In other words, the smoothness of the graph may be an artifact of the way that the CPI is calculated across changes in the basket of consumption goods. The right CPI is the one that keeps the trend going.

Of course, bad times are bad times, even if good times are sure to happen again. It should help, though, to know that the bad times are not permanent, as some describe it.

Another point is that recessions keep getting lighter and lighter, not worse. It is virtually guaranteed that in the coming recession, people on average will still be better off than even in the “heyday” under Clinton, because the economic growth that has happened in the meantime, and which cannot be undone.

Any support for the notion of the middle class shrinking (separating into rich and poor)?

Yes, but the reason the economy was able to recover so quickly after the Depression is because the whole world went to war. If someone in the 1930s had claimed that per capita GDP would be back on track by 1950, but only because the economy would be spurred by five years of worldwide, total war (entailing the slaughter of innocent millions and the physical destruction of most of Europe and Japan), would that person have been scoffed at?

My point is, not all costs are strictly economic, and so not all costs can be captured in a chart such as this one. It very well could be that in little more than a decade, GDP will be back on track. But if that only happens because of economic growth resulting from the very political instability caused by the worldwide recession, is it really much of a win? It's like: maybe my portfolio/career is back on solid ground thanks to the booming wartime economy of the last decade, but maybe it's also true that my son was killed or injured in that war.

Am I way off the mark here?