That's the essence of a lengthy and very informative essay by Quoth The Raven. Here are some extended excerpts. They may look dauntingly long, but they're right on the money (you should pardon the expression) and are well worth reading. If you're finding it hard to make ends meet, this is why.
The widening wealth inequality gap is the political third rail nobody in power truly ever wants to touch.
Politicians will scream at each other all day over taxes, healthcare, immigration, tariffs, student loans, climate policy, or whatever outrage is currently driving engagement on cable news and social media. But the second the conversation turns toward monetary policy, toward the machinery of money creation itself, the room suddenly gets very quiet.
That’s because monetary policy has quietly become the single most powerful force reshaping wealth distribution in modern America. And unlike the endless partisan theater surrounding fiscal policy, monetary intervention oddly enjoys remarkable bipartisan support.
Republicans and Democrats may pretend to be existential enemies on television, but when it comes to flooding the financial system with dollars, both parties reliably fall into line. And that support is precisely why this topic is politically radioactive: once people understand how the system works, the illusion of two competing economic ideologies starts to collapse. Republicans want less spending, Democrats want higher taxes…but both parties want the Fed to keep printing dollars.
. . .
Now we operate inside a permanently distorted financial system where trillions of dollars can be electronically created and injected into markets whenever instability appears. The market is no longer primarily driven by productivity or efficient allocation of capital. It is driven by liquidity. Price discovery has been replaced by intervention dependency and risk has been socialized while gains remain privatized.
And every time markets threaten to correct naturally, policymakers intervene to ensure asset prices do not fall far enough to inflict meaningful pain on the people who own the overwhelming majority of financial assets. And the consequences of this have been staggering.
While both parties bitch and moan about affordability, protecting the middle and lower class, and “equity”, one of the clearest signs of this Fed-created distortion is the explosive growth of the ultrawealthy class. According to The Wall Street Journal, there are now roughly 430,000 American households worth more than $30 million, including approximately 74,000 households worth over $100 million. The growth of these groups has dramatically outpaced overall population growth over the past several decades.
In other words, Fed policy, blessed by both political parties, is widening the wealth inequality gap both political parties claim to fighting against ... When it comes to purchasing power, we are literally taking from the poor, and giving to the rich.
. . .
Beneath the culture war circus exists a deeper bipartisan consensus: financial markets must remain inflated at all costs.
And the lower and middle class gets absolutely brutalized in this arrangement.
Historically, middle-class wealth accumulation depended on disciplined saving, stable employment, affordable housing, and gradual investment appreciation over time. But inflationary monetary regimes destroy the reliability of all of those pathways. Savings become punishment, cash becomes a melting ice cube, young people are forced into speculative assets (or outright becoming gambling addicts) simply to attempt to preserve purchasing power. Conservative investing gets punished while reckless leverage gets rewarded.
Entire generations now feel compelled to try and make quick money in markets not because they are greedy, but because monetary debasement has made traditional financial prudence nonviable. This creates an economy built less on productivity and innovation and more on asset inflation, debt expansion and outright speculation.
. . .
A market that cannot survive without permanent monetary life support is no longer a healthy market, it is a managed dependency system. A patient on hospice care. And every bailout pushes the reckoning further into the future while making the eventual consequences even worse.
There's more at the link. It's a long article, but well worth reading in full.
My take-away from this article is that if every American took the time to read and understand it, we'd have a Second American Revolution almost overnight. It's precisely because most Americans don't understand what is being done in their name by their political leaders (who are enriching themselves in the process, at our expense) that our current miserable monetary situation has been allowed to develop. I fear that unless and until we kick out those responsible, it'll just go on until it collapses . . . but such a collapse would take us with it, and punish everybody, not just the guilty.
What can we do about it? Elect a better class of politician, on both sides of the political divide. Will we do that? I fear too few of us care enough to make the attempt . . . and that's what our current politicians rely on to keep their place in the sun.
Peter
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