Let's not blow the trumpets just yet. The wealthy lost a lot of paper wealth in the crisis aftermath and that has bounced back. Lower on the scale, not so much, since most financial equity is held by the wealthy rather than being widely distributed and many home "owners" lower on the scale are still underwater. Inequality of income and wealth distribution has increased since the crisis, shrinking the (formerly) "middle class" households even more than the figures show, since many are only a paycheck away from being poor if they lose their access to credit.
Calculated Risk
Fed's Q4 Flow of Funds: Household Net Worth at Record High
Bill McBride
5 comments:
Very, very, VERY uneven distribution. At this point the only just solution is to claw back the income and assets of those at the very top, by imposing massively punitive taxes. I mean, massive. This would not only go a long way towards bringing the wealth and income distribution back to a more normal level, it would also wrest control of the political system from these parasites and send a powerful message that their wants and needs no longer supercede everybody else's. This may not be "MMT," but I don't care.
The policymakers will see this and think "everything is fine.... getting back to normal... see, we didnt need that UE extension or nutrition programs.... etc..."
The only light at the end of the tunnel is that maybe now with this report, the Fed will stop the QE completely, and raise interest rates and hence interest incomes .... they for sure are not going to come up with a new stimulus program with this new information in view...
rsp,
I agree. We have to look at the overall picture not just so-called economics. This is the problem with the way economics is done, as Marx realized. The overall picture includes society, with the economy functioning as the material life-support system. The economy for the well-being of the society, not the society for the economy as conventional economics assumes in assuming economic laws of nature based economists fantasies about nature and humans' place in it. TINA is bullshit. There are alternatives.
Credit is essentially a "reverse discount"…the more you borrow the less you get for your money, and at some point debt service starts eating into your "nut"…then your future borrowing hits a ceiling that never goes away.
From then on you owe your soul to the company store.
Holders of student loans have reduced their own incomes for their lifetimes , or much of it.
That doesn't bode well for the rest of us, since we may have received some of that spent income.
Right, funding public purpose (health care, education, etc.) with private credit is a recipe for ruin, and it's crazy when the policy space exists to fund public purpose publicly with fiscal deficits. It's shooting the nation in the head to make a few richer.
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