The article is inane. He seems to be implying that everything would be fine if the nasty rich people would just "spread the wealth" around a little more. It's kind of like you have a barren field and in one corner there is a big pile of manure. If you could just pread it evenly over the field, everyone would be better off. Sure they would, particularly the people who were in charge of deciding where the manure was applied aftertaking it from its rightful owner. Maybe just a little bit more for their corner of the field and those of their friends. After all, isn't that their right as overseers/ This is the essence of our brilliant President's economic theory. I recall seeing it in action in the epic movie Dr. Zhivago. Only it didn't work out so great. You see, an economy is complex. It runs on price signals and is driven by raw greed, ie the profit motive. Take those away and you get a big mess, like the old USSR. Things could work better here. There is no excuse for corporate CEO's to make tens or hundreds of millions when they take no personal financial risk. There is no excuse for the government to bail out big banks and let the same execs who drove them in the ditch not onoy stay on the job, but cash in big bonuses. Universities shouldn't create hyperexpensive ivory towers and expect the government to subsidize them, particulalry not when what they are offering can be done for basically nothing over the internet. None of that justifes wealth confiscation, which is the point of the article and progressives' next Big Idea. Get their hands on all those juicy IRA's and 401k's. After all, it's not fair that some were responsible and planned for retirement and others didn't.
I don't think that's where he's going. I think he's pointing more to the self-serving, corrupt machine that feeds itself and only itself, while ignoring the people because they aren't part of the machine. Conservatives like us talk all the time about the parasite class, but I would make an argument that this machine is the true parasite, as it lives off the people - buying votes to get itself elected so it can continue to write laws and gorge on the public purse. Greed is good (to borrow from Gecko) but greed and fear only function in the market when they are allowed to function without manipulation and distortion, and are forced to suffer for the mistakes of their own doing. By protecting them with the public purse, we have created a monster where no one is held accountable for any illegal, much less unethical, behavior. At least that's how I see it.
I believe the following paragraph is probably incorrect, though admittedly opinions differ with regard to effects of QE on income distribution. "For one of many examples of how we can begin to address this urgent crisis, the Federal Reserve’s Quantitative Easing (QE) program created $4 trillion, out of thin air, under the guise of stimulating job growth. However, since QE started the economy has lost over 10 million full-time workers. Most of the $4 trillion created through QE went to only 1% of the population. Clearly, giving another $4 trillion to people who already had a stunning $21 trillion in unused wealth was not an effective stimulus for the overall economy." The Fed has expressed concern over the possibility that the QE programs exacerbated the wealth distribution problem in the U.S., but it is as yet uncertain whether this is a significant problem. In the opinion of James Bullard, the St Louis Fed President, " [QE] had no medium-term implications for the U.S. income or wealth distribution -- it is only as good or bad as it was before the crisis ... [While QE lifts stock prices,] I would stop short of saying that this has made wealth inequality worse.” Although after the financial crisis the wealthy saw stocks and real estate largely recover their former values, and bonds rise in value, the effect of QE on incomes of the wealthy was minimal. Any such effect was somewhat offset by QE's affect on yields. The lowering of long term rates was of large benefit to the middle class home owner, however, by preventing rates on adjustable rate mortgages from rising and by rescuing the real estate market in general. Treasury borrowing tied to QE fueled other recovery measures too that also aided the middle class. Specifically, there seems to be no justification for this statement: " Most of the $4 trillion created through QE went to only 1% of the population." Although it is true that 1 % of the population saw disproportionately large increases in income following QE, that trend existed before QE, and its continuation can not be traced to QE. Nevertheless the Fed, according to Janet Yellen, remains vigilant and concerned over any possible effects QE might have on income distribution. I would add, that though it is a popular conception that the Fed created 4 trillion "out of thin air" that is not the case. The approximate 4 trillion was created out of additional public debt, which is nothing like "thin air". In economist speak, creating money out of thin air is called "printing"; money is simply printed and used to pay debts without being tied to new debt -- what Zimbabwe did! Every bit of the new Money generated by the Fed's QE program is tied to new debt, i.e., 4 trillion was borrowed by the Treasury, not printed. The treasury will pay interest to itself to the extent that the Fed returns interest earned minus expenses to the Treasury. The effect of this is to greatly reduce the immediate cost of borrowing, which would be far greater were the Treasury to try to quickly raise 4 trillion without the Fed as a ready buyer. As economic conditions improve the Fed may choose to sell more bonds than it buys, thus reversing QE.
First, the incomes of the wealthy weren't the beneficiary of rising asset prices, sure. Capital gains on the other hand, went through the roof. Unless you think the majority of the poor out there are raking in huge capital gains on their stock portfolios. Second, to properly gauge the effect of lowering rates on the middle class, you can't just focus on the small portion of home owners that had purchased way too much house for their affordability. You're taking out the millions of people that would have benefited from savings accounts that paid a better yield, for example, of all of the people who relied on fixed income CDs to live through their retirement. Try balancing the equation instead of focusing on one side, and you come to a different picture. This, of course, doesn't even consider the damage that will be caused by forcing people out of cash and into riskier assets to chase yield - like pension funds and the like. When this goes, and it will, they will incur catastrophic damage. What other factors in your "other recovery measures" also aided the middle class? Pray tell, so that we may examine them in turn. According to Yellen, yeah. "We know QE exacerbates the problem and we'd wish it were different, but excuse me, I need to leave the meeting so I can hit CTRL-P." Semantics. The Fed created $4 Trillion to buy assets it otherwise would not have bought (and thus not have created money for) had there been no QE. The fact that others who would have instead bought that debt can now spend their $4 Trillion on something else, creates money. Even Bernanke called it printing money. You are wrong, flatly.
More on the whole "money wasn't created" lie...I present the change in cash balances of domestic and foreign banks.
She was just sad for me, as her Mother and Father came here just as communism was gone there. Her Mom and Dad tee totally despise communism, and she said she's sad to see what she thought was perfect, about to go to civil war. I just met the Parents (help!), and they've gotta be the most freedom loving folks I've met. She's the same. Wouldn't vote for a dem, and asks me how they're "not in trouble," meaning jailed. She was trying to point out just how sad it is that a free guy like me, has to have $5,000 in canned food, in the land of freedom. I do hope she's close by when the shtf, so I can know she's at least with me, and not hurt somewhere. Is painful to type this, as I can see what's coming. And even I'm not ready for it... Is sad that a girl that was born into communism, is now a Woman who loves freedom, but really can't have it here anymore...
Bro!!! If I hear something in Russian, can I try to get it close to what I heard and send it to you for translation? I REALLY like this gal, and just wasn't expecting we'd get where we are... She does talk on the phone sometimes in Russian, makes a joke, and I don't know what was said. And thank God she didn't have her fingers making that small gesture!:eek: Oh, and what do I do about her smoking cigarettes? I know that's not looked as down upon as it is here, but damn! A pack and half a day on her days off!:eek: