Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

(Credit: bigstock )

Before the crisis, American households were worth $67.4 trillion. At the end of 2012, they were worth $66.1 trillion. That's...pretty close. Closer than you'd think given media coverage of the economy. So are we almost done with this whole bad economy thing? Finally?

Sorry, but no. (C'mon. This is Wonkbook. You knew the news wouldn't be that cheery.) That calculation misses three important factors. First, it doesn't adjust for inflation. Second, it doesn't adjust for population growth. And third and most importantly, it doesn't adjust for inequality.

Here's a startling number from the St. Louis Federal Reserve's latest report on household wealth: Before making any of those adjustments, we've recovered 91 percent of the household wealth lost in the recession. After adjusting for inflation and population growth, the average household has only recovered 45 percent of the wealth lost in the recession.

And then there's the inequality adjustment. The St. Louis Fed estimates that 62 percent of the wealth we've recovered has come in the form of higher stock prices. But about 80 percent of stock wealth is owned by families in the top 10 percent of the income distribution. The families that lost homes are not the families making money off stocks.

The bottom line, according to the Fed? "Most families have recovered much less than the average amount." So let's back it up. We've recovered 91 percent of the wealth lost since 2007. After adjusting for inflation and population growth, that falls to 45 percent. And after adjusting for the unequal nature of the recovery, that falls even lower for the average household.

Did I forget to say "happy Friday"?

Wonkbook's Number of the Day: 45 percent. After adjusting for inflation and population growth, that's how much of the wealth Americans have rebuilt so far that they lost amid the recession. 

Wonkbook's Quotation of the Day: "This is the Ben and Janet show!" wrote David Zervos of investment bank Jefferies of Bernanke and Yellen. "These guys have long advertised a policy of not removing accommodation too quickly."

Wonkblog's Graphs of the Day: Statistical evidence that slow growth causes high debt, not high debt causes slow growth.

Wonkbook's Top 5 Stories: 1) the growth outlook; 2) an IRS special prosecutor; 3) competition in health care; 4) Obama's preferred climate policy; and 5) where the tax breaks go.

1) Top story: Is economic growth really about to accelerate?

Revisions show moderated first-quarter growth. "The economy grew at a modest 2.4 percent annual rate from January through March, slightly slower than initially estimated. Consumer spending was stronger than first thought, but businesses restocked more slowly, and state and local government spending cuts were deeper. The Commerce Department said on Thursday that economic growth in the first quarter was only marginally below the 2.5 percent annual rate the government had estimated last month." The Associated Press.

...It's consumption keeping the recovery alive. "Personal consumption expenditures were revised up to a 3.4% gain—the largest increase in the category since the fourth quarter of 2010. As a result, the personal saving rate fell to 2.3% in the first quarter from 5.3% in the prior period...Some economists are concerned about the ability of consumers to remain a key driver of the recovery. "It's not sustainable—consumers can't keep drawing on savings," IHS Chief Economist Nariman Behravesh said. "They will continue to spend, but not at the rate of the first quarter."" Eric Morath in The Wall Street Journal.

...But are we accelerating? "The American markets are getting worried again. But this time the fear is refreshingly different. The worry is that economic growth may be about to accelerate...The sudden optimism about the American economy — even if it is tempered by fears about how we will handle prosperity — came in part because the economy is not behaving as it did in 2011 and 2012. At the time, signs of strength as the years began were followed by spring swoons." Floyd Norris in The New York Times.

@grossdm: everyone looking at jobless claims and GDP report as sign the U.S. economy is in trouble: you're doing it wrong.

Swoon in bonds puts eye on Fed. "The bond market's monthlong plunge has pushed long-term interest rates on mortgages and U.S. Treasurys to their highest levels in more than a year, sparking a debate: Is this a bursting bubble, the aftereffect of clumsy Federal Reserve communication or a welcome sign the U.S. economy is, at last, on the mend." David Wessel and Victoria McGrane in The Wall Street Journal.

Mortgage rates jump to highest in a year. "Mortgage rates surged again this past week, completing a consistently steep ascent in May, according to data released Thursday by Freddie Mac. The 30-year fixed-rate average jumped to 3.81 percent with an average 0.8 point, its highest mark in the past year. May began with the 30-year hovering at 3.35 percent, well below last year’s reading at the start of the month; however, four straight weeks of increases have pushed the average above last year’s reading of 3.75 percent." J.D. Harrison in The Washington Post.

Interview: Neil Irwin talks with Paul VolckerThe Washington Post.

Americans have rebuilt less than half the wealth lost in recession, study finds. "American households have rebuilt less than half of the wealth lost during the recession, leaving them without the spending power to fuel a robust economic recovery, according to a new analysis from the Federal Reserve. From the peak of the boom to the bottom of the bust, households watched a total of $16 trillion in wealth disappear amid sinking stock prices and the rubble of the real estate market. Since then, Americans have only been able to recapture 45 percent of that amount on average, after adjusting for inflation and population growth, according to the report from the St. Louis Fed released Thursday." Ylan Q. Mui in The Washington Post.

@jimtankersley: 'Wimp speed' = new fave phrase RT @RBReich: US economy continues to grow at wimp speed -- 2.4% first Q, not nearly enough to get jobs back.

Is the economy doing better as measured by income than by production? "Thursday’s GDP report offers an alternate explanation: Perhaps GDP isn’t fully capturing recent economic growth. An alternate, lesser-known measure of output, known as gross domestic income, or GDI, shows the economy growing 2.2% over the same period — still not great, but more in line with recent job gains." Ben Casselman in The Wall Street Journal.

MOORE: The economic recovery is not real. "Household debt is still high and savings are still low, which has been a persistent problem in the US for years. Median household incomes have collapsed since the recession, indicating that most households are making do with less money...When the absurd illusion of a "better economy" is gone, lawmakers and CEOs may be forced to stop believing in the myth of a good economy and actually start working to create the reality of it." Heidi Moore in The Guardian.

Music recommendations interlude: Tycho, "A Walk," 2011.

Top op-eds

DELONG: Inequality on the horizon of need. "[T]he market is not guaranteed by nature to produce a long-run future characterized by a reasonable degree of wealth inequality and relative poverty. Unless and until we recognize this fully, we will remain at the mercy of Keynes’s poorly understood “delicate machine.”" J. Bradford DeLong in Project Syndicate.

KRUGMAN: From the mouths of babes. "Like many observers, I usually read reports about political goings-on with a sort of weary cynicism. Every once in a while, however, politicians do something so wrong, substantively and morally, that cynicism just won’t cut it; it’s time to get really angry instead. So it is with the ugly, destructive war against food stamps." Paul Krugman in The New York Times.

SOLTAS: To reduce health care's costs, destroy its jobs. "Economists and politicians talk frequently of "reducing health-care costs." There are some ways that costs themselves can be better contained -- for one, Congress could allow Medicare to negotiate drug prices with pharmaceutical companies. Yet the disembodied talk of health-care "costs" is mostly deception. There is no pot of gold at the end of the rainbow where all of our health-care spending has magically accrued. Health care "costs" are really health care jobs...Achieving any substantial reduction in the cost of care will require what economists call "labor-saving technology."...It will also require policy changes that reduce demand for labor-intensive care." Evan Soltas in Bloomberg.

SAMUELSON: Is Stein's law real? "Stein’s Law appeared on Page One of the June 1989 issue under the headline “Problems and Not-Problems of the American Economy.” The reference was inspired by America’s trade and budget deficits, which have probably lasted longer than Stein imagined likely." Robert J. Samuelson in The Washington Post.

CROOK: American attitudes are changing towards marijuana. "Most Americans now think that marijuana should be legalized. A new paper for the Brookings Institution by Bill Galston and E.J. Dionne draws attention to this startling shift of public opinion: Support for legalization has surged by almost 20 percentage points in less than a decade and by 11 points in the past three years." Clive Crook in Bloomberg.

Cultural TV interlude: Japanese game shows are still bizarre and painful to watch.

2) Now what on the IRS?

Poll: Americans want special prosecutor for IRS scandal. "Across partisan lines, Americans agree that a special prosecutor should investigate charges that the IRS targeted conservative groups, a new Quinnipiac poll finds. Seventy-six percent of voters want a special prosecutor, including 63 percent of Democrats, 88 percent of Republicans and 78 percent of independent voters." Rachel Weiner and Scott Clement in The Washington Post.

...But the White House isn't on board. "White House deputy press secretary Josh Earnest said the administration isn’t looking at that option...“We’re not,” Earnest said, according to a transcript. “And the reason for that simply is that there is a new IRS commissioner in place, Danny Werfel, who is a career civil servant, who represented — who served in administrations led by Republican presidents and Democratic presidents. He’s conducting a 30-day review.”Aaron Blake in The Washington Post.

House panel will interview Cincinnati IRS employees. "House investigators will interview four Internal Revenue Service employees over the next two weeks, POLITICO has learned. The House Ways and Means and Oversight committees hope the four front-line employees from the agency’s Cincinnati office will help lawmakers better understand how the IRS targeting of conservative groups first began." Lauren French in Politico.

And you thought you had seen it all interlude: There is a Tumblr that only features "local people with their arms crossed" in newspapers.

3) Competition in the health care marketplace

Will Obamacare force insurers to compete? "More than 120 health insurance plans have applied to sell on the federally run health insurance exchange, according to a White House memo published Thursday. One-quarter of those applicants are new competitors in a state’s individual insurance market...[T]he White House estimates that “90 percent of target enrollees will have five or more different insurance company choices.”" Sarah Kliff in The Washington Post.

...And are the exchanges actually competitive? "Health policy experts were more cautious, though, in characterizing insurers’ enthusiasm to sell on these new marketplaces, and what that would mean for the price of health insurance. “I would characterize it as modest plan competition,” Caroline Pearson, vice president for health reform at Avalere Helath, said. “In most markets, there seems to be a bit more choice than what’s available in the market today. But we’re certainly not seeing a wild influx of plans into the market.”" Sarah Kliff in The Washington Post.

States: We'll be ready on time with exchanges. "State setting up their own insurance exchanges say they'll meet their Oct. 1 deadline, but are concerned they'll have to make big changes later, the Government Accountability Office said Thursday...Some states said they will have to make changes to their computer systems after the exchanges come online. Exchanges also might not be fully integrated right away with other federal programs, such as food stamps and housing vouchers. The states have triaged their responsibilities to make sure they are able to accept applicants on Oct. 1." Sam Baker in The Hill.

Study: Immigrants put billions more into Medicare than they use. "When politicians talk about immigration and health care, they usually voice worries about immigrants as a drain on federal health care programs...New research suggests that, for the Medicare program, it would actually prove a boon: Immigrants regularly contribute billions more to the Medicare program than they draw out. The study, published Wednesday in the journal Health Affairs, showed a surplus for immigrants’ contributions to Medicare every year between 2002 and 2009. It finds that immigrants have, over that time period, contributed $115 billion more to the Medicare program than they drew out." Sarah Kliff in The Washington Post.

...And one more study: Premiums could rise by 40 percent. "The survey of premiums in six states found that premiums could increase most significantly for young, healthy men.  Premiums will rise for people who currently purchase bare-bones plans with high deductibles and meager coverage. They'll be forced to upgrade to policies that must offer at least a certain level of coverage...Most people who see their premiums rise will get help from the federal government to help cover the additional costs, according to Thursday's survey, which was conducted by the Milliman consulting firm on behalf of Center Forward." Sam Baker in The Hill.

Employers get leeway on health incentives. "The Obama administration issued a final rule on Wednesday that gives employers greater leeway to use employee wellness programs, with financial rewards and penalties for workers worth up to 50 percent of the premium as an incentive to exercise, quit smoking, lose weight, eat more healthful food and lower cholesterol and blood pressure. Tens of millions of workers could be affected. More than 90 percent of employers with 200 or more employees have programs to promote healthful behavior or prevent disease, the Labor Department says." Robert Pear in The New York Times.

Journalism interlude: The Chicago Sun-Times: now with no staff photographers.

4) How to make climate policy

How Obama wants to make climate policy. "“If I’ve got somebody who has a different approach to dealing with climate change — I don’t have much patience for people who deny climate change, but if you’ve got creative approaches, market-based approaches, tell me about them,” Obama said at a Democratic fundraiser in Chicago. “If you think I’m doing it the wrong way, let me know. I’m happy to work with you,” he added at one of two fundraisers for the Democratic Congressional Campaign Committee." Ben German in The Hill.

Should the government had made more money off Tesla? "Silver points out that Congress didn’t create the various loan programs to turn a profit for taxpayers — the point was to correct existing market failures and promote cleaner sources of energy that weren’t getting funded by the private sector. “Our goals were to help get the technology into the marketplace, to jump-start new industries by bringing private capital off the sidelines, to meet public-policy objectives like enhanced energy security, and to get repaid,” he says." Brad Plumer in The Washington Post.

Your world interlude: First-ever high-resolution images of a molecule as it breaks and reforms chemical bonds.

5) Where the tax breaks go

Who gets the biggest tax breaks? "[T]he 10 major expenditures examined in the report cost the government $900 billion this year and will cost almost $12 trillion over the decade to come. That’s more than Medicare, defense or Social Security...As a share of individuals’ income, the level of benefit doesn’t differ that much by class. In fact, the very poorest and the very richest each do better than those in the middle." Dylan Matthews in The Washington Post.

Only a third of charitable contributions go to the poor. "[W]hat share of charitable giving actually goes to poor people? Unfortunately, we don’t have up-to-date data on that, but in 2007 Google and Indiana University’s Center for Philanthropy tried to find out the answer for 2005′s donations. That’s not as recent as one would like, but it does give a sense of what the breakdown was prior to the financial crisis, which really battered the nonprofit sector." Dylan Matthews in The Washington Post.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

Spelling bees are only fun in English. So here's what other countries do insteadBrad Plumer.

Here are the five best moments from the National Spelling BeeSarah Kliff.

Why a la carte cable won’t save you as much as you thinkTimothy B. Lee.

Are Obamacare’s exchanges competitive? Here’s what the experts saySarah Kliff.

Only a third of charitable contributions go to the poorDylan Matthews.

Will Obamacare force insurers to compete? The White House thinks soSarah Kliff.

Paul Volcker on good governance, Abenomics and why he won’t serve on any more commissions. Neil Irwin.

Here’s who gets the biggest tax breaks, in one chart (okay, six)Dylan Matthews.

Study: Immigrants put billions more into Medicare than they useSarah Kliff.

Et Cetera

Need a Friday, end-of-the-week longread? We have just the thing: "The Death and Life of Chicago," Ben Austin, The New York Times Magazine.

Self-driving cars spark new guidelinesJoseph B. White in The Wall Street Journal.

Is 10 years of CBO scoring enough for immigration reformAlexander Bolton in The Hill.

Romney planning to rejoin national dialogueNeil King Jr. in The Wall Street Journal.

...And Democrats are pushing Obama to sharpen his messagePeter Nicholas in The Wall Street Journal.

House preps two spending bills for 2014Pete Kasperowicz in The Hill.

Debate: How to tax multinational corporations fairlyThe New York Times.

Federal contractor pay heading towards $1m-markJoe Davidson in The Washington Post.

Ex-Bush aide Marlene Colucci to lead Business Council. Byron Tau in Politico.

Banks improving on fee disclosure, Pew findsDanielle Douglas in The Washington Post.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.