Which is the more important statistic: A 36 percent decline in U.S. median household net worth since 2003, or a 43 percent decline in that same statistic since 2007?
The average person would certainly be more concerned about the latter, which represents an annual drop of about 7 percent compared to the less than 4 percent per year seen in the past decade. But apparently if you’re a reporter or editor at the New York Times, the former statistic is of far more interest, while the latter doesn’t merit a specific numerical mention.
Why? Because the since-2003 stat includes four years of the Bush 43 administration operating with a Republican Congress, giving the Times the ability to present the precipitous decline in net worth and the increased wealth inequality resulting from it as some kind of bipartisan phenomenon — even though the U.S. median increased from 2003-2007.
The trouble is, the underlying research summary the Times’s Anna Bernasek cited in her writeup (“The Typical Household, Now Worth a Third Less”) is pretty clear, both at its beginning, and in its conclusion, that the problematic years have been those since 2007, which “just so happens” to be the year Democrats took control of Congress and the Senate in Washington.
Here is the opening paragraph of the research study summary published by the Russell Sage Foundation (bolds are mine):
The Great Reession caused an unprecedented decline in wealth holdings among American households. Between 2007 and 2009, average housing prices in the largest metropolitan areas fell by nearly one-third, as measured by the Case-Shiller home price index. Stock prices also collapsed, with the Dow Jones Index losing nearly half of its value between mid-2007 and early 2009. These developments were exacerbated by a doubling in the unemployment rate from 5 to 10 percent between December 2007 and October 2009 and a large reduction in earnings due to increased unemployment, wage and hour cuts, and furloughs.
2003 doesn’t get a mention until the fifth paragraph.
The summary’s final paragraph reads like a thinly veiled indictment of the post-recession economy:
The American economy has experienced rising income and wealth inequality for several decades, and there was little evidence that these trends are likely to reverse in the near-term. It is possible that the very slow recovery from the Great Recession will continue to generate increased wealth inequality in the coming years as those hardest hit may still be drawing down the few assets they have left to cover current consumption and the housing market continues to grow at a modest pace.
In other words, the authors are acknowledging as an established fact that the “very slow recovery from the Great Recession” generated increased wealth inequality. Thanks, Barack Obama.
The authors may have a point about long-term wealth inequality, but the Gini coefficient calculated at the Census Bureau each year tells us that income inequality barely budged from roughly 1993 (when methodologies were changed, making comparisons before that time difficult), until the Great Recession and its “very slow recovery” — slower than every post-World War II recovery by miles, and almost as bad as the awful post-Great Depression years of the 1930s. If income inequality is rising now, it’s largely — not entirely, because illegal immigration and unfair trade also play significant roles — because public policy has constrained economic growth and opportunity.
Below on the left is the graphic the Times deigned to show in Anna Bernasek’s article. On the right is Russell Sage’s 10-year wealth table:
No bias there. (/sarcasm)
Cross-posted at NewsBusters.org.