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All of these factors suppressed wage growth while jacking up corporate profits and increasing investment returns. The minimum wage started falling in real terms, and the government deregulated the transportation, telecommunications, and financial sectors. Corporations ballooned in size, and their tax bills fell, with big playersвЂ™ dominance of their respective markets becoming more absolute and the financial economy going global. The share of employees in blue-collar professions declined, as did the unionization rate, as manufacturing became automated and shifted offshore. The forces cleaving labor and capital were many and complicated. Then, work started to pay less and ownership to pay more. (Fun fact: The S&P 500 gained essentially no value during the вЂ™70s.) Inflation ate away at the earnings of working families, while stagnant asset prices squeezed high-income households. In the вЂ™70s, the United States economy was characterized by high rates of inflation, strong wage growth, and falling asset prices.

In some ways, this financial moment resembles the one that kicked off our grand, unequal age to begin with. But high interest rates are not going to build a more equitable economy either. Low interest rates helped bolster growth and employment, even if they fostered inequality. Does this mean a new economic equilibrium going forward, one less advantageous to capital and more advantageous to labor, less favorable for high-wealth rentiers and more favorable to regular-old renters? The uncomfortable answer is no. Rising interest rates and spiraling inflation might be killing off our age of asset capitalism, with no more 1.05 percent loans available for anyone, not even the richest of the rich. Animal spirits and a few hundred additional basis points have erased colossal sums of paper wealth in the past half year: $2 trillion and counting in crypto, $7 trillion and counting in stocks, uncalculated sums of home equity. And the economy might be on the verge of its second recession in two years, particularly if gas prices remain high. Financing for mergers, acquisitions, and start-ups has dried up.

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That has pushed equities into a bear market (because corporate profits are at risk and investors are pulling back to safe assets), the housing market into a correction (because mortgages have become much more expensive), and the tech sector into free fall (as many companies are being asked to deliver profits, for once). The Federal Reserve is hiking interest rates as it struggles to tamp down on inflation. The вЂњwhy not take the loanвЂќ days are at least on hold. Given low labor-force participation and sluggish wage growth, the United States has come to look like what the theorists Lisa Adkins, Melinda Cooper, and Martijn Konings have termed an вЂњ asset economyвЂќ-in which prosperity is determined not by what you earn but by what you own. That has made the small share of Americans capable of investing in homes, farmland, stocks, bonds, commodities, art, patents, water rights, start-ups, private equity, hedge funds, and other assets breathtakingly rich, fostering astonishing levels of wealth inequality. An extended period of low interest rates has translated into surging asset values. вЂњWhy not take the loan?вЂќ has been a pretty good summary of American wealth building and class dynamics in the past few decades. Zuckerberg got to preserve his Facebook holdings, load up with tax-advantaged debt, and benefit from rising Silicon Valley real-estate prices. But First Republic Bank offered him an adjustable-rate loan with an initial interest rate of just 1.05 percent-below the rate of inflation, meaning the financier was paying him for the privilege of lending him money. He was worth $16 billion at the time, meaning he could have bought that house and a hundred more outright, no mortgage necessary.

A decade ago, the Facebook founder refinanced his loan on a $6 million Palo Alto mansion. HereвЂ™s a bit of esoterica I think about from time to time: Mark Zuckerberg has a mortgage.

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