Fed: Americans’ wealth dropped 40 percent

[woo me with science]

http://www.washingtonpost.com/business/economy/fed-americans-wealth-dropped-40-percent/2012/06/11/gJQAlIsCVV_story.html

Fed: Americans’ wealth dropped 40 percent

By Ylan Q. Mui
Washington Post
June 11, 2012

The net worth of the American family has fallen to its lowest level in two decades, according to government data released Monday, driven by a more than 40 percent drop in their stakes in their homes.

The Federal Reserve’s detailed survey of consumer finances showed families’ median wealth plunged from $126,400 in 2007 to $77,300 in 2010 — a 39 percent decline. That put them on par with median wealth in 1992.

The Fed’s data underscore the depth of the wounds of the Great Recession and how far many families remain from healing. The median value of Americans’ debt did not change between 2007 and 2010. Meanwhile, the housing market crash inflicted particularly severe damage, with the Fed showing that the median value of Americans’ equity in their homes plunged 42.3 percent between 2007 and 2010.

The survey is conducted every three years, and this report offers one of the most exhaustive looks to date at the greatest economic upheaval in a generation. Although there have been some signs that the recovery has picked up steam — housing prices have begun to stabilize and unemployment has fallen — Fed economists said those improvements largely do not change the survey results.

“Recovery from the so-called Great Recession has also been particularly slow,” the Fed said in its report.

[bobobjohnae]

1. Connection to rise in wealth of 1%?

Interesting that the Fed didn't mention that the wealthiest Americans have seen their net worth rise, and that this rise is the cause of the fall in everyone else's wealth. As the saying goes: "It's not a recession, it's a robbery."

[kenny blankenship]

4. Thanks to our generous bailout for their pet industry - finance

Bailing out the criminal banks, with no strings attached even, allowed the same fine folks who've hollowed out our real economy for the past generation, and who then crashed the casino which they had raised in its place, to reassert their dominant position over the economy and our political system. (well, perhaps we should call it their political system, not "ours", since that's certainly the way they look at it and also the way it has worked in practice)

Everything that has gone wrong since then, which is pretty much everything, is due to that crucial twist - the parasitical super-rich escaping the legal consequences of their systemic fraud and having their loot protected and restored by the "elected representatives" of their victims. They kept/regained all the money they would have lost and thus, after the briefest of wobbles during which they lost income and appeared to lose clout, they got to keep and extend their hegemony over this so-called democracy. For them, the recession and depression which followed and goes on grinding away at the lives of the 99% were just a hiccup, 12 lean months, after which they resumed digesting greater and greater accumulated wealth stripped from the rest of us.

[Egalitarian Thug]

2. Consider how many have lost everything to drag the average down that far.

Far enough to wipe out all of the gains of the tech boom, while those on top have multiplied their fortunes several times. It's impossible to overstate just how bad it really is out here on Main Street.
K&R

[cthulu2016]

3. A better headline is probably "Ordinary Americans’ wealth dropped 50 percent"

There are some rich households in the averages that are way up.