Thread by @Noahpinion

Greetings, my fellow Americans! Today's @bopinion post is about the Great Recession, wealth inequality, and the death of the American Dream:

bloomberg.com/view/articles/…

Here's a picture of how wealth has changed at three levels of the distribution: the bottom 50%, the middle 40%, and the top 10%.

As you can see, the bottom group has been devastated, the middle group has stagnated, and the top group has resumed its upward climb.

Keep in mind, this doesn't represent wealth changes of *individuals* from those groups; it represents changes in how much wealth you have to have to be in each part of the distribution.

So it shows growing wealth inequality.

But it also shows the impact of the financial crisis.

2008, and the recession that followed, turned a 60-year-long narrative of broadly shared rising wealth into a narrative of massive inequality.

It clobbered the American Dream.

Why did 2008 destroy the wealth of the middle class, while mostly sparing the upper class?

One big reason: the middle class has its wealth in housing, the upper class has its wealth in stocks. And housing has done much worse than stocks since 2008.

minneapolisfed.org/institute/work…

And even though housing recovered somewhat, a lot of middle- and working-class people didn't get to share in that recovery, since they lost their houses.

Remember that the Tea Party began with a rant against the government bailing out homeowners who had been hurt in the crash.

Well, Rick Santelli won. The Tea Party won.

So how do we restore the American Dream of rising wealth? In an era of slow productivity growth, it'll be hard.

One way is to distribute stock ownership more widely.

We could also try to use housing as the vehicle for middle-class wealth again, but this is tricky and perilous.

But we had better try SOMETHING, because as things stand, a huge percentage of Americans no longer see a bright future ahead of them. They must feel like peasants in a world built for lords.

That's not a recipe for social peace.

(end)