7 ms·

Americans are 40% poorer than before the recession

117 points by saadmalik01 12y ago

yournemesis 12y ago
Thanks, Obama.
- snarfy 12y ago
  Pretty sure he was still a senator when it happened.
  - waterlesscloud 12y ago
    It's worth noting there has been further decline since 2010, which is wholly in Obama's term as President.
    - forgotpasswd3x 12y ago
      It's worth noting the president doesn't have direct control of the economy anyway, sooo...
    - MAGZine 12y ago
      It's also worth noting that he inherited a hundred years of other president's failure and successes. Pinning the upward or downward movement of such a sweeping figure onto one person is the definition of disingenuous. e: not to mention my sibbling's comment that no, the president does not control the economy, the industry, people's spending and borrowing habits. Heck, not even the Fed. Reserve.
      - waterlesscloud 12y ago
        And yet the same President in question earns praise for decreasing unemployment and increasing GDP, even though he has the same lack of control over those. If you take credit for the good, you have to take blame for the bad.
        MrZongle2 12y ago
        Now how are we supposed to cheer for Team Pepsi or Team Coke if we do that?
        dasil003 12y ago
        What do you mean "and yet"? You are not contradicting the GP in any way, you are merely reiterating exactly what he already said: successes and failures, upward or downward.
        nether 12y ago
        He's not responsible for everything good that happens to the country during his terms, nor is he responsible for all of the bad. Is that ok?
  - andy_ppp 12y ago
    flagkilled seems a bit much for that comment? Any reason why his joke was deleted?
    - spacehome 12y ago
      Cheap shots and meme humor are frowned upon here. Clever humor is always appreciated, but this kind of stuff pulls down the level of discourse without offering anything memorable or redeeming.
coldcode 12y ago
40% of a random number is still a random number. People calculate stuff like this all the time without any actual basis in fact. Unless you have a rigorous knowledge of statistics and a careful process, most of these definitive statements are basically pulling numbers out of your ass.
- thaumaturgy 12y ago
  Here's the link to the original article from the Pew Research Center: http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealth-gaps-great-recession/ http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealt... You should consider contacting them to explain exactly what they did wrong.
josefresco 12y ago
Why are they using the height of the real-estate bubble (2007) as the measure of previous net worth? If home prices were so out of whack in 2007, I would think their values might be influenced considering they include "homes" in the valuation.
pvnick 12y ago
"The recession is over" has always struck me a political double-speak. We never left the recession; mainstream America just collectively forgot how it felt to have enough money. We have become accustomed to the 60 hour work weeks for folks fortunate enough to have jobs, chronic unemployment for those unfortunate enough to work outside of tech, the cheaper processed food, the increasing debt, and the lower standard of living. Being poor is the new norm, and "the recession is over" translates to "get used to it buddy, it's not getting any better." Given that's the case, I wonder what the phrase "double dip recession" we hear thrown around referring to impending repeat economic troubles actually translates into?
- jpetersonmn 12y ago
  How do you figure we haven't left the recession? Since June 09 we've been growing and not shrinking, which means the recession was over. It may not be the boom we all want, however the recession is over by any reasonable measure.
  - aero142 12y ago
    The word recession has a technical definition about a shrinking GDP, and a common usage that basically means, lots of people or companies have job/money problems more than normal. You have to figure out which one people are talking about from the context.
  - itbeho 12y ago
    Not to debate whether the technical term of recession is applicable or not, it seems to me like the the labor participation rate is a reasonable measure to look at. http://www.businessinsider.com/labor-force-participation-rate-september-2014-2014-10 http://www.businessinsider.com/labor-force-participation-rat...
  - glesica 12y ago
    It takes about 10 minutes on Google to conclude that, regardless of any technical definition of a "recession", the economy is terrible unless you you're in a handful of industries or happen to make your money by owning the means of production (shocking that the group for whom the system is named always seem to do just fine...) Here's a good example: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor... Some groups have actually seen their real wages fall over time, even since '09. If your wages are falling, then your economy is contracting, that's a recession. Over-aggregating and being pedantic about technical definitions adds nothing to the conversation, just like saying "my wages have gone up, therefore things are fine" adds nothing to the conversation (not saying you did the latter). Edit: I'm not saying accuracy in terminology is never a good thing, if you're writing an academic or professional article then, by all means, be precise. But this isn't that kind of forum, so significant contextual inference is called for.
forrestthewoods 12y ago
Absolute trash analysis. Worse than garbage. I say worse because the analysis is so catastrophically wrong that the complete inverse could be true. It's using average. Average is a terrible data point. I think if you replace 'average' with 'median' you'll have something more useful >95% of the time. Maybe more. For example, it is widely circulated that the gains have all gone to the rich. Well the losses also went to the rich. It's theoretically possible that the median household, or even 90% of all households, have exhibited slow but linear growth since just before 2007. Meanwhile the upper echelon could have swung wildly down than up. Now I'm not saying that's the case. What I'm saying is that could be the case. The data presented provides insufficent information to make any type of determination on how "Americans" are doing. Bah hum bug! Edit: Yup. I deserve that for failure in reading comprehension. Oops.
- rayiner 12y ago
  It's clearly using median net worth. As indicated by the label on the chart that says "median net worth."
- wavefunction 12y ago
  I downvoted you for your trash analysis. I will be back this evening (1:45PM here at the moment) and I will cite sources until you scream for mercy. The loss of wealth for the average American (note I didn't say MEDIAN lol) is well-established at this point.
  - api 12y ago
    I periodically see these press releases from places like AEI (the American Enterprise Institute) and similar trying to argue that the loss of wealth for the average American is some kind of illusion and "things have never been better." Reminds me of the stories I've read about the glory days of the former USSR. As collectivized farming failed, Pravda printed endless stories about how farm yields were exploding. People read these stories as they starved. I'm sure the cognitive dissonance was almost comical. There's something oddly Soviet about the self-assured parallel universe fantasizing of American conservatism. I'm sure it's from decades and decades of fanatical anti-Communist propaganda warring. You become that which you fight.
lottin 12y ago
It looks like they don't know the difference between nominal value and real value. In a housing bubble, the nominal worth of your house increases, but its real worth stays the same - unless, of course, you have a stock of houses that you can sell, but that's not the case of most Americans.
- api 12y ago
  The trouble is when nominal value shrinks, it shackles people to endless cycles of debt slavery. Either that or people default, which causes follow-on cascades of defaults. If we had a low-debt cash-only economy this might not be the case, but our economy is so far from that it's not even worth talking about. We are absolutely a credit economy, and when the numbers get smaller in a credit economy pretty much everything breaks. Eventually the collapse of the middle class will drag down everything else, including the rich.
  - Amezarak 12y ago
    FWIW, the US is actually doing a great job of deleveraging its private debt, especially relative to other countries. http://www.mckinsey.com/insights/global_capital_markets/uneven_progress_on_the_path_to_growth http://www.mckinsey.com/insights/global_capital_markets/unev...
    - api 12y ago
      As with most things, it could be worse. But the overall picture -- especially of wages vs. asset prices -- is not exactly good.
hawkice 12y ago
Calculating how poor people are based on comparing against a time known to have unrealistically high and unsustainable housing prices, which made up a very large portion of net worth, seems like clickbait. We haven't re-entered a housing bubble massive enough to make every a paper millionaire. We shouldn't sulk about that.
- branchless 12y ago
  Yes! Great post. As you note this is good news. If house prices stay at sane levels we will be able to have true wealth creation instead of money printing via housing which leaves the next generation impoverished. We should celebrate a reduction in house prices as we celebrate the reduction in the cost of a laptop. More disposable income for the next generation and less going to the banks for creating money on a screen and then crediting your account with it.
- sillysaurus3 12y ago
  It doesn't seem like clickbait. It seems pretty important to think about, actually. Little story: In 2007, a member of my family landed a lot of signed contracts to commission him to do a certain type of job. These were actually so lucrative that he quit his dayjob. Then 2008 happened. All of those signed contracts became meaningless. People simply said no, we're not paying you anymore, sorry. Fast forward a month, and he's contemplating ways to kill himself to make it look like an accident so that his family will keep their house via life insurance payments. Luckily, things didn't turn out that way. He was able to get his job back. Somehow. Might it be true that comparing the present to the lucrative year of 2007 isn't necessarily productive? Possibly. Probably. But it's an interesting historical perspective, and it's also interesting to remember how much people's faith in the economy matters. The type of work he was being commissioned for wasn't anything related to tech or housing. The ripples are profound, both in the upswing and the downswing.
  - branchless 12y ago
    Sorry to hear of his issues, but surely perpetuating high house prices means his children would also be under huge stress as they stretch themselves to the limit (and assume zero unemployment like this guy). The "wealth" created by pulling forward demand through credit through housing wasn't real. That's why living standards fell - we stopped creating wealth and started adding zeros to numbers on a screen. Reducing house prices means more disposable income for our children. And their children. And theirs. Yes there was a hit to the housing crash, but only because the loss in living standards was a result of the misallocation during the "boom". 2008 was just Wile E Coyote looking down having already run off a cliff. Want to avoid a fall? Don't run off the cliff. Not looking down isn't an option long-term.
nostromo 12y ago
I'm really worried about our economic future. I think job creation has been decoupled from economic growth. That's terrifying for the lower class today, and will eventually be terrifying to nearly everyone. I also think central banking has lost its effectiveness. We've had 6 years of 0% interest and money printing -- the pedal is to the metal -- but labor participation for working-aged citizens is stuck at a low not seen since the mid-1980s. http://www.washingtonpost.com/blogs/wonkblog/files/2013/09/EmployPop2554Aug.jpg http://www.washingtonpost.com/blogs/wonkblog/files/2013/09/E... Scary stuff...
- spiralpolitik 12y ago
  Indeed. It's hard to have a comsumption based economy if 99% of the population have no money to spend on things.
- thaumaturgy 12y ago
  I'm not so sure. Most of what I read suggests that American workers are as productive as ever; the generated wealth just seems to be getting concentrated into the hands of a smaller number of people. It's not really employment or even industry that's broken, it's the exploitation of workers (and not just in the U.S., although it's pretty bad here right now), and since it is politically incorrect to suggest anything that smells even a little like wealth redistribution, the problem will continue for a while until there is sufficient public unrest. The situation looks to me a lot like the one in the late 19th century (e.g. http://en.wikipedia.org/wiki/File:The_Bosses_of_the_Senate_by_Joseph_Keppler.jpg http://en.wikipedia.org/wiki/File:The_Bosses_of_the_Senate_b...), except now the political fat cats and monopolists are in the news and communications industries.
gaius 12y ago
Man, I hate it when the rich get richer and the poor get poorer.... Ooh look, new iPhone!
pcarolan 12y ago
This study uses 2007 as it's baseline which is like saying that lake levels are 40% lower than they were at the height of the last flood. Asset prices were overinflated in 2007, so you'd probably want to baseline somewhere between 2003 (the end of the early 2000s recession and 2007 to get a sense of how much worse off people actual are.
dumbfounder 12y ago
And that doesn't even take into account inflation. (at least the article makes no mention of it, maybe the original report does)
vondur 12y ago
I'm guessing most Americans net worth is based on the value of their homes, and property values for the most part have declined since 2007, this would make sense.
eyeareque 12y ago
This makes me want to ask: Where did all of the money go? It had to go somewhere, right?
- JoeAltmaier 12y ago
  Its actually imaginary points. It doesn't have to go anywhere.
  - eyeareque 12y ago
    Sure, but if someone lost their house and the bank took it, wouldn't that mean the banks ate up all of the assets?
- delecti 12y ago
  The article seems to be discussing the median. The money went to the top of the curve.
- DrJokepu 12y ago
  Money is not wealth. It's a (very efficient) mechanism for exchanging wealth. "Where did all the wealth go?" would be a better question to ask. The answer is that nothing in life has inherent value, only perceived. If the perception changes, wealth can be lost (or gained).
- mynewwork 12y ago
  It didn't have to go anywhere, and in many cases it didn't. Imagine you have a house (500k) and a car(20k) in 2007. Today you still have the same house (now valued at 400k) the same car (now valued at 10k). Your net worth has dropped substantially but the money didn't go anywhere, nobody else gained by the depreciation of your car or the market price correction of your house.
  - eyeareque 12y ago
    I'm assuming that people who lost their homes lost their equity. I'd assume there was a transfer of wealth in those situations.
patmcguire 12y ago
Is this page violently broken for anyone else on desktop?
- zo1 12y ago
  Broken for me, too. Running Firefox
pistle 12y ago
Should have drawn a trend line to avoid a comparison that includes the bubble in real-estate value... but then it wouldn't likely be such an ominous number.
russelluresti 12y ago
So, everyone's already pointed out that it's dumb to compare the amount of money you have now to the amount of money you had at the height of a bubble (where that money was unsustainable and over-inflated). One thing that's missing here, though, is the idea of amount of money to cost ratio. For example, say you had $1000 in 2007. Now say that, in 2007, a loaf of bread cost $1000. In that year, you had enough money to buy 1 loaf of bread. Now, in 2014, you have $600 (40% less than 2007). But now, instead of $1000, a loaf of bread is $100. Now you have enough money to buy 6 loaves of bread. You technically have less money, but the value of each dollar you have is significantly more. So, are you really "poorer" now? The issue with just looking at a single number when analyzing economic health is that it will never tell you the whole story. I can have a million dollars and still be in poverty if a gallon of milk costs 2 million.
- Negitivefrags 12y ago
  > One thing that's missing here, though, is the idea of amount of money to cost ratio. That isn't missing at all. It's specifically accounted for. See how the graph says "in 2013 dollars". That indicates that they are using inflation adjusted values.
tokenadult 12y ago
It's really amazing to contrast this thread with the thread currently up about the Gates Foundation report on good news in reducing disease in poor countries. I live in the United States, I do NOT own a house (I never have), I've had several career changes (bad planning on my part, no one else to blame) but I still consider myself very well off. I have use of this amazing device called the Internet to have intellectual conversations with friends any hour of the day or not. That alone would have been unimaginable in my childhood. There has been a lot of progress, and Americans are staggeringly wealthy by any reasonable worldwide standard. Moreover, Americans are living longer and healthier lives than ever before, and mostly don't even notice that.[1] So, sure, many Americans don't have as many on-paper financial assets as they appeared to have at the peak of the housing bubble, but so what? Americans can still take care of their children, still enjoy leisure, and still change where they live and what they do for a living with a freedom unknown in much of the world. If this is what it's like to be poor in America, I have no problem with being poor. (Disclosure: I have lived outside the United States, and I have been to places with stark poverty. I have a point of comparison as I type this.) [1] http://www.slate.com/articles/health_and_science/science_of_longevity/2013/09/life_expectancy_history_public_health_and_medical_advances_that_lead_to.html http://www.slate.com/articles/health_and_science/science_of_... http://www.nature.com/scientificamerican/journal/v307/n3/box/scientificamerican0912-54_BX1.html http://www.nature.com/scientificamerican/journal/v307/n3/box...

117 points by saadmalik01 12y ago

yournemesis 12y ago

Thanks, Obama.

snarfy 12y ago
Pretty sure he was still a senator when it happened.
- waterlesscloud 12y ago
  It's worth noting there has been further decline since 2010, which is wholly in Obama's term as President.
  - forgotpasswd3x 12y ago
    It's worth noting the president doesn't have direct control of the economy anyway, sooo...
  - MAGZine 12y ago
    It's also worth noting that he inherited a hundred years of other president's failure and successes. Pinning the upward or downward movement of such a sweeping figure onto one person is the definition of disingenuous. e: not to mention my sibbling's comment that no, the president does not control the economy, the industry, people's spending and borrowing habits. Heck, not even the Fed. Reserve.
    - waterlesscloud 12y ago
      And yet the same President in question earns praise for decreasing unemployment and increasing GDP, even though he has the same lack of control over those. If you take credit for the good, you have to take blame for the bad.
      - MrZongle2 12y ago
        Now how are we supposed to cheer for Team Pepsi or Team Coke if we do that?
      - dasil003 12y ago
        What do you mean "and yet"? You are not contradicting the GP in any way, you are merely reiterating exactly what he already said: successes and failures, upward or downward.
      - nether 12y ago
        He's not responsible for everything good that happens to the country during his terms, nor is he responsible for all of the bad. Is that ok?
- andy_ppp 12y ago
  flagkilled seems a bit much for that comment? Any reason why his joke was deleted?
  - spacehome 12y ago
    Cheap shots and meme humor are frowned upon here. Clever humor is always appreciated, but this kind of stuff pulls down the level of discourse without offering anything memorable or redeeming.

coldcode 12y ago

40% of a random number is still a random number. People calculate stuff like this all the time without any actual basis in fact. Unless you have a rigorous knowledge of statistics and a careful process, most of these definitive statements are basically pulling numbers out of your ass.

thaumaturgy 12y ago
Here's the link to the original article from the Pew Research Center: http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealth-gaps-great-recession/ http://www.pewresearch.org/fact-tank/2014/12/12/racial-wealt... You should consider contacting them to explain exactly what they did wrong.

josefresco 12y ago

Why are they using the height of the real-estate bubble (2007) as the measure of previous net worth? If home prices were so out of whack in 2007, I would think their values might be influenced considering they include "homes" in the valuation.

pvnick 12y ago

"The recession is over" has always struck me a political double-speak. We never left the recession; mainstream America just collectively forgot how it felt to have enough money. We have become accustomed to the 60 hour work weeks for folks fortunate enough to have jobs, chronic unemployment for those unfortunate enough to work outside of tech, the cheaper processed food, the increasing debt, and the lower standard of living. Being poor is the new norm, and "the recession is over" translates to "get used to it buddy, it's not getting any better." Given that's the case, I wonder what the phrase "double dip recession" we hear thrown around referring to impending repeat economic troubles actually translates into?

jpetersonmn 12y ago
How do you figure we haven't left the recession? Since June 09 we've been growing and not shrinking, which means the recession was over. It may not be the boom we all want, however the recession is over by any reasonable measure.
- aero142 12y ago
  The word recession has a technical definition about a shrinking GDP, and a common usage that basically means, lots of people or companies have job/money problems more than normal. You have to figure out which one people are talking about from the context.
- itbeho 12y ago
  Not to debate whether the technical term of recession is applicable or not, it seems to me like the the labor participation rate is a reasonable measure to look at. http://www.businessinsider.com/labor-force-participation-rate-september-2014-2014-10 http://www.businessinsider.com/labor-force-participation-rat...
- glesica 12y ago
  It takes about 10 minutes on Google to conclude that, regardless of any technical definition of a "recession", the economy is terrible unless you you're in a handful of industries or happen to make your money by owning the means of production (shocking that the group for whom the system is named always seem to do just fine...) Here's a good example: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor... Some groups have actually seen their real wages fall over time, even since '09. If your wages are falling, then your economy is contracting, that's a recession. Over-aggregating and being pedantic about technical definitions adds nothing to the conversation, just like saying "my wages have gone up, therefore things are fine" adds nothing to the conversation (not saying you did the latter). Edit: I'm not saying accuracy in terminology is never a good thing, if you're writing an academic or professional article then, by all means, be precise. But this isn't that kind of forum, so significant contextual inference is called for.

forrestthewoods 12y ago

Absolute trash analysis. Worse than garbage. I say worse because the analysis is so catastrophically wrong that the complete inverse could be true. It's using average. Average is a terrible data point. I think if you replace 'average' with 'median' you'll have something more useful >95% of the time. Maybe more. For example, it is widely circulated that the gains have all gone to the rich. Well the losses also went to the rich. It's theoretically possible that the median household, or even 90% of all households, have exhibited slow but linear growth since just before 2007. Meanwhile the upper echelon could have swung wildly down than up. Now I'm not saying that's the case. What I'm saying is that could be the case. The data presented provides insufficent information to make any type of determination on how "Americans" are doing. Bah hum bug! Edit: Yup. I deserve that for failure in reading comprehension. Oops.

rayiner 12y ago
It's clearly using median net worth. As indicated by the label on the chart that says "median net worth."
wavefunction 12y ago
I downvoted you for your trash analysis. I will be back this evening (1:45PM here at the moment) and I will cite sources until you scream for mercy. The loss of wealth for the average American (note I didn't say MEDIAN lol) is well-established at this point.
- api 12y ago
  I periodically see these press releases from places like AEI (the American Enterprise Institute) and similar trying to argue that the loss of wealth for the average American is some kind of illusion and "things have never been better." Reminds me of the stories I've read about the glory days of the former USSR. As collectivized farming failed, Pravda printed endless stories about how farm yields were exploding. People read these stories as they starved. I'm sure the cognitive dissonance was almost comical. There's something oddly Soviet about the self-assured parallel universe fantasizing of American conservatism. I'm sure it's from decades and decades of fanatical anti-Communist propaganda warring. You become that which you fight.

lottin 12y ago

It looks like they don't know the difference between nominal value and real value. In a housing bubble, the nominal worth of your house increases, but its real worth stays the same - unless, of course, you have a stock of houses that you can sell, but that's not the case of most Americans.

api 12y ago
The trouble is when nominal value shrinks, it shackles people to endless cycles of debt slavery. Either that or people default, which causes follow-on cascades of defaults. If we had a low-debt cash-only economy this might not be the case, but our economy is so far from that it's not even worth talking about. We are absolutely a credit economy, and when the numbers get smaller in a credit economy pretty much everything breaks. Eventually the collapse of the middle class will drag down everything else, including the rich.
- Amezarak 12y ago
  FWIW, the US is actually doing a great job of deleveraging its private debt, especially relative to other countries. http://www.mckinsey.com/insights/global_capital_markets/uneven_progress_on_the_path_to_growth http://www.mckinsey.com/insights/global_capital_markets/unev...
  - api 12y ago
    As with most things, it could be worse. But the overall picture -- especially of wages vs. asset prices -- is not exactly good.

hawkice 12y ago

Calculating how poor people are based on comparing against a time known to have unrealistically high and unsustainable housing prices, which made up a very large portion of net worth, seems like clickbait. We haven't re-entered a housing bubble massive enough to make every a paper millionaire. We shouldn't sulk about that.

branchless 12y ago
Yes! Great post. As you note this is good news. If house prices stay at sane levels we will be able to have true wealth creation instead of money printing via housing which leaves the next generation impoverished. We should celebrate a reduction in house prices as we celebrate the reduction in the cost of a laptop. More disposable income for the next generation and less going to the banks for creating money on a screen and then crediting your account with it.
sillysaurus3 12y ago
It doesn't seem like clickbait. It seems pretty important to think about, actually. Little story: In 2007, a member of my family landed a lot of signed contracts to commission him to do a certain type of job. These were actually so lucrative that he quit his dayjob. Then 2008 happened. All of those signed contracts became meaningless. People simply said no, we're not paying you anymore, sorry. Fast forward a month, and he's contemplating ways to kill himself to make it look like an accident so that his family will keep their house via life insurance payments. Luckily, things didn't turn out that way. He was able to get his job back. Somehow. Might it be true that comparing the present to the lucrative year of 2007 isn't necessarily productive? Possibly. Probably. But it's an interesting historical perspective, and it's also interesting to remember how much people's faith in the economy matters. The type of work he was being commissioned for wasn't anything related to tech or housing. The ripples are profound, both in the upswing and the downswing.
- branchless 12y ago
  Sorry to hear of his issues, but surely perpetuating high house prices means his children would also be under huge stress as they stretch themselves to the limit (and assume zero unemployment like this guy). The "wealth" created by pulling forward demand through credit through housing wasn't real. That's why living standards fell - we stopped creating wealth and started adding zeros to numbers on a screen. Reducing house prices means more disposable income for our children. And their children. And theirs. Yes there was a hit to the housing crash, but only because the loss in living standards was a result of the misallocation during the "boom". 2008 was just Wile E Coyote looking down having already run off a cliff. Want to avoid a fall? Don't run off the cliff. Not looking down isn't an option long-term.

nostromo 12y ago

I'm really worried about our economic future. I think job creation has been decoupled from economic growth. That's terrifying for the lower class today, and will eventually be terrifying to nearly everyone. I also think central banking has lost its effectiveness. We've had 6 years of 0% interest and money printing -- the pedal is to the metal -- but labor participation for working-aged citizens is stuck at a low not seen since the mid-1980s. http://www.washingtonpost.com/blogs/wonkblog/files/2013/09/EmployPop2554Aug.jpg http://www.washingtonpost.com/blogs/wonkblog/files/2013/09/E... Scary stuff...

spiralpolitik 12y ago
Indeed. It's hard to have a comsumption based economy if 99% of the population have no money to spend on things.
thaumaturgy 12y ago
I'm not so sure. Most of what I read suggests that American workers are as productive as ever; the generated wealth just seems to be getting concentrated into the hands of a smaller number of people. It's not really employment or even industry that's broken, it's the exploitation of workers (and not just in the U.S., although it's pretty bad here right now), and since it is politically incorrect to suggest anything that smells even a little like wealth redistribution, the problem will continue for a while until there is sufficient public unrest. The situation looks to me a lot like the one in the late 19th century (e.g. http://en.wikipedia.org/wiki/File:The_Bosses_of_the_Senate_by_Joseph_Keppler.jpg http://en.wikipedia.org/wiki/File:The_Bosses_of_the_Senate_b...), except now the political fat cats and monopolists are in the news and communications industries.

gaius 12y ago

Man, I hate it when the rich get richer and the poor get poorer.... Ooh look, new iPhone!

pcarolan 12y ago

This study uses 2007 as it's baseline which is like saying that lake levels are 40% lower than they were at the height of the last flood. Asset prices were overinflated in 2007, so you'd probably want to baseline somewhere between 2003 (the end of the early 2000s recession and 2007 to get a sense of how much worse off people actual are.

dumbfounder 12y ago

And that doesn't even take into account inflation. (at least the article makes no mention of it, maybe the original report does)

vondur 12y ago

I'm guessing most Americans net worth is based on the value of their homes, and property values for the most part have declined since 2007, this would make sense.

eyeareque 12y ago

This makes me want to ask: Where did all of the money go? It had to go somewhere, right?

JoeAltmaier 12y ago
Its actually imaginary points. It doesn't have to go anywhere.
- eyeareque 12y ago
  Sure, but if someone lost their house and the bank took it, wouldn't that mean the banks ate up all of the assets?
delecti 12y ago
The article seems to be discussing the median. The money went to the top of the curve.
DrJokepu 12y ago
Money is not wealth. It's a (very efficient) mechanism for exchanging wealth. "Where did all the wealth go?" would be a better question to ask. The answer is that nothing in life has inherent value, only perceived. If the perception changes, wealth can be lost (or gained).
mynewwork 12y ago
It didn't have to go anywhere, and in many cases it didn't. Imagine you have a house (500k) and a car(20k) in 2007. Today you still have the same house (now valued at 400k) the same car (now valued at 10k). Your net worth has dropped substantially but the money didn't go anywhere, nobody else gained by the depreciation of your car or the market price correction of your house.
- eyeareque 12y ago
  I'm assuming that people who lost their homes lost their equity. I'd assume there was a transfer of wealth in those situations.

patmcguire 12y ago

Is this page violently broken for anyone else on desktop?

zo1 12y ago
Broken for me, too. Running Firefox

pistle 12y ago

Should have drawn a trend line to avoid a comparison that includes the bubble in real-estate value... but then it wouldn't likely be such an ominous number.

russelluresti 12y ago

So, everyone's already pointed out that it's dumb to compare the amount of money you have now to the amount of money you had at the height of a bubble (where that money was unsustainable and over-inflated). One thing that's missing here, though, is the idea of amount of money to cost ratio. For example, say you had $1000 in 2007. Now say that, in 2007, a loaf of bread cost $1000. In that year, you had enough money to buy 1 loaf of bread. Now, in 2014, you have $600 (40% less than 2007). But now, instead of $1000, a loaf of bread is $100. Now you have enough money to buy 6 loaves of bread. You technically have less money, but the value of each dollar you have is significantly more. So, are you really "poorer" now? The issue with just looking at a single number when analyzing economic health is that it will never tell you the whole story. I can have a million dollars and still be in poverty if a gallon of milk costs 2 million.

Negitivefrags 12y ago
> One thing that's missing here, though, is the idea of amount of money to cost ratio. That isn't missing at all. It's specifically accounted for. See how the graph says "in 2013 dollars". That indicates that they are using inflation adjusted values.

tokenadult 12y ago

It's really amazing to contrast this thread with the thread currently up about the Gates Foundation report on good news in reducing disease in poor countries. I live in the United States, I do NOT own a house (I never have), I've had several career changes (bad planning on my part, no one else to blame) but I still consider myself very well off. I have use of this amazing device called the Internet to have intellectual conversations with friends any hour of the day or not. That alone would have been unimaginable in my childhood. There has been a lot of progress, and Americans are staggeringly wealthy by any reasonable worldwide standard. Moreover, Americans are living longer and healthier lives than ever before, and mostly don't even notice that.[1] So, sure, many Americans don't have as many on-paper financial assets as they appeared to have at the peak of the housing bubble, but so what? Americans can still take care of their children, still enjoy leisure, and still change where they live and what they do for a living with a freedom unknown in much of the world. If this is what it's like to be poor in America, I have no problem with being poor. (Disclosure: I have lived outside the United States, and I have been to places with stark poverty. I have a point of comparison as I type this.) [1] http://www.slate.com/articles/health_and_science/science_of_longevity/2013/09/life_expectancy_history_public_health_and_medical_advances_that_lead_to.html http://www.slate.com/articles/health_and_science/science_of_... http://www.nature.com/scientificamerican/journal/v307/n3/box/scientificamerican0912-54_BX1.html http://www.nature.com/scientificamerican/journal/v307/n3/box...