Russell Sage Foundation Author/Grantee Edward Wolff Cited in NY Times Article About Record-setting Bull Market and Uneven Wealth Distribution
The party has been going for more than a decade. But a lot of Americans haven’t been celebrating.
Stocks crossed a major threshold on Wednesday, when the 10-year-old bull market arguably became the longest on record.
It ranks among the great booms in American market history. The Standard & Poor’s 500-stock index has soared more than 320 percent since emerging from the rubble of the financial crisis in March 2009, creating more than $18 trillion in wealth.
As the stock market surged, prices for homes — the most important source and store of wealth for the American middle class — recovered much more slowly from the Great Recession and housing bust. Incomes, too, have only recently surpassed pre-crisis levels, despite steady economic growth in recent years
“This is the decade in which wealth inequality has increased the most in U.S. history,” said Moritz Schularick, a professor of economics at the Bonn Graduate School of Economics in Germany who has written about the distribution of wealth in the United States. “The driver has been the very unequal gains in the very sharp performance of the stock market relative to the sharp drop of the housing market.”
There is some debate over whether this bull market technically deserves the award for the longest on record. Bull markets are defined as a stretch when the stock market rises without suffering a 20 percent drop.
At issue is a market run from October 1990 to March 2000, a 3,452-day period that was preceded by a slump of 19.92 percent. Wednesday, despite the S. & P. 500’s ticking down 0.04 percent, was the current upswing’s 3,453rd day.
Statistical sticklers, though, don’t round up, in which case that earlier boom started in December 1987 — a 4,494-day stretch that would retain the crown.