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W W W . F O R W A R D J A N E S V I L L E . C O M

Recent conversations with several Forward Janesville

members would cause almost any logical thinking

person to conclude that our economy is cruising into

high gear. A real estate professional told me she has

far more buyers than homes available for those

buyers. The value of homes is rising, a key indicator

that historically makes homeowners bullish about

their futures. Homebuilding is finally picking up and

the demand for skilled trades is robust. As previously

noted in this publication, construction jobs are good-

paying, family-supporting jobs.

More broadly, a recent job fair at the Rock County Job

Center included 49 employers with 900 openings.

Nine hundred open positions. A recent full page ad

in the Janesville Gazette was designed to entice

potential job seekers to contact SSI Technologies

about numerous open positions with the rapidly

growing company. Area companies are nervous

about their ability to fill a variety of positions. I hear

about it nearly every day.

If we broaden our view to the national stage,

unemployment is below 5 percent. Pay has actually

risen steadily since 2009. Interest rates remain at

historically low levels. Retail sales are very strong. A

barrel of oil is still under $50 and all indications are

that the price of gas will remain stuck in a range of

$2.25-$2.50 per gallon for the foreseeable future.

Overall inflation is a very tame 1 percent.

So why all of the pessimism? A recent article in

Fortune Magazine about the disconnect between facts

and peoples’ feelings suggests if the economy is so

strong, “most Americans have missed the memo.”

The political season is likely part of the answer.

Donald Trump and Bernie Sanders have both

hammered home the themes of lost jobs, income

inequality and a shrinking middle class. The news

cycle is often filled with narratives about how the

economy is underperforming or “rigged” to only

benefit a few. Some pundits have called it a recession

hangover, the idea being our collective pessimism is

tied to the bender we suffered through during the

prolonged recession.

I have no intention of wading into fact checking or

partisan politics. My goal is very modest: I want to

inspire you to do some reading from non-political

sources to try and get a better sense of what is really

happening in the economy. For example, it is true that

employment in manufacturing has declined by about

5 million since 2000. It fell from 17.3 million to 12.3

million, yet manufacturing output is near a record

high. We are producing far more with fewer workers.

Policies related to trade may have had an impact on

employment but that is not the crux of the issue. New

technology is far more impactful than trade deals.

Manufacturing in the U.S. totaled $6.2 trillion in 2015,

about 36 percent of the U.S. domestic gross product.

That’s nearly double the output of any of the other big

sectors such as transportation, retail, mining, utilities

and business services. This notion that “we don’t

make anything anymore” is simply not true.

I have another theory about why there is so much

pessimism about the economy. I can’t prove it, but

my instincts tell me it is real. The pace of change is

difficult for many Americans to handle. An increasing

number of people just wish we could rewind to a

simpler time. Add to that 10,000 boomers per day

who slide into retirement and you have a recipe for

fear and loathing.

These are typically the folks who call into talk radio

shows and anonymously comment online or in the

daily paper. Their angst is palpable and often their

predicament is real. It

is not surprising that

when it comes to the

actual performance of

the economy, their

hearing is selective

and they often just

don’t believe what is

presented as factual

data. There are far too

many scenarios to

worry about to be optimistic about the future.

The tonic for this is a robust economy, rising incomes

and a sense that the next generation has a real

opportunity for upward mobility. I see data that leads

me to believe all three of these benchmarks are

achievable. We are positioned for steady growth. Real

income is rising despite what you may have heard on

the campaign trail. And finally, since 2000, two-thirds

of people who have left the middle class have “fallen

up” in the sense that they are no longer considered

part of the middle class (defined as two-thirds to

double median household income) because their

income has increased enough to be statistically above

the middle-class threshold.

With positive political leadership, increasing incomes,

available job opportunities and stable prices, one can

be hopeful the reflexive pessimism that is so

pervasive today will eventually give way to renewed




How Can So Much Good News Feel So Bad?