Awareness | Debate | Action
The Game Plan That Keeps You Screwed to the Wall
The Fed's monetary policy of low interest rates favor the financial/corporate/mega-wealthy oligarchy with an increase in the money supply which encourages speculation that overvalue assets that form economic bubbles that collapse.
Tax policy favor the financial/corporate/mega-wealthy oligarchy by increasing their money supply which encourages speculation that overvalue assets that form economic bubbles that collapse.
The except below is from Fed Policy Stealing From Our Future Part 2 (google it for the complete article).
Why is it that it appears we can do nothing but watch the rigged game without doing anything about it?
Not surprisingly, the Fed’s first foray into bubble economics between 1923 and 1929 endowed the speculative classes with an immense windfall that self-evidently could not be ascribed to pure market forces. During that six-year period, fully 70% of national income growth went to the top 1% of the population while the bottom 90% got only 15% of the gain.
After the New Deal soaked the rich with taxes and the Fed retreated to a more conservative posture in the immediate post-war period, Mr. Market generated far less egregious distributions of the growth. In the 1960s, for example, the national income pie was whacked up in nearly the opposite fashion, with the bottom 90% getting two-thirds of the decade’s income growth while the top 1% garnered only 10%. (h says, very much needed again.) Even during the Reagan decade of the 1980s, and notwithstanding the so-called “trickle-down” tax cuts, the top 1% obtained just 40% of the national income growth while a somewhat lesser share went to the bottom 90%.
During the Greenspan/Bernanke bubble of 2002-2007, however, the 1920s windfall to the speculative classes came roaring back: Nearly two-thirds of national income growth accrued to the top 1% while the bottom 90% ended up with comparative crumbs, obtaining just 12% of the gain. And when the figures for 2008-2010 eventually come in, they will undoubtedly best even the Roaring Twenties result: It’s likely that more than 100% of the income gains since 2007 have gone to the speculative classes since the population as a whole will have gone backward. (h says, what a great country we live in.)
By contrast, the Fed’s message to the saving classes is not only opposite, but it appears, perversely, to be working. This week’s release on personal income and spending showed that personal consumption expenditures were up 0.6% in March and that over the last three months they have increased by $146 billion, or at a 5.5% annual rate. On cue, bubble vision was quick to transmit the “consumer is back” sound bite, but failed to complete the sentence. The consumer is indeed back — right back to spending nearly every dime that comes in! During the three months ending in March — the period in which restaurants, retail chains, and bullish market strategists were on fire — the household savings rate declined by $139 billion, thereby accounting for fully 94% of the pickup in consumption expenditures. At that pace, the savings rate, which receded to 2.7% in March, will be back to zero by September. (h asks, looks like we are at it again, will we never learn.)
Tax policy favor the financial/corporate/mega-wealthy oligarchy by increasing their money supply which encourages speculation that overvalue assets that form economic bubbles that collapse.
The except below is from Fed Policy Stealing From Our Future Part 2 (google it for the complete article).
Why is it that it appears we can do nothing but watch the rigged game without doing anything about it?
Not surprisingly, the Fed’s first foray into bubble economics between 1923 and 1929 endowed the speculative classes with an immense windfall that self-evidently could not be ascribed to pure market forces. During that six-year period, fully 70% of national income growth went to the top 1% of the population while the bottom 90% got only 15% of the gain.
After the New Deal soaked the rich with taxes and the Fed retreated to a more conservative posture in the immediate post-war period, Mr. Market generated far less egregious distributions of the growth. In the 1960s, for example, the national income pie was whacked up in nearly the opposite fashion, with the bottom 90% getting two-thirds of the decade’s income growth while the top 1% garnered only 10%. (h says, very much needed again.) Even during the Reagan decade of the 1980s, and notwithstanding the so-called “trickle-down” tax cuts, the top 1% obtained just 40% of the national income growth while a somewhat lesser share went to the bottom 90%.
During the Greenspan/Bernanke bubble of 2002-2007, however, the 1920s windfall to the speculative classes came roaring back: Nearly two-thirds of national income growth accrued to the top 1% while the bottom 90% ended up with comparative crumbs, obtaining just 12% of the gain. And when the figures for 2008-2010 eventually come in, they will undoubtedly best even the Roaring Twenties result: It’s likely that more than 100% of the income gains since 2007 have gone to the speculative classes since the population as a whole will have gone backward. (h says, what a great country we live in.)
By contrast, the Fed’s message to the saving classes is not only opposite, but it appears, perversely, to be working. This week’s release on personal income and spending showed that personal consumption expenditures were up 0.6% in March and that over the last three months they have increased by $146 billion, or at a 5.5% annual rate. On cue, bubble vision was quick to transmit the “consumer is back” sound bite, but failed to complete the sentence. The consumer is indeed back — right back to spending nearly every dime that comes in! During the three months ending in March — the period in which restaurants, retail chains, and bullish market strategists were on fire — the household savings rate declined by $139 billion, thereby accounting for fully 94% of the pickup in consumption expenditures. At that pace, the savings rate, which receded to 2.7% in March, will be back to zero by September. (h asks, looks like we are at it again, will we never learn.)
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