The case that things aren't so bad

By Pat Regnier, Money Magazine senior editor

You can handle all that, can't you? The odds are certainly in your favor, say conservative economists and academics.

Yes, a dynamic, growing economy will have winners and losers. And many conservatives concede that the Ownership Society rhetoric has fallen flat. "It's not like it's led to a lot of successes," says Kevin Hassett of the American Enterprise Institute, noting the lead-balloon performance of Bush's 2005 Social Security plan.

But they also point to low unemployment and the recent jump in average wages (up 2.8% after inflation in the past year) as evidence that economic growth is helping the middle class. More important, they argue that Americans will prove resilient in the face of change.

First, for all the talk about offshoring, its impact so far isn't what you might think from watching Lou Dobbs Tonight.

Even Blinder, who believes that offshoring is going to get much bigger, is careful to point out that fewer than a million service sector jobs have moved abroad. The U.S. economy sheds that many jobs, and usually adds more, every two weeks, he notes. And don't forget the other side of the ledger. Trade creates jobs (often indirectly) as well as destroying them.

Moving beyond offshoring, University of Chicago labor economist Steven Davis says there's no evidence that jobs have gotten harder to hang on to over the long run.

So why does it seem that way?

First, job security has declined for college-educated men, a group that had been relatively insulated from economic ups and downs.

Second, says Davis, employment stability actually has fallen at publicly traded firms. They employ just a third of all workers, but news about them gets reported every day. "The sector of the economy that gets the most attention," says Davis, "has become more volatile."

For Brink Lindsey of the free-market Cato Institute, the look-around-your-house test is the one that matters. "Despite a lot of statistical mumbo jumbo from the sky-is-falling crowd," he says, "Americans are enjoying a level of material prosperity unrivaled in the world."

In a pugnacious Wall Street Journal review of Hacker's book, Lindsey points out that since the 1970s, the number of college-educated adults has more than doubled, home ownership has risen, and air conditioners, color TVs and dishwashers (most no doubt built in cheap labor markets) have become fairly common even in households living below the poverty line.

What about income volatility? Free-market advocates argue that the way Americans spend suggests that middle- and upper-income households are pretty good at smoothing out the bumps.(Low-income households have a much harder time.)

Families can dip into savings - or into their credit accounts. "We have a plastic safety net, and an ability to take out loans on incredibly appreciated homes, and all kinds of mechanisms for dealing with income volatility," says Lindsey.

Of course, using credit cards and home-equity loans to smooth out dips from lost wages is plenty risky, and it only works at all if your income is going to bounce back - something that doesn't happen for lots of laid-off workers.

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.