Tags: Federal Reserve | income | depression | economy

Yahoo Columnist Newman: Fed Has Been 'Unable to Prevent Income Depression'

By    |   Sunday, 21 September 2014 05:15 PM

Economic-research firm IHS Global Insight forecasts that real median household income won't return to its 2007 peak until 2019.

That represents the longest period of stagnation for purchasing power since the Great Depression of the 1930s, and it doesn't speak well of Federal Reserve policy, says Yahoo columnist Rick Newman.

"The stark disparity between the return of jobs and wealth, on one hand, and depressed incomes, on the other, shows the limits of the Federal Reserve’s ability to stimulate the economy," he writes.

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Household wealth rose 1.7 percent in the second quarter to a record $81.5 trillion.

The Fed's massive easing program has boosted stock and home prices, aiding primarily the wealthy, Newman says.

"That's why some aggregate economic data looks pretty good. Huge gains at the top pull up the averages," he writes.

"But the most aggressive Fed action ever has been unable to prevent an ongoing income depression. Of course, incomes might have been even lower had the Fed been less aggressive."

The central bank has taken a lot of heat lately for its monetary stimulus. But Paul Volcker, who served as Fed chairman from 1979-87, still holds the institution dear.

"I consider myself the Joe Louis of the Federal Reserve, always defending himself," he said at a recent economic conference, The Dallas Morning News reports.

Volcker was referring to the champion boxer of the 1930s and '40s. "The Federal Reserve maintains a respect and independence that is very unique," he said.

Editor’s Note: New Warning - Stocks on Verge of Major Collapse

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Economic research firm IHS Global Insight forecasts that real median household income won't return to its 2007 peak until 2019.
Federal Reserve, income, depression, economy
266
2014-15-21
Sunday, 21 September 2014 05:15 PM
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