Academia, Politics, Society

Median Net Worth Of American Families Down 40 Percent In Three Years

There is a chilling report out from the Federal Reserve that 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 returns American families to the wealth level of 1992.

The biggest hit were the middle class families. The wealthiest families actually saw a slight rise. The median for credit card debt did not materially change, however. Much of this decline is due to the decline in home values which remains the biggest investment for most families. Forty-seven percent of citizens do not pay taxes income taxes and 87 percent of those earn less than $20,000 a year.

These figures are remarkable since they parallel the Great Depression but we have not seen the same degree of displacement or social or political upheaval as a result. There are different theories from better public welfare programs to a new political dynamic with many lower and middle class families supporting either the Tea Party or GOP. It may also be that many families have experienced the decline but continue to hold on to their homes so that the diminishing in wealth does not manifest as sharply in their lives. Whatever the cause, the reduction in wealth has not produced a comparative political backlash that I can see.

Source: Washington Post

130 thoughts on “Median Net Worth Of American Families Down 40 Percent In Three Years”

  1. CLH,

    Obama said he feels like he has to go to confession every day. How often do you go to confession?

    I’m not Catholic, and I’m not going to confession. I saw Obama on the 39th Floor at 230 S. Dearborn in Chicago. I walked the stairs.

  2. “Let us get closer to the fire, so that we may see what we are saying.” — the Bubis of Fernando Po

    “Indeed, the most notable trait common to members of such [primitive] communities is a certain amiable inefficiency when confronted with force or fraud.” — Thorstein Veblen, The Theory of the Leisure Class

    In other words:

    “Boobie Top-Down Class Warfare”
    (from Fernando Po, U.S.A., America’s post-literate retreat to Plato’s Cave)

    It happened back in Vietnam
    Some two score years ago
    When parents of the upper class
    Declined to serve, and so
    They coined Selective Service to
    Select who wouldn’t go

    They called themselves the brightest and
    They called themselves the best
    And then they sent their countrymen
    Into a hornet’s nest
    But not themselves, of course, because
    They’d passed the privilege test

    These parents of a George and Dick
    Thought communism bad
    But worried that some other lands
    Would find it not as sad
    As slaving for the rich ones whose
    Rank greed had made them mad

    So sympathizing with the rich
    No matter what they did
    The parents of a George and Dick
    Sent someone else’s kid
    To fight the dreaded communists
    No matter where they hid

    But not their George and Dick, of course,
    They couldn’t spare the time
    And Vietnam seemed far away
    Immersed in war and grime
    An atmosphere too turbulent
    For orchids in their prime

    These studly hot-house orchid types
    Worked hard to dodge the light
    Their parents helped them jump the line
    To keep them out of sight
    Arranging for deferments that
    Would keep them from the fight

    And so the years of war went by
    And communism won
    Which had exactly no effect
    On those who had the fun
    Of skipping out and turning tail
    To take off on the run

    Soon Vietnam recovered from
    The blasting it had got
    And communists turned businessmen
    To hatch a common plot
    With those who liked cheap labor
    And cared less why some had fought

    Still some remained embittered by
    The waste made of their lives
    And swore they’d never live again
    Like worker bees in hives
    Content to feed the rich who dined
    With sharpened forks and knives

    But Boobie schools taught only fraud
    And fiction to the young
    With fantasy and fables coined
    To see the truth unstrung
    Till history became a fog
    That never bit or stung

    On schedule, Boobie Dick and George
    Found Politician Town
    And learned that pandering for votes
    Could win some safe renown
    Affirmatively actioned up
    They never could fall down

    The millions seemed to flow their way
    And stuck to them like paste
    They spent what others raised for them
    With no thought for the waste
    Since someone else’s money had
    The sweetest sort of taste

    They made a deal between themselves
    To do a pantomime
    With Dick to do the thinking while
    George mouthed a lisping rhyme
    And so with the Supine Court’s help
    They grabbed for our last dime

    The Boobie George then tripped and crashed
    Into this truth sublime:
    That Boobies hated freedom and
    Considered it a crime
    Dick told him then what he should do:
    Just work them overtime!

    With not a moment left to think
    The Boobies wouldn’t know
    Where all their beads and shells had gone
    Or why they couldn’t show
    A single thing as evidence
    That they had labored so

    Once George and Dick gained access to
    The treasury’s largesse
    It hardly seems surprising that
    It soon contained much less
    A fact which few observers seemed
    To think of with distress

    But “stupid is as stupid does,”
    The stupid do and say
    Confronted by a wealthy thief
    They genuflect, then pay;
    With eyes and minds shut fast like that
    They make such tempting prey

    Michael Murry, “The Misfortune Teller,” Copyright 2006

    Thorstein Veblen had it right about the Boobies.

  3. Split personality again for me on this subject.
    On one hand, I dislike government and people in authority in general. I do not trust politicians. I can not point to any single politician in DC and say, “That’s a good man. He works for the people, in good faith, with the interests of the nation at heart.” Not one. Giving these kinds of people more money to screw around with is anathema to me. I can not trust that a single dime given by any tax payer to the government will be wisely and intelligently spent.

    I have no problem with my money going to aid those as can not aid themselves. I have no problem with my tax dollars building infrastructure, provided it’s viable, cost effective, and actually can be used by the nation to facilitate the development of economic activities. I have no problem funding public education, provided that it bases its methods on scientifically sound best practices of education, and provided that they do not interfere with the traditional role of the parent in providing societal and moral guidance to their children.

    I have a lot of problems with my tax dollars going to Iraq and Afghanistan. I have a lot of problems with my tax dollars going into direct subsidies of any corporation, be they for companies that provide blue collar jobs or banks. Giving government and corporations more money is, in my opinion, giving the government more power and influence over the lives of everyone.

    I have a huge problem with the debt we’re racking up. Eventually, the money will get more expensive, or simply stop being loaned. Expenditures must match growth. I hate the notion of people “voting themselves more money” (I can’t remember where that quote came from, but I do believe it was Jefferson). But I hate the idea of 25 percent of people owning 90 percent of the nation’s wealth (those are approximations, correct me if I’m off by all means.)

    So what’s the solution? To all hell if I know. I have no problem with taxing on a progressive curve, but I don’t want that money going into the hands of people I despise (D. and R. both). The problem with the economy is not easy to fix, there are no magic bullets, and there are no plans that I have seen that will work. There has been too much idealism in both sides of the debate. I have seen neither D. or R. plans that have anything to do with boosting the economy. All I have seen are D. and R. plans that have to deal with boosting their power base.

    The only question I have is how do you create a system by which people are not penalized for doing well, maintain incentives for people to strive at the level and with the work ethic that pushed America to the top in the first place, maintain a minimum standard of living for the worst off in society without breaking that work ethic, and provide for National Defense (as opposed to American Imperialism). I can’t believe that system comes about by giving the idiots in DC more money. I guess I just want the current crop of self interested, buggy bastards the hell out of Washington, to be replaced by intelligent, rational and caring human beings. That is how you fix the economy. Put people in power who actually know something about and are willing to take an ethical stance to do so. All debates on tax, investments, financial regulations, etc. are pointless when no one we elect will bother with anything that doesn’t increase their own power base.

  5. Come to think of it: can everybody — even the working poor — play at this “national security” game? I mean, if merely uttering the word-like noises “national security” justifies literally anything and everything, then what may not anyone and everyone in the nation do if they feel “unsafe”?

    Personally, I do not feel at all safe with legions of cops, guards, soldiers, and hired mercenary thugs marching around all over the place. I mean: Why does my own government seek to terrify me in the name of making me feel “safe”? Something about this schizophrenic doublethink really smells.

    Somehow, I can’t shake the conviction that all the fear-flogging has only the objective of driving me into some updated version of a scene written by Charles Dickens. After all, as Attila the Hun said: “It is not enough that I succeed. Everyone else must fail.” Sounds like the 1% at work to — I mean, on — me. Like when I got 0.001 return on my money market account last year.

  6. Economic cycles are about sixty years apart. The last great depression was in the 1930’s. The next one isn’t far off.

    The United States needs to stop policing the rest of the planet and stay home. Is that uncomfortable? Join whatever branch of the military you want. Ladies? Do you want equal opportunity to be killed and/or maimed? Get with it.

  7. Jill — because of the absence of the life interest.

    You simply cannot have rights coexistent with slavery. Any kind of slavery. Full stop.

  8. “Even Jim Grant is advocating a classical gold standard to stop congress & the federal reserve from further destroying the American economy.” — Dave S

    Oh, yes. By all means. Then watch as the Chinese and Japanese show up at Fort Knox with all their Treasury Bills demanding conversion to gold bullion. In less time than it takes to say “Ron Paul,” the United States would not have an ounce of gold in its treasury and its economy would collapse. This nearly happened to the British when they wanted tea and silk and porcelain from the Chinese, but the Chinese only wanted sliver from them to pay for it. The British economy began to collapse from their contracting currency. Only the drug trade in opium (produced in British India) saved the British economy from trade-induced implosion.

    The same fate awaits the United States (with its enormous “free trade” deficits) if it stupidly adopts a bullion base for its currency when it doesn’t have the bullion and the Chinese refuse to buy drugs from a western world that cannot produce anything that China wants or needs.

    So what to do? Former Assistant Secretary of the Treasury, Paul Craig Roberts says:

    Everyone wants a solution, so I will provide one. The US government should simply cancel the $230 trillion in derivative bets, declaring them null and void. As no real assets are involved, merely gambling on notional values, the only major effect of closing out or netting all the swaps (mostly over-the-counter contracts between counter-parties) would be to take $230 trillion of leveraged risk out of the financial system. The financial gangsters who want to continue enjoying betting gains while the public underwrites their losses would scream and yell about the sanctity of contracts. However, a government that can murder its own citizens or throw them into dungeons without due process can abolish all the contracts it wants in the name of national security. And most certainly, unlike the war on terror, purging the financial system of the gambling derivatives would vastly improve national security.

    About time to rob the real robbers. They’ve got it coming. And now that President Obama can do what he wants to anyone on earth without having to explain why, he can do something for the 99% of us for a change. I’d feel so much “safer” if he did. I might even vote for him again.

  9. ah yes, idealist, instead of ‘off with their heads’
    we now have ‘send the drone’.

  10. Indigo Jones quote of Jefferson sounds like a description of Congress today. Odd isn’t it?

    And who is Indigo Jones. Where will he pop up next.

  11. Shano,
    The Kennedys tried. The Bushes may make the first family or relatives to be three time winners. But the power is still divinded. Even as exec expansion is on the march.

    BUT SICKENINGLY HE IS ALMOST GRANTED A GOD STATUS, WHICH WAS RESERVED FOR KINGS……!

  12. From George Orwell’s The Road to Wigan Pier (1937):

    … It greatly confuses the issue to assume … that social status is determined solely by income. Economically, no doubt, there are only two classes, the rich and the poor, but socially there is a whole hierarchy of classes, and the manners and traditions learned by each class in childhood are not only very different but – and this is the essential point – generally persist from birth to death [emphasis added]. Hence the anomalous individuals that you find in every class of society. … you find petty shopkeepers whose income is far lower than that of the bricklayer and who, nevertheless, consider themselves (and are considered) the bricklayer’s social superiors; you find board-school boys running Indian provinces and public school men touting vacuum cleaners. If social stratification corresponded precisely to economic stratification, the public-school man would assume a cockney accent the day his income dropped below £200 a year. But does he? On the contrary, he immediately becomes twenty times more Public School than before. He clings to the Old School Tie as to a life-line. And even the [“h”-less] millionaire, though sometimes he goes to an elocutionist and learns a B.B.C accent, seldom succeeds in disguising himself as completely as he would like to. It is in fact very difficult to escape from the class into which you have been born [emphasis added].

    As prosperity declines, social anomalies grow commoner. You don’t get more [“h”-less] millionaires, but you do get more and more public-school men touting vacuum cleaners and more and more small shopkeepers driven into the workhouse. Large sections of the middle class are being gradually proletarianized; but the important point is that they do not, at any rate in the first generation, adopt the proletarian outlook. Here am I, for instance, with a bourgeois upbringing and a working-class income. Which class do I belong to? Economically, I belong to the working class, but it is almost impossible for me to think of myself as anything but a member of the bourgeoisie. And supposing I had to take sides, whom should I side with: the upper class which is trying to squeeze me out of existence, or the working class whose manners are not my manners? It is probable that I personally would side with the working class. But what about the tens or hundreds of thousands of others who are in approximately the same position? And what about that far larger class, running into millions this time – the office-workers and the black-coated employees of all kinds – whose traditions are less definitely middle class but who certainly would not thank you if you called them proletarians? All of these people have the same interests and the same enemies as the working class. All are being robbed and bullied by the same system. Yet how many of them realize it? When the pinch came nearly all of them would side with their oppressors and against those who ought to be their allies. It is quite easy to imagine a middle class crushed down to the worst depths of poverty and still remaining bitterly anti-working class in sentiment; this being, of course, a ready made Fascist Party[emphasis added].

    The reforms of the New Deal occurred because the generation that designed and implemented them grew up poor and so could identify with the poor for the remainder of their lives. No matter how much better they managed to do economically later in life, they never really considered themselves rich. They didn’t look down in fear and loathing at the less fortunate. Rather, they looked up with the sure and certain recognition of who had made them poor in the first place. The part of the Baby Boomer generation that grew up feeling privileged and who avoided the indignity of cleaning toilets in the military, cannot now adjust to their new poverty, so the rabid right plays upon the rage that their downward mobility has engendered in them, turning it upon the working poor whom they now recognize bitterly as themselves. “Culture War,” the rabid right calls their chief electoral strategy. As Thomas Frank says: “Drive them off their land and out of their businesses and the next thing you know, they’re protesting in front of an abortion clinic.”

    It will take a new generation who has grown up poor to restore the American middle class — if they can physically stand up to the beatings and arrests that the hyper militarized, corporate rent-a-cops have in store for them. Perhaps they have what it takes. Perhaps they don’t. I won’t live to see it. Their future belongs to them if they wish to take seizure of it in their own hands.

  13. You mean the federal reserve & congress have been destroying the wealth of Americans? The Horror!! YouTube Peter Schiff was right, and read any Austrian Economist on why this is happening & you’ll have a pretty clear idea of what is happening to middle America. Even Jim Grant is advocating a classical gold standard to stop congress & the federal reserve from further destroying the American economy. Another great vid is Peter Schiff’s mortgage bankers speech which is a great analysis of what actually happened to the housing market via fanny/Freddy & low interest rates by the fed. It may all be moot soon if QE3 happens I don’t see many avenues left for America to not lose the reserve currency status & the whole country will collapse.

  14. What I’m spelling out here was seen for what it was even in its day. This is controversial mostly because of modern brainwashing.

    While Hamilton was busy crafting the national debt payout scheme I discuss in some detail above, Jefferson was off in France. On returning, Jefferson supported the financing plan only until he learned about what it actually was, at which point, Jefferson said in pretty clear words:

    “When I embarked in the government, it was with a determination to intermeddle not at all with the legislature, & as little as possible with my co-departments. The first and only instance of variance from the former part of my resolution, I was duped into by the Secretary of the Treasury and made a tool for forwarding his schemes, not then sufficiently understood by me; and of all the errors of my political life, this has occasioned me the deepest regret.”

    http://oll.libertyfund.org/index.php?option=com_content&task=view&id=937&Itemid=345

    Jefferson quickly grew suspicious of all the speculation, conflict of interest, and insider trading among the legislators, and even drew up a list of names!

    Jefferson complained of Hamilton’s plan in detail:

    “I saw this influence actually produced, & it’s first fruits to be the establishment of the great outlines of his project by the votes of the very persons who, having swallowed his bait were laying themselves out to profit by his plans: & that had these persons withdrawn, as those interested in a question ever should, the vote of the disinterested majority was clearly the reverse of what they made it.”

    Oh, poor Jefferson, still under the impression that the Constitution was about Democracy or the Great Will of the Majority…

  15. I’ll say it. The Constitution did have a major flaws. We are in part, failing as a nation, due to those flaws. The framers set up the Constitution to protect themselves: wealthy, powerful, white, male land owners from others who were like them, except more powerful (say, a king). Their failure to actually mean liberty and justice for all has led to many national crises, not just the current one. We needed (and still need) the civil rights and women’s movements to include more people as part of bringing about liberty and justice for ALL. We are in the midst of a deep crisis this one based on class and kleptocracy. This crisis will either end our society’s movement towards being a real democracy aiming for justice or I hope, move to rectify all injustice in the framework of a functioning democracy. (I don’t have much hope but that is what I hope for.)

    We don’t see poverty in much the same way that we don’t see murdered civilians from the govt.’s many wars of empire. Our newz is controlled and we have been trained not to see what is in plain sight. There are far more children and families in poverty than even a few years ago. Food banks and homeless shelters cannot keep up with the demand. People are getting sicker. Our national health statistics are closer to third rather than first world numbers. If you listen to news sites in nations in Canada and the EU you will here comments about how badly things are for most people in the US, something you will not normally hear on our news. It is much worse than this article states.

    When I talk to people I do hear extreme politically disaffection. I don’t see much rah-rah for Obamney. I see people searching for other choices than Demopublicans but not knowing what’s out there (again, this is a very information controlled society). I must also say that dealing with being hungry, homeless and sick makes it very hard to engage in political life, (something I don’t think is an accident).

  16. that for a capitalist, repeat, CAPITALIST, the first choice would be a KING. It does not promote the idea, only notes the first preference of the capitalist class. OK?” Idealist

    The Unitary Executive privilege is getting very close to Monarchy.

  17. Dredd,

    You read worse than the proverbial devil reads the Bible.

    Now the quote simply says: that for a capitalist, repeat, CAPITALIST, the first choice would be a KING. It does not promote the idea, only notes the first preference of the capitalist class. OK?

    So on it goes to the second choice: to provide measures whereby men of opulence can maintain control although they are in numbers less than the folk majority. OK?

    So, either you can not read, or IJ is misquoting, or Madison/Hamilton wrote BS in the Fed papers.

    And your quote of Madison has nothing to do with the accuracy of IJ’s quotation. It is only a parts piece, which I welcome, but not as an argument against IJ’s quote.
    Of course quoting FF’s is a favorite playgame for those with the time to read and select. Context always context.

    What say you Amygdala Man? Hee Hee Hee!!!

    I agree it important. It has such direct effects, frightening actually. But to build mankind on reflections on the amygdala reminds me of Freud, Sigmund Fraud (sp? hee hee).

  18. “That is, the government is designed to be difficult to change, and the judiciary shares with monarchy.”

    sorry, I meant to say, the Framers saw this benefit of the monarchy clearly, and were interested in emulating it.

  19. @Dredd

    “It was not to establish the ideology, opulence, or power of the King”

    Hamilton, Federalist 78:

    “The standard of good behavior for the continuance in office of the judicial magistracy, is certainly one of the most valuable of the modern improvements in the practice of government. In a monarchy it is an excellent barrier to the despotism of the prince; in a republic it is a no less excellent barrier to the encroachments and oppressions of the representative body. And it is the best expedient which can be devised in any government, to secure a steady, upright, and impartial administration of the laws.”

    Note that the “steady, upright, and impartial administration of the laws” concerned are those laws that the speculators, who overthrew the Confederate government and now took occupation of the legislature, write for their own interests.

    And the “representative body” that is to be protected against “encroachments and oppressions” is the capitalists who have explicitly excluded women, the poor, slaves, and laborers.

    That is made clear in the next paragraph:

    “Whoever attentively considers the different departments of power
    must perceive, that, in a government in which they are separated
    from each other, the judiciary, from the nature of its functions,
    will always be the least dangerous to the political rights of the
    Constitution; because it will be least in a capacity to annoy or
    injure them. The Executive not only dispenses the honors, but holds
    the sword of the community. The legislature not only commands the
    purse, but prescribes the rules by which the duties and rights of
    every citizen are to be regulated. The judiciary, on the contrary,
    has no influence over either the sword or the purse; no direction
    either of the strength or of the wealth of the society; and can
    take no active resolution whatever. It may truly be said to have
    neither FORCE nor WILL, but merely judgment; and must ultimately
    depend upon the aid of the executive arm even for the efficacy of
    its judgments.”

    That is, the government is designed to be difficult to change, and the judiciary shares with monarchy.

    As I’ve laid out, the “political rights of the Constitution” pertain ONLY to the capitalist class, who wrote the Constitution to benefit themselves. Women, the poor, blacks, and laborers were disenfranchised.

  20. @Dredd

    And your opinion is worth what, exactly?

    You give me one quote without context and expect that, on face value, to make up for painstaking legal, social, and economic research?

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