Washington’s eyes were on the Federal Reserve this week: It announced modest plans to revive the feeble economy after a two-day policy meeting. But while the Fed’s expansion of its asset-purchase program, Operation Twist, was what made headlines – another, underreported narrative has recently emerged from the central bank’s vaults. Reid Cramer, the director of New America’s Asset Building Program, highlighted new data from the Fed’s recently released Survey of Consumer Finances that illuminates how much the Great Recession exacerbated wealth inequality in the U.S. The takeaway: It was even worse on wealth than on income. Wealth is comprised of an individual’s assets –homes, cars, savings and investments.
According to the survey, the average family’s wealth dropped 39 percent between 2007 and 2010. But not for families in the top 10 percent of income earners: Their net worth jumped up by nearly two percent, Cramer wrote in a blog post.
“While we have known for years that median incomes have stagnated even as there were income gains at the very top, the re-concentration of wealth is an emerging phenomenon,” he explained. “And it appears that the Great Recession has changed the dynamics at play.”
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