Why the 'New Normal' Is Getting Old

Nissan Motor Co. vehicles sit lined up after being unloaded from a ship at the Port of Los Angeles Photograph by Tim Rue/Bloomberg

Three years ago, Pimco, the Jupiter-proportioned bond manager, famously diagnosed the low-growth, high-unemployment economic sobriety of the times as the New Normal. The timing of the communiqué was rather perfect: Joblessness and per capita self-doubt were soaring, while the stock market had just visited levels unseen since the mid-1990s. We were urged to get used to all this as an inexorable, chronically harsh reality. “It’s time to grow up and become a chastened adult,” wrote Pimco founder Bill Gross. “It’s time to recognize that things have changed and that they will continue to change for the next—yes, the next 10 years and maybe even the next 20 years.” Doubt pays: Thanks to the global macroeconomic dislocations of the past 40 months, and investors’ record ardor for bond funds, Pimco has since swelled from $800 billion in assets under management to $1.8 trillion.

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