If you live in America, and not under a rock, you probably heard that the Fed announced earlier this week that U.S. wealth fell nearly 40 percent from 2007 through 2010. To be more specific, Bloomberg News explained it this way:
The financial crisis wiped out 18 years of gains for the median U.S. household net worth, with a 38.8 percent plunge from 2007 to 2010 that was led by the collapse in home prices.
There’s a lot behind those numbers. According to the Fed, nearly every demographic group lost wealth. That took nearly $50,000 in assets out of the average family’s “portfolio,” largely due to housing prices. We returned roughly to 1992 wealth levels.
I’ve said in these pages before that we are all part of one class looking to rise in the ways we choose — economically, socially, personally — and that the act of trying to rise is a shared experience. This data demonstrates the extent to which, in trying economic times, and despite best intentions and efforts, facing barriers to rising also can be a shared experience.
In light of that fact, this is the part of the blog where I say, “Can’t we all just get along?”
That’s too drippy, I know, but this kind of data does make one ask, are we really so different? We have a long history of separating the middle class from the “poor” or “lower class.” In fact, we’re desperate for that separation. We “escape” poverty. We rise into the middle class, and if we lose some ground, we’re “falling” into something we culturally consider shameful.
In addition, hundreds of articles and columns over the last two presidential cycles have noted that we won’t even talk about poverty any more. We focus on the middle class when we talk about the economy. When was the last time you actually remember poverty being the economic issue in a debate? A campaign ad? A riveting, memorable speech? I remember the last time I saw it. It was Tony Blair. In 1999.
Don’t get me wrong. A vibrant middle class is an essential piece of our economic engine. And I do not seek to propose poverty as some other economic option. Poverty is malignant. It prevents people from fulfilling their dreams and expressing who they really are and want to be. Over time, it can grind hope right out of us, and trap us in a cycle of learned helplessness in the worst cases, and learned hopelessness in so many more.
An 18-year loss in wealth teaches us something that the very poor have known for a long time. A crummy setback largely or completely outside of your control can have an overwhelming impact on your future, your children’s futures, and your ability to live your dreams.
A 40 percent loss in wealth reminds the rest of us of a truth that those born into poverty (and therefore more likely to stay there than at any time in about 50 years) live with every day. Even if you work really hard, play by the rules and live within the system, you may not break out of your place, despite that the American promise is supposed to be that you can do just that. Indeed, thePew Center on the States has shown that growing up in a neighborhood with extreme poverty dramatically increases your own likelihood of downward mobility, even despite your own income level.
Why the call for Kumbaya followed by the Debbie Downer litany? In this crazy time where the American political poles are growing at 100 times the rate that the actual poles are shrinking, this data actually gives us a chance to feel like we’re all in this together. Because we are.
And we’re never better than when faced with a common threat. The threat here is a complex, broken economy that is going to require all of our collective best thinking to fix. As we fix it, we can reverse not only what’s ailing the middle class, but potentially also that which has kept the generationally poor in an economic jail for at least three generations.
Lately, it sure seems that we can’t all just get along. But we’re all struggling along together. Sure wish we could act like it.