Term Sheet — Thursday, October 30

When Americans head to the polls next week, many will vote for congressional candidates who promise to fix the economy. In fact, the economy is “very important” to the majority of registered voters and outstrips any other issue, including health care and terrorism, according to a recent survey by the Pew Research Center.

The sad reality, however, is that these voters won’t get what they want, no matter who ultimately heads to Washington, namely because too many Americans have developed a nasty case of economic hypochondria. How can any politician fix what isn’t really broken?

It has been more than five years since America emerged from the Great Recession, and most economic indicators have improved ever since. GDP climbed by 4.6% last quarter, which is tied for the best mark since 2007 (this morning came word that Q3 GDP was 3.5%, beating estimates). The national unemployment rate fell to 5.9% in September, which not only is its best mark since 2008 but is actually lower than it was for most of the 1980s. Even the number of long-term unemployed has been cut by more than a quarter over the past year. Gas prices are way down, and the public stock markets, despite some recent volatility, are hanging around record highs.

All those factors have led 42% of Americans to say they’re in “excellent or good” financial shape, according to another Pew poll. The trouble is that only 21% of respondents in the same poll say the economy is in “good or excellent” condition. This disconnect is also reflected when 56% expect their personal finances to improve over the next year, but only 22% expect economic improvement over the same period.

And then there’s this stunner: According to a summer poll by the Public Religion Research Institute, 72% of Americans still think we’re in a recession, down just barely from 76% when the same question was asked in 2012.

I’ve come up with three explanations for this massive disconnect, in ascending order of importance.

Shell shock: Most American adults had experienced economic downturns before 2008, but few had experienced anything quite as severe or wide ranging as the Great Recession. It’s the sort of thing that some people just can’t get over; many put up mental defenses to make sure they don’t get fooled again. It’s both totally understandable and thoroughly illogical.

Yours truly: We media folks also don’t like getting egg on our faces, and you could have cooked a lifetime of omelets on our foreheads in 2008. So we keep predicting that bubbles will burst. Plus, bad news sells better than good news. So we overplay the high unemployment figures and underplay the low ones. We explain that top-line figures like unemployment rates aren’t really reflective of the current environment, but we use the exact same measurements when nostalgically harking back to economic boom times.

Political calculus: In theory, both political parties should claim ownership of economic improvements. But rather than advocate for a continuation of current policy, each party has determined that the smarter electoral strategy is to claim that everything is awful and the other side’s fault. That is true of both incumbents and challengers. Rather than “Our policies helped you find a job,” we hear “You can’t get work because we aren’t able to implement our policies.” Even if a voter has a good job with gold-plated benefits, he remains immersed in political discourse about those who don’t.

You may think I’m waving pompoms past the economic graveyard. But I’m no cockeyed cheerleader. In fact, I’m downright pessimistic. The less we are willing to recognize the economy we have, the more likely we are to elect representatives who stoke economic fear because they have little else to offer. And if that happens, we will indeed end up with a lousy economy.

Share today's column by using this link:
http://fortune.com/2014/10/30/us-economic-midterm-voters-reality

THE BIG DEAL

• Axalta Coating Systems Ltd., a Philadelphia-based maker of liquid and powder coatings, has set its IPO terms to 45 million shares being offered at between $18 and $21 per share. It would have an initial market cap of approximately $4.47 billion, were it to price in the middle of its range. The company plans to trade on the NYSE under ticker symbol AXTA, with Citigroup listed as left lead underwriter. The Carlyle Group acquired Axalta in 2012 for $4.9 billion from Dupont. The company reports $22.9 million in net income on $4.34 billion in revenue for the year ending June 30, 2014. www.axaltacs.com

VENTURE CAPITAL DEALS

• Credorax, a Boston-based digital merchant acquirer, has raised $40 million in new growth equity funding from Columbus Nova Technology Partners ($25m) and return backer Blumberg Capital ($15m). www.credorax.com

• Minted, a San Francisco-based curated marketplace for connecting consumers with designers, has raised $38 million in new VC funding. Norwest Venture Partners led the round, and was joined by Technology Crossover Ventures. www.minted.com

• VytronUS Inc., a Sunnyvale, Calif.-based developer of technologies for the treatment of cardiac arrhythmias, has raised $31.6 million in Series B funding. Apple Tree Partners led the round, and was joined by BioStar Ventures, Windham Venture Partners, Abbott Labs and return backer NEA. www.vytronus.com

• Capriza, a Palo Alto, Calif.-based startup that focuses on migrating existing business applications to mobility, has raised $27 million in Series C funding. Andreessen Horowitz and Charles River Ventures co-led the round, and were joined by Tenaya Capital,  Harmony Partners and Allen & Company. www.capriza.com

• Digital Lumens, a Boston-based provider of “intelligent” LED lighting solutions, has raised $23 million in Series C funding. Nokia Growth Partners, Aster Capital and Goldman Sachs were joined by return backers Flybridge Capital Partners, Black Coral Capital, and Stata Ventures. www.digitallumens.com

• LiquidSpace, a San Francisco-based real-time marketplace for professional meeting and workspace, has raised $14 million in Series C funding. Roth Capital led the round, and was joined by Shasta Ventures, Black Diamond Ventures, Lucas Venture Group, Avison Young, GPT Group and Steelcase. www.liquidspace.com

• Krimmeni Technologies, a San Francisco-based cyber-security startup focused on cloud-based data centers and the Internet-of-things market, has raised $11.7 million in Series A funding from Third Point Ventures and Pelion Venture Partners. www.krimmeni.com

• P.S. XO (f.k.a. Moonfrye), an ecommerce company focused on the kids party and product space, has merged with New Zealand-based Seedling. The combined company also has raised $7 million in new VC funding from existing P.S. XO backers Upfront Ventures and Greycroft Partners. www.shopseedling.com 

• Print Syndicate, a Columbus, Ohio-based apparel and home goods e-commerce company, has raised $4.25 million in Series A funding. Data Point Capital led the round, and was joined by Lightbank, Vegas Tech Fund, CNF Investments and TechColumbus. www.printsyndicate.com

• Jongla, a Finland-based cross-platform instant messaging app, has raised €3.4 million in new VC funding. Backers include JSH Capital, Ingman Finance, Kontino Invest and Holdington Ltd. www.jongla.com

• HouseLens Inc., a Nashville, Tenn.–based provider of real estate video marketing solutions, has raised $2 million in Series A funding from undisclosed investors. www.houselens.com

• Valooto, an Israel-based provider of a SaaS collaborative sales engagement platform, has raised $1.5 million in seed funding from JVP Media Labs. www.valooto.com

• Gogoro, a stealthy Taiwanese startup led by former HTC executive Horace Luke, is raising $100 million in new VC funding, according to Re/Code. It previously raised a $50 million Series A round from HTC Chairwoman Cher Wang and Ruentex Group founder Samuel Yin. Read more.

PRIVATE EQUITY DEALS

• Avenue Stores LLC, a plus-sized woman’s apparel retailer owned by Versa Capital Management, has finalized a dividend recap that includes a $90 million term loan and revolving credit facility from J.P. Morgan Chase and Goldman Sachs. www.avenue.com

• The Blackstone Group has agreed to acquire Philadelphia Financial Group Inc., a Philadelphia-based provider of insurance and investment management solutions, from Tiptree Financial Inc. (Nasdaq: TIPT) for approximately $155 million (plus up to $10 million in additional considerations to be paid over the next two years). Blackstone is transacting the deal via its Tactical Opportunities group, and said it is expected to close in Q3 2015. www.philadelphiafinancial.com

• Comvest Partners has acquired Old Time Pottery Inc., a Murfreesboro, Tenn.–based retailer of home goods and furnishings. No financial terms were disclosed. Harris Williams & Co. managed the process. www.oldtimepottery.com

• E.ON, a German utility giant, is asking bidders to submit offers for its Spanish business by Monday, according to Reuters. The deal could be worth upwards of €2.2 billion, with CVC Capital Partners, Macquarie group and Endesa among likely suitors. Read more.

• Francisco Partners has completed its previously-announced acquisition of Vendavo Inc., a Mountain View, Calif.-based provider of revenue and price optimization and management solutions for B2B mid-market and enterprise companies. No financial terms were disclosed. Vendavo had raised VC funding from such firms as DCM, InterWest Partners, Sigma Partners and Split Rock Partners. www.vendavo.com

• Investcorp has acquired PRO Unlimited, a Boca Raton, Fla.–based provider of contingent workforce management software and services, from ABRY Partners. No financial terms were disclosed. www.prounlimited.com

• Permira has agreed to acquire Metalogix, a Charlotte, N.C.-based provider of management tools for mission-critical collaboration platforms. No financial terms were disclosed. Metalogix had raised VC funding from Bessemer Venture Partners and Insight Venture Partners www.meta-logix.net

• PetSmart (Nasdaq: PETM) is expected to receive takeover bids from Apollo Global Management, Hellman & Friedman and KKR, according to the WSJ. The pet retailer has a market cap just south of $7 billion. Read more. \

• TDR Capital has offered to buy Norwegian ferry and cruise operator Hurtigruten (Oslo: HRG) for approximately $442 million. Other members of the TDR consortium include Home Capital and Periscopus. www.hurtigruten.com

IPOs

• Boot Barn Holdings Inc., an Irvine, Calif.-based western and work wear retailer owned by Freeman Spogli & Co., raised $80 million in its IPO. The company priced 5 million shares at $16 per share, for an initial market cap of around $399 million. It will trade on the NYSE under ticker symbol BOOT, while J.P. Morgan, Piper Jaffray and Jefferies servedas co-lead underwriters. Boot Barn reports $5.66 million in net income on $346 million in revenue for the fiscal year ending March 29, 2014. www.bootbarn.com

• Fifth Street Asset Management, a Greenwich, Conn.-based alternative asset manager, raised $102 million in its IPO. The company priced 6 million shares at $17 per share, compared to original plans to offer 8 million shares at between $24 and $26 per share. It will trade on the Nasdaq under ticker symbol FSAM, while Morgan Stanley served as lead underwriter. www.fifthstreetfinance.com

• Rhythm Pharmaceuticals, a Boston-based developer of peptide therapeutics for the treatment of GI and genetic deficiencies that result in metabolic disorders, has withdrawn registration for an $86.25 million IPO, following its recent agreement to be acquired by Actavis PLC (NYSE: ACT). The pre-revenue company has raised around $95 million in VC funding from such firms as New Enterprise Associates (31.21% pre-IPO stake), Third Rock Ventures (31.09%), MPM Capital (18.58%) and Pfizer Inc. (9.92%). www.rhythmtx.com

EXITS

• Capital Dynamics has agreed to sell its U.S. Solar Energy Fund assets, which include 39 solar energy productions assets across five states, to TerraForm Power Inc. (Nasdaq: TERP) for approximately $250 million. www.terraform.com

• Charles River Laboratories International Inc. (NYSE: CRL) has acquired ChanTest, a Cleveland-based provider of laboratory testing services for drug development, from Ampersand Capital Partners. www.chantest.com

• Veritas Capital has hired Goldman Sachs and Rothschild to find a buyer for Excelitas Technologies Corp., a Waltham, Mass.–based provider of lighting and sensor components to the health and defense markets, according to Reuters. The deal could be valued at upwards of $2 billion, including debt. Read more.

OTHER DEALS

• Bayer CropScience, a unit of Bayer AG (DB: BAYN), has agreed to acquire certain crop protection and land management assets of DuPont (NYSE: DD). No financial terms were disclosed. Read more.

• Coca-Cola Co. (NYSE: KO) has agreed to acquire a 29.4% stake in the Indonesian unit of Australian affiliate Coca-Cola Amatil Ltd. (ASX: CCL) for $500 million. Read more.

• Fiat Chrysler announced plans to spin out its Ferrari unit into an independent company. Read more.

FIRMS & FUNDS

• The New Mexico State Investment Council said in a public meeting that it is considering a secondary sale of interests in around 25 private equity funds (managed by 15 GPs), which would be its third secondary sale of 2014. www.sic.state.nm.us

• The Pennsylvania Public School Employees’ Retirement System has opted not to move forward with a $100 million commitment to a new private equity fund managed by Centerbridge Partners, after failing to agree on “contractual terms.” Read more.

• CORRECTION: Yesterday's issue reported that The Carlyle Group's Bill Conway said that buyout fund LPs would pay around 25% of the firm's recent $115 million collusion case settlement. That was inaccurate. He said that Carlyle itself will pay 25%, with the rest being paid by a combination of LPs and insurance. Read more here.

MOVING IN, UP, ON & OUT

• Tim Haley, a co-founder of Redpoint Ventures, has been elected to the board of trustees at Santa Clara University. www.scu.edu

• Clayton Main has joined private equity group Bregal Sagemount to lead a new dedicated credit strategy. He had spent the past decade with Goldman Sachs, as a founding member of its specialty lending group. In related news, Bregal Sagemount said that its debut fund size has been increased from $500 million to $650 million. www.bregalsagemount.com

• Sarah Rajani has left Apax Partners, where she had been global director of communications. No word yet on her future plans. www.apax.com

Share today's Term Sheet:
http://fortune.com/2014/10/30/term-sheet-thursday-october-3o