Meet the 'missing millions' who've vanished from the economy

As you've probably seen, there's good economic news. Since the election in November, employers have created about 200,000 jobs a month, the unemployment rate has dipped to 7.7%, and overall spending has held up pretty well in the face of tax hikes and the imposition of reductions in federal spending. At least for now, the economic optimists -- myself included -- have been vindicated. With house prices and disposable income both rising, we can be fairly confident that the recent progress will be sustained.

But before anybody starts celebrating, take a closer look at the U.S. labor market, which remains a case study in frustrated hopes and wasted resources. Some 12 million Americans are out of work, 8 million are working part-time for economic reasons, and 2½ million say they want a job but have given up looking. Yet the jobless figures don't fully capture the damage that the Great Recession has wrought upon the country's stock of human capital, which, after all is said and done, is what keeps the economy going.