Posted on 06/21/2012 6:18:04 AM PDT by TigerLikesRooster
Wealth implosion: It's not just housing
By Tami Luhby @CNNMoney June 19, 2012: 2:32 PM ET
NEW YORK (CNNMoney) -- Americans' net worth collapsed in recent years, but don't blame the housing market for it all.
A CNNMoney analysis of new Census Bureau data shows that if you strip out the effects of the housing collapse, median household net worth still fell by 25% between 2005 and 2010. The decline was driven largely by the plummeting stock market, which devastated Americans' portfolios and retirement accounts.
Overall, median household net worth declined 35% to $66,740 in 2010.
The median worth of stock and mutual fund portfolios fell 33%, while the median home equity value dropped 28%.
"One of the significant factors is housing, of course, but it's not that alone" said Alfred Gottschalck, an economist with the Census Bureau. "It's how business conditions affect stock and retirement accounts."
(Excerpt) Read more at money.cnn.com ...
Lots of scientist jobs are going overseas too. Scientific jobs are often related to manufacturing.
All quite correct.
I was quite amused by the workers who got shafted by the collapse of Enron 10 years ago. They apparently felt they should have been informed of the poor condition of the company so they could sell their stock off to some poor schmuck who wasn’t informed.
IOW, they were upset they weren’t able to shift their losses to anther totally innocent person. In the process committing insider trading and fraud.
LOL
Time for another taxpayer funded vacation and a game of golf.
By allowing the 2003 tax cuts to retire, President Obama will be increasing the bottom rate from 10% to 15% and the 20% bracket to 25%.
math here:
Raising the 10% bracket to 15% represents what percentage of increase? Hint: The correct answer is NOT 5%.
Raising the 20% bracket to 25% represents what percentage of increase? Hint: The correct answer, again, is NOT 5%.
Finally, raising the 35% bracket to 39% represents what percentage of increase: Hint: The correct answer is NOT 4%.
Extra credit question: People in which tax bracket will see the largest percentage of increase in their taxes?
Extra extra credit question: People in which tax bracket will see the smallest percentage of increase in their taxes?
To those moving from the 35% to the 39% tax bracket...that’s roughly an 11% increase in taxes.
From 20% to 25%...that’s a full-blown 25% increase in taxes.
To those moving from the 10% bracket to 15%, their taxes will be increased by a whopping 50%.
So the low-income people get their taxes raised even more when seen as a percentage. And the rich folks lose a higher magnitude of money, but the percentage compared to what they already make is lower.
Many interrelated factors are also creating inefficient capital allocation and unproductive spending. A lot of houses are underwater, creating illiquid market conditions at one end of the market while foreclosures are selling for cash prices at the other end. People and businesses with otherwise good track records for repaying debt can’t get credit because their balance sheets have been negatively impacted. Someone paying on an underwater mortgage could be putting that money to better use but can’t sell the house. The bubble did a lot of damage beyond what can be objectively measured in asset prices.
Try thinking.
When I graduated high school, I went to the fields and work mind-numbing agricultural jobs next to the Mexicans and the immigrants from India. I was the only white guy out there. It was menial and mind-numbing, but I learned work ethic, and struggled to rise above it. I learned humility, and I learned to pray. I also went to school to improve my prospects.
Without menial jobs, we have no way to filter out the lazy bums from the good workers. My stepson refused to clean the toilets at the pizza restaurant and quit instead. Twelve years later, he is unemployed. He tries going to school, and fails, but still he gets financial aid. He works at occasional menial jobs when he can get them. He gets food stamp assistance, and leeches off of his parents and grandparents.
So what you are sayimg is that we should want Americans doing work that Americans will do, and what they won't do, what then? Immigrants? Somebody has to do menial jobs.
Many interrelated factors are also creating inefficient capital allocation and unproductive spending. A lot of houses are underwater, creating illiquid market conditions at one end of the market while foreclosures are selling for cash prices at the other end. People and businesses with otherwise good track records for repaying debt can’t get credit because their balance sheets have been negatively impacted. Someone paying on an underwater mortgage could be putting that money to better use but can’t sell the house. The bubble did a lot of damage beyond what can be objectively measured in asset prices.
“On the other hand, there is an opportunity for thrifty, responsible, industrious households to get great bargains in real assets. There are places in some areas near me where you can buy multi-family units for one half their 2006 sales prices.”
I agree there are many real estate bargains. My concern with multifamily rentals for the longer term is government regulation and higher taxation. The leftists are extremely creative in creating new taxes as well as playing the class warfare card. I can envision a locality run by liberals instituting a per unit “slumlord” tax on dwellings housing comprising more than one unit or on individuals and corporations owning multiple housing units. Certainly rent control is another vehicle a liberal local government can use to transfer wealth from property owners to renters.
Our economy is grinding to a halt because people with money to invest have no way to reasonably project future returns given the propensity of government to arbitrarily take actions harmful to investors.
My father provided a family of 5 with one of those menial, low paying jobs at a papermill. My mother did not work. We lived a hell of a lot better than I am now with my college degree and my husband and both I working with 3 kids.
Its also a matter of national security to have a strong manufacturing base.
If you had common sense you would understand that.
I
Because a lot of those jobs were neither menial nor mind-numbing nor low-paying.
Phuk, I’ve had it. I’m only buying lead from now on.
Someone pointed this out to me last week on another thread. I’d supposed it was just housing, but last night I heard from a friend whose wife’s unemployment had run out, they’d been spending their retirement funds to make ends meet. It’s very, very tough out there.
If you HAVE a job - take all the cr@p they give you each and every day and hold on for dear life!
And even if we all do that, we’ll still be meeting one another in the future as Wal-Mart Greeters because we’ll need to work well into our 70’s and 80’s at this point...
Why do so many Freepers so miss millions of Americans working menial and mind numbing low paying jobs? I’ll never get it,
Because nearly half the population has a below average intelligence but still need a good enough job to keep body and soul together. Without jobs they’ll need to be supported by other workers who still have jobs.
Remember also Operation Twist - it’s lowering long term rates and punishing businesses that desperately need short term credit. Bailing out our bankers is hurting the rest of the economy.
We lost 22 million manufacturing jobs over the last 20 years due to trade policies that opened our markets and allowed the Chinese, employing mercantilist trade policies, to acquire a huge part of our manufacturing infrastructure and knowledge. Given that a factory job typically has a 3 to 4 multiple, had we not adopted these policies we would have another 60 million middle class jobs, a strong US economy, the manufacturing infrastructure to protect us if we ever have another major war where imports are cut off, and a much higher tax base. Unfortunately, the bankers on Wall Street became wealthy financing the gutting of our manufacturing base while the average US citizen has enjoyed a decade of declining standard of living.
Americans are falsely taught in school the Smoot Hawley Tariff caused the Great Depression so tariffs are bad. What they don’t tell you is that manufacturing exports at the beginning of the Great Depression in 1920 comprised only 2.5% of total GDP. From 1929 to 1932 GDP declined 45% and manufacturing output declined about the same percentage. If manufacturing exports comprised only 2.5% of the economy, and if retaliation for the Smoot tariff had been responsible for the loss 100% of our manufacturing exports (it wasn’t as our exports didn’t dry up), the most the tariff could have cost the economy was 2.5% of GDP. The remaining 42.5% drop in GDP was due to the downturn in domestic demand, not trade.
Go to a store or look around your house and see how many products you use are imported and how many are made in USA. Consider the difference in our economy if these products were made in the USA again.
We’ve experimented with globalist “free trade” for over 20 years and it has been a disaster for the middle class and while weakening our national security. Raise tariffs to 1980’s levels and rebuild US manufacturing. The US had high tariffs through most of its history to protect domestic industry. The result was the highest standard of living in the world. Our citizens are suffering from globalist trade policies, excess government regulation, and anti-business tax policies. Let’s admit the trade policies of the 1990’s and early 2000’s have been a disaster for the American worker. It is not to late to return to 1980’s prosperity.
As someone who has been called mutliple different kinds of names by certain FREEPERS, I can relate to that. It is even worse, because the illusion of wealth was created by borrowing money to pay for "your" apparent increase in wealth, meaning that someone is now getting a rent that he was not otherwise going to get, so he is going to stop working for a living and enjoy an easy life living off the interest that must be paid by the guy who borrowed to make you wealthy. So not only have "you" quite working to enjoy your newfound "wealth," but someone else has as well.
The economists identify three conditions for a free market - 1. no monopoly or monopsony 2. No externalities and 3. no information asymmetries.
In this case the government has a monopoly and monoopsony, and certainly is creating an externality on the market by bidding with taxpayer or printed money to create useless jobs in the place of useful ones.
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