Dems, GOP warily eye news of falling family wealth
WASHINGTON – Democrats and Republicans are wary of trying to exploit a new report about the sharp drop in household wealth over the past 20 years.
The economic report, released just as the presidential race is heating up, was stunning: The Great Recession shrank Americans' wealth so much that, in 2010, median family net worth was no more than it had been in 1992 after adjusting for inflation.
Two decades of accumulated prosperity had vanished, mainly because of falling home prices, the Federal Reserve reported Monday. Surely this was fodder for Republican Mitt Romney's claim that President Barack Obama has presided over economic calamity and should be replaced.
Or, might it instead bolster Obama's argument that Republican President George W. Bush oversaw the collapse of American prosperity and handed the new administration an economic nightmare from which it is still trying to recover?
By late Tuesday, the smartest minds in both campaigns seemed to conclude that the guts of the report were too complex, too old and too tricky to exploit for political ends.
Obama made only a passing reference to it at a fundraiser in Maryland. "The plunge in housing prices," he said, has "put enormous strains on people all across the country."
"What we have been able to do over the last 3-1/2 years, after a decade in which we have been moving in the wrong direction, is to begin to point towards a trajectory where here in this country everybody is getting a fair shot," the president said.
Romney, asked about the Fed report on Fox News, gave a vague response. "People are having hard times in this country," he said. Obama, he said, should "go out and talk to people in the country and find out what's happening."
In his reply about a report that focused on household wealth, Romney avoided the word "wealth."
GOP insiders suggest it was no accident, pointing out that Romney — who has a personal fortune estimated as high as $250 million — isn't the best messenger to be talking about overall family wealth dropping.
The Fed's survey of family finances found that median net worth declined from $126,400 in 2007 to $77,300 in 2010. The median marks the point where half had more and half had less.
From a campaign standpoint, the report presented challenges for both parties. For starters, it's stuffed with statistics, talk of adjusting for inflation over 20 years, and discussions of "median" and "mean" averages.
The study did not go beyond 2010, so it captured a relatively brief period in which Obama's policies were in full effect. The report noted, "The survey data are largely unaffected by changes in economic activity since 2011 — in particular, the rise in the market price of corporate equities, the relative stabilization of house prices and the start of a decline in the unemployment rate."
Some Republicans say it would be hard for Republicans to exploit the findings considering that much of the period studied was in the Bush and Clinton years. These Republicans say no one will buy that it's Bill Clinton's fault and blaming Bush gives Obama an opening.
Obama's allies, meanwhile, seemed reluctant to pursue that opening, with some Democrats saying that party strategists decided it was too complicated and too risky to invite voters to blame previous presidents, but not Obama, for the drop in family fortunes.
For months, Obama has walked a careful line. He reminds voters that the economic collapse was in full fury when he took office in January 2009. But he agrees that he must shoulder much of the responsibility for where the economy goes from here.
Republican consultant Chris LaCivita said the Fed's report is not destined to play a big role in the campaign. "Overall, it's just another bullet point in a growing list of bullet points of how bad things really are," he said. "And that should be used to demonstrate the need for economic change."