IF YOU EXAMINE the statistical performance of the American economy at the end of 2015, all looks well. The U.S. is generating solid growth, producing jobs and creating plenty of wealth.
But there's more than one way to judge American prosperity, and here's where things get rougher: Assess the public's mindset and you'll find the American psyche still reeling from the Great Recession. We're far too pessimistic.
This week should have marked the capstone to recovery from the financial crisis of 2008-09, but it's going to fall short because of how people feel. On Wednesday, the Federal Reserve raised interest rates, which have been kept near zero for seven years. With this rate hike, our economic state of emergency recedes.
It's hard to feel celebratory, though. That's because the Fed's justification for raising interest rates is based on data analysis. Meanwhile, Americans are frustrated, struggling to keep afloat, or nagged by the notion that their prospects should be better.
The top-line numbers on the economy do sound excellent: six straight years of growth, with unemployment down to 5 percent, a proxy rate for full employment. Since the worst of the recession, the economy has created about 13 million jobs, while the stock market has nearly tripled. Inflation is low, to boot.
Unfortunately that's not the end of it: The growth is unimpressive, stuck at about 2.25 percent per year. The unemployment rate is low in part because so many Americans have dropped out of the workforce. Many other workers have gone a long time without a decent raise. Those numbers show wages finally seem to be rising again, but it's tentative movement, too soon to tell if it sticks.
Now consider the opinions of the American public six years into this recovery.
* A recent poll by the Public Religion Research Institute asked if the recession is over: 72 percent of respondents said no, the country is still in a recession, even though that same recession ended in June 2009.
* A Harvard Institute of Politics poll of millennials (ages 18-29) asked about their aspirations: Nearly half said they believe the American dream is dead for them.
* A Gallup poll this year found a significant decline in the percentage of Americans who consider themselves middle class -a drop to 51 percent from an average of 61 percent in 2000-2008. That perception is echoed in a new study from the Pew Research Center that shows the middle class (households earning between two-thirds and twice the overall median income) is shrinking and no longer the majority of Americans.
Polls are selective snapshots. Other surveys, confirmed by economic data, show that consumers are spending money again.
The presidential contest is putting on display some of the ideas for rejuvenating the economy and making it work for more people. We will want to hear much more from the candidates - especially on how to restore more robust growth.
Yes, the American dream lives. But an economy generating more investment and jobs would be better for us all. Gradually returning interest rates to market-driven (as opposed to Fed-entombed) levels is an overdue step in that direction.