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It’s the Economy, Stupid

This year’s presidential election is not a normal one. Rarely in U.S. history has an election year been preceded by as much economic fear and doubt. The results of the recent Fed report do not provide much encouragement for an already fearful electorate:

The recent recession wiped out nearly two decades of Americans’ wealth, according to government data released Monday, with ­middle-class families bearing the brunt of the decline. The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were in 1992.

Our economy has recovered to a great degree since the initial crash, but because of all that was lost and the gloom on the horizon, Americans are still incredibly concerned with their prosperity, as a Rasmussen poll shows: 52 percent of Americans are not confident in the stability of the U.S. banking industry, and 42 percent are worried about losing the money they keep in the bank. People fear that the euro crisis could stall an already slow recovery, causing another round of bank failures.

Regardless of the multitude of other issues that Mitt Romney and President Obama will no doubt spend weeks debating, the central question of the election is which candidate can better show off his plan to return America to prosperity. The candidate who makes that case and makes it convincingly will win the presidency.

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  • Anthony

    WRM, a wise man has said that the electorate (mass) does not vote for its objective interests; generally it votes for some fantasy. You imply the wielding of the electoral sword this election turns on which paladin of the people promises economic revival (American prosperity).

    My question is can either candidate accomplish such? To be fooled in politics is to be manipulated – being hoisted by our own petard. I guess what I am really getting at is the limits of American capitalism and whether a presidential election changes the stakes for the average voter economically.

  • Bart Hall (Kansas, USA)

    What’s more, the Bureau of Labor Statistics reported some months ago that real median family income has declined to 1995 levels since January 2009. Note the date. They expect the trend to continue through 2012, in which case, by year-end median family income will be at about 1983 levels.

    The destruction of wealth and family income is NOT happening in Canada, which makes it painfully clear that this is a direct result of the policies and actions of the current administration.

    Nice job y’all. In less than four years you have set the American middle class back by a generation, both for wealth and income. You’ve also set race relations back by at least a generation. And you’ve set American prestige in the world back to 1979 levels.

    Your ideology is an utterly failed [profanity removed]. Your only successes have been when you have continued successful programs — diplomacy in Asia, attacking militant islamists, tax cuts — conveyed to you by the previous administration.

  • ms

    Americans are concerned not just because of what was lost. Many of us regarded the housing bubble as just that, and never thought of those housing “gains” as a real addition to our net worth. Instead, we are concerned in part because, though we are repeatedly told that our economy has recovered, many are still out of work and young people are having a terrible time entering the job market. Maybe stocks are back up, but that does not a full recovery make. In other words, the “recovery” has never felt like a recovery, and to make it all worse, the national debt looms on the horizen as the darkest of clouds. Bring on the fix-it man–Romney.

  • Luke Lea

    Luxury cars are selling like hot cakes.

  • Luke Lea

    Read about a corporate retention package in the WSJ the other day for a quarter of a billion dollars.

  • Jacksonian Libertarian

    I have been telling this blog or a long time that the American Family nest egg has been destroyed. I have also been telling you that Home Equity is the source of most small business startup and expansion capital, and that small businesses provide as much as 80% of the new jobs during a normal recovery.

    So you should believe me when I say we are in a deflationary depression which I am calling Great Depression 2.0. And we got here the same way as we did in 1929, like Herbert Hoover, Obama is sucking much of the capital out of the capital markets ($1.3 Trillion per year), which would have been loaned to consumers and businesses to create jobs. $1.3 Trillion is enough money to create 13 million $100k per year jobs; instead Obama and the Democrats chose to waste it expanding the burden of Government.

  • wanderer

    “And we got here the same way as we did in 1929, like Herbert Hoover, Obama is sucking much of the capital out of the capital markets ($1.3 Trillion per year), which would have been loaned to consumers and businesses to create jobs.”

    False. Capital sees the US government as the only safe investment right now, which is why it is willing to invest in ten-year Treasuries that pay only 1.6%. To believe that that money would have been loaned to consumers and businesses is to set at defiance the wisdom of the Market. The Market clearly prefers to loan to the Federal Government, not businesses and consumers.

  • John

    Since Obama has pretty much failed to bring America back to prosperity during his first term, he is going to be hard pressed to convince voters his second term will be an improvement. Hope and Change always seems to be just out of reach.

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