Why are Americans still gloomy about the economy?
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By Global Public Square staff
The American economy is back. Last week, the IMF projected that the United States will be one of the very fastest growing advanced economies in the world in 2015. In fact, the American economy is just about the great exception in a world that is showing signs of economic stagnation.
Good news keeps piling on. The Congressional Budget Office just announced that the U.S. deficit fell by nearly a third during the fiscal year, which marks a 6-year low. Meanwhile, the Dow Jones Industrial Average and the S&P 500 both surged to record highs over the last month. And the most recent economic snapshot from the Labor Department says that private sector employment grew in September for a 55th month in a row, a record, and that the unemployment rate is now at 5.9 percent, the lowest level it's been since July 2008.
But, and here is the paradox, despite a relatively robust recovery now, Americans aren't feeling more prosperous. In fact, 56 percent of Americans told the Pew Research Center in August that they are "'falling behind' financially." That's pretty much the same percentage as in October 2008, during the heat of the Wall Street financial crisis.
So, why are so many despondent over the economy when the statistics say it's doing pretty well?
For some insight, listen to a recent interview that President Obama granted CBS News's 60 Minutes:
Obama: Ronald Reagan used to ask the question, "Are you better off than you were four years ago?" In this case, are you better off than you were in six? And the answer is the country is definitely better off than we were when I came into office. But now we have to make sure…
Steve Kroft: Do you think people will feel that?
Obama: They don't feel it. And the reason they don’t feel is because incomes and wages are not going up.
Well, the President is right. The one number that isn't up is the average American's pay check.
Look at the data from The Economist, which in turn cites Census Bureau and Sentier Research data. They show that during the first six years of Ronald Reagan's Presidency, the U.S. economy grew by 22 percent and the median household income also shot up by 6 percent.
Fast forward to Bill Clinton's first six years in the Oval Office and the nation's GDP grew by 24 percent, while median income increased 11 percent.
Then, it starts to turn. The first six years of George W. Bush's Presidency saw 16 percent GDP growth but a 2 percent decrease in median incomes. Likewise, the first six years of Obama's presidency have seen 8 percent GDP growth coupled with a decline in median incomes – a 4 percent decline, again according to the research in The Economist.
Indeed, when you adjust for inflation, census data shows that the American middle class is actually 1 percent poorer today than it was in 1989, when Reagan left office. That's also probably why Obama's job approval rating is about 20 percent lower than Reagan's was by the second October after his re-election, according to Gallup.
And guess what? The new employment report sees that trend continuing: the average hourly wage for Americans working in the private sector actually decreased by one penny last month.
Why are wages stagnating (or, even, falling)?
Nobody is actually sure. Generally, when unemployment drops, workers can demand better wages. That's not happening. And no one quite knows why. It could be globalization, with its endless supply of cheaper labor from around the world. It could be technology, which replaces people with machines and software. It could be other, more technical factors.
But we think we can confidently say that until all this changes – and until the majority of Americans who do have jobs see some improvement in their wages – they will feel gloomy. And that will have economic consequences in the years ahead but also political consequences in the weeks ahead.
@fareedzakaria on Twitter
By Christmas, the U.S. economy will be great.
I eat doggie poop.
I just farted a big one. A hazmat team has been called to my stinky office cubicle.
Mask required.
Americans need advanced training or college degrees to make more money. These lazy b@stard americans want to earn big annual salaries with no training. Lazy bums.
The laziness of able bodied men claiming to be disabled us the blight of our economy. And the avg. Ivy League grad student enters university having passed a12th grade final. And upon graduating cannot pass an 8th grade final. Your theory is flawed.
Explain how better education for Americans is flawed.
National US Adult Literacy Survey: The avg. Ivy League Grad student who passed the 12rh grade to enter university cannot pass an 8th grade final exam upon graduating from an Ivy League university.
Americans are and have been becoming fatter and stupider for years now. Open your eyes and ears and see and hear for yourself. Idiots are among US, and with papers sating they are smart!
A degree won't get you a job that does not exist. If there are no jobs, then what good does a degree do you? For the first time since I've been in banking, we have loads of tellers with 4 year degrees. Are they not ambitious or is there no place else for them to go? You tell me.
I don't believe in that mumble jumble take 1989 into account and adjust for blah blah blah. We are better off than 1989 and better off now than when G.W. Bush was in office.
Yea. Always takes a democrat to clean a republican poop.
Thank you President Obama.
Debt, ineffective inappropiate congress, mismanaged government, foreign wars without resolution and a continous weakening dollar. The illusion is the problems of the recent failure of integrity with AGI and wall street are over but no one thinking believes it.
I'd say war is a major factor. How many needless wars has the US been involved in over the past decade? How much does it cost? Well the decade-long American wars in Afghanistan and Iraq would end up costing as much as $6 trillion, the equivalent of $75,000 for every American household. This was calculated by the prestigious Harvard University’s Kennedy School of Government last year. Add to that the current war we're waging in Syria and Iraq which will likely take another decade or so and likely cost another several trillion $$$... You get the picture.
The bloodiest war ever waged is being waged right now: Suicide vs. US troops. Suicide, not enemies, is the number one killer of troops defending US. Suicide epidemic. Right here... right now. Not some make-believe "terrorist".
The US treats its veterans horribly. This is common knowledge, but thank you for pointing out the epidemic of suicides that have plagued our wounded warriors since the continuing wars have caused constant redeployment since 2001. Better after care is needed for the mental health of our soldiers to help the re assimilate into civilian society.
Stfu @Lester. The vets in the front of VA lines are killing themselves just as statistics prove. The last thing a vet suffering trauma needs is a VA doctor shoving suicide pills down his throat.
Yet it's basically an assumption that after-care or any care really is highly effective at treating people mired in psychological problems that rise to the level of potential suicide. I'd bet the data are very weak on any such claim. The real people killing the veterans, at least primarily, are the multinational corporations pushing for war, the politicians enabling them and the citizens supporting these senseless, endless wars that achieve nothing.
They want their “Meth” back. They want banking to let anyone have a mortgage, so that housing construction will rise along with the cost of houses. They want another war with tax breaks. But what they really want is for the country to spend itself into debt so it can have another recession. Or maybe, is it a pay raise in a deflationary environment?
Why? Because over half of US are dependant on government spending. And our government is deeper in debt than we are. Duh.
I am afraid you will have to clarify what you mean before I give any credence to an anonymous internet guy pulling "facts" out of thin air. Because as you should know, every person in the US are beneficiaries of government spending.
Thanks in advance.
Lester is a troll.
Having read your posts elsewhere, I think you don't know what the term "troll" means. Run along, now. Adults are trying to converse.
Hi Lester la mo lester. When can we hide in your closet so you can touch me again. I would like that very much.
And I don't think you know what an adult is you dirty troll
Lester la Mo-lester.
Lester is a mo lester. He touched my groing area when I was 12 years old.
But I liked it. Felt so good
Americans have every right to be gloomy about the economy judging by the way the stock market's going and those idiots in Washington are ignoring the whole thing. Then again, what do they care as long as they're making money out of all these useless wars overseas?
Spot on @ Lester! Your post about our veterans was spot on and shame on those who allow this to go on!
GLOBAL ECONOMIC COLLAPSE REASON ILLEGAL WAR AND ROYALBUDGET $1.7TRILLION
next BBC All press and media Arabs leader and G20 leader ELECTRONIC VOTE ,,WHITE HOUSE HOUSE OF COMMAND,HOUSE OF LORD,,MICROSOFT, under control by CONGRESS ATO Z CONTROL ECONOMIC BY QUEEN ELIZABETH still British rule the global 21 st century
Royal budget and wedding cost. 10 generation total $ 57 trillion
Each every politician rolling 8 years only
But queen family enjoying 10 generation world leader creation war
GLOBAL ECONOMIC FALL REASON WAR. Improve economy only peace and prayer
WAR cost total $ 3.5 TRILLION. Every poor human blood tear .please saves economic
POVERTY FAMINE &Effected education many people suicide. Many people Drug addict
Jobless PRESENT ECONOMIC CRISIS
Effected All liberal democracy. Billion of people tax pays.
FDI INVESTOR &Joint ventured, effected global Federal Reserve
Effected CNC manufacturer & energy power
BANKRUPT 170 BANKS OVER ALL 87000 BRANCHES
Million of people death martial for not success only peace and prayer only success
Now we are in 21st century there were times former journalist exposed truth and sacrificed their precious life for the sake of truth, they unveiled the real history. Perhaps contradicting to their present power and money clouded their mind and our upcoming generation becomes a victim.
We do not believe politicians as we used to, we do not believe the media, and whereas we believe each other”
Thanking you securing A benefit t future GLOBAL ECONOMIC
1. Press freedom 2.libral democracy 3.all country equal currency4.open emigration 5.free trade policy 6.avoid electronic vote 7. Every one equal right
Your’s sincerely
M.S.MOHAMED ANSARI MOONERRGEBB
Pragmatism has now fallen foul of the continuing power of the press.
http://costofwar.com/
http://edition.cnn.com/SPECIALS/war.casualties/index.html
http://openlibrary.org/authors/OL3647712A/World_Media_Association
Economic save only 6 point. Peace, prayer, liberty, unity, friendly, simple
Obama care? Organizations have to pay you more, and your benefits...they didn't get into v
Business to make you money.
Nice news
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YouTech
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