The Dual Economy: How the American Dream Got Divided (and What It Means for You) This episode reviews American economist and economic historian Peter Temin’s The Vanishing Middle Class, focusing on Chapter One, “The Dual Economy.” It introduces Temin’s adaptation of W. Arthur Lewis’s 1954 theory to explain the growing economic inequality in the United States. Temin argues that the American economy is divided into two distinct sectors: the FTE sector, made up of highly skilled workers in finance, technology, and electronics, and the low-wage sector, consisting of less-skilled workers. He highlights the stagnation of wages for the majority since 1970, contrasting it with the significant income growth of top earners, especially the wealthiest 1 percent. The chapter further examines how education, physical capital, human capital, and social capital can function both as bridges and as barriers between these two sectors, with the FTE sector leveraging these resources for continued advantage. Finally, Temin underscores the disproportionate political power of the FTE sector, which deepens inequality and obstructs efforts to address challenges faced by the low-wage sector and the nation’s educational system.