Comparing Presidents, Net Asset Accumulation

This post looks at real net worth per capita. Data on net worth is the market value of assets owned by households and non-profit organizations obtained from the Federal Reserve. The data is converted from nominal to a 2000 base year using the CPI, and further divided by the population, obtained from the BEA’s NIPA Table 7.1. If you’re not happy about the inclusion of non-profits, well, neither am I – this is what the Fed seems to estimate.

In 1945, the first year for which data is available, the average net worth (nominal) of Americans was $5,084… in 2005, it was $186,389. Here’s what it looks like adjusted for inflation:

The series tends to trend upward over time, with a few blips here and there… the biggest is at the end of the dot com bubble. Aside from the size of the drop, the big surprise is that it went on for three years in a row, which seems very unusual.

Here’s what it looks like broken out by President.

And here’s a summary.

FYI… Nixon/Ford doesn’t show up because at 0.01%, the growth rate is just about zero.

So what is going on? Clinton and JFK/LBJ top the charts. They’re also the ones who top the charts, by some distance, on measures of economic growth
economic growth and personal income growth so its not surprising net asset accumulation was fastest with them. Reagan followed – he was fourth on economic growth, and third on personal income,
and he benefited from easy money so his spot is no shocker. Ike, in fourth, is a bit of a surprise… I’m guessing that has something to do with spending on recently discharged GI programs and Levittown constructions that made accumulation of assets possible. Additionally, Ike, was a pretty frugal sort, ranked two or three (depending on your measure) on paying down the debt; its possible that frugality was indicative of the country’s mood, or that Ike, with his bully pulpit, helped make it so. Of the four at the bottom, GW’s poor showing is a bit of a surprise; given the very low interest rates and extremely easy money policy the Fed maintained during much of his term so far, its frankly a surprise to me accumulation of net assets hasn’t been stronger under his term.

Next post on the subject… combining all the ownership society series.

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Correction… I’m embarrassed to say when I originally posted, I uploaded the three graphs from my previous post. Its been corrected.