WASHINGTON — This is not your economy. It's not even your parents' economy. To a surprising degree, this is your great-grandparents' economy.
Quietly, while attention has focused on the technology, finance and service sectors, businesses that stood astride 19th century industrial America but then collapsed have been resurrected to meet the needs of a feverishly industrializing world. In the process, much of what Americans think they know about their economy is being upended.
Steel makers, railroads, mining concerns and agriculture, long considered part of a fading past, suddenly have bright futures. And segments of the economy long lauded as the wave of the future are undergoing an old-fashioned, and very painful, consolidation.
"The wheel has turned. What was up is down, and what was down is up," said San Francisco investment executive Frank Husic. "And it's all because an emerging world wants to eat, drive and live in houses, things we take for granted and have for well over a century."
Dan Basse, president of AgResource Co., a Chicago agricultural forecasting firm, agreed. "The tech industry offered us things to occupy our minds and entertain us. But we're moving back to a world of stuff, whether that's vegetable oil or copper or zinc or cotton. Stuff that you can hold in your hand and drop on your foot."
The twin turns of fortune for the nation's old and new economies are letting once-struggling behemoths such as U.S. Steel Corp. put modern marvels such as Microsoft Corp. to shame. The price of U.S. Steel's stock has shot up 1,000% in recent years, while Microsoft's has essentially flat-lined.
And the changes are lifting much of America's geographic middle at the expense of its coasts. Personal income in the nation's manufacturing, mining and farming states, which are concentrated in the heartland, has been growing at an average annual rate of 6.5% in the last five years. The rest of the country has managed only a 5.4% pace, according to government statistics assembled by Moody's Economy.com.
"The new trends in the economy bode well for the middle and very badly for the edges," Husic said.
There's one huge catch: While the heartland's revival is producing lots of new revenue and profits for old-economy companies, and while it's pushing up the incomes of their employees, it's not generating lots of new jobs.
