During his State of the Union address tonight, President Obama will offer "concrete, practical proposals" on economic recovery and the growth of the middle class – top issues for nearly 90 percent of Americans, according to a recent Gallup poll.
Political rhetoric aside, economists debate the extent of the recovery and whether short-run economic turnarounds are really possible. With the housing market on the rebound, unemployment at least lower than it has been in recent years, and a booming stock market, many are optimistic about the state of the economy.
Others worry the relatively slow recovery suggests previous interventions haven't done enough. Harvard economist Larry Summers, for example, has argued for more proactive, aggressive government spending programs by invoking the Depression-era theory of "secular stagnation." This theory warns that, like the late 1930s, we may be living in an age of "sick recoveries which die in their infancy and depressions which feed on themselves and leave a hard and seemingly immovable core of unemployment."
My own view is that we are in the midst of a long-run Great Reset, one that is slow moving and uneven across cities and regions.
A report [PDF] released at the annual meeting of the U.S. Conference of Mayors last week – though it was spun optimistically, with predictions of job growth in 357 of the country's 363 metropolitan areas – lends support to this view. Just a third of all metros (121) are projected to have job creation rates of 2 percent or more. And while 40 percent are predicted to have unemployment rates below 6 percent during 2014, a worryingly high proportion – 35 percent – will see their rates hover above 7 percent.
The map below, from the report, shows the geographic variations of the great metro reset. It charts the time frame for return to peak employment in metro areas across the U.S.
Many of the places that have already recovered, in gray and blue, are located in one of the two pillars of the new economy – the energy belt of Texas and the Great Plains, and knowledge hubs like Boston, New York, the Baltimore-Washington region, and the Bay Area.
The places that likely won't return to full employment until 2016-7 (yellow) or 2018 and beyond (red) include former manufacturing hubs of the Rustbelt; poorer, de-industrialized East Coast metros like Camden, New Jersey; and old Southern manufacturing cities like Birmingham, Alabama.
As I wrote in my book The Great Reset, economic recoveries are uneven, long-scale, and generational in nature. Any return to normal will "unfold not from top-down policies and programs but gradually, as millions upon millions of people respond to challenging economic times by changing the ways that they live."
Tonight, President Obama will likely offer reassurances that his economic plan will bring us closer to his goals of growing the economy, strengthening the middle class, and reducing inequality. But overreaching, one-size-fits-all policies are unlikely to work on an economy that is highly uneven geographically. Today, our coastal knowledge centers see high rates of growth, skyrocketing housing prices, and escalating inequality. Meanwhile, too many metros in the de-industrialized Rustbelt and sprawl-powered Sunbelt continue to struggle. Tailoring policies that can restore growth and equity across America's increasingly uneven economic landscape is the real challenge we face.