MatrixLeaks: June 2014

For most families, wealth has vanished



If you’re a typical family, you’re considerably poorer than you used to be. No wonder the “recovery” feels like a recession.

new study published by the Russell Sage foundation helps explain why many families feel like they’re falling behind: They actually are. The study, which measures the average wealth of U.S. households by income level, reveals a startling decline in wealth nationwide. The median household in 2013 had a net worth of just $56,335 -- 43% lower than the median wealth level right before the recession began in 2007, and 36% lower than a decade ago. “There are very few signs of significant recovery from the losses in wealth suffered by American families during the Great Recession,” the study concludes.




Wealth generally comes from two types of assets: financial holdings and real estate. Financial assets have more than recovered ground lost during the recession, thanks largely to a stock-market rally now in its sixth year. The S&P 500 index, for instance, has hit several new record highs this year and is up more than 25% from the peak it reached in 2007. Home values, however, are still about 18% below the peak reached in 2006, according to the S&P/Case-Shiller index.

Since wealthier households tend to hold more financial assets, they’ve benefited the most form the stock-market recovery, which itself has been assisted by the Federal Reserve’s super-easy monetary policy. Fed policy has been intended to help typical homeowners and buyers too, by pushing long-term interest rates unusually low and, in theory, goosing demand for housing. But a housing recovery is taking much longer to play out than the reflation of financial assets. That’s part of the reason the top 10% of households have held onto more of their wealth than the other 90% during the past 10 years. Here’s how different income groups have fared since 2003:

The Russell Sage data is based on surveys, and differs in a few important ways from data gathered by the Federal Reserve, which paints a rosier picture. The Fed’s numbers, derived from banking data, show that total net worth plunged during the recession but hit new highs in 2012, and is now nearly 20% higher than the prerecession peak. Since the Fed’s numbers aren’t broken down by income level, they don’t show whether more wealth has been concentrated among a smaller number of rich households.

The Sage numbers fill in that blank and do show that the top 10% of households control a larger portion of the nation’s total wealth than they used to. They also show, however, that every income group is still behind where it used to be, on average. The top 5% of households, for instance, have an average net worth of about $1.4 million — but that’s still about 16% lower than in 2007. The top 10% have an average net worth of about $763,000, down about 18%. Yet that’s far better than the median household, which has lost about 43% of its net worth since 2007. “Wealth inequality increased significantly from 2003 through 2013,” the study found.


By technical measures, the economy has been expanding since the middle of 2009, which is why economists label the past six years a recovery. Yet it’s the weakest recovery since the 1930s, with incomes stagnant, consumers reluctant to spend and employers skittish about hiring. Lost wealth has a lot of do with that, since people can’t spend money they don’t have, and they don’t feel like spending when they’re in the hole, anyway.

The wealthy do contribute to an economic recovery, but they can’t pull the whole economy up on their own. That requires a vibrant middle class spending en masse as their earnings and wealth climb. Maybe next year, or the year after that, or the year...




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The Home



Bodies Of 800 Children, Found at Former Irish Home For Unwed Mothers

In a town in western Ireland, where castle ruins pepper green landscapes, there's a two-metre stone wall that once surrounded a place called the Home. Between 1925 and 1961, thousands of "fallen women" and their "illegitimate" children passed through the Home, run by the Bon Secours nuns in Tuam.

Many of the women, after paying a penance of indentured servitude for their out-of-wedlock pregnancy, left the Home for work and lives in other parts of Ireland and beyond. Some of their children were not so fortunate.

More than five decades after the Home was closed and destroyed - where a housing development and children's playground now stands - what happened to nearly 800 of those abandoned children has now emerged: their bodies were piled into a massive septic tank sitting in the back of the structure and forgotten, with neither gravestones nor coffins.

Children at "the Home" in Ireland in 1924 (Connaught Tribune, 21st June 1924) Source: @Limerick1914 Photo: Supplied

"The bones are still there," local historian Catherine Corless, who uncovered the origins of the mass grave in a batch of never-before-released documents, told The Washington Post in a phone interview. "The children who died in the Home, this was them."

A campaign is under way to place a statue and memorial plaque near the site where the children were buried in County Galway, according to Irish Central.

The grim findings, which are being investigated by police, provide a glimpse into a particularly dark time for unmarried pregnant women in Ireland, where societal and religious mores stigmatised them. Without means to support themselves, women by the hundreds wound up at the Home. "When daughters became pregnant, they were ostracised completely," Ms Corless said. "Families would be afraid of neighbours finding out, because to get pregnant out of marriage was the worst thing on Earth. It was the worst crime a woman could commit, even though a lot of the time it had been because of a rape."

According to documents Ms Corless provided the Irish Mail on Sunday, malnutrition and neglect killed many of the children, while others died of measles, convulsions, TB, gastroenteritis and pneumonia. Infant mortality at the Home was staggeringly high.

"If you look at the records, babies were dying two a week, but I'm still trying to figure out how they could [put the bodies in a septic tank]," Ms Corless said. "Couldn't they have afforded baby coffins?"


                                                 Local historian Catherine Corless

Special kinds of neglect and abuse were reserved for the Home Babies, as locals call them. Many in surrounding communities remember them. They remember how they were segregated to the fringes of classrooms, and how the local nuns accentuated the differences between them and the others. They remember how, as one local told the Irish Central, they were "usually gone by school age - either adopted or dead".

According to Irish Central, a 1944 local health board report described the children living at the Home as "emaciated," "pot-bellied," "fragile" and with "flesh hanging loosely on limbs."

Ms Corless has a vivid recollection of the Home Babies. "If you acted up in class, some nuns would threaten to seat you next to the Home Babies," she said. She said she recalled one instance in which an older schoolgirl wrapped a tiny stone in a bright candy wrapper and gave it to a Home Baby as a gift.

"When the child opened it, she saw she'd been fooled," Ms Corless told Irish Central. "Of course, I copied her later and I tried to play the joke on another little Home girl. I thought it was funny at the time ... Years after, I asked myself what did I do to that poor little girl that never saw a sweet? That has stuck with me all my life. A part of me wants to make up to them."


She said she first started investigating the Home, which most locals wanted to "forget," when she started working on a local annual historical journal. She heard there was a little graveyard near what had been the Home, and that piqued her curiosity. How many children were there?

So she requested the records through the local registration house to find out. The attendant "came back a couple of weeks later and said the number was staggering, just hundreds and hundreds, that it was nearly 800 dead children," Ms Corless said.

The site of a mass grave for children who died in the Tuam mother and baby home, Galway, Ireland Photo: Niall Carson/PA

Once, in 1995, Ms Corless said in the phone interview, several boys had stumbled across the mass grave, which lay beneath a cracked piece of concrete: "The boys told me it had been filled to the brim with human skulls and bones. They said even to this day they still have nightmares of finding the bodies."

Locals suspect that the number of bodies in the mass grave, which will likely soon be excavated, may be even higher than 800. "God knows who else is in the grave," one anonymous source told local media. "It's been lying there for years, and no one knows the full extent of the total of bodies down there."





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