Are we better off then four years ago?

The key question for the election and the economy is whether we are better off from four years ago. Think about September of 2008. There was a clear financial crisis. By this measure we are much better off. Financial institutions are better off and there is no crisis, but the number after four years are not anything to feel good about.

• Consumer confidence is still below 2008 levels, but we are significantly above the lows set in February 2009by a factor of two.
• Disposable income is higher than four years ago by 3% but we should see this growing at about 3% per year. The level of disposable income is also much higher then the lows of October 2009.
• Housing is still off by about 20 percent from 2008 although we have improved off the bottom based on the Case-Shiller index.
• Non-farm payroll as measured by the number employed is worse off from 2008 but again we are above the lows set February 2010.
• Equities have almost doubled since the lows of March 2009 but we are still below 2008 levels. 

We have hit bottom and have improved. The is whether we are hitting our potential. The output gap is not easy to measure and the debate on answering our original question is related to whether you believe different policies would have helped us reach our potential.