Bubble Prices are not Wealth
Conservative sites are running with this story:
OBAMANOMICS IN ACTION: Typical US Household Worth One-Third Less Than Under Bush
Seriously? The bursting of the housing bubble, which actually began under Bush, is Obama's fault? Because that is what likely drove middle class household worth down (while the Fed-sponsored asset boom in financial instruments drove up wealth of the top 1%). I suppose one could say that the Republicans sponsored a bubble that helped the middle class while Obama is sponsoring a bubble that helps the wealthy.
I won't say this stuff is meaningless to the economy, because clearly they affect people's perception of wealth and thus spending and optimism. But sound long-term economic growth has got to come from stable and rational monetary policy that allows interest rates and financial assets to find their correct level. Getting political mileage out of bubble pricing of assets only creates incentives for politicians such that they will never stop fiddling with interest rates and credit.
