Jeff Turner/Flickr
Jeff Turner/Flickr

The fundamentals of the economy are, well, okay.

It's been slow and steady, but the recovery has chugged along enough to get us back to something close to normal. The economy has surpassed its pre-crisis peak, unemployment is at a six-year low, and stocks have more than tripled from their 2009 low. It's not the best of times, but it's certainly not the worst -- which was a very real possibility after Lehman Brothers' bankruptcy threatened to send us into a second Great Depression.

President Obama and his fellow Democrats, naturally, would like to claim some of the credit for that. If voters credited them with this economic turnaround, Obama and his party might have a better chance of holding the Senate this fall, an outcome that looks precarious. Indeed, Obama will give a high-profile speech Thursday at Northwestern University, trying to remind voters of all the economic success he's had.

Unfortunately for Obama, though, voters have rewarded him for the upbeat economic news by starting to trust Republicans more on the economy. What in the name of Phil Gramm is going on?

Part of this mystery isn't one at all: the economy simply isn't as healthy as the headline numbers suggest. Unemployment has fallen, in part, because so many people have given up looking for work rather than finding it, and there are still millions of part-timers who want full-time jobs.

But then there are deeper factors at work. The economy has gotten bigger, but much of that growth hasn't reached the middle class. Indeed, the top 1 percent grabbed 95 percent of all the gains during the recovery's first three years. And that's not even the most depressing part. Even adjusted for household size, real median incomes haven't increased at all since 1999. That's right: the middle class hasn't gotten a raise in 15 years.

But one of the biggest, and least appreciated reasons Democrats might be struggling, is that the middle class is poorer, too. Median net worth is actually lower, adjusted for inflation, than it was in 1989. Even worse, it's kept falling during the recovery.

Yes, even after the economy started to grow again, and the stock market started to boom, and housing prices began to bounce back, the median net worth of the average American household continued to decline.

Source: Federal Reserve Survey of Consumer Finances
Source: Federal Reserve Survey of Consumer Finances

This is a story about stocks and houses. The middle class doesn't have much of the former, which has rebounded sharply, but has lots of the latter, which hasn't. Indeed, only 9.2 percent of the middle 20 percent of households owns stocks, versus almost half of the top 20 percent. So the middle class has not only missed out on getting a raise, but also on the big bull market the past five years.

The only thing they haven't missed out on was the housing bust: 63 percent of that middle quintile own their homes, which are more likely to be a financial albatross than asset. And it doesn't help that, with student loans hitting $1.2 trillion, people have to take out more and more debt just to try to stay in, or join, the middle class.

It's no surprise, then, that people are still so gloomy about the economy. The recovery just hasn't been much of one, if at all, for most of them. Middle class wages are flat, and their wealth is still falling. At least during the bubble years, rising home prices gave people access to credit that helped mask their stagnant wages. But no more. Home equity lines of credit are down almost 25 percent from their peak, and are still declining. The middle class, in other words, can't borrow from the future to pretend that the economy is working for them today.

But people won't be happy until they don't have to pretend anymore.