BARACK OBAMA’S strenuous efforts to avoid being a war president have failed. But voters care more about the economy than the Middle East, and here Mr Obama has a good story to tell. The headline numbers are impressive: both output and employment have passed their pre-recession peaks and the unemployment rate, at 6.1%, has fallen far enough to inspire the Federal Reserve to debate, openly, when to raise interest rates. Though the latest jobs report was disappointing, private payrolls have grown by 10m in the past four and a half years, the longest uninterrupted streak in history.

Yet for all the upbeat economic news, Mr Obama has yet to reap any political reward. His approval rating, at 43%, is stubbornly low. Just 39% of voters approve of his handling of the economy, according to YouGov; 56% disapprove. Remarkably, they now trust Republicans more than Democrats to manage the economy.

Voters give Mr Obama little credit for America getting richer because, by and large, they haven’t felt it. Not only is the recovery subdued by historical standards, but widening inequality means that the median household (in the middle of the income range) is doing far worse than the mean (total income divided by the number of households).

Ken Hodges of Murfreesboro, Tennessee, thinks Mr Obama wasted money bailing out banks and carmakers, “but it hasn’t helped the working-class people at all.” Mr Hodges used to build guitars for a living but the business went downhill after the financial crisis, as did his investments. He now sells barbecue lunches out of a food truck in Nashville and, between the cost of meat, fuel and the thousands of dollars he spends on permits, reckons he makes 20% less than he did in 2007. “I’m slowly but surely going broke, though I’m working like a madman,” he says.


Inequality actually began to widen in the early 1980s. But, for two decades, overall growth was still healthy enough to lift the median household. During Ronald Reagan’s first six years in office, GDP grew 22% while the median income grew 6% (see chart 1). During Bill Clinton’s first six years, GDP grew 24%; median income, 11%. But growth began to slow in the 2000s, undermining both the mean and the median. In George Bush’s first six years GDP rose 16%, but median incomes fell 2%. Under Mr Obama it has been even worse: GDP is up 8% and median income is down 4%, according to the Census Bureau and Sentier Research, a private outfit.


Though median income performed almost as badly under Mr Bush as Mr Obama, there was an important difference. During the first part of the 2000s consumers could borrow easily, thanks to rising property prices. Between 2001 and 2007 the median household’s real net worth rose 19%, to $135,400. The collapse of the housing bubble sent it plunging. By 2013 it was $81,200, less than in 1989. In contrast, the mean net worth of American households has increased by 60% since 1989, to $534,600, thanks to the soaring fortunes of those at the top (see chart 2).


Efforts by the Fed to support the economy have bolstered stock and house prices, but the benefits have bypassed many households. Just 65% owned their own home in 2013, compared with 69% in 2007. Fewer owned shares or mutual funds outside retirement accounts. Even the impressive decline in unemployment has partly come about because many people have given up looking for work, and so are not counted as unemployed. In previous recoveries the labour-force-participation rate rose even as unemployment fell; this time, it has fallen (see chart 3).

Voters tend to blame the president for bad times and give him credit for good ones, regardless of the real cause. Thus presidential approval ratings depend a lot on median household income (see chart 1, again). Mr Obama is not on the ballot in November, but history suggests that voters will vent their frustrations on his party, as they did on Republicans in 2006, when George W. Bush’s approval rating was even worse than Mr Obama’s is now.

The economy and presidential popularity are not everything, of course. Ronald Reagan’s approval rating was over 60% in 1986, but Republicans still lost control of the Senate, thanks to the quirks of the electoral calendar. Senators serve six-year terms; every two years, a third of them stand for election. Many Republican novices won Senate races in Democratic states in the Reagan landslide of 1980; six years later, few could hold onto their seats.

Action chart: American unemployment and labour force participation
 

Mr. Obama has the worst of both worlds. Not only are voters feeling glum; Democrats are also fighting to hold on to several Senate seats in Republican states, such as Arkansas. It is not that voters love Republicans, says Jim Kessler of Third Way, a Democratic think-tank. Rather, this year could see “an anti-incumbent wave, and Democrats happen to have more beach-front property”.

Charlie Cook, an elections analyst, thinks the Senate could flip back and forth over the next four years, with neither party securing the 60 seats (out of 100) needed to pass big laws without help from the other side. Disgusted voters may be open to radical alternatives. Mr Hodges, the Tennessee food-truck operator, despises Democrats and most Republicans, but would vote for Ted Cruz, a Texan Tea Party populist, if he could. Mr Cook recently advised some bankers to hope that Democrats nominate Hillary Clinton for president in 2016, because the alternative is Elizabeth Warren, a banker-bashing Massachusetts senator. “The energy and passion of the Democratic Party is a heck of a lot further to the left than Hillary,” says Mr Cook.

On the stump, Mr Obama offers morsels of economic populism aimed at the Democratic base: a higher minimum wage, debt relief for students and a law that will make unequal pay for women even more illegal than it has been since 1963. Also, on September 22nd, the White House announced rules to stop companies from moving their headquarters abroad to avoid taxes. Such policies could marginally reduce inequality, but they do nothing to boost underlying growth.

A better bet would be free trade, tax reform, more money for infrastructure and training and an overhaul of entitlements such as disability insurance. Many of the jobless end up drawing disability benefits and never return to work, another reason labour-force participation has fallen.

Even if Congress were to co-operate, such policies would take years to bear fruit. But surveys by Global Strategy Group, a Democratic consultancy, found that voters prefer a candidate who promises higher growth to one who promises to reduce inequality. Alas, neither party has plausible plans for that.