Just when you think Alan Greenspan's legacy couldn't get any worse, it does. How about creating racial tensions by blowing out the wealth gap?
The wealth gaps between whites and minorities have grown to their widest levels in a quarter-century. The recession and uneven recovery have erased decades of minority gains, leaving whites on average with 20 times the net worth of blacks and 18 times that of Latinos, according to an analysis of new census data.
The analysis shows the racial and ethnic impact of the economic meltdown, which ravaged housing values and sent unemployment soaring. It offers the most direct government evidence yet of the disparity between predominantly younger minorities whose main asset is their home and older whites who are more likely to have 401(k) retirement accounts or other stock holdings.
"What’s pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade — because that was the American dream — are seeing big declines," said Timothy Smeeding, a University of Wisconsin-Madison professor who specializes in income inequality.
The median wealth of white U.S. households in 2009 was $113,149, compared with $6,325 for Latinos and $5,677 for blacks, according to the analysis released Tuesday by the Pew Research Center. Those ratios, roughly 20 to 1 for blacks and 18 to 1 for Hispanics, far exceed the low mark of 7 to 1 for both groups reached in 1995, when the nation’s economic expansion lifted many low-income groups to the middle class.
The white-black wealth gap is also the widest since the census began tracking such data in 1984, when the ratio was roughly 12 to 1.
"I am afraid that this pushes us back to what the Kerner Commission characterized as ‘two societies, separate and unequal,’" said Roderick Harrison, a former chief of racial statistics at the Census Bureau, referring to the 1960s presidential commission that examined U.S. race relations. "The great difference is that the second society has now become both black and Hispanic."
We discussed the Fed- and government-created wealth gap in more detail here. Racial unrest is an inevitable consequence.
I see it firsthand in DC - I'm not talking about the black bureaucrats pressured into the Maryland suburbs with their bubble houses, manicured lawns and Lexus leases... I'm talking about my neighbors in Southeast. Most of whom are normal 9-5ers trying to afford the mortgage on their $150,000 townhouse in the hood.
Gentrification is a bitch. And they've got their sights on SE now that they've "successfully" gentrified the remainder of DC. I'd rather go to the burbs for my grocery shopping than lose my sweet ass parking lot spot to a Whole Foods. NIMBY!!
I'm half tempted to start a non-profit foundation called "Keep SE Hood" to keep these developers out of my little corner of town. Because as soon as they figure it out, they'll be ripping down my fantastic, renovated 1940s-era building for live-work lofts that are more in line with property prices in the other three quadrants of DC.
Have I mentioned 1 bedrooms are going for $4000 in NW these days? I'm having major SF dot-com era flashbacks. And that didn't end well.
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