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USA Today says: "Surging stock prices and steady home-price increases have finally allowed Americans to regain the $16 trillion in wealth they lost to the Great Recession ... [but] ... The regained wealth - most of it from higher stock prices - has been flowing to richer Americans."
That sure sounds like some Americans are more American than other Americans.
Both CBS Nightly News and PBS News Hour, while reporting the recovery, failed to mention which group has directly benefited the most (at least so far). I couldn't find any online American news sources that seemed to cover this point. (They may be there but I didn't find any on my google search of "household wealth recovers").
I had to go to the New Zealand Herald to get this detail:
The rebound in wealth has benefited mostly wealthier Americans. The Dow Jones industrial average has just set a record high, and roughly 80 per cent of stocks are held by the richest 10 per cent of households.
And for the past five years, middle-class Americans have sold stocks and missed out on much of the rebound. In the October-December quarter, Americans dumped nearly $466 billion in stocks and bought $229 billion in bonds, the Fed's report showed.
For most middle-class Americans, home equity is their largest source of wealth. National home values remain about 30 per cent below their peak.
Any thoughts?
Long time no see, 2009? If the rich are getting richer, that's just Darwinian justice, don't you think?
ReplyDeleteIf you don't pay attention, you lose out.
ReplyDeleteThat's "llb" not "lib" - although I am a libertarian. Hmm..
ReplyDeleteUsing Bing search I found this by an AP economics writer on the Minnesota Public Radio website - gotta be a commie:
ReplyDelete"The recovered wealth -- most of it from higher stock prices -- has been flowing mainly to richer Americans. By contrast, middle class wealth is mostly in the form of home equity, which has risen much less." ... "Finally, the upper-income Americans who have benefited most from the nation's recovered wealth don't tend to spend as much of their money as Americans overall do." ... "For the past five years, middle-class Americans have sold stocks and missed out on much of the rebound. During 2012, Americans dumped $204 billion in stocks, the Fed's report showed. Homes accounted for two-thirds of middle-class assets before the recession, estimates economist Edward Wolff of New York University. Among all U.S. households, they accounted for only one-third of assets. And national home values remain about 30 percent below their peak. Still, some Americans are benefiting from rising home prices -- and spending more as a result."
I can understand the middle class selling stock over the last 5 years as the economy stagnated, but why so much in the last quarter of 2012? Fiscal Cliff Fears? They will probably sell even more with the sky is falling administation rantings. Then we can all keep blaming the rich for getting richer. Keeping their money in the market - bastards!
It's hard to find straight uneditted news reports anymore. AP seems to still employ a few reporters, although it can be hard to find their entire uneditted reports.
It amazes me how much power the media now has as far as government, elections, and the stock market are concerned. Who controls the media? Those rich folks who keep getting richer of course.
ReplyDelete@brad > Darwinian justice
ReplyDelete@ r chuck: > Then we can all keep blaming the rich for getting richer.
@ Anna Maria > Who controls the media?
I found the Minnesota Public Radio story (thanks), by Christopher Rugaber. What so interesting is it is obviously the same story circulating at every other location, including the New Zealand Herald, CBS, PBS and even the Nightly Business News, all with various degrees of details taken from the same source: AP. Whoever owns AP and Reuters seems to control what we hear and read.
That can't be good, can it?
The question doesn't seem to me to be about Darwinian justice or blame on the rich for acting in their own interests. The question seems to me to be whether the country, and the economy, can be said to be healthy if the wealth being generated is consistently being shifted (regardless of the mechanism) into fewer and fewer hands.
Is that what is meant by the salutary effects of Adam Smith's invisible hand?
I don't think so.
Btw, welcome r chuck, A.M., Brad. You, too, llb. Keep the motors running.
ReplyDelete