The poorest half of Americans have nothing left, so now the 1%'s growth comes from the upper middle class
The Fed’s latest figures on American household wealth paint a rosy picture – in the aggregate. US households now own a record-breaking $107T worth of assets!
But drill into those figures and you’ll notice that almost all of this new wealth has landed in the pockets of the top 1% of households. That’s not unusual: America has been on a glide-path to oligarchy since the Reagan years. What’s also not new is that the share of wealth owned by the bottom 50% of American households has continued to fall, while their debts have continued to rise: the bottom half own 6.1% of all US wealth, while they are burdened with 36% of America’s debts. When you subtract debts from assets, the bottom half of US households account for only 1.9% of America’s assets.
What that tells us is that the top 1%’s growth can no longer come from the bottom half, the people whose political woes and economic anxiety do not provoke regulators or lawmakers to actions.
And indeed, when you look at the Fed’s quarterly figures, you see that the biggest decline in household wealth is now coming from the upper middle class, the 50%-99% of households, who are, basically, the last people left in America with piggybanks for oligarchs to empty.
There’s lots of ways in which wealth-transfers from the upper-middles to the super-rich are effected: while upper-middles might own stocks, they don’t get to buy into private equity funds or VC funds, where table-stakes are $5m. Meanwhile, the most common assets for the middles – CDs, savings accounts – have been stagnant for more than a decade, thanks to the Fed’s low-interest policies.
Meanwhile, the things that define middle-class life – quality health care, post-secondary education, decent housing – have soared in costs, far, far ahead of the modest gains experienced by the 50-99%. Those increased costs are largely due to market-cornering and price-gouging by companies that have been bought up by the private equity sector whose beneficiaries are almost exclusively the super-rich.