Rotting From Within

Anna Bernasek writes in the New York Times that the typical American household is worth a third less than it did ten years ago.

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially. …

…For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.

“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001,” said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

Hm, who became President in 2001? Wait, it’ll come to me.

Meanwhile, the Dumbest Man on the Internet links to this article under the Headline “OBAMANOMICS IN ACTION: Typical US Household Worth One-Third Less Than Under Bush.” And he wasn’t the only rightie who commented without bothering to read the article. The Derp: It burns.

It doesn’t surprise me that this particular decline began in 2001. I remember looking at the incoming Bush Administration and fearing the nation was doomed. And I also remember the headlines were full of bad news about the economy before September 11. The financial crisis of 2008 (who was President then, do you remember?) accelerated the decline, of course.

Via Digby, see What caused the wealth gap?

David Atkins presents the Four Responses to Record Inequality. In brief:

  1. “There is a broad recognition within the progressive left that the wheels are increasingly coming off the train that propelled the 20th century economic model.”
  2. “Those in the neoliberal/center-left camp do believe that modern inequality is a problem, but that this too shall pass and we can trudge along as usual after a recovery. . . . This is delusional thinking, but extremely commonplace—particularly among wealthier liberals.”
  3. “Then you have the center-right. They take rational market theory as an article of faith, believing with religious fervor that if the labor and capital markets are allowed to act unimpeded, then both labor and capital will find a comfortable, fair and balanced price. No amount of evidence can convince them that both human life and dignity are priced incredibly cheap on the open market, or that that late 19th century was not, in fact, the model of a moral or economically functional society.”
  4. “Finally, there is the far right. These are the True Believers: the ones who not only buy into the center-right line, but also the raw Objectivism of Ayn Rand and Fox News … In this view, the only inequality that matters to them is redistributive taxation to ‘others’ in society.”

As much as we may crab about the far right, it’s really the centrists, left and right, that are in the way of addressing this crisis. They’re the ones who dominate news media and who have the real power in Washington. Progressives have little power or voice.