The woes of the average Joe
BARACK OBAMA’S strenuous efforts to avoid being a war president have failed. But voters care more about the economy than the Middle East, and here Mr Obama has a good story to tell. The headline numbers are impressive: both output and employment have passed their pre-recession peaks and the unemployment rate, at 6.1%, has fallen far enough to inspire the Federal Reserve to debate, openly, when to raise interest rates. Though the latest jobs report was disappointing, private payrolls have grown by 10m in the past four and a half years, the longest uninterrupted streak in history.
Yet for all the upbeat economic news, Mr Obama has yet to reap any political reward. His approval rating, at 43%, is stubbornly low. Just 39% of voters approve of his handling of the economy, according to YouGov; 56% disapprove. Remarkably, they now trust Republicans more than Democrats to manage the economy.
Ken Hodges of Murfreesboro, Tennessee, thinks Mr Obama wasted money bailing out banks and carmakers, “but it hasn’t helped the working-class people at all.” Mr Hodges used to build guitars for a living but the business went downhill after the financial crisis, as did his investments. He now sells barbecue lunches out of a food truck in Nashville and, between the cost of meat, fuel and the thousands of dollars he spends on permits, reckons he makes 20% less than he did in 2007. “I’m slowly but surely going broke, though I’m working like a madman,” he says.Voters give Mr Obama little credit for America getting richer because, by and large, they haven’t felt it. Not only is the recovery subdued by historical standards, but widening inequality means that the median household (in the middle of the income range) is doing far worse than the mean (total income divided by the number of households).
Inequality actually began to widen in the early 1980s. But, for two decades, overall growth was still healthy enough to lift the median household. During Ronald Reagan’s first six years in office, GDP grew 22% while the median income grew 6% (see chart 1). During Bill Clinton’s first six years, GDP grew 24%; median income, 11%. But growth began to slow in the 2000s, undermining both the mean and the median. In George Bush’s first six years GDP rose 16%, but median incomes fell 2%. Under Mr Obama it has been even worse: GDP is up 8% and median income is down 4%, according to the Census Bureau and Sentier Research, a private outfit.