A new Fed survey and a new Joseph Stiglitz book remind us that we have yet to assess the long-term damage of the economic meltdown much less come to terms with it. Middle class families saw 40 percent of their net worth melt away between 2007 and 2010, according to a study by the Federal Reserve. Median net worth fell from $126,000 to $77,000, primarily due to plummeting home values. While the stock market recovered 91 percent of its 2007 peak value by 2011, home prices have remained deep under water. And a huge chunk of middle class net worth is locked into their homes. Since the wealthiest Americans have a much higher exposure to the stock market, they fared better. And the top 1 percent? They made money off the meltdown.
The middle class, however, was rocked all the way back to 1992 on the net worth scale. Their median income fell 8 percent, from $50,000 to $46,000. If you owned a house, the poorer you were to start with, the harder you were hit in the freefall. But higher-earning middle class families experienced a larger percentage loss of income than did lower middle class families, for reasons that are not yet entirely clear. It is possible that SNAP food aid and unemployment compensation played a larger roll by way of supporting lower income families in percentage-of-income terms. In some respects, it can be said that lower-earning families just did not have as far to fall. "
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