A Guide to the “New Normal”

Abstract

A one might expect, a book whose main subject is exploring the implications of diminished future prospects, Don Peck’s Pinched: How the Great Recession has Narrowed Our Futures and What We Can Do About It, does not make for fun reading. Yet its description of how U.S. society is changing in the reverberations of the 2008 recession is compelling, interesting, and recommended. Peck, a features editor at The Atlantic, brings accessible journalistic sound bites of data and a broad perspective to his argument that the Great Recession will have an enduring impact on American life. Biting off no more than he can chew, he discusses historical trends from past recessions, and examines how they might already be playing out for three groups—the middle class, the rich, and men. The trends he sees at work are not hopeful, but he does not conclude that they are deterministic. This provides a sliver of hope to the book that is otherwise incredibly, though appropriately, sobering. While the concept of a “new normal” of stagnant economic growth has come into greater usage in 2011, Peck’s work in this area has been ahead of the curve, and began with a March 2010 piece on long-term unemployment in The Atlantic. As consensus gathers behind accepting the “new normal,” the Obama Administration renews efforts on job-creation, and the 2012 campaign season moves into high gear, Pinched is well poised to highlight some of the landmines and possibilities that will accompany this state of affairs. As such, the book is a definite contribution to the policy conversation, and comes at an opportune time to reflect on our expectations for policy following the Great Recession. It is particularly strong when describing the effects of long-term unemployment and arguing for policies to help mitigate them. As this issue of the SAIS Review is focusing on generational fault lines, this review will examine that aspect of Pinched most closely. Peck is worried about the millennial generation—those born somewhere between the mid 1970s and the mid 1990s. As they were not yet rooted into the labor force prior to the recession, Peck cites research that states millennials will likely have lower lifetime earnings and lingering psychological effects such as heavy drinking and depressive symptoms, particularly for those of the generation who endure