Recent Blog Posts
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The Times' Rorshach Geithner Story
Apr 27 20099:04am EDT -
Sinking Animal Spirits
Apr 27 20098:04am EDT -
Counter-cyclical Urban Policy
Apr 26 200910:04am EDT -
Be Your Own Counterfeiter
Apr 26 20099:04am EDT -
Being Tim Geithner
Apr 25 200912:04pm EDT -
Notes From a Press Conference Naif
Apr 25 20099:04am EDT -
What Good is the News?
Apr 25 20098:04am EDT -
Stressful Enough
Apr 24 20092:04pm EDT -
Not Regretting the Pound
Apr 24 20091:04pm EDT -
Introducing the New Ford Squeeze
Apr 24 20099:04am EDT -
Non-Economic Questions of the Day
Apr 24 20099:04am EDT -
The Stress Test Blind Alley
Apr 24 20098:04am EDT -
Happy Hour
Apr 23 20099:04pm EDT -
Recovery Without Rebalancing
Apr 23 20096:04pm EDT -
The Shape of Your Recession
Apr 23 20095:04pm EDT
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The Astonishing Growth of Bank Deposits
Paul Kedrosky finds this chart of total US bank deposits in a WSJ story about FDIC insurance. But step back a minute: just look at how total deposits have grown over the past ten years!
Since 2000, bank deposits have grown from just under $4 trillion to just over $7 trillion: that's an increase of $3 trillion, or $30,000 per household. And this during a time of record-low savings rates and soaring household debt. I'm quite sure that people aren't borrowing money just to deposit it in the bank, so what's going on?
I do think it's safe to look at this chart and see very obviously the effect of Alan Greenspan's loose monetary policy. We might not know whose deposits we're looking at, exactly - although the rise in uninsured deposits would certainly seem to indicate that it's the rich who got much of the benefit - but we do know that ultimately the money came falling out of helicopters courtesy of the Federal Reserve.
And maybe the next time someone asks George Bush to defend his economic record, he might do well to ask them how much money they have in their bank account today, compared to when he took office. Judging by this chart, there's a very good chance the number will have risen substantially.
