1. Branko Milanovic:

There are very good reasons to study distribution of net wealth, globally and within countries. Even for those people in the rich world who are “anomalously” placed among the wealth-poor and who may lead nice lives despite owning nothing, a shock in the form of a medical emergency (unless there is public health care), or loss of job may have catastrophic consequences. There is just no wealth to fall back on to tide you over the bad times. A decline in the value of the main asset (housing) had similar consequences for many people in the US during the recent crisis. Finally, wealth, especially when we look at the rich, is the source of both economic and political power. It is not people who are running huge, and hard to repay, credit card debts, who are likely to be “players” by contributing to the political campaigns, influencing policy and setting legislative agenda.

It was hard to excerpt. Read the whole thing. Pointer from Mark Thoma.

2. The Washington Post:

Just over a decade ago, homeownership — the single biggest engine of wealth creation for most Americans — reached a historic high for African Americans, nearly 50 percent. Now the black homeownership rate has dipped under 43 percent, and the homeownership gap separating blacks and whites is at levels not seen in a century, according to Boston University researcher Robert A. Margo.

…For a substantial number of African Americans who remain homeowners, their properties only hurt their net worth. According to the Fed survey, 1 in 7 owed more on their mortgages than their homes were worth in 2013, a sharp increase from 2010.

By comparison, just 1 in 18 white homeowners was underwater, an improvement from 2010. Also, African Americans own fewer businesses, stocks and other equities than whites — assets that have all recovered sharply since the recession.

Some of us dare to suggest that the government should encourage saving, rather than home borrowership. The housing lobby drowns us out.