Paul Krugman: Summer of Our Discontent

For the last few months there has been a running debate about the U.S. economy, more or less like this:

American families: "We're not doing very well."

Washington officials: "You're wrong - you're doing great. Here, look at these statistics!"

The administration and some political commentators seem genuinely puzzled by polls showing that Americans are unhappy about the economy. After all, they point out, numbers like the growth rate of G.D.P. look pretty good. So why aren't people cheering?

Some blame the negative halo effect of the Iraq debacle. Others complain that the news media aren't properly reporting good economic news. But when your numbers tell you that people should be feeling good, but they aren't, that means you're looking at the wrong numbers.

American families don't care about G.D.P. They care about whether jobs are available, how much those jobs pay and how that pay compares with the cost of living. And recent G.D.P. growth has failed to produce exceptional gains in employment, while wages for most workers haven't kept up with inflation.