The global economy is roaring. "For the first time since 1969," reports a newsletter I rely on, Bridgewater Daily Observations, "not a single country in the world has had negative year-over-year growth."

Resident Fellow James K. Glassman

Overall, the world economy is rising at a 4.4 percent rate, after inflation. At that pace, Gross Domestic Product doubles in 17 years, quadruples in less than a generation and rises by a factor of about 30 in a lifetime. Imagine the average nation being 30 times richer than it is today!

It's no secret why this is happening. Nearly half the world's population--China, India, the former Soviet Union and its satellites--has moved within 20 years from an anachronistic economic system that doesn't work, like autarky or communism--toward a free-market system that does. Certainly, these nations haven't fully embraced an open, competitive system with limited government involvement yet--but, then again, neither has Europe, or the United States for that matter. The vector, however, is clear, and a growing world economy is very, very good for us.

U.S. growth for 2005 was 3.5 percent--slower than the world as a whole but still quite brisk and much brisker than Europe--and the consensus of economists is predicting roughly the same for the year ahead. The numbers are staggering. In the past year, including modest inflation, America's output of goods and services has increased by nearly $1 trillion - or about $10,000 for every family. In the last five months alone, the U.S. has created 1 million net new jobs.

But if the U.S. economy is doing so well, why aren't Americans happier about it? Surveys show they are pretty miserable. Since January 2001, the Gallup Poll has been asking people, on a monthly basis, how they "rate economic conditions in this country today - as excellent, good, only fair, or poor." Gallup also asks whether respondents think economic conditions "as a whole are getting better or worse."

With the results, Gallup creates three groups: positive Americans, who rank the economy as excellent or good and believe conditions are getting better or staying the same; negative Americans, who say conditions are fair or poor and are staying the same or getting worse; and Americans with mixed views, who answer positively on one measurement and negatively on another.

What is mind-boggling is that more respondents fall into the negative camp now than during the 2001 recession. Today, respondents who are negative on the economy outweigh those who are positive by more than two-to-one. Gallup concludes that "Americans' views of economic conditions in this country have essentially never recovered from the precipitous drop they took in 2001 after the dot-com boom ended."

Pollsters and politicians have noticed that there are lags in the public's perception of how the economy is doing, but the length of the delay this time is a little ridiculous. The recession ended four and a half years ago; unemployment peaked in mid-2003.

There may be better explanations. For example, a 2004 paper by Princeton economists Alan Blinder and Alan Krueger explores the fascinating question of how the public forms its opinions--not on the economy but on economic policy--and finds that "ideology is the most important determinant...while measures of self-interest are least important."

Gallup hints at a similar conclusion: data show consistently that Americans who identify with the party in power "are more positive about the way things are going in the country." In other words, it's not reality but partisanship or ideology that determines one's view of the economic situation.

If this analysis is correct, then Republicans will have a difficult time this November. Since President Bush took office, the period when Americans felt best about the economy was the third quarter of 2004, just before his re-election, when 32 percent were positive and 42 percent negative, compared with a 25-55 split today.

In other words, supporters are abandoning the president--most likely for reasons other than the economy, such as the war in Iraq--and an improvement in the economy won't help.

Let me offer another explanation. Globalization simply raises the level of anxiety for many workers, especially older people lacking technical skills. Even if the reality is that their lives are getting better, they worry much more about their own futures and those of their kids and grandkids. And demagogues among politicians and journalists exploit the worries. In 2008, the presidential candidate who addresses this anxiety--not by quoting Adam Smith but by offering sympathy and encouragement--will likely be the winner.

James K. Glassman is a resident fellow at AEI.