Earlier this week, Americans had to swallow the kind of news that makes them queasy. Despite all their hard work, and despite the growing long-term productivity that is helping their employers earn more, US families are poorer than they were in 2007. Much poorer.
The Federal Reserve reported that between 2007 and 2010, the typical American family's income had dropped by 7.7 percent, and net worth plummeted by 38.8 percent. That meant that the median American family "had no more wealth than in the early 1990s, erasing almost two decades of accumulated prosperity," as the NY Times put it.
That's hardly the message that President Obama wanted to portray, just five months before the election.
And so the White House is fighting back. A blog post by two of the president's senior economic advisors spells out why President George W. Bush is really to blame.
It's called "More Work to be Done, But Household Wealth Up Every Year Under Obama."
Here's a sampling:
The entire drop in household wealth between 2007 and 2010, the period covered by the Survey of Consumer Finances, occurred in 2008 — before the President took office.
Household wealth has risen every year President Obama has been in office — by a total of 23 percent overall.
The Dow Jones Industrial Average is up 56 percent since January 20th 2009.
If those statistics seem convincing, others are less so — citing nominal rather than real dollar gains. For example:
[M]utual fund assets have increased more than 65 percent since President Obama took office, reaching their highest level on record in nominal terms, above their pre-crisis peak.
In 2011, the Investment Company Institute estimated that retirement balances reached the highest nominal value recorded, up 27 percent from 2008 through the end of 2011.
Granted, inflation has been minimal over the past several years. But was the president so desperate for good news that he needed to use figures that were only impressive given the fudge factor of not accounting for inflation?
The blog post — worth a read — is cautious not to suggest that the economy is "doing just fine." It concludes, "Even with these solid gains, household wealth has still not fully recovered from its large fall during the height of the financial crisis in 2008."