Americans' Wealth Plummets 40% from 2007 to 2010
The Washington Post is reporting this evening that government data from the Federal Reserve Board's Survey of Consumer Finance (requires Adobe) shows that Americans' wealth plummeted nearly 40% from 2007 to 2010. (HT Breitbart's Big Government). The Post story, written by Yian Mui, goes on to say:
"The Federal Reserve said the median net worth of families plunged by 39 percent in just three years, from $126,400 in 2007 to $77,300 in 2010. That puts Americans roughly on par with where they were back in 1992.
"The data represent one of the most detailed looks to date of how the economic downturn altered the landscape of family finance. Over a span of three years, Americans watched progress that took almost a generation to accumulate evaporate. The promise of retirement built on the inevitable rise of the stock market proved illusory for most. Homeownership, once heralded as a pathway to wealth, became an albatross.
"Those findings underscore the depth of the wounds of the financial crisis and how far many families remain from healing. If the recession set Americans back 20 years, economists say, the road forward is sure to be a long one. And so far, the country has only seen a halting recovery."
"The median family's net worth dropped 38.8 percent during the three-year period, the Fed said in its latest report on changes in U.S. Family Finances, derived from a survey of consumer finances. Fed economists told reporters that this was the biggest drop in net worth since the survey started in 1989.
"The median net worth, which is the value of assets minus debt, plunged to $77.3 trillion in 2010 from $126.4 trillion in 2007. Net worth in 2010 was at levels last seen in 1992."
In their reporting, the Miami Herald added a political twist, saying:
"The survey findings provide fodder for both the re-election efforts of President Barack Obama and the campaign of presumptive GOP presidential nominee Mitt Romney. Obama can use the data to show what a terrible economy he inherited, while Romney can use the data to show how bad things remain."
And to put the 40% drop firmly in perspective, the Wall Street Journal's economics blog wrote:
"That is a very big drop, a drop big enough to change people’s world views and long-term attitudes toward what they can and cannot buy. And those decisions, of course, drive the level of economic activity and employment, and around and around it goes.
"As it is, in our land of economic data overflow, many of us are willing to change our outlooks, with implications for everything from monetary policy to budget deficit reduction, on the basis of a couple of months of employment figures.
"These consumer-finances numbers are much more telling, reinforcing the notion that our post-financial-crisis world is not one we will exit easily and, as we know by now, certainly not quickly.
< . . . >
"Things may look modestly brighter for many U.S. families since 2010. There are some reasons to think home prices, at least in much of the country, have bottomed. Despite disappointments, there are net new jobs being created. But that 40% figure is a sobering one, and speaks to the depths of the impact on so many."
Sobering indeed! And the Arlington County Board probably doesn't know how well off the county really is. sitting as it does across from the Potomac River from the nation's parasitic capital.
UPDATE (6/12/12): First, the American Thinker cites the same Washington Post article, and then opines:
"This would seem to buttress Obama's campaign narrative that the situation he inherited was worse than anything any president has had to face since the Great Depression. But it really doesn't. The fact that Obama's policies haven't helped, and may have even slowed the recovery is a far more powerful argument at this point, given the economic circumstances.
"The issue isn't the past, but rather the present and future. And Obama is losing that argument."
Second, CNN*Money features the following chart in their story on the plummeting net worth: