Although President Trump touts the current economy as an unprecedented success, the benefits are not being felt for most Americans. Most of the wealth lost during the 2007 to 2009 economic crisis has not recovered.
Many pundits and analysts have been praising the current economy, even if they are against President Trump. The economy has repeatedly been called ‘strong,’ with fears of a recession diminishing. However, could it just be that our expectations have completely plummeted? By any estimate, the economy today is anemic, producing little benefits for the vast majority of Americans.
Middle-class wealth still has not recovered to the levels seen before the Great Recession. The rebound in the home equity market has been severely lacking and wage growth has been meager at best. Even worse, income inequality has exploded since the Great Recession with most major income gains going to the top one percent of earners. This economy is ‘working,’ but it is being designed to work only for a small subset of American elites.
Looking at the Data
Federal Reserve Governor Lael Brainard reiterated these same concerns on Friday, providing us with a peak of soon-to-be-released Fed data. According to her remarks, families in the 40th to 70th percentiles had wealth (including their properties) of around $340,000 at the end of 2018. This is still significantly below what it was before 2007, and 13 times less than the average $4.5M held by the top 10 percent of earners. The disparity increases exponentially the higher up the ladder you go. Brainard says that it is harder for middle-class families to achieve any semblance of financial security. However, she does not go far enough in illustrating the even grimmer picture. The numbers are becoming extreme. Today, 0.1 percent of U.S. households own almost a quarter of money and property in the United States. The richest one percent own around 40 percent of all U.S. wealth, while the richest 200,000 families in America have as much wealth as the bottom 90 percent (294 million people).
A Strong Economy?
These are some damning statistics for a so-called ‘strong’ economy. Ultimately, many of the world’s largest companies, some of which are worth almost $1T, should be broken up since they are effectively monopolies. Facebook, for example, deserves to be decentralized and treated as a public good. Likewise, Google should be regulated and not be looking to boost its revenues when almost all internet infrastructure relies on it. Many of these companies do not even need figureheads. They can simply be automated without operating purely on a for-profit basis. Making them decentralized would take out the wealthy ‘dead-weight’ leading them. These are some basic steps we can take to stop this economy from continuing its decline. Decentralization is one step forward to changing the fundamentals of this current lopsided economy. Do you believe major corporate giants should be broken up and decentralized? Let us know your thoughts in the comments below.
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Anton Lucian
Raised in the U.S, Lucian graduated with a BA in economic history. An accomplished freelance journalist, he specializes in writing about the cryptocurrency space and the digital '4th industrial revolution' we find ourselves in.
Raised in the U.S, Lucian graduated with a BA in economic history. An accomplished freelance journalist, he specializes in writing about the cryptocurrency space and the digital '4th industrial revolution' we find ourselves in.
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