Back at the top of the bubble, the middle class had $6 trillion more assets on the books. Considering the Mortgaged Middle Class now owns about $6 trillion in net assets, then the bursting of the housing bubble caused their net worth to drop by 50%.
Read the whole thing.
The other day, I said that our housing policy was based on a misconception that mortgage borrowing is the great savings vehicle of the middle class. In fact, the policies and programs that were designed to help people save by that means actually caused harm rather than good for the intended beneficiaries. Smith makes my point with data.
I was somewhat stunned to find myself a few weeks ago at a hearing where the other participants and the Democratic Senators were still acting as if showering the middle class with mortgage credit is a great and wonderful thing. It is worth repeating that this is a misconception.