KAI RYSSDAL: Let me get back to that housing report Bob Moon told us about at the top of the program. We don't know yet whether it'll be a soft economic landing. Or a hard one. But with elections coming up in November it's no secret which way the White House is leaning.
The President met with his economic team at Camp David last week. Then he met with reporters. He said the economy's growing. The deficit's shrinking. Henry Paulson, the Treasury secretary, said he doesn't know why so many people don't feel so good about the economy.
Commentator Robert Reich says the answer's really pretty simple:
ROBERT REICH: The University of Michigan's latest survey shows consumer confidence dropping like a stone. The Administration is puzzled, and worried about the implications for the fall elections. Treasury Secretary Henry Paulson calls the disconnect between the upbeat economic news and the public's downbeat attitude "the $64,000 question."
Paulson shows his age by referring to the title of an old TV quiz show that most Americans don't even remember. In it, contestants worked their way up to a big stumper of a question which, if they answered correctly, paid them $64,000. But how can the Administration really be stumped by the public's downbeat assessment of this economy? I mean, the housing sector is weakening, and homes had been piggy banks for extra cash as well as baby boomer retirement nest eggs. Meanwhile, the price of gas continues to hover around $3 a gallon.
But maybe Hank Paulson had something more subtle in mind when he spoke of a $64,000 question. Maybe, just maybe, he was taking note of the fact that median annual household incomes have dropped, in real terms, from about $46,000 a year in 2000 to $45,000 today. Yet, if American households had been sharing in the growing economy the Administration is so eager to tout, median household income today would be on the way to $64,000.
Supply-side economics, meaning big tax cuts for the very wealthy, used to be called trickle-down economics on the assumption that some of the gains would be felt by average people. But in this economy nothing has been trickling down. The real $64,000 question is why the White House is puzzled that most Americans are so downbeat.
RYSSDAL: Robert Reich was Labor secretary for President Clinton. Now he's a professor of public policy at the University of California at Berkeley.