The Fed’s report this week on the impact of the recession on Americans’ wealth is devastating; it is a long, sad walk along a boulevard of broken American dreams. The economic vise on the middle class, which was already tightening throughout much of the last decade, closed in the last several years as various bubbles — most notably, real estate — popped. Underneath the Fed’s grim statistics are thousands of grimmer stories of families adjusting to a lower standard of living. Ed is right; of course this study is more fodder for Mitt Romney.
But it is so much more. For years, the decline in America’s economic wealth and power had been obscured by two significant bubbles: the Nasdaq run and the housing boom. (The former was driven by “irrational exuberance,” like all bubbles; the latter by government policy.) Now, here we are: Our families are broke; and our government is in deep debt.
This is why this election is so significant: It is the first in recent history where the majority of Americans doubt the future will be better. One should not underestimate the volatility this promises for our politics.
We are entering the anger phase of the five stages of grief. Romney may be a beneficiary of this phase long enough to win, but his honeymoon may consist of a barrel ride over Niagara Falls.