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If the U.S. economy is so good, why do we feel so bad?

October 30, 2014, 11:50 AM UTC
Photo: Joshua Roberts/Bloomberg/Getty

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. 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 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.

PRI-11.17A CASE OF THE BLAHS A poll by the Pew Research Center found that three-quarters of Americans believe the economy will be either the same or worse a year from now.Graphic Source: Pew Research Center

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.

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This story appears in the November 17, 2014 issue of Fortune.