On June 11, 2012, Don Lee writes in the Los Angeles Times:
“The Great Recession took such a heavy toll on the economy that the typical American family lost nearly 40% of its wealth from 2007 to 2010, shaving the median net worth to a level not seen since the early 1990s.
“The Federal Reserve said in a new report Monday that median family net worth, the point smack in the middle of those richer and poorer, fell to $77,300 in 2010 from $126,400 three years earlier after adjusting for inflation.
“The fall came with the collapse in the housing market and massive layoffs that slashed people’s incomes, and the pain was felt by families across the board — young and old, well-educated and less so, with children or not.”
The Federal Reserve report stated: Overall median net worth 38.8 percent between 2007 and 2010. The 7.7 percent decline in median income was most pronounced among more highly educated families, families headed by persons aged less than 55, and families living in the South and West regions.
Hopefully, economists and political leaders now recognize that capitalism is not self-regulating and requires an institutional structure to guide successful democratic capitalism that empowers ordinary Americans to participate in the full income-producing earnings that real physical productive capital formation can produce as products and services. The role of the Federal Reserve should be the last guarantor.
http://www.latimes.com/business/la-fi-mo-economy-wealth-20120611,0,5418853.story
