The most important thing to know about the state of the United States economy was revealed in a report Tuesday morning that Wall Street barely noticed.
The 2013 median income remained a whopping 8 percent — about $4,500 per year — below where it was in 2007. The 2008 recession depressed wages for middle-income Americans, and they haven’t recovered in any meaningful way. And 2007 household incomes were actually below the 1999 peak.
This simple fact may be the most important thing to understand about today’s economy: Around 1999, growth in the United States economy stopped translating to growth in middle-class incomes. In the last 15 years, median income has been more or less flat while there was far sharper growth in, for example, per capita gross domestic product.
Forget ISIS, forget Obamacare, forget whatever. As James Carville famously said back in 1992: It's the economy, stupid. And it always will be. People care about their pocketbooks. It's the only thing that's real to them. Am I feeling good about the economy? Then the president's doing a great job! Do I feel meh? Then throw the bums out!
I think that's what it really comes down to.
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