Recently by Bill Bonner: When Your Credit Card StopsWorking
Twenty years of going nowhere! Where are we, Hokohama?
Dear Reader…and anyone who has been paying attention…you already knew there was something wrong. The world’s 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…actually losing wealth.
We’ll 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.
Here’s the story from The New York Times:
Family Net Worth Drops to Level of Early ’90s, Fed Says
WASHINGTON – 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 Monday.
A hypothetical family richer than half the nation’s 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.
Families’ 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 for inflation.
Bill Bonner is the author, with Addison Wiggin, of Financial Reckoning Day: Surviving the Soft Depression of The 21st Century and 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.