By Peter Schroeder - 04/21/14 06:02 AM EDT
A 98 percent gain in the stock market should be a boon to any sitting president, but that hasn't been the case for President Obama.
The Dow Jones Industrial Average has nearly doubled in value since Obama took office, but the stock surge has done little to chip away at lingering pessimism about the economy and how the president has handled the economy.
The market has been more volatile at the outset of 2014, but still stands vastly ahead of the dark days when Obama first took office. But polling consistently shows that while Wall Street is back on its feet, many voters are still looking for their recovery.
That leaves Democrats looking to strike a balance between noting the progress the economy has made, while hammering home an inequality message aimed at the continued discontent.
"No politician at this point wants to be defending the performance of the economy today, and you shouldn't be. It's still really bad," said Josh Bivens, director of policy and research at the left-leaning Economic Policy Institute.
"The market can be at 16,000, but if you've got these long-term unemployed… what does that do?" said Douglas Rediker, a visiting fellow at the Peterson Institute for International Economics and adviser on Obama's first campaign. "That's something I think the administration is deeply concerned about."
The message from Democrats and Obama appears squarely framed around that continued disappointment in the economy. They have pushed renewed unemployment benefits, a boost to the minimum wage and expanded job training programs. The president made economic inequality a central theme of January's State of the Union Address, and only referenced the stock market spike to highlight the discrepancy between those enjoying the gains and those struggling to get by.
Recent polling on the economy doesn't seem to reflect that that the stock market is flirting with all-time highs. Polls consistently show Americans are more pessimistic about the economy than hopeful, and roughly split on whether it is getting better or worse — many believe it is trudging along without much change.
A March NBC News/Wall Street Journal poll found 65 percent of Americans believe the country is on the wrong track. That poll also found that 57 percent believe the nation is still in a recession, despite the fact it actually ended in the summer of 2009.
The president's popularity was battered along with policymakers of all stripes during the fall shutdown, and revelations about data gathering by the NSA and the rocky rollout of ObamaCare have also chipped away at his approval. But the economy remains a top priority for voters, who may be growing impatient as the crisis fades from memory but economic pains remain.
"If the basic story is that the equity markets reflect the promise of better days ahead, it's hard to run on that as people have been hearing that story," said Rediker. "It's still always a future still to be determined. It doesn't effect them on an individual basis such that they feel better about some things."
Looking beyond headline numbers in the stock market, it's not hard to find reasons why Americans would continue to be down on the economy. The unemployment rate is down to 6.7 percent, nearly a percentage point decline in the last year. But another measure of unemployment that includes people working part-time who want to work full-time and those who have given up hunting for work is nearly twice that, at 12.7 percent.
And wages have roughly kept up with inflation since the recession, meaning many Americans don't really feel like their paychecks are getting larger. Seeing stocks hit new highs is cold comfort to many of those still struggling.
"Something really much better has to happen in the labor market for it to feel like a full recovery to most people," said Bivens.
Another reason for the discrepancy is the fact that the financial collapse drove away a significant chunk of Americans from the stock market. As the stock market broke records, only 54 percent of Americans say they owned a piece of it, according to a January poll from Gallup. That number was in the mid-60's before the 2008 crisis.
Most Americans are relying on real estate, not stocks, to boost their economic standing. The U.S. homeownership rate is well above stock ownership — 65.2 percent — but that sector has not seen nearly the increase in value that the stock market has.
"The general public has not participated as much in the equity rally," said Gerald Cohen, nonresident senior fellow at the Brookings Institution. "When they get their 401(k) statements, they're not feeling it."
Anyone still in the stock market is seeing gains that are somewhat offset by inflation, as well as a tax bill that is the price of realizing those gains.
Exactly what the markets hold for the remainder of 2014 remains an open question. Presidential election years actually tend to be fairly stable, 2008 notwithstanding. But midterm election year results are much more mixed, according to InvesTech Research, an investment research firm that has studied the impact of elections on markets.
Since 1940, markets generally have gained in midterm election years, but in the last 18 midterm years, nine have shown double-digit gains and five double-digit losses. And the worst may be yet to come in 2014, as two of the worst quarters for markets during a presidential term have historically been the second and third quarters of the midterm year.
So it's a mixed bag as to whether Democrats can get a broader economic boost before voters head to the polls in November. And few are expecting a dramatic turnaround that could fundamentally alter how Americans view the economy.
Nonetheless, some economists and experts are optimistic for what 2014 has in store. They note that many of the obstacles to the recovery have abated. Congress is no longer squabbling over shutdowns and the debt limit, and lawmakers have agreed to slightly smaller spending cuts. Struggles in Europe appear to be abating, banks are getting stronger, and housing prices nationwide continue to climb. And a harsh winter that many believe weighed on the economy has melted away.
"It's an environment in which the things that were dragging are much less likely to be a drag," said Cohen. "That's what makes me optimistic."
And if nothing else, Obama can be encouraged by the fact that as poorly as he is polling on economic matters, his Republican opponents are doing worse.
A Gallup poll released Thursday found that 42 percent were confident Obama would do the right thing for the economy. Only 24 percent gave GOP leaders in Congress the same endorsement.