Who's Most Optimistic in America? The Answer Will Break Your Heart - Pacific Standard

Who's Most Optimistic in America? The Answer Will Break Your Heart

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This is a finding that has turned up in a number of studies, and it's always fascinating:

Many of the demographic groups that have fared the worst during the recession—including young adults (ages 18 to 24), blacks and Hispanics—have the most upbeat assessments of their own economic mobility, their children’s economic prospects and the nation’s economic future.

This comes from a new Pew report called "The Lost Decade of the Middle Class: Fewer, Poorer, Gloomier," which just about sums up where things stand. "Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future," says the sobering rundown. "Fully 85% of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living."

And yet, as far as faith in the future goes, it's the hardest-hit groups who are looking up -- maybe because they see the most room for improvement? This is amazing when you consider how especially cruel the housing bubble and financial crisis were to blacks and hispanics. Between 2005 and 2009, white Americans lost about 16% of their wealth (assets minus debts)--a big hit, to be sure; but blacks and hispanics, whose assets were more heavily tied up in housing, lost 53% and 66%, respectively. Let that sink in a minute; it's one of the most devastating statistics I know of from a half decade full of devastating statistics.

This all gels, um, interestingly with another finding from a paper released earlier this year by some economists at the Chicago Fed. Here it is: "high-income individuals became more pessimistic than other groups during the Great Recession." 

When wealth and lack of confidence both concentrate at the tippy top of the socioeconomic spectrum, we have two problems: 1) Worried rich people become reluctant to go out and spend the heavily disproportionate share of the nation's wealth that they hold in their bank accounts, thus slowing down the chance of recovery; and 2) We get a weird political climate that puts popular unrest alongside frequent displays of the most powerful people's bruised feelings, as exemplified by genuine but utterly gobsmacking headlines like "Secret Fears of the Super-Rich," and "It's not easy being a hedge fund billionaire these days."

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