Graph Of The Day: Inequality Has Grown More Extreme Since Last Recession

Image courtesy of the Wall Street Journal / data courtesy of Federal Reserve Survey Of Consumer Finances.

The distribution of wealth has shifted to the wealthiest Americans in the years since the Great Recession.

The distribution of wealth (income and wealth are different measures) has shifted to the wealthiest Americans in the years since the Great Recession.

There are a number of reasons for this:

  1. Historically, low interest rates encourage savers to put their savings into the market to keep pace with inflation.
  2. The Federal Reserve’s policy of quantitative easing artificially lifted asset prices.
  3. In the U.S., the investor class is made up of wealthier Americans.
  4. The market nearly tripled in value from 2007-2016
  5. The Great Recession was caused by toxic home mortgages which lead to many foreclosures. Homes make up a disproportionate percentage (around 60%) of most American’s net-worth.

Those who could not invest, but worked, saw little increase in wages during this period. ​

Image courtesy of the Wall Street Journal / data courtesy of Federal Reserve Survey Of Consumer Finances.

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