Monday, July 12, 2010

Recession is equal opportunity recession. Big wake up call to the wealthier.

Here's an interesting analysis of who are the most affected by the deepest recession since World War II. Everyone has been hit but it seems those hit the hardest or it's at least been the most impacted are the rich. The housing and stock market crash has hit the rich big time.

Robert Samuelson says the recession has hit everyone:
It has been the most egalitarian of all the 11 recessions since World War II. In various ways, it has touched every social class through job loss, pay cuts, depressed home values, shrunken stock portfolios, eroded retirement savings, grown children returning home -- and anxiety about all of the above. The Great Recession (as it is widely called) has changed America psychologically, politically, economically and socially. Just how will be examined and debated for years. Here comes a booming cottage industry of scholars, pollsters and pundits.
And it's probably been most impactful on the higher income folks. The housing bust and stock market downturn has hit them big time and changed their thinking and behavior.
Another theory -- more powerful, I think -- is that the Great Recession, though jarring to almost everyone, has been most disruptive and disillusioning to those who were previously the most protected. It punctured their cocoons so unexpectedly that they became more cautious and fearful, whereas those who even in good times faced job loss and income shifts (many blacks, the young and the poor) were less surprised. One legacy of the Great Recession is that insecurity and uncertainty have gone upscale. People feel more exposed. They tend to plan for the worst rather than hope for the best. Their reluctance to make major purchase commitments (a new car or home) validates their pessimism by retarding recovery.

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