New Inequality Data Is a Gift to Campaign Sloganeers
The Fed developed a data set that throws wealth disparities into high relief.
Bloomberg, July 16, 2019
Attention AOC, POTUS, Treasury Secretary Mnuchin, and whoever becomes the Democratic nominee for President:
Have I got an economic data series for you!
The Federal Reserve Board of Governors has just made available a huuge run of information on U.S. wealth distribution, and it has something for everyone. You can now cherry pick your favorite series from the Fed to best support your philosophical views on just about anything – taxes, wealth, and inequality.
Introduced by a research earlier this year, “The Distributional Financial Accounts of the United States,” 1 is an older aggregate data series sliced into much finer pieces. It will be a game changer for whichever side figures out how to best use it in the 2020 presidential elections. (Do I have your attention yet?)
It allows the sort of deep analysis on wealth and how it is distributed in America (total assets, net worth, liabilities, etc.) that previously had to laboriously done by hand.2 No more! The Fed has made it much easier to analyze wealth inequality, breaking down the percentiles distribution of assets dating back to 1989; the new data series will be released quarterly.3
Making it even easier is Federal Reserve Economic Data, aka FRED. Every wonk’s favorite government data source, FRED is maintained by the research division of the Federal Reserve Bank of St. Louis. It breaks the data down in the Financial Accounts wealth table into various percentile brackets (top 1, next 9, next 40, and bottom 50).
Why does this matter? As anyone who has every toiled in the morass of economic data can attest, FRED makes it exceedingly easy to access, analyze and display economic information. This is the raw material that can be fashioned into campaign slogans about the state of the economy and how wealth is distributed in America. You can find something to support any view of our economy – whether you are AOC or Secretary Mnuchin. I expect a “Cambrian Explosion” of wealth analysis, courtesy of this new data series. The examples of what any campaign can do with this rich collection of data are limited only by their imaginations.
See the full column here
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1. Please cite this paper as: Batty, Michael, Jesse Bricker, Joseph Briggs, Elizabeth Holmquist, Susan McIntosh, Kevin Moore, Eric Nielsen, Sarah Reber, Molly Shatto, Kamila Sommer, Tom Sweeney, and Alice Henriques Volz (2019). “Introducing the Distributional Financial Accounts of the United States,” Finance and Economics Discussion Series 2019-017. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2019.017.
2. “Financial Accounts of the United States,” better known as Federal Reserve’s Z1 report, is an aggregate measure of household wealth released quarterly. Survey of Consumer Finances is another wealth distribution measure, put out by the Fed every three years.
3. It has added 216 quarterly series on the distribution of U.S. household wealth from the Distributional Financial Accounts release from the Board of Governors.
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I originally published this at Bloomberg, July 16, 2019. All of my Bloomberg columns can be found here and here.
