Rex Nutting, MarketWatch
Submitted by: T. Hawkins
The Middle Class Has Been Decimated
Rex Nutting reports in Market Watch that "The prosperity of the middle class has been the chief engine of growth in the economy for a century or more. But now our mass market is no longer growing. How could it? The middle class doesn't have any money."
Further, he says, "And make no mistake, the middle class has been ruined: Its wealth has been decimated, its income isn't even keeping pace with inflation, and its faith in the American economy has been shattered."
Corporate robber barons have walked away with untold trillions of dollars while hard-working middle class Americans watched their wealth drop by an average of 55% due to the precipitous plunge in housing prices.
According to the Federal Reserve's comprehensive Flow of Funds report, American homeowners lost a total of $7.38 trillion dollars as a direct result of the housing collapse.
"Most middle-class families didn't have much wealth to begin with — about $100,000. For the 22 million families right in the middle of the income distribution (those making between $39,000 and $62,000 before taxes), about 90% of their assets was in the house. Now half of their wealth is gone and it will never come back as long as they live.", says Nutting.
The rich don't have these worries because the market value of paper investments has fully recovered. The rest of us lucky enough to have work will put in tens of thousands of extra hours to rebuild the wealth we lost in the hopes we'll have something saved to pass along to our children.
A more curious question is this: Why did it take so long for this article to be written? Mr. Nutting makes it clear that this has been going on for a very long time.
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