The Federal Reserve just released its Survey of Consumer Finances, the only government survey of wealth in America. The Survey is conducted every three years. This survey, conducted in 2010, is the first one to reflect the effects of the Wall Street Meltdown in 2008.
How does it look? Bad. Really, really bad.
The median wealth of American families (meaning half above and half below) dropped from $126,400 in 2007 all the way down to $77,300 in 2010. That's a 39% slide. It puts the median net worth of American families at its lowest level since 1995, fifteen years earlier.
About 12% of American families have a negative net worth. Meaning that they're broke.
Among Americans with no high school diploma (15 percent of the adult population), median wealth plunged from $34,800 in 2007 to $16,100 in 2010, a 54% drop. That is the lowest level since at least the Fed's 1983 survey, maybe earlier. So three decades of progress have been wiped out.
Among minorities, median wealth plunged from $29,700 to $20,400. That is the lowest level since 1992. White median wealth is now 540% higher than minority median wealth.
The median value of American homes dove from $209,500 in 2007 to $170,000 in 2010. But the median mortgage was almost completely unchanged: $74,700 in 2007, $74,100 in 2010. So debt payments increased from 7% of income to 11% of income.
In 2007, the bottom 25% had a net worth of $14,800 or less. In 2010, the bottom 25% had a net worth of $8,300 or less, a 44% decline.
In 2007, the top 10% had a net worth of $955,600 or more. In 2010, the top 10% had a net worth of $952,500, a decline of less than 1%.
Let me sum it up for you: In the greatest economic crisis that the United States has faced since the Great Depression, the rich barely lost a nickel. But the poor definitely got poorer. And people in the middle were crushed.
If this continues any longer, then we can invite a priest to administer last rites to the American middle class.
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Robert Reich: Why The Economy Can't Get Out of First Gear
Jared Bernstein: Wow... Just Wow: The Depth of the Hole
From 1979 to 2009, the top 1 percent of earners saw their income grow by 275 percent. It grew 65 percent for the next 19 percent of earners and just 18 percent for the bottom 20 percent.
Of all the new financial wealth created by the American economy from 1983-2004 42% of it went to the top 1%. A whopping 94% went to the top 20%, which of course means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s.
"In 2009, if you were to add up the total fortune of America's richest 400 people, that amount—$1.27 trillion—would be more than the holdings of the bottom 50 percent of Americans, less than $1.22 trillion." http://www.good.is/post/the-400-richest-americans-are-now-richer-than-the-bottom-50-percent-combined/
The middle class is bombarded by advertising from all sorts of companies that put fine print into their ads in print and on television. On TV one barely can read the fine print within the time that the disclaimer is posted.
The big banks do the same thing even in person. Usually the bank will precede the sales pitch with a smile and say: "The law says I have to read this to you..." then they proceed to read quickly through legalese doublespeak. Mean while the applicant's mind is not on what's being said but rather on wondering if the application will be approved.
So if middle class folks watched their 401k's crash and burn, or suddenly they are a month behind on their mortgage because of job loss, the thinking must be changed.
Keep money out of the stock market and bank with a local institution. Maybe you'll keep from sinking.
Since the second quarter of 2009, real GDP has increased for seven consecutive quarters. By the fourth quarter of 2010, real GDP had finally surpassed its pre-recession level in the fourth quarter of 2007. By the second quarter of 2011, after-tax corporate earnings were 12 percent higher than when the recession began and the highest percent of GDP since tracking began in 1947.
In 2010, the typical American household earned an inflation-adjusted income of $49,445, scarcely different from that in 1989 and a fall of 2.3% since 2009. Current incomes are at roughly the level of the late 1970s for those near the bottom of the income spectrum. From a real income perspective, the American economy has already experienced a lost decade, but for the median household the picture is one of a generation of stagnation.
http://www.employmentpolicy.org/sites/www.employmentpolicy.org/files/field-content-file/pdf/Mike%20Lillich/Revised%20Corporate%20Report%20May%2027th.pdf
And it took two years to get these 2010 results because?
Does make it easier to blame it all on Obama that way, I guess, even though it is the result of fraud and actions perpetrated by the banks and other corporations on the people, and promoted by their politician water carries, all now signed sealed and delivered courtesy of "corporate" Citizens United. Real citizens be damned!!
And so, what is the answer? Take the money from the rich and pay the poor for being poor?
Nonsense.
American workers need to start competing in this global system. We have to STOP coddling our workers and get them off their butts and back to work. Learn new trades. Start new businesses. Take some risks. Work with your families and communities. It takes time and a lot of effort. But sitting around waiting for another unemployment check, or another batch of food stamps does not help our economy.
Whining isn't going to solve anything. America still has the ability to compete, but we are losing it. American productivity is still among the highest in the world. America still is just behind China as the largest producing company. The infrastructure in the US is better than any developing country. We have impressive advantages. What we don't need are politicians telling us it is the fault of the Europeans or the wealthy or Bush. Stop whining, accept some responsibility for your situation, and go out and make a difference.
OWS is an example of the problem. They took whining to a new level -- and then showed the world what they really were about -- disgusting behavior and vandalism. It didn't convince our business leaders they should hire that rabble. Hopefully that experiment in self-pity is over.
Obama's first three months witnessed a loss of 2.34 million jobs; Bush saw a growth of 20,000 jobs.
More jobs were lost in the recession of 2007-09 than in the previous four recessions combined. At the current pace, it looks as if it will take until late 2016 to make up for the net job loss to date of 7.5 million. There were six million jobs outsourced under President Bush and then we lost 8.5 million jobs under the recession the GOP passed to the current administration. Isn't that 8.5 million jobs lost and 6 million outsourced jobs really close to the 15 million unemployed Americans? Bush and the Republicans ended their term with payroll employment below where it was when they took office, the first time that’s happened since the Hoover administration.