" ‘Jesus,' he said to himself. ‘Drunk for ten years.' "—F. Scott Fitzgerald, "The Lost Decade"

For months, the "lost decade" meme has been wending its way through blog posts, economics journals, cable news shows, and newspaper think pieces until, like a minor leaguer on a hot streak, it finally reached The Show, the White House, where President Barack Obama explained its provenance during his professorial first press conference:

"If you delay acting on an economy of this severity, then you potentially create a negative spiral that becomes much more difficult for us to get out of. We saw this happen in Japan in the 1990s, where they did not act boldly and swiftly enough, and as a consequence they suffered what was called the ‘lost decade' where essentially for the entire '90s they did not see any significant economic growth."

Only in 1999, when Japan finally created a "bad bank" to handle toxic debt from its mismanaged banking system, was recovery able to take root, the thinking goes.

The phrase "lost decade" has a meaning of parallel gloom for stock watchers. As the Wall Street Journal reported in July 2008, "Adjusted for inflation and dividends, the return on the S&P 500 was negative for the decade that ended on June 3." Things have only gotten worse since June—the Dow is adrift at 1997 levels, and GDP contracted by 6.2 percent in the last quarter of 2008. Stock-market indexes, vehicles that have long been touted as providing safe growth for retirement accounts, have actually had worse performance for investors this decade than simple I-class savings bonds.

It might sound like mere semantics, but granted hindsight, the "lost decade" already happened: It was the "last decade." Yet we talk as if we're on the cusp of the precipice, not over it. Given that the talk in political and economic circles still carries that dissonance, isn't it worth stopping to ask: What the hell did just happen?

Consider the major investments that middle-class Americans make and what those investments are worth today. We looked at retirement plans. Next is housing, where for years now, nearly anyone who wanted to buy a house has had to lie about what they could afford on their mortgage application. The national housing price-to-income ratio nearly doubled between 1998 and 2006, even as real wages fell and real estate appreciated in value at a breakneck pace.

Careerwise, through the popping of the dot-com bubble in 2001, the 2003 recession, and the housing and credit crises, our economic recoveries have largely been jobless ones. Job creation over the past decade has mostly occurred in the service industries that catered to our consumption driven economy, not in the creation or rebirth of any major industry.

That's what makes this a lost decade—and makes an accurate name important. Nearly every institution the average American leans on to build equity and wealth has already evaporated. Prevention is no longer possible. Personally, I've gone from mocking the Depression-era mentality of my grandparents' generation to suddenly understanding their thrifty and cautious approach to living, and I'm not alone. The major institutions of their time also blew up, and it took a world war to restart the engine of economic growth. Not exactly the direction we're hoping for.

It's odd to think of the last decade, one of unparalleled growth and prosperity, as being "lost." And in many noneconomic advances, like science and technology, perhaps it wasn't. But underpinning nearly everything in our society were flawed financial institutions and regulatory policies that warped our economic growth track into a screaming thrill ride. Rushing through the peaks and twists on sheer momentum was fun at the time but could never last. Even children know roller coasters end right back where they start, leaving riders with dazed grins and pumping hearts but nothing else.

The Federal Reserve's latest report on the financial condition of American households, Survey of Consumer Finances, dryly concurs, reading, "median income measured in the survey had been relatively flat for all income groups since 2001 after an earlier period of growth before 1998." New York Times columnist and resident economic doomsayer Paul Krugman concluded about the same report, "The bottom line is that there has been basically no wealth creation at all since the turn of the millennium."

By nearly every measure then—stocks, mortgages, credit, retirement, salaries, employment, GDP, trade—we have just lived the lost decade. The chance to avert it came when economic indicators like credit, housing prices, and savings rates went completely out of whack but had not yet synced up into the vicious cycle that causes the floor to fall out of the economy. In September 2005, for example, the savings rate in the United States flipped into a negative number for the first time in history. I think I am not the only who doesn't remember the alarm bells being sounded terribly loudly.

If we admit we have lived a lost decade, we can look at the plans President Obama and Treasury Secretary Tim Geithner have put forward in a more realistic way: They must be designed not to prevent a lost decade but to stave off another one. That's something that Japan, despite its modest recovery, failed to do, and it seems to have cost them. Two Heritage Foundation economists point out the Asian nation's recovery has stalled, largely because it didn't fully acknowledge and respond to economic reality fast enough. Marketplace calls this Japan's second lost decade, but, again, isn't it really their third? Japan wasted most of the '90s passing stimulus bills designed to buy its way out the real estate and credit excesses of the 1980s—excesses that were caused by overconsumption in the first place.

If we examine the administration's plans through this lens, one of Geithner's Treasury policies seems vital to any recovery, and it's largely gone unmentioned in the media thus far. It's called "quantitative easing," and it basically amounts to printing money and putting it right in the accounts of the banks that need it. If bad debts are causing banks to hoard cash, the idea is to flood the banks with so much cash they'll be able to cover their bad debt and restart lending.

This program, under the auspices of Treasury and the Federal Reserve, seems like a savvy realization by Geithner that a stimulus package alone is not enough. But focusing attention on stuffing Citi, AIG, Bank of America and other financial villains with fresh cash is probably not part of the new administration's media strategy. Hence the "quantitative easing" program, called TALF, (actually a reinvention by Paulson of the failed TARP program) will end up lending as much as $1 trillion to secure loans that banks wouldn't otherwise make. Geithner also seems poised to unveil a Bad Bank soon, something the Japanese, we noted earlier, took nearly a decade to do. TALF and the Bad Bank are really the only stimulus programs so far designed to address the banks' past mistakes—that they squandered their assets by making risky investments and won't survive through a second lost decade without direct government investment.

If Obama acknowledges that the Lost Decade already happened, he doesn't have to throw political mud on the policies of George W. Bush and Bill Clinton. His head speechwriter, 27-year-old Jon Favreau, has quite literally grown up on the roller coaster and has proved he can write speeches that acknowledge reality, a pleasant departure from past practice. Yet the country still seems to be waiting for the collective deep breath it needs to regain its composure and attack the crisis.

Yes, Obama said in his faux-State of the Union, "If we're honest with ourselves, we'll admit that for too long, we have not always met these responsibilities—as a government or as a people." But then he continued, "I say this not to lay blame or look backwards, but because it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament." Too often our leaders use verbal hedges like that one to excuse themselves, and us, from our errors. The psychic pain of calling this past decade a lost one would be harsh. But the resulting fresh perspective on the "roaring" '90s and '00s might help us avoid a repeat of the hubris that got us here in the first place.

Fitzgerald wrote The Lost Decade in 1939, near the end of his own lost decade and just before his death from alcoholism in 1940. In it, a young reporter is showing a middle-aged man around New York as if he had never seen the city before, though, in fact, he knew it well. But the older man has somehow been absent, and the young reporter wonders silently where the man has been all those years: jail, the psychiatric ward, Admiral Byrd's Expedition? They come upon a Manhattan skyscraper, and the old man explains that he designed it but had been, "drunk that year—every-which-way drunk. So I never saw it before now."

What dawns on Fitzgerald's young reporter is what has to dawn on us. We have been talking about ourselves as if we were absent from the last decade: the choices, the events, and the consequences. But, really, we were there all along.