EconomicGreenfield

In the October 22-23 Wall Street Journal, there was an article titled “The Wild Ride Of The 1%.”

This article discusses the fluctuations, and causes of fluctuations, of the wealth of the country’s most affluent.

While the entire article is worthwhile reading, I found the following excerpts to be particularly notable:

The American rich, who used to be the most stable slice of the personal economy, are now the most volatile, with escalating booms and busts.

also:

The super-high earners have the biggest crashes. The number of Americans making $1 million or more fell 40% between 2007 and 2009, to 236,883, while their combined incomes fell by nearly 50%—far greater than the less than 2% drop in total incomes of those making $50,000 or less, according to Internal Revenue Service figures.

also:

Rising debt plays a role. While the rich are often portrayed as thrifty “millionaires next door,” the era of low interest rates and easy money has turned them into a leveraged elite. The household debt of the top 1% surged more than three-fold between 1989 and 2007, to $600 billion, and grew faster than their net worth.

Add to that the growing arms race in conspicuous consumption and you get big spenders who are only one crisis away from financial ruin.

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1284.59 as this post is written

Yesterday the New York Times had an article titled “Recession Officially Over, U.S. Incomes Kept Falling.”  It discusses trends in real median family income over the last few years.

While the entire article is worthwhile, here are a few excerpts I found most notable:

In a grim sign of the enduring nature of the economic slump, household income declined more in the two years after the recession ended than it did during the recession itself, new research has found.

Between June 2009, when the recession officially ended, and June 2011, inflation-adjusted median household income fell 6.7 percent, to $49,909, according to a study by two former Census Bureau officials. During the recession — from December 2007 to June 2009 — household income fell 3.2 percent.

also:

The full 9.8 percent drop in income from the start of the recession to this June — the most recent month in the study — appears to be the largest in several decades, according to other Census Bureau data. Gordon W. Green Jr., who wrote the report with John F. Coder, called the decline “a significant reduction in the American standard of living.”

also:

One reason pay has stagnated is that many people who lost their jobs in the recession — and remained out of work for months — have taken pay cuts in order to be hired again. In a separate study, Henry S. Farber, an economics professor at Princeton, found that people who lost jobs in the recession and later found work again made an average of 17.5 percent less than they had in their old jobs.

“As a labor economist, I do not think the recession has ended,” Mr. Farber said. “Job losers are having more trouble than ever before finding full-time jobs.”

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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1194.89 as this post is written