Yesterday, the Fed released its latest Survey of Consumer Finances.
The report included a lot of depressing data about the financial situation of average Americans. But nothing was so shocking and depressing as this:
(Yes, the situation has improved in the 18 months since 2010, but only modestly. House prices are about where they were back then.)
Most of this decline came from the collapse of the housing market. But we can’t just write this one off to the housing bubble. The median net worth of households has now fallen to the same level as it was two decades ago, in 1992.
What does that mean?
It means America just isn’t working right now.
Not just Americans. America itself, a country whose economy once worked for almost everyone.
In the old America, if you worked hard, you had a good chance of moving up.
In the old America, the fruits of people’s labors accrued to the whole country, not just the top.
In the old America, there was a strong middle class, and their immense collective purchasing power drove the economy for decades.
Over the past couple of decades, the American economy has increasingly mostly worked for the richest Americans, at the expense of everyone else. As a result, the disparity between “the 1%” and “the 99%” has hit a level not seen since the 1920s. And there is a widespread and growing sense that life here is not fair or right.