The forces at work in the American economy appear so entrenched that Obama may be remembered as the president who pulled the nation from its worst downturn since the Great Depression, but failed to arrest deepening economic inequality.There are limits to what the president (or any government official) can do to shape the economy. But it is not exactly clear how many of the president's policies---from Too Big to Fail to the encouragement of the growth of illegal labor---advance the interests of the middle class. They may in fact hurt it.
The Federal Reserve, under Obama appointee Janet Yellen, has put money in almost all Americans' pockets with near zero interest rates that have held down mortgage payments, allowed companies to reinvest, and boosted job creation.
But the Fed's Survey of Consumer Finances shows how uneven the distribution of that stimulus has been. Between 2010 and 2013, as recovery took hold and stock markets soared, the average net worth of families in the top 40 percent of income earners grew. For all others average net worth shrank, declining 19 percent for the middle fifth.
Similarly, the average earnings for families in the top 10 percent grew more than 9 percent from 2010 through 2013, while those at other levels stagnated or shrank. For the middle fifth, average earnings fell 4.6 percent.
Over the six years through 2013, the middle fifth's average annual family earnings fell to $47,243 from $53,008 while their average net worth dropped to $170,066 from $236,525.
Sunday, January 18, 2015
Fate of the Middle Class
Reuters surveys the economic landscape and finds that the middle class is still struggling:
Posted by Fred Bauer at 11:03 PM