The latest consumer confidence survey from the Conference Board has taken a dive, reports the Associated Press. The confidence index fell to a reading of 99.6, down from 107.0 in July.

That is the lowest number since November when the problems of recovering from Katrina pushed the numbers lower. The big factor, apparently, was the declining confidence in the job market.

And the background to that sudden drop in confidence is the longer-term trend reported by the New York Times that real wages are not going up despite rises in productivity. Wages and salaries now make up the smallest share of gross domestic product since the government started keeping records in 1947. At the same time, corporate profits have climbed to their highest share since the 1960s. That makes the current expansion the first since World War II when economic gains did not translate to wages.

The problem is complicated because health benefits are being cut, which underlines the vulnerability wage and salary earners are feeling. That news came on the heels of Fed Chairman Ben Bernanke's warning that the failure to spread the wealth was causing protectionist sentiment to rise. 

Average incomes are steady but a bigger percentage is going to the elite. On the other hand, plenty of people feel they are doing well with rising home prices. 

Some of this anxiety should be making Republicans nervous. The median hourly wage has declined 2 percent since 2003, after factoring in inflation. And this has happened despite productivity gains. Even Republican Pollster Frank Luntz says the paycheck thing is making voters anxious.

It's not the kind of drop you'd notice like a 10 percent paycut so we're not talking about open revolt. Still, it's a false dichotomy to wonder whether the election is about the war or the economy. If both are going bad, they'll likely reinforce each other. Remember Jimmy Carter? He had bad inflation, a poor economy and was a laughing stock because of foreign policy. They all made Ronald Reagan's job in 1980 pretty easy.