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.

  • dragontamer@lemmy.worldEnglish
    11·
    8 months ago

    Sounds like you’re speaking off of ignorance. Farm collectivization has led to some severe famines, but after the collectivization was completed those nations rarely saw food insecurity. China still hasn’t had major food insecurity since being collectivized. I think there are ways to prevent that from happening, because it hasn’t happened in every country that collectivized the farmland.

    China imported $104.6 billion in food alone just last year, mostly from the USA.

    They’re not the example you think they are. They are increasingly reliant upon imports (and USA’s capitalist system) for food security.

    Now there’s plenty of downsides to capitalism. But collecing fucktons of money to fund $Billion ventures is one of the good things that capitalism does exceptionally well. You’re arguing against literally Capitalism’s greatest strength here. Go poke a hole at all the other problems capitalism causes, you aren’t going to make progress on this front.

    BTW: China’s increasingly grown capitalist themselves, reliant upon huge bonds and stock markets to raise funds like the USA does. The debate is over, capital markets are widespread even in former Soviet Bloc’s and former Communist countries. And its been like that for decades.

    • rockSlayer@lemmy.world
      1·
      8 months ago

      Please read what I said again. The whole thing. I’m saying that the federal government of US doesn’t need to raise any money at all because of modern monetary theory.