Record American Wealth?

Recently, the Federal Reserve reported that Household Worth hit a record $80.7 trillion dollars.  The Drudge Report headline said it all: "Boom: Household Net Worth Hits Record High..."

Now, if you read that headline and you are an average Joe or Jane in America, you are probably scratching your head because you just know, since this recession, that you are still hurting.  The report claims that the record wealth was due to improved home prices. Really? Home prices are nowhere near the record median price of 2005:

Then, too, there are more Americans in poverty than ever:

Add to that the fact that the median household income has fallen for 5 years in a row and you have to wonder what the Federal Reserve was smoking when they came up with that "record" wealth story. 

Well, the primary problem with the Fed's calculation is that it heavily weights stock market gains.  But, most of those gains primarily benefit the rich and rich stock market funds.  Even Obama had to admit that 95% of the income gains under his Administration went to the top 1%.

The bottom line is that the Fed's numbers are completely deceptive.  Americans are not better off now than they were before the housing bust and the recession. All that their Quantitative Easing initiatives (QE1, QE2, and QE3) did is benefit the wealthy individuals, hedge funds, and major corporations.  Meanwhile, all that spending never reached the little guys of our society. 

References:

Household Worth in U.S. Climbs by $2.95 Trillion to Record: http://www.bloomberg.com/news/2014-03-06/household-worth-in-u-s-rose-by-2-95-trillion-in-fourth-quarter.html

Median Income Falls For 5th Year, Inequality At Record High: http://www.huffingtonpost.com/2013/09/17/median-income-falls-inequality_n_3941514.html

Obama admits 95% of income gains gone to top 1%: http://money.cnn.com/2013/09/15/news/economy/income-inequality-obama/