The Reverse Robin Hood Recovery

Here’s why your politics and your investing outlook should never ride the same short-bus to that special school they’re enrolled in – the conventional wisdom about George W. Bush was that his “business experience” would mean a great boon to Corporate America and US businesses. Now of course, his laissez-faire policies of delegate and deregulate meant the end of the world for US companies as the free-for-all eventually took us off the cliff, but we’ll stop right there and get to Barack Obama.

The socialist Muslim President from Kenya was supposed to have been horrible for businesses and for the stock market and especially for rich people. “If Obama wins,” went the rhetoric in 2008, “we’re all screwed.”

Only the opposite happened.

The stock market, since Obama’s first election, has doubled in price and then some. Shareholders have received trillions in capital gains, stock buybacks and dividends as corporations find their cups runnething over and over and literally run out of places to stash all the extra profits and retained earnings.

And wealthy American households have never had it quite so good. In the aggregate, they have become rentiers, the French term for those with investment portfolios who essentially extract an income from the nation and return very little (in the form of jobs or spending) in comparison to what they take.

The recovery for the top 7% of US households (the wealthiest 8 million homes) has so completely exceeded the recovery of the bottom 93% that it’s laughable we all inhabit the same country – a night and day comeback indeed. In fact, from 2009 through 2011, according to census data and Pew Research, the bottom 93% of the country actually saw their assets shrink!

One could only look at the robust recovery for the top 7% side-by-side with the non-recovery of everyone else and conclude that Barack Obama has presided over one of the most winningest periods for the wealthy in US history and is akin to some kind of reverse Robin Hood, enriching the rich while the poor are evicted from their homes and remain jobless.

The unbelievable supporting evidence, from a new Pew Research report, is below:

Gains Non-Existent for the Bottom 93% through 2011

pew 0

During the first two years of the nation’s
economic recovery, the mean net worth of
households in the upper 7% of the wealth
distribution rose by an estimated 28%, while
the mean net worth of households in the lower
93% dropped by 4%, according to a Pew
Research Center analysis of newly released
Census Bureau data.

From 2009 to 2011, the mean wealth of the 8
million households in the more affluent group
rose to an estimated $3,173,895 from an
estimated $2,476,244, while the mean wealth of
the 111 million households in the less affluent
group fell to an estimated $133,817 from an
estimated $139,896.






If ANything, Wealthy Homes Took “Share” of the Nation’s Assets

pew 0.5

Wealth inequality increased during the first two years of the
recovery. The upper 7% of households saw their aggregate share of the nation’s overall
household wealth pie rise to 63% in 2011, up from 56% in 2009. On an individual household
basis, the mean wealth of households in this more affluent group was almost 24 times that of
those in the less affluent group in 2011. At the start of the
recovery in 2009, that ratio had been less than 18-to-1.









The Key Was to Have a Portfolio, Which Only Already-Wealthy People Really Do

pew 1

The different performance of financial asset and housing markets from 2009 to 2011 explains virtually all of the variances in the trajectories of wealth holdings among affluent and less affluent households during this period.Among households with net worth of $500,000 or more, 65% of their wealth comes from financial holdings, such as stocks, bonds and 401(k) accounts, and 17% comes from their home. Among households with net worth of less than $500,000, just 33% of their wealth comes from financial assets and 50% comes from their home.










The Gains from 2009 Were Not Equally Distributed At All

pew 2The total stock of household wealth in the U.S. increased $5.0 trillion from 2009 ($35.2  trillion) to 2011 ($40.2 trillion); all of these  aggregate gains, and more, went to households in the upper 7%. In 2009 households with a net worth of $889,275 and below (the lower 93%) had an estimated $15.4 trillion in wealth.

By 2011, households in the lower 93%
had $14.8 trillion in wealth. Meanwhile, at the
top of the wealth pyramid, the aggregate
wealth of the upper 7% rose from an estimated
$19.8 trillion in 2009 to $25.4 trillion in 2011
(a $5.6 trillion increase).As a result, the upper
7% of households owned 63% of the nation’s
total household wealth in 2011, up from 56% in 










Through the End of 2011, You Can Basically Point to the Portfolios of the Wealthy as Having Benefited

pew 3As with the Census data, the Fed data show a rise in wealth from 2009 to the fourth quarter of 2011. Likewise, the Fed data indicate that most of the growth in the nation’s wealth during that period was due to an increase in the value of financial assets. From 2009 to the fourth quarter of 2011,financial assets increased in value by $4.8 trillion (from $45.8 trillion to $50.6 trillion), accounting for nearly all of the $4.9 trillion increase in the nation’s net worth of households and nonprofit organizations.














Full report below:

An Uneven Recovery, 2009-2011 (Pew Research)

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.

What's been said:

Discussions found on the web
  1. isofrane rubber straps commented on Sep 21

    … [Trackback]

    […] Read More here on that Topic: […]

  2. bitcoin era reviews 2020 commented on Sep 23

    … [Trackback]

    […] Read More here to that Topic: […]

  3. bitcoin evolution review commented on Oct 02

    … [Trackback]

    […] Info on that Topic: […]

  4. Dank Vapes flavors commented on Oct 13

    … [Trackback]

    […] Read More Info here to that Topic: […]

  5. 사설토토 commented on Oct 16

    … [Trackback]

    […] Read More on that Topic: […]

  6. login to tangerine commented on Nov 17

    … [Trackback]

    […] Read More on that Topic: […]

  7. DevOps company commented on Nov 18

    … [Trackback]

    […] Read More to that Topic: […]

  8. Regression Testing Solutions commented on Nov 28

    … [Trackback]

    […] Read More on that Topic: […]

  9. 사설토토 commented on Dec 24

    … [Trackback]

    […] Information to that Topic: […]

  10. fake watches commented on Dec 29

    … [Trackback]

    […] Find More on to that Topic: […]

  11. replica watches commented on Dec 31

    … [Trackback]

    […] Read More here to that Topic: […]

  12. EarthQuake Subwoofers manuals commented on Jan 18

    … [Trackback]

    […] Read More to that Topic: […]