Paul Craig Roberts and I have pretty much the same answer to this question. He says:
There is no economy left to recover. The US manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical “New Economy.”
The “New Economy” was based on services. Its artificial life was fed by the Federal Reserve’s artificially low interest rates, which produced a real estate bubble, and by “free market” financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.
The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans’ wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.
He then goes on to identify Goldman Sachs as “the bankster firm [that] controls the economic policy of the United States.” Read the full article here.
His historical account resonates with me, but his analysis that the cause was free trade is not supported at all.