Admin's 'economic boom' spin is a bust

As if we didn't know, the White House's rosy proclamations on the vigor of the US economy aren't all they're cracked up to be. They just look rosy when you fiddle with averages. As Robert Reich just put it on Al Franken's show, "if you take me and Shaquille O'Neal, our average height is 6'1"." Robert Reich is 4'10" tall. So it's pretty misleading to take America's richest, who are benefitting from Bush's policies to the tune of hundreds of thousands a year, it can make the unpleasant reality of the working poor sound a little more sunny. But they aren't benefitting at all.

In his State of the Union address last month, George W. Bush described an economy that is "healthy and vigorous." A new report from the Federal Reserve explains why it might not feel that way to you.

The Fed says that average family income, after adjusting for inflation, fell more than 2 percent between 2001 and 2004 -- a dramatic and unhappy turnaround from the 17 percent gain in average after-inflation income Americans enjoyed during the prior three-year period.

Of course, income averages tell only part of the economic story. Some of the other numbers are worse, and they suggest that the rich-getting-richer, poor-getting-poorer dynamic is alive and well in America today. For the poorest 20 percent of America's families, the Fed says, median net worth dropped 11 percent, to $7,500, between 2001 and 2004. For the richest 10 percent, it rose by a respectable 4 percent, to $924,100.

But even for those lucky ducks, the gains may be short-lived. The Fed says that a major part of the growth in net worth came from the explosion in housing prices over the last three years. If the real estate bubble finally bursts -- and it's sure feeling leaky in some parts -- those paper gains could disappear. Don't expect renters to shed any tears. The Fed says homeowners saw a 1 percent increase in their net worth over the last three years. For renters, it was a 22 percent drop.