Recovery sees private wealth soaring $9T, thank Obama?

Discussion in 'Economy' started by expat_panama, Jul 6, 2011.

  1. expat_panama
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    expat_panama Silver Member

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    Since the recovery began 2-1/2 years ago private household wealth has increased by almost $9Trillion while private debt's been falling steadily. It's all in "Balance Sheet of Households" on page 104 of the Fed's latest flow of funds report. While some say we should thank Obama for handling the economy so well, others would complain that American households still haven't recouped $8Trillion in losses since the 2007 peak.

    [​IMG]

    More info:

    FRB: Z.1 Release--Flow of Funds Accounts of the United States--June 9, 2011
    Household Wealth Gets Strong Bounce Even as Home Equity Falls
     
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  2. uscitizen
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    uscitizen Senior Member

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    Yah the rich got richer.

    Party!
     
  3. Mr. H.
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    Mr. H. Diamond Member

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    Isn't this just a reflection of stock market performance?
    '07 was a crazy year for stocks as well as commodities. Plus, home values were so inflated it's rediculous.
     
  4. expat_panama
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    expat_panama Silver Member

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    Ordinarily I find the whole 'wealth inequality' schtick to be a bogus sham but for a few years now we got 5 or 6 million fewer people working while average wealth and average incomes have soared.

    OK, so while one explanation is inequality of benefits, but how about the possibility that there was a greater inequality of losses leading up to the 2009 bottom?
     
  5. expat_panama
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    expat_panama Silver Member

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    That's pretty much my take. Stocks went up from $6T to $9T while real estate fell from $20T to $18T.
     
  6. Toro
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    Toro Diamond Member

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    Thank Bernanke.

    It's a canard to blame or not blame Obama for not being back at the 2007 peak. We were at that level in 2007 because of a massive, artificial housing bubble that should never have existed. Without that bubble, we wouldn't be in the mess we are today. What should Obama do, create another, bigger bubble?

    We have to let the economy run its course. We didn't do that at the beginning of the century and now we are paying for it.
     
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  7. ShackledNation
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    ShackledNation Libertarian

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    Do these numbers take inflation into account? Because have more money means nothing if everything is more expensive. Also, what recovery? Unemployment numbers 2 1/2 years ago were lower than they are now. Causation also needs to be explained as does the usefulness of net worth as a measure of economic health (it could also mean there is just another bubble).
     
  8. ShackledNation
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    ShackledNation Libertarian

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    You make a good point. The reason for this inequality, IMO, is that government bails out its rich friends and contributors. The auto industry was bailed out, the banking industry was bailed out, all of these business people that should have failed did not. They got to keep their money and profits despite their mistakes. This is what happens when you let the government meddle in the economy. We have let inefficient industries suck up wealth when they should have failed or restructured themselves.
     
  9. expat_panama
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    expat_panama Silver Member

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    Blaming Obama for the real estate price surge before he took office is stupid lazy thinking. It's just like blaming Bernanke. Obama was elected in '08, Bernanke was named in '06, and the ten-year real estate price surge was from '97-'06, which is why a lot of people like to blame Barny Frank and his great big Fannie Mae.

    My take is they'd be off the mark too because while housing was big it was not that important:
    [​IMG]
    Stocks was far bigger, and they didn't tank until Obama turned America anti-investor in late '08.
     
  10. expat_panama
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    expat_panama Silver Member

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    No, population growth is overlooked too. Here's average wealth per household in 2011 dollars:

    [​IMG]

    It shows households are doing better now than they did during the Clinton economy, but not as good as they did with GWBush.
     

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