What I Learned This Week

A rising U.S. stock market widens the wealth divide—fueling social unrest and a weaker U.S. dollar.

The Federal Reserve’s September 2017 Survey of Consumer Finances carried the following stark illustration: the wealth share of the bottom 90% of families has fallen from 33.2% in 1989 to 22.8% in 2016, while the wealth share of the top 1% has risen from just below 30% to 38.6% over that same time periodThe booming wealth of the top 1%, which accelerated after the Global Financial Crisis, is largely a result of the inflation of asset prices, especially stocks, after QE. While the S&P 500 nearly doubled between 2012 and 2016, average annual U.S. real GDP growth was only 2.2%—roughly half the level achieved during the bull markets of the 1980s and 1990s.Moreover, as the chart attests, the…

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