2016: A Year Defined by America’s Diverging Economies
In many ways, 2016 has been the strongest year, economically, since the mid-2000s, or even the late 1990s. Unemployment was low. Wages were increasing. The markets hit new highs. Consumer confidence rose. Yet Donald Trump unseated the incumbent party and won the presidential election promoting economic pessimism and promising restoration: He swore to Make America Great Again, describing the country as falling behind, workers as jilted, growth as anemic, and the current period of expansion as a sham.
How could a message like Trump’s take hold in an economy like that? The answer is that it did not take hold with everyone—or, more to the point, everywhere. In ways that have been overlooked and under-appreciated for years, the strength of the post-recession recovery has varied dramatically not just from income bracket to income bracket, but from place to place as well. And it so happens that the places left behind are also places that wield outsized political power—enough power to vault the loser of the popular vote to the presidency and to make the economic story of 2016 more about stagnation, failure, and the dissolution of the American dream than it was about the headline economic numbers.
And those headline numbers were undeniably good. This year offered unremarkable but steady growth—about , the that has characterized the Obama recovery. But over time, that same-same, just-okay annual pace has nudged the economy to a pretty good position relative to where it, and measures of underemployment dropped as well. “It’s a pretty good year bordering on a very good year in terms of jobs,” Mark Zandi, the chief economist at Moody’s Analytics, told me.
