Silent depression

With the U.S. economy once again a top priority of policy makers, it is worth understanding that matters are worse than they seem. Output, the traditional "bottom-line" measure of the economy's health, has turned up. The recession of 1990-91 is over. But the tepid recovery leaves much to be desired. Digging deeper, longtime observer of the economy Wallace C. Peterson finds plenty of cause for alarm. Wages, family income, and productivity growth began a long, downward.

Trend in 1973 that continues to this day. The riveting drama of the 1929 stock market crash will not be repeated, but the numbers tell a clear story: the American Dream has taken on a nightmarish cast. Slow and insidious, largely unnoticed for much too long, a silent depression has taken hold that now affects four out of five American families. The causes lie, reports Professor Peterson, in the diversion of too much of the nation's scarce scientific and engineering.

Resources to military purposes for the forty years of the Cold War, a serious falloff in the rate of investment in the nation's infrastructure, a loss of well-paying blue-collar jobs in manufacturing, the fragmentation of America's labor force because of the globalization of the economy, and misguided tax policies from the 1980s. Strong medicine is called for and, as Professor Peterson finds, the Clinton economic initiatives have provided a small step in the right.

Direction. The book closes with a series of more dramatic proposals for health care, education, and revision of the tax system that will help speed the recovery.