That may seem like a trick question, given the recent surge in inflation and continuing dislocations caused by the pandemic, not to mention the decades-long stagnation of earnings for middle- and lower-income families. But it’s not a trick question. It’s a real puzzle.

Many of the indicators used to measure the strength of our economy are robust: Jobs have come roaring back since the big losses of 2020, GDP has grown at its fastest annual rate in nearly four decades, and family balance sheets have become much stronger. Indeed, when asked by pollsters about their personal finances in recent months, Americans have actually seemed relatively sunny—at least until the start of this year—with 61 percent reporting in January that their personal finances were “excellent” or “good.” What they’re not sunny about is the economy overall, which they give lower ratings than at any time since the Great Recession.

Democratic leaders, as well as most commentators, seem genuinely baffled by the disconnect. Analysts who’ve offered an explanation have generally focused on a single factor, whether it be partisanship, pandemic fatigue, or inflation. Looking at the data, however, the disconnect just doesn’t line up well with one bad trend or anxiety-producing (mis)perception. More important, we think such single-factor explanations downplay a crucial part of the story: Americans’ ratings of the economy aren’t just about how they’re doing right now, but also about how much economic risk they face and whether they think those in power are trying to tackle that risk.

After all, the disconnect is not new. Middle- and lower-income Americans have felt bad about the economy for a long time, and there’s no real mystery about why. Virtually alone among citizens of rich democracies, households in the middle of the income distribution and below have experienced much slower income growth than those at the top for more than a generation. They have also become dramatically more exposed to economic risks in their work and family lives, health care, and retirement—again, distinctively so in cross-national perspective. Organized labor once helped, but unions have all but disappeared in the private sector. Americans now appear to see the problem and are more favorable to unions than at any point since 1965, but this has yet to translate into major new power for workers.

No mediating identity is more powerful today than voters’ party affiliations.

Recent events add scary new risks on top of these familiar ones—scary not only because people fear new dangers more than long-standing threats, but also because these new dangers are genuinely hard to solve. COVID-19 is one such novel risk. Not only did the pandemic immediately lay bare many long-standing but worsening economic threats, like job loss and inadequate health insurance; it also quickly established itself as the wild card for public health and economic recovery. After the delta and omicron waves, Americans are now much more likely to believe that COVID is not going away anytime soon. Why should anyone who holds this belief be bullish about an economy that could at any moment be battered by an even more serious wave of COVID?

The fear of inflation can be understood through a risk lens, too. It’s been a long time since Americans have experienced substantial inflation, and even if it abates later this year, it signals for many a serious new risk to their well-being. In other words, it’s not just that inflation eats away at wage gains, daily confronting Americans with sharply higher costs for the things they need. It is also that inflation introduces another unsettling source of uncertainty into Americans’ already risk-laden lives. Moreover, experts are sharply at odds with how to address the problem. The most familiar tool to curb it, raising interest rates, has massive risks of its own.

This is the second shoe dropping: Not only do Americans face a compounding mix of old and new risks, but most have little confidence that their leaders are capable of handling these threats. Over the past few decades, the share of Americans who believe they have a say in what government does has plunged. Instead, Americans increasingly think that government works to serve big interests, and not their own.

In a February survey by Navigator Research, 70 percent of Americans said dealing with their finances was stressful. Yet an even larger share, 72 percent, said that they felt stressed out by politics. Indeed, the concerns that Americans find most stressful today involve matters of collective action far more than individual choice: “health stresses related to the pandemic” (described as stressful by 64 percent of Americans) and “global stresses like climate change and international conflicts” (62 percent) more than “professional,” “family,” and “personal” stresses.

Of course, what sparks this pervasive disaffection varies from voter to voter. Less affluent voters are much more concerned about inflation than more affluent ones, and for good reason: They’re the ones whose finances are most fragile, especially given the expiration of the Child Tax Credit. Black Americans have turned much more negative about the economy—and President Biden—since 2020. This, too, is no great surprise: African Americans have always felt the greatest fallout from economic reversals, have experienced vastly disproportionate losses from the pandemic, and are increasingly frustrated with the pace of structural change.

No mediating identity, however, is more powerful today than voters’ party affiliations. The gap between Republicans’ and Democrats’ assessments of the national economy is larger now than it has ever been. In January, the University of Michigan reported that its long-standing consumer confidence index has come to differ so much between Republicans and Democrats that “partisan views now dominate consumers’ economic expectations.” Since Biden took office, the gap in consumer confidence between Republicans and Democrats has averaged more than 52 index points. That’s essentially the difference between the 60-year index’s worst year (1980) and its best (2000). Indeed, Republicans have turned so negative under Biden that their ratings of the economy are the lowest a party’s voters have ever provided.

As enormous and consequential as the partisan gap is, it can’t explain the big perceptual disconnect on its own. For one, partisanship cuts both ways, raising Democrats’ evaluations even as it drags Republicans’ into the basement. (The partisan gap during the Trump years was roughly as large.) Moreover, Democrats have recently soured on the economy, too. And economic perceptions that reveal little polarization have also turned negative. Still, the partisan divide is yet another sign that people assess the economy (and much else) through a lens that is colored by their perceptions about the institutions that shape their lives and whether they think those institutions are looking out for them.

Democrats should continue to say that the status quo is unacceptable and that effective responses exist.

Given such powerful filters, it’s easy to despair that nothing can be done to rebuild public confidence. Yet many of the economic measures pursued since the pandemic began are quite popular among voters of both parties—despite GOP attacks on everything the federal government has done since January 2021. And these measures have made a real difference, not just for the economy, but also for voters’ assessment of it. Among voters who received the newly generous Child Tax Credit in 2021, evaluations of the economy were more positive than they were among similar voters who didn’t, according to a recent analysis by Data for Progress.

The fundamental problem is not the absence of popular and effective solutions. It is that our institutions are aligned against the expression of popular will. Gerrymandering, Senate apportionment and rules, and the judiciary all create massive roadblocks to enacting even highly popular policies. When a near-universal subsidy to parents is allowed to lapse, throwing millions back into poverty, voters understandably feel the system isn’t working. According to that same Data for Progress study, voters told the CTC was expiring were much more negative about the party in power—that is, the Democrats. Among CTC beneficiaries, trust in Democrats was 14 points lower when told the credit was expiring versus likely to be extended.

The stalling out of Biden’s Build Back Better agenda (again, popular among voters of both parties) only adds to the frustration. While the risks that Americans face call for big structural changes, big structural changes are not in the cards right now. In the face of this harsh reality, there is a temptation to retreat to poll-tested reassurances. Yet history suggests this would only compound the problem. Faced with Republican opposition and an improving but still rocky economy, the nation’s last two Democratic presidents pivoted far too quickly from critiquing the economy as unfair to heralding a recovery and shelving their structural agenda. The lesson is clear: Telling voters the economy is better than they think it is will not win their allegiance; it will just further convince them that those in power don’t understand their problems.

Instead, Democrats should continue to say that the status quo is unacceptable and that effective responses exist. And they should continue to emphasize that our political system needs fundamental reforms to make it more responsive. At the same time, they should stress that there are steps that can be taken right now that would help many Americans—steps that would signal their continuing commitment to more transformative changes.

For example, the Congressional Progressive Caucus has put out a list of major initiatives that President Biden could undertake through executive action, including the forgiveness of student loan debt and the use of existing powers to lower drug costs. Meanwhile, the Biden administration should be publicly preparing for the next wave of COVID-19 by boosting surge capacity in hospitals, improving pandemic surveillance, building stockpiles of essential goods, and ensuring the speedy availability of free tests and masks—massively appreciated by Americans across the political spectrum. Taking constructive steps like these will do much more to reassure Americans than talking up an economy that most think is flawed.

Recognizing the problem is the starting point: Americans face risks that require systemic solutions, and they want people in power to fight for those solutions. Until they see this happening, the great economic disconnect will continue to roil our democracy.