Disconnect Between Household Wealth and GDP Growth
by Bill Bonner: When
Your Credit Card Stops Working
of going nowhere! Where are we, Hokohama?
anyone who has been paying attention
you already knew there
was something wrong. The worlds leading economy, in the most
dynamic, inventive period in human history, failed to make people
a penny richer.
GDP went up.
But real wages did not. In fact, people got nowhere financially
if they were lucky. And many families got caught in the credit/housing
bubble. When it blew up they got knocked back
give you the conclusion before we give you the facts: the growth
in the last 20 years was largely phony. The wheels on the economy
spun around faster and faster. The shopping malls were full. Houses
were built on nearly every vacant lot. Wall Street cashed big checks.
But, overall, it was an illusion. Compared to a real boom, it was
a counterfeit. Nobody got anywhere.
the story from The New York Times:
Net Worth Drops to Level of Early 90s, Fed Says
The recent economic crisis left the median American family
in 2010 with no more wealth than in the early 1990s, erasing almost
two decades of accumulated prosperity, the Federal Reserve said
family richer than half the nations families and poorer
than the other half had a net worth of $77,300 in 2010, compared
with $126,400 in 2007, the Fed said. The crash of housing prices
directly accounted for three-quarters of the loss.
income also continued to decline, a trend that predated the crisis
but accelerated over the same period. Median family income fell
to $45,800 in 2010 from $49,600 in 2007. All figures were adjusted
the rest of the article
Bonner is the author, with Addison Wiggin, of Financial
Reckoning Day: Surviving the Soft Depression of The 21st
The New Empire of Debt: The Rise Of An Epic Financial Crisis
and the co-author with Lila Rajiva of Mobs,
Messiahs and Markets (Wiley, 2007). His
latest book is Dice
Have No Memory.
Since 1999, Bill has been a daily contributor and the driving force
behind The Daily Reckoning.
© 2012 Daily Reckoning
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