010 (first six months): $119 billion