The growing chasm between rich and poor in America – Latest data shows that 500,000 people were added to the food assistance program in one month. 6 million Americans added over the last year. Those that buy diamonds versus those that barely have enough to buy soup.
The shrinking of the American middle class is painful to watch. Shopping at the grocery store I’ve noticed more and more people with unique debit cards that don’t look like your typical debit or credit card. These are actually the modern day food stamps and help to take away the stigma of pulling out a pile of paper coupons. My anecdotal observations are confirmed by the data. Since September of 2009 we have added a stunning 6,000,000 Americans to the nationwide food assistance program. In fact, even as some are touting how great things are in the last month we added 521,000 more Americans to the food assistance program. Let me reiterate, we added half a million Americans to the food assistance program in the latest month of data. Is this really what we have in mind as a recovery? The latest data shows 43,000,000 Americans now receive food assistance. When we chart this data out it is rather startling.
How much does the average American make in 2010? Examining new data on U.S. household income numbers and high income earners. 100 million Americans make less than $39,999 per year.
Examining the average income for Americans sheds a very troubling light on what has happened to income over a very financially destructive decade. If we look at the median household income in the U.S. this actually underplays the falling behind of wages because we are looking at households with multiple people working. Without a doubt the median wage is bolstered by two income families but when we break this out, we realize how challenging things have gotten for most Americans on a very personal level. You might even be one of these people (the odds are good that you individually make less than $40,000 per year given that 66 percent of individual Americans make this amount or less). For this article I will be looking at recent income data from the Census, Social Security, and also examine tax receipts for the Federal Government. What we find is a pooling of money at the top while most Americans have found a smaller paycheck with much less employment security. One startling fact that I found looking at Social Security information was that 100,000,000+ Americans earn an average of $39,999 or less a year (66 percent of all Americans). When we break down the cost of daily living and what one would expect out of a middle class lifestyle we get a better understanding of why so many people feel that they are being left behind in a dust cloud of economic verbiage.
The era of mega banks – The growth of too big to fail. American banking system still backing over $13 trillion in assets with a negative deposit insurance fund. 7,760 banks but 19 banks make up 50 percent of the asset base.
The growth of the too big to fail bank is something that is modern to this era. In the 1990s there were fewer than 40 institutions that had total assets above $20 billion. In the late part of the 1980s and 1990s this number was below 20. The peak was reached in 2005 with 55 institutions having more than $20 billion in total assets. That number has fallen in recent years because of the crisis yet we have a handful of banks that control most of the nation’s banking assets. The total U.S. banking system as of today supports over $13 trillion in total assets. The FDIC insures these deposits with a deposit fund that is negative so it might as well be supported by pure faith. What makes up most of these assets are residential and commercial real estate loans. As we have discussed banks have yet to come to terms with the reality that many of these loans are not worth what they claim they are. First, let us look at the growth of too big to fail.
Catch 22 economics – The U.S. economy has 7,400,000 less workers than the peak in late 2007 yet nominal GDP is at a record. What does that mean for those without jobs?
The Friday jobs report was significant for a variety of reasons but one key theme is that it shows the true fragility of the state of the economy. Even though it was a net add of 39,000 jobs we need to remember that the nation needs to add roughly 150,000 jobs per month just to keep pace with population growth. Many economists agree that an unemployment rate over 8 percent is felt by virtually everyone in the economy. The average American is facing some of the most dramatic changes to our employment market in over a generation. While the recession on paper has been over since summer of 2009 most Americans would agree that the economy is still in deep problems. This is because most Americans would view a recovery with actual job growth. Yet when we look at the Gross Domestic Product (GDP) or the aggregate production of the U.S. we are back and growing. This dichotomy raises some troubling questions moving forward. Do we need as many workers to grow? GDP tells us that we don’t.