Are you better off?

During the 1980 debate Ronald Reagan asked the audience, "Are you better off today than you were four years ago?" He went on to defeat President Carter. Four years later Reagan asked the same question and won in a landslide.

The Obama people knew that this question was coming but when reporters started asking it a week ago they seemed to be taken by surprise.

It actually is more complicated question now than in 1980 or 1984.

In general the country is better off. Four years ago the economy was failing. Major banks and brokerage firms were on the verge of going bankrupt and taking the economy down with them. GM and Chrysler were in serious trouble. The economy was shedding jobs instead of creating them

Today the banks and brokerages are on more solid footing although Bank of America is still in serious trouble. GM went through a government-backed bankruptcy and closed several of its divisions. The remaining pieces are doing better but still face serious long-term problems. The economy is creating jobs but at a sluggish pace that does not keep up with population growth. Unemployment is higher than four years ago and would be even higher if you take into account the underemployed and people who dropped out of the workforce.

In summary, things are not getting worse but they are not improving very fast, either. That is not much of a reelection slogan which is what is giving the Obama campaign so much trouble.

But the question is not, "Is the country doing better?", it is "Are you doing better?"

The majority of the country has been continuously employed for the last four years so the unemployment rate does not affect them directly.

Nearly everyone who owns a house is poorer today than four years ago. For most people, their biggest asset is their house and housing values continued to fall will into this year. There is some indication that housing prices may have finally hit bottom this Summer and that demand is increasing. On the other hand, I have seen predictions that a new round of foreclosures is coming this Winter. If that happens then home prices will drop again.

Gas prices reached a high point four years ago then dropped, going from over $4/gallon to $2/gallon within a few months. They are back up near $4/gallon.

Food prices are up. even before the drought they were rising. Part of this is because of the mandate that a large portion of the corn crop be turned into (expensive) auto fuel. Other prices are up, also. Wages have not been keeping up with inflation.

Interest rates are at a historic low (except for credit cards). If you have money in the bank it is losing value. The Fed hopes that low long-term interest rates will stimulate growth. So far this policy has failed.

So most individuals are not doing quite as well as they were four years ago.

There is a related question to "Are you better off than you were four years ago?" - "Could the economy have been handled better?" Reagan had to cope with a double-dip recession and higher unemployment but at this point his economy was creating jobs several times as fast as the Obama economy. Obama spent most of his first two years concentrating on health care instead of jobs. He was over-reliant on short-term Keynesian fixes to solve long-term problems. And, he has put ideology ahead of prosperity.

The fact that reporters are asking "Are you better off?" is a string indication that the nation does not feel better off. For a president who promised to stop the oceans from rising to admit that fixing the economy is hard and will take longer than he thought is an admission of failure.

The final question is the most difficult for Obama, "Could Romney handle the economy better than Obama?" Voters will express their opinion in November.