How America's Wealth Vanished

Americans aren’t worth as much as they used to be. Last week, the Federal Reserve survey of consumer finances found that the net worth of U.S. households declined 15% on average between 2007 and 2010. Because of changes in the distribution of wealth, the net worth of the median household declined even faster, falling from a peak of $126 thousand in 2007 to just $77 thousand in 2010—a drop of 39% in just three years.


That means that the median household was worth about the same in 2010 in as it was worth in 1992. The huge recent drop in household wealth is primarily due to the collapse in household prices in the recent recession. In the longer term the fall in household wealth has something to do with the rapid increase in the number of U.S. households in the early part of the decade. But the fact is that the total household net worth of the country fell sharply in the recession. In fact, it was the same at its low in 2009 as it was in 2004. The economic crisis, in other words, wiped out five full years of wealth.

As Paul Krugman says, you can’t blame this on President Obama. Household wealth began to collapse at the beginning of the recession in 2007, and started to recover just a couple of months after Obama took office. The truth is that the wealth gains of the Bush years were largely illusory. Even before the start of the recession the economy and real wages grew more slowly than in almost any period since the Great Depression. The dramatic increase in home prices during the housing bubble disguised the underlying weakness of the economy and made Americans feel richer than we ever really were.

U.S. household net worth chart from the Federal Reserve Bank of St. Louis

Stress is contagious–but resilience can be too

The way that you think about stress can actually transform the effect that it has on you – and others.

Big Think Edge
  • Stress is contagious, and the higher up in an organization you are the more your stress will be noticed and felt by others.
  • Kelly McGonigal teaches "Reset your mindset to reduce stress" for Big Think Edge.
  • Subscribe to Big Think Edge before we launch on March 30 to get 20% off monthly and annual memberships.
Keep reading Show less

Think of the closest planet to Earth... Wrong! Think again!

Three scientists publish paper proving that not Venus but Mercury is the closest planet to Earth

Strange Maps
  • Earth is the third planet from the Sun, so our closest neighbour must be planet two of four, right?
  • Wrong! Neither Venus nor Mars is the right answer.
  • Three scientists ran the numbers. In this YouTube video, one of them explains why our nearest neighbour is... Mercury!
Keep reading Show less

Horseshoe crabs are captured for their blue blood. That practice will soon be over.

The blood of horseshoe crabs is harvested on a massive scale in order to retrieve a cell critical to medical research. However, recent innovations might make this practice obsolete.

An Atlantic horseshoe crab in an aquarium. Photo: Domdomegg via Wikimedia Commons.
Surprising Science
  • Horseshoe crabs' blue blood is so valuable that a quart of it can be sold for $15,000.
  • This is because it contains a molecule that is crucial to the medical research community.
  • Today, however, new innovations have resulted in a synthetic substitute that may end the practice of farming horseshoe crabs for their blood.
Keep reading Show less

10 novels that brilliantly capture the American experience

The distance between the American dream and reality is expressed best through literature.

American novelist, writer, playwright, poet, essayist and civil rights activist James Baldwin poses at his home in Saint-Paul-de-Vence, southern France, on November 6, 1979. (Photo: Ralph Gatti/AFP/Getty Images)
  • Literature expands our ability to feel empathy and inspires compassion.
  • These ten novels tackle some facet of the American experience.
  • The list includes a fictional retelling of the first Native American to graduate from Harvard and hiding out in inner city Newark.
Keep reading Show less