November 02, 2006
Thursday

President Bush and his political aides are puzzled by how little credit the White House is getting for the economy. The frustration is especially acute as next week's election nears. The president has devoted campaign appearances to boasting about the performance of the economy.

By all the traditional measures, the economy is good and Bush should be reaping the customary political rewards. Growth is steady. Inflation and unemployment have stayed low. The stock market is setting records. The gasoline price crisis has blown over.

But Americans don't feel the economy is good. Over 55 percent in a recent CBS poll said it was bad and a similar percentage said it was getting worse. Only 32 percent approved his handling of the economy. Other polls show similar dismal ratings.

One factor may be that, although the situation has improved slightly in the last month or so, real hourly wages have been stagnant since 2001 even though worker productivity has improved 14 percent in that time.

If Americans feel insecure about their financial future, maybe that's because it really is insecure.

Yale economist Jacob Hacker, writing in The Washington Post, noted that bankruptcy is much more common than it was 25 years ago and cited a study that "found the likelihood that a worker will lose a job over a three-year period has been rising - and is now about as high as it was in the early 1980s, which saw the worst economic downturn since the Depression."

And, he wrote, family income has become more unstable -"the gap between our income in a good year and our income in a bad year has expanded. Increasingly, it seems, Americans are living on a financial roller coaster."

Now housing prices are slumping, and their home is most Americans single largest asset. New home prices fell 9.7 percent from September a year ago and the price of existing homes by 2.5 percent, both the steepest drop in nearly 40 years.

The country has weathered these cycles before, but pointing to charts and graphs and invoking macroeconomic numbers is of little comfort to worried homeowners. It's about as much use as telling President Bush that, statistically, his luck is bound to turn.

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