Rich Karlgaard‘s column in the latest issue of Forbes magazine offers a prognosis for what ails the American economy and political climate.

WHAT THEORY explains the following?

– Stocks are hitting record highs, yet 60% of Americans think the country is in recession.

– A solid majority likes President Obama’s Iran nuclear deal, but only a third believe it will work. Such a position (like but doubt) is both passive and fatalistic–perhaps even suicidal.

– The phrases “all lives matter” and “everyone can succeed if they work hard enough” are now fighting words to the political left. Apologies are due, or else watch your reputation and career evaporate.

– On the right a businessman who has filed for corporate bankruptcy four times trumpets his aim to lead the U.S. to a rich future. He sneers at a former POW who was tortured for five years. The candidate says he will make the country great again. He leads in the polls.

It’s nut time in America.

The theory behind all of this? I’ll offer one. It has to do with the collapse in productivity growth, which, in turn, has led to slow economic growth. The results for the nation have been like a slow death from dashed hopes and mounting frustration. …

… This stagnant economic pond is what turns people against one another. When growth is absent, people compare themselves with others. They become jealous. They start to believe that successful people must be stealing from the rest of us. They succumb to paranoid political theories and crackpot politicians.

In a growing economy a quite different thing happens. People still compare, but they compare themselves with their potential future selves. They look ahead with hope, even excitement. They start businesses. They hire ahead of demand–and thus create demand.