Shlaes dicusses the politics of the economy

Amity Shlaes takes a look at Middle Class Anxiety at a time of low unemployment.

What is most striking about today’s anxiety is that it has emerged despite a robust economy. Americans have worried in times of 8- or 10-percent unemployment, but why at 5 percent or less? Even with the recent jump in oil prices, today’s misery index is at a docile low. Yet a Gallup survey published in March 2006 reported that “Americans continue to resist giving the nation’s economy positive ratings.” Data from ISR, a research firm, suggest that in 2005 three times as many Americans were afraid they would lose their jobs as had similar fears during the ugly downturn of the early Reagan years.

Members of the new majority on Capitol Hill mock Republican talk of an “ownership society,” and have moved quickly to try to raise the minimum wage. Charles Rangel of New York, the new Democratic chairman of the House Ways and Means committee, attacked as “dangerous” a White House plan to move responsibility for health care from employers to individuals. Even some Republicans have gotten in on the act. John McCain has warned that “My children and their children will not receive the benefits we will enjoy. That is an inescapable fact, and any politician who tells you otherwise, Democrat or Republican, is lying.” In the 2008 race for the White House, class angst is sure to be a prominent theme—as John Edwards, among others, has already made clear in his early campaign rhetoric.

Economic populism, in short, is back with a vengeance. But is it justified by our economic circumstances? And do its noisiest proponents have viable answers to the concerns of working Americans?

Who would have believed that 5 percent unemployment, which used to be considered "full employment," would be labeled "a sluggish economy?"