Mass Incarceration: The Hidden Costs of America’s Dual Economy and Racial Divide This episode reviews Chapter Nine of American economist and economic historian Peter Temin’s The Vanishing Middle Class. Temin examines how the dual economy model—divided between the full-time equivalent (FTE) sector and the low-wage sector—shapes government activities, particularly through the rise of mass incarceration in the United States. He argues that the FTE sector, driven by the interests of the wealthy, prioritizes tax cuts and the dismantling of the welfare state, resulting in reduced social programs and expanded privatization. Alongside these shifts, the militarization of policing and the justice system has intensified, often fueled by racial anxieties and the “War on Drugs,” which disproportionately target Black and Latino communities. Temin contends that mass incarceration, despite its staggering costs, functions as a mechanism to repress the low-wage sector and preserve existing power structures. The growth of private prisons, motivated by profit, further deepens these inequities and reinforces the dual economy’s divide.