Economists say the rising stock market is giving an added boost to consumer spending through what is known as the "wealth effect."

Key Points

  • The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
  • All of the gains came from stock holdings thanks to an end-of-year rally.
  • Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”

The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.

The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.

While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.

  • givesomefucks@lemmy.worldEnglish
    2·
    6 months ago

    What’s crazy is the reason people believe in it, is total coincidence.

    Bill Clinton thought it was a good idea and republicans just implemented it wrong, and then when he was president the dotcom boom happened and everyone gave credit to Clinton’s policy. It stopped being a conversation on if it worked, and became how best to implement it.

    Like when Biden did the “child predators” bill, it wasn’t harsh punishments that got crime under control, it was the normal effect of banning leaded gasoline 20 years earlier. But we’re left with two “tough on crime” options even though that approach just doesn’t work.

    In both cases it’s reminiscent of cargo cults, a good thing happened, so we just repeat what we were doing when it happened and expect the good thing again.

    But with how long political careers are and how slow science moves, by the time we can prove it, they’ve built huge careers off the false assumption they had something to do with it. For them to admit they’ve been wrong, they have to realize they spent decades doing the wrong thing and while they had good intentions they’ve been causing harm.

    That’s a big ask for anyone, but especially for someone whose over 60.

    So they ignore all evidence and double down even harder

    • Snot Flickerman@lemmy.blahaj.zoneEnglish
      1·
      6 months ago

      That’s a big ask for anyone, but especially for someone whose over 60.

      Interesting that you reference Bill Clinton, because he is actually on record on realizing some stuff he did was the wrong choice. Specifically the idea of treating food as commodities and not a human right. Not that that invalidates your point, just an interesting note.

      “Food is not a commodity like others,” Clinton said. “We should go back to a policy of maximum food self-sufficiency. It is crazy for us to think we can develop countries around the world without increasing their ability to feed themselves.”

      Clinton was 61 years old in 2008.

      • givesomefucks@lemmy.worldEnglish
        01·
        6 months ago

        Uhhh…

        I mean it’s good he’s admitted to some mistakes.

        But I really don’t see how African food subsidies applies to domestic economic policy…