Score a Great Deal During Memorial Day Sales -- Savings Experiment
A $12,000 Smartphone May Already Be in Your PocketThanks to the ownership society, families have never lost more in three months than they did between July and September of this year. And I have no doubt that when the numbers for the fourth quarter are totaled up, 2008 will go down as the worst year for destruction of family wealth in history.
How bad has the third quarter damage been? Household net worth fell $2.81 trillion, the most since records began in 1952, to $56.5 trillion. Real-estate-related assets declined by $646.9 billion, following a $217.1 billion loss. Owners' equity of real-estate holdings dropped to a record-low 44.7% in the third quarter, from 46% in the second quarter. With 1.9 million jobs lost in the last year and unemployment claims at a 26 year high, people are hurting.
You will remember back in 2004 when President George W. Bush boasted about the wonders of the ownership society. In case you forgot, he bragged about his June 2002 America's Homeownership Challenge to the real estate and mortgage finance industries to increase by at least 5.5 million families the number of minority homeowners before 2010. As Bush boasted, "under his leadership, the overall U.S. homeownership rate in the second quarter of 2004 was at an all time high of 69.2%."
With a $10 trillion loss in home equity and stock portfolio value in the last year, I wonder if those folks are glad to be part of Bush's ownership society.
Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter
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Reader Comments (Page 1 of 1)
12-11-2008 @ 8:37PM
Lona said...
It's really amazing how you can blame President Bush....what a stupid thing to say. President Clinton signed into law to relax the regulations for minoritys who couldn't afford the houses in the first place, to get the loans. The DEMOCRATIC controlled congress for the past 2 years did nothing when President Bush and McCain and others kept stating that since 05 the banking industry...fannie and freddie...to stop giving loans to people who didn't qualify for them. STOP WITH YOUR BLAME GAME....THE ELECTION IS OVER...THE MEDIA DID WHAT IT INTENDED TO DO TO GET OBAMA ELECTED...YOU HARPED AND HARPED ABOUT HOW BAD THE ECONOMY WAS...CAUSED PEOPLE TO LOSE JOBS.....PEOPLE STOPPED SPENDING AND WOW...THE ECOMONY TANKED...ARE YOU HAPPY NOW? WHILE CHRIS MATTHEWS AND KATIE COURIC ENJOY THEIR 6 FIGURES...WE ALL LOSE NOW....AND NO OBAMA WASN'T BORN IN A MANGER AND HE CAN'T HELP ANYONE BUT HIMSELF AND HIS WIFE AND HER 30,000.00$ RING! WHAT A HYPOCRITE
12-11-2008 @ 8:33PM
Sheldon L said...
So Bush had good intentions gone awry?
12-11-2008 @ 11:20PM
Maestro said...
Wow--that's a lot of debt!
12-11-2008 @ 11:37PM
MG said...
Republican greed has finally destroyed the middle class. it started with Greenspan and easy credit, accelerated with the repeal of Glass-Steagal and reached the critical stage with Bush's tax cuts for the wealthy and two costly, failed wars.
12-14-2008 @ 9:16PM
steve bourg said...
Lona is correct. Cohan, you forget that Pelosi and Reid in their infinite lack of wisdom made Bush irrelevant for domestic policy 2 years ago. And before that for 6 years, the Dems in the Senate blocked any entitlement reform. And along with that, you really didn't expect Bush to "unwind" the CRA regulations of Clinton's in 1995 and stop giving preferential loans to poor people did you? In sum, Bush's tax rate cuts for everyone in '01 and '03 helped our economy immensely, we need much more of that now but have no chance since Pelosi and Reid control the purse-strings of the American economy. Oh, and by the way, Obama's fiscal plan exactly mirrors that of the Communist Party USA's plan. Check it out on cpusa.org and you can stop wondering why investors are deathly pessimistic about the economy for years to come.