Imagine mad scientists have developed an experiment in which they try to teach lab mice to press a button for food pellets. Press the red button and they get the pellet; press blue, they get zapped. Then the scientists switch: press red, zap; press blue, pellet. Then, for real fun, they decide to zap the mouse no matter which button the mouse pushes.
The U.S. has been running a real-life version of that experiment for a political generation. Income growth under Ronald Reagan ended in the S&L crisis of 1990-91. Income growth under Bill Clinton was halted by the dotcom bust of 1999-2000. Weak recovery under George Bush ended in the financial crisis and Great Recession of 2008-2009.
Real Median Family Income Growth (1947-2011)
As for the Obama economy ... well, here's CNN reporting this very morning: "Adjusted for inflation, the July median household income of $54,045 was $2,600 lower than in December 2007."
Has the great American zap experiment come to an end? Wages and salaries have begun to rise recently, up 0.8 percent in the third quarter of 2014, the fastest rise in six years. But that’s merely an aggregate, and may be swayed by big increases at the top of the wage distribution rather than increased up and down the pay scale. And with fewer Americans working, it takes larger and larger wage increases to improve household incomes.
Labor Force Participation Rate (2004-2014)
When you ask Americans directly, they assess their personal prospects bleakly. A majority of Americans earning less than $75,000 complain that they are “falling behind” economically. In the summer of 2014, 45 percent of Americans reported experiencing at least one major financial problem in the past year: a layoff, pay cut, trouble meeting a mortgage payment or rent, trouble with a collection agency, or trouble paying medical bills.
Is any of that likely to change now that Republicans hold a majority in both Houses of Congress? Is it likely to change if Republicans win the White House in 2016? Until it does, the wild oscillations between red and blue that have defined U.S. politics in the past generation are likely to continue.
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