|Between 2007 and 2010, the median net worth of U.S. households fell by 47 percent, reaching its lowest level in more than forty years, adjusted for inflation. In other words, middle class wealth virtually evaporated in this country. A good chunk of the population got sucked through a financial wormhole back to the sixties.
Such are the findings of Edward Wolff, an economist at New York University who has produced a paper [sub. req] documenting the Chernobyl-like meltdown of asset values during the recession, and its impact on wealth inequality. To some degree, his work confirms what we've already more or less known; home prices, 401Ks, and the like were demolished during in the recession, and we've been reckoning with the consequences since. In June, the Federal Reserve released its own analysis of household finances, which found that median net worth (which just means a family's assets minus its debts) fell closer to 39 percent from 2007 to 2010. Wolff also uses Federal Reserve data, and approaches the net worth calculation in a slightly different way. But his study is valuable in that it gives us a clear sense of which families were set back, and how far.
In the United States, wealth (again, what people own, minus their debts) tends to be much, much more concentrated than income (what people make). That's not particularly surprising, since the rich have extra cash to stow away in bonds, stocks, and other investments, while the rest of us spend much of our money fulfilling basic needs such as housing and transportation. The rich are frequently well off to start with because they also own pieces their own businesses, which adds to their net worth tally.
But Wolff found that during the recession, wealth inequality increased, even as incomes evened out a bit. Why? Because while middle class families saw the value of their possessions collapse dramatically, the wealthy came out comparatively unscathed.
Chart shows the mean and median inflation-adjusted net worth. The mean gets boosted by the rich. The median fell nearly by half because of Great Recession while the mean only fell 18 percent.
Blast from the Past. At Daily Kos on this date in 2008—KBR, Halliburton sued for sickening U.S. troops :
|KBR and Halliburton are the targets of a new class-action lawsuit alleging that U.S. troops have been sickened by water, food and fumes produced by the two massive private contractors, according to the Army Times. The details of the charges laid out in the lawsuit are macabre:
The lawsuit also accuses KBR of shipping ice in mortuary trucks that "still had traces of body fluids and putrefied remains in them when they were loaded with ice. This ice was served to U.S. forces."The troops that the contractors so love to claim to support are not only being exposed to toxic fumes and scenes of wild dogs dragging off body parts. No, they're getting extra treats in their rotten food as well
On today's Kagro in the Morning show, Greg Dworkin reviewed the WaPo/Pew poll showing Republicans losing the "Fiscal Thingy" debate. Then, a wandering bit of interconnected background on the current filibuster reform fight, the origin of the filibuster, Aaron Burr versus Alexander Hamilton, and back to today's tax cut fight, via House discharge petition procedure. Finally, ALEC's pre-fabricated legislation that allows states to turn its prison population into a profit center. Now crime really does pay. The state, that is.