Gene Ludwig - The Vanishing American Dream: A Frank Look at the Economic Realities Facing Middle- and Lower-Income Americans

When, in 2018, I first approached Dean Heather Gerken about hosting a forum at Yale Law School on the plight of lower- and middle-income Americans, I was driven primarily to address a masked and increasingly grave deterioration in the nations economic environment for that specific but enormous segment of the population. Amid a raft of seemingly very positive economic indicatorsa low unemployment rate, strong GDP growth, buoyant market benchmarksI had concluded that too few policymakers were taking heed of the fact that many communities were being left behind. Too frequently, Washington insiders seemed sanguine that wealth accruing at the top of the income scale would eventually trickle down to the rest of the country. A closer look at localities like the place where I grew upYork, Pennsylvaniarevealed that thinking to be entirely off base. And Yorks experience wasnt unique. It was reflected in neglected corners of thriving cities, in hollowed-out rural communities, and thousands of other American towns and small cities as well.

A year after the Yale forum, and just before this book was scheduled to go to press, the nation was both newly laid low by the economic crisis precipitated by the COVID-19 pandemic and newly enraged by the scourge of racial inequality. Americans are losing faith in their nations promise. The unemployment rate is 14.7 percent overallbut 21.2 percent for those without a high school degree. At the forum a year before, many of us had anticipated a recession. But the downturn now appears significantly deeper even than what the nation faced amid the financial crisis of 2008. So, positive economic indicators no longer obscure our understanding of the economys declining health because, well, there are very few positive economic indicators to speak of.

Thats why the substance of our conversation in the spring of 2019 is more relevant, important, and resonant than ever. The wisdom shared over the course of that day, among a group amassed from the top echelons of academia, policy, business, and banking, anticipated many of todays challengesbut dangers lurk today that existed beyond the scope of our conversation in 2019. That adds a new urgency to the tenor of our conversation. As is now utterly clear, we do not live in a Panglossian world where most believe that all is for the best in the best of all possible worlds. The protests that erupted after George Floyds murder make clear that weve done too little even during good times to address the ongoing legacy of racism. And yet it would appear some of the same myopia that spurred policymakers to ignore the plight of lower- and middle-class Americans before the crisis is now steering efforts to shape the recovery.