Why stocks, crypto, and home values are all plunging at once

Here’s a bit of esoterica I think about from time to time: Mark Zuckerberg has a mortgage.

Or at least, he had one. A decade ago, the Facebook founder refinanced his loan on a $6 million Palo Alto mansion. He was worth $16 billion at the time, meaning he could have bought that house and a hundred more outright, no mortgage necessary. 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. Zuckerberg got to preserve his Facebook holdings, load up with tax-advantaged debt, and benefit from rising Silicon Valley real-estate prices. Why not take the loan?

“Why not take the loan?” has been a pretty good summary of American wealth building and class dynamics in the past few decades. An extended period of low interest rates has translated into surging asset values. 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. 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 “asset economy”—in which prosperity is determined not by what you earn but by what you own.