Mitch McConnell is wrong about the economy

On Wednesday's edition of "Squawk Box," Senate Majority Leader Mitch McConnell made the claim that the average American is worse off today than in 2007 … and worse off than when President Barack Obama took office in early 2009.

He also noted that the economy has not enjoyed the typical "V-Shaped recovery" that often follows deep recessions, also a failing of the current Administration.

But as Ken Rogoff and Carmen Reinhart pointed out in "This Time is Different," their widely respected analysis of financial crises, recoveries from shocks like the one in 2008 typically take as long as ten years to recapture lost economic output.

And while steps can be taken to mitigate economic losses, it is difficult to achieve a forceful recovery typical of more cyclical rebounds.

Having said that, the U.S. has done remarkably well in the aftermath of the crisis and has meaningfully outperformed the rest of the world ever since.

While I am not an apologist for the Obama Administration (though I'm certain some readers and/or viewers will insist I am), there are few metrics by which the economy is not doing better than it was at its peak in 2007, at the end of 2008, nor at the beginning of the Obama presidency, in early 2009.

Though it is verifiably true that some Americans are worse off, it is demonstrably untrue that either all, or even the average American is worse off today than some seven years ago.

Consider the following:

  • Since the 4th quarter of the 2008, America's Gross Domestic Product (GDP) stood at $14.2 trillion. GDP is $18.2 trillion today.
  • Unemployment has fallen from a recession peak of 10 percent to 5 percent today.
  • The stock market has tripled since its 2009 low.
  • Oil and gas prices are one-half to one-third of their peak prices in 2008.
  • Median and average home prices are now above their 2007 peak at $321,100 and $379,800, respectively.
  • Household net worth hit $86.8 trillion in the fourth quarter of 2015, well above the 2007 peak of $66.5 trillion.

There is no doubt that the gains from the economic recovery have been spread unevenly and that income inequality has increased greatly in recent years. So too, wage growth has lagged while those hardest hit in the recession have struggled to find gainful employment at wages equal to their pre-recession levels.

But those sad facts have now been true for nearly three decades, in one way or another.

It is, however, impossible to say that Americans are not better off than they were seven years ago, or even than they were at the economy's brightest days before the crash.

This economy most definitely needs additional policy assistance to reach its maximum sustainable output, whether it's through comprehensive tax reform, infrastructure investment, immigration reform or education and training for those who are entering the workforce, or for those who need to acquire new skills to remain competitive.

But in this presidential season, our problems are not so much found in our economics, but in our politics.

The Majority Leader should acknowledge that while the economy can do better, his party had seven years to lend a helping hand.

Commentary by Ron Insana, a CNBC and MSNBC contributor and the author of four books on Wall Street. Follow him on Twitter @rinsana.

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