Paul Krugman
June 15, 2012, 5:54 pm
Wealth Destruction

...Anyway, to make a not terribly original point, the SCF is useful because it gives us information on the distribution of net worth, not just its level. When it comes to level, we have another and more timely source, the Fed’s flow of funds data. And here’s what real net worth of households per capita looks like:



To say the obvious, the plunge in net worth took place under the previous administration; it bottomed out just two months after Obama took office, which makes it hard to claim that it was his fault.

The chart also illustrates just how much bigger the housing bust was than the tech bust of the early Bush years, which is why conventional monetary policy wasn’t enough to cope — and why we needed rising government employment and spending on goods and services, not the unprecedented austerity we actually got.

Finally, wealth growth during the Clinton years looks as if it was mainly real, with only a moderate bubble component; wealth growth in the Bush years was all bubble.

http://krugman.blogs.nytimes.com/2012/06/15/wealth-destruction/