CapitalismEssaysFeatureIn Depth

The Recovery And Its Discontents

The current situation in the United States presents a seeming paradox. On the one hand, the US economy is about to enter its eighth consecutive year of recovery, and in the first months of 2016, the unemployment rate fell below 5%, its lowest level since the beginning of the economic crisis of 2007–2009. On the other hand, there seems to be general discontent about the state of the economy. For example, according to various public opinion polls, the principal concern of voters in this year’s presidential primaries has been “economy/jobs”. This concern has been a main — if not, the main — factor behind upsets in both races.

However, if we look a little closer, the paradox resolves. Figure 1 depicts the path of real GDP from the trough to the peak of each post–World War II economic recovery, at quarterly frequency. …