Best Column

Why we feel poorer 'post-recession'

By some measures, the U.S. economy is as strong as it was before the Great Recession, says Michael Kinsley in Politico. Yet somehow the average American still feels the pinch

On paper, the economy is back to where it was before the Great Recession, says Michael Kinsley in Politico. Our seasonally adjusted gross national product in the third quarter of 2010 was $13.277 trillion. Adjusting for inflation and using 2005 dollars, it was $13.268 trillion during the same period in 2007 — before the bank bailouts, and before the stimulus package. Life wasn't "so terrible for most people" back in 2007, was it? "So why are so many people glum now? Why are so many actually suffering, losing their houses or their jobs?" GDP isn't a "perfect reflection" of the average American's prosperity, but "it's not a bad one." So "why does $13 trillion feel poor today, although as recently as 2007, it felt rich?" Here, an excerpt:

There are all sorts of reasons. Among them, the relation between making or having money and feeling prosperous is far from linear. ... In judging our own prosperity, we don't compare it with long ago — or even 20 years ago. We compare it with how other people are doing and how we ourselves have been doing recently. It's no comfort to be told that you're a thousand times richer than a caveman. If a caveman killed a wildebeest, he felt rich and actually was rich by the standards of his time.

A more important reason that $13 trillion doesn't feel as rich this time as the last time we passed through it is the increasing inequality of wealth and income. In 1984, a family income of $81,365 (2009 dollars this time) put you in the top fifth of all American families. In 2009, it took 23 percent more, an even $100,000.

Read the full article in Politico.

Recommended

Zoomers at work
Man on phone in an office.
Briefing

Zoomers at work

Nvidia's meteoric rise
The Nvidia logo on a smartphone screen
Briefing

Nvidia's meteoric rise

The daily business briefing: May 30, 2023
Elizabeth Holmes, convicted founder Theranos
Business briefing

The daily business briefing: May 30, 2023

Preparing for a layoff
An illustrated image of an office chair covered in a 'dismissed' sign
Feature

Preparing for a layoff

Most Popular

Why are so many boomers homeless?
Homeless person and tents
Today's big question

Why are so many boomers homeless?

Xi Jinping tells national security team to prepare for 'worst-case scenario'
Chinese President Xi Jinping.
Chinese Troubles

Xi Jinping tells national security team to prepare for 'worst-case scenario'

Fossils uncovered in Australia are 107 million-year-old pterosaurs bones, scientists say
Reconstruction of Australian pterosaur.
ptero-sighting

Fossils uncovered in Australia are 107 million-year-old pterosaurs bones, scientists say