Editorial: Economic troubles in sharp focus
The Democrats and Republicans have got one thing right: The election in November will be about the economy.
If you have any doubt, take a gander at the latest findings of the Survey of Consumer Finances, an in-depth study of family finances conducted triennially by the Federal Reserve, the nation's central bank.
The newest results were released Monday, and they are grim: Adjusted for inflation, the net worth of the median American family has fallen back to 1992 levels. That's a drop of 39 percent in three years, to $77,300 in 2010 -- mostly due to a steep drop in home prices.
As if that weren't bad enough, median family incomes fell too, from $49,600 in 2007 to $45,800 in 2010, also adjusted for inflation (as were all the numbers in the report). Hard times in that miserable three-year period were especially hard on the middle class, which suffered the biggest hits in family wealth and income.
Household debt, meanwhile, was a persistent accompaniment. Three-quarters of families owed something (their median debt was $70,700), and while this figure was virtually unchanged in the period, the burden grew heavier because incomes and family wealth shrank.
The report is pain laid out in black and white. As a result of the housing bubble bursting and the subsequent Great Recession, Americans got quite a bit poorer and earned less money. If there is a silver lining, it's regional: In our part of the country, the Northeast, median incomes were almost unchanged. Yet here too, median family wealth fell sharply -- although, at 28 percent, the drop was less than it was nationally.
But it's what these numbers represent that will make the economy so important in the upcoming election. The housing collapse, the loss of millions of jobs and the stock market's gyrations represent dreams turned to ashes. They mean older people who can't retire, and younger ones who can't finance a business or relocate to greener pastures because they can't sell their homes.
Our persistent economic woes mean middle-aged Americans, their previous jobs having evaporated, are working at things way beneath their skill level or potential -- and young people living at home and picking up odd jobs because they can't find steady work, never mind embarking on a career.
Although the data are 18 months old, the larger problems -- slow growth, persistently high unemployment and chronically depressed home prices in much of the country -- persist. Our economic future is further clouded by the never-ending debt crisis in Europe, where teetering banks and tottering governments lean unsteadily on one another for support. Europe's troubles, which persist amid signs of a slowdown elsewhere in the world, are likely to get worse -- and when they do, they are likely to take an additional toll on the U.S. economy.
That's why it's imperative that Barack Obama and Mitt Romney use this presidential election to present clear and forthright ideas on how to get us out of this mess. Doing so is in their interest as well as the nation's, because the economy is likely to be the main thing on the mind of voters when ballots are cast in November. This latest Fed report just put some numbers on the pain.