Newsflash: Federal Reserve policy is making the rich much richer.
Certainly that’s not something we need to harp upon for most of our readers, who understand exactly how the Fed printing trillions of dollars over the course of months has further bifurcated the wealth gap in the United States. But, what is worthy to point out is that the mainstream media now appears to be getting wise to the concept – and all it took to realize what was going on was billionaires reaping another collective $1.3 trillion while the rest of the country suffered from agonizing depression.
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For example, over the weekend, Bloomberg published a piece called “The Rich Are Minting Money in the Pandemic Like Never Before”. The sub-heading of the article simply said: “Country’s most well-off benefit from Federal Reserve policies”.
The report wonders how it is possible that some people are struggling for food, shelter and jobs while the rich cash in. “It’s a difficult thing to fathom,” the piece starts, but “there’s a whole class of people — at least the top 20% or so of earners — who’ve had to worry little about such matters.”
Clearly, the report’s authors don’t read Zero Hedge – because it’s not that difficult to fathom. In fact, it’s been going on for decades.
The report goes on to note how mortgage refinancing, working from home and the stock market has helped along the “haves” while the “have nots” continue to struggle. These wealth gains “obscure” the plight of the middle and lower class, which has seen hundreds of thousands of businesses shut down and more than 10 million unemployed.
Peter Atwater, an adjunct professor at William & Mary, said: “There has probably not been a better time to be wealthy in America than today. So much of what policy makers did was to enable those that were wealthiest to rebound fastest from the pandemic.”
Employment for the bottom quartile of workers, making less than $27,000 per year, remains 20% lower than January 2020 levels. 30 million adults lived in households where there wasn’t enough to eat, according to the report – up 28% since prior to the pandemic. In Louisiana, 1 in 5 citizens faces food scarcity.
Meanwhile, employment for the top quartile of workers earning over $60,000 per year has “already recovered to levels from a year ago”. Many of Americans were also able to redirect money they would have used on entertainment and travel to savings and investments. Thanks to the Fed, these types of redirections have paid off well.
Hilariously, Bloomberg places blame on the bifurcation to “challenges” regarding money distribution: “By easing credit conditions via the Fed, lawmakers were able to quickly prop up large corporations and wealthier individuals. But distributing aid to smaller firms and low-income workers has turned out to be a lot more challenging.” But, the truth is that it isn’t more challenging – the Fed and the government choose to distribute newly printed money disproportionately. The government doesn’t seem to understand the problem and the Fed simply doesn’t seem to care.