THE WOLF STREET REPORT: The Rich Got Richer in the Pandemic. Why?

Over 30 million people lost their jobs between mid-March and mid-May. But the wealth of America’s 600+ billionaires ballooned by $434 billion. How did this happen? You can also find the podcast on Apple Podcasts, Spotify, Stitcher, Google Podcasts, iHeart Radio, and others.

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  171 comments for “THE WOLF STREET REPORT: The Rich Got Richer in the Pandemic. Why?

  1. leanfire_Queen says:

    Way too premature.
    The everything bubble will turn into an everything crash hurting those same billionaires the most.

    It’s not over until the fat lady sings.

    • Stan Sexton says:

      Unless they buy silver or gold. But most just buy assets like real estate. They want to own the world.

    • Trinacria says:

      Yes indeed “leanfire Queen”, and I can hear the “fat lady” clearing her throat and starting to warm up those vocal cords !!!

      Thank you Wolf for another good report/info.

    • Bobber says:

      You must have been sleeping the last 10 years. Every time the market drops a little bit in the name of price discovery, the Fed has intervened to artificially prop asset prices. Clearly, the Fed will do this again if stocks drop in the future. They’ll print money, and give it to the wealthy. There’s a clear long-term pattern.

      It’s really idiotic, because all this does is increase financial instability in the system. They’ll keep pushing the limit, until there is a mega financial crisis, so bad that the country falls completely apart.

      • Say It aint so says:

        Bobber..Not meaning to be negative…but what is it going to take for the Fed to be ineffective???

        • Rcohn says:

          Collapse of the dollar

        • Bobber says:

          Rcohn is correct in my opinion. A collapse of the dollar leads to inflation, and the only way to fight that is by increasing interest rates. They can let inflation run, but this will create massive strife within the population that wouldn’t last for long.

          Contrary to popular belief, the US dollar is not the cleanest dirty shirt. It is getting soiled more and more each day, relative to foreign currencies. The US deficits as a percentage of GDP are massive relative to other countries, and there is no end in sight.

          Any day, the dollar could begin a precipitous drop, which would only be a catch up adjustment to consider deterioration of USD fundamentals over the past two years.

          Gold is rising fast. There is a reason for this. Inflation expectations are rising. It starts with a spark, then you have a forest fire.

      • Trinacria says:

        Well Bobber, the other folks responding pretty much summed it up. Yes, the Criminal Reserve does intervene to patch up the drops, I realize that, I’m not Rip van Winkle. However, this comes and will come at a great cost – the dollar is on the proverbial sacrificial altar. The greed of the folks in charge has negated any good sense they may have had. I believe if significant inflation is unleashed, then serious social disorder follows, which concerns me greatly. Will be the huge cost to society. This is why I say the fat lady is clearing her throat. I guess I had to spell it out…

      • Mr. Ralph Hiesey says:

        It is sickening to watch as Wolf describes what is so obvious–for which so few seem to pay any serious attention.

        Bobber, I think you are right — the whole tower of $100T of so called “wealth” in the US will eventually- be recognized what it is– only of pieces of paper –oh sorry!–computer memory chips which hold absurd promises to pay someone, somehow, from somewhere unknown, five times the US GDP now on steroids, promises which are now beginning to be laughed at by serious buyers–thus requiring the Fed to take their place by printing money (oh sorry!) filling computer bits that promise to throw pretend money to buy the stuff that the Fed was afraid no one was now available to prop up..

        ……. extend and pretend at its most absurd.

    • 2banana says:

      Big businesses love big government

      The uber rich love big government

      The bigger, the better.

      Cheap and easy money goes to those in the front of the line.

      Those in the back get $800,000 crack shacks.

  2. fred flintstone says:

    Unfortunately or fortunately depending on your view. Wealth almost always is arrogant . So eventually after it abuses those without……they are hung up on hooks. As our middle class struggles more and more due to internationalism and those at the top continue to collect ungodly bonuses for running the empire……..the pressure continues to build.
    IMO when these dolts decide to gut social security when it runs out of cash…..the crap will hit the fan. I suspect a wealth tax of 4 percent is just the start. Estate tax of 90 percent will be hard to argue against.

    • California Bob says:

      re: “… those at the top continue to collect ungodly bonuses for running the empire …”

      At first I read ‘ruining the empire’ … perhaps that is what you intended?

    • John says:

      Please do it. Our founding fathers never imagined the corrupting influence that virtually unlimited money had to buyeven more unlimited money.

      • Richard says:

        Actually they did. That’s why our country started on the gold standard. Currency devaluation is not a new phenomena.

    • 2banana says:

      Gut social security?

      This was done under LBJ to make the deficits for the Vietnam War look smaller.

      Social Security went from an independent and self funded program to part of the overall federal budget.

      There is NO social security lockbox. There are NO accounts, with your name on it, with the money (and your employer match) went into to.

      ALL that money has been spent.

      All that is left is IOUs.

      • Rob D says:

        What is the real difference in these IOU’s than run of the mill treasuries?

        The money will have to be borrowed to pay both at maturity. What’s the big deal?

      • Wolf Richter says:


        Nonsense. SS funds are invested in Treasury securities, just like other pension funds are invested in Treasury securities. The only difference is that these Treasury securities in the SS Trust Fund are “non-marketable” securities, which only means that they cannot be traded in the bond market, which means that they don’t need to be “marked to market” every day. At maturity date, the SS trust fund gets face value from the Treasury, just like all other holders of Treasury securities, including me from time to time.

        This SS fearmongering is BS and needs to stop.

        • Petunia says:


          I agree with you SS is not going away yet, but if you have been paying attention lately, they definitely want to chip it away bit by bit. This latest payroll tax deferral is a small chip. They will give you a break on the taxes, which you may have to pay back or not, or they may extend your retirement age.

          The retirement age extension idea came from a former Bear Stearns executive, Minerd, in an interview. If I was a suspicious person, I would guess he was out testing the waters.

        • Ralph Hiesey says:

          Wolf, I 100% agree that virtually all the SS fearmongering is BS. But the exact reason is not easy to explain–which explains a lot of the BS.

          What is hard for people to understand is that ALL SS payment money must come out of PRESENT taxes –both payroll and general taxes. It has ALWAYS been that way. None of it has EVER come out of a lockbox–an illusion that the SS founders propagated in the 1930’s to sell the program, but were afraid to tell people. The SS treasury fund tries to cover this truth with a trust fund–but that also scares people, I think unnecessarily.

          I know– it’s hard to believe– but that’s the way ANY effective retirement program must work–and it’s the reason SS is BETTER than many alternative retirement programs.

          In simplest possible terms: the economic resource to pay retirees benefits in the PRESENT must always be taken from resources from the PRESENT economy, not from the economy that may have happened 40 years before. That’s how SS was designed. It now comes partly from payroll tax, and partly from general tax funds.

          The one worry with SS or any retirement program is that we do have to trust that the economy will be in decent shape to afford it when our retirement time comes. Otherwise no matter what retirement program you have, including $10M in the bank could be worthless if the economy is in shambles. Our best and only hope for SS is to keep the economy in decent shape–and keep the SS fearmongering from ruining it.

        • Zantetsu says:

          Hi Wolf, is JSRG just an alt for your account that you use to create fake drama in the comments section? Legitimate question, because the way you moderate sure makes it seem that way …

        • Wolf Richter says:


          The answer is no.

          JSRG has been commenting here for years. He’s very smart and knows a lot of stuff, and is a good writer, and when he isn’t trolling my site, he posts some really good and funny comments, and I love those comments.

          His trolling stuff gets cut into two piles: one pile I delete, and you never see it. The other pile, I respond to because he gives me an opportunity to clarify things or be publicly pissed off or whatever. This part isn’t about him, but it’s for the entertainment of our readers. Some readers are looking forward to these jousts (some have said that in the comments). I think he gets a kick out of doing this, and so do I, and I think we both understand our roles.

        • nodecentrepublicansleft says:

          Thank you Wolf. SS is near and dear to my heart.

          First of all, a country that could flush $1B/week down the toilet for decades for the bloody, expensive unnecessary war in Iraq II shouldn’t take Grandma’s $600/month.

          (**Note: Iraq didn’t have WMDs and was not involved in 9/11, but 15/19 hi-jackers were from Saudi Arabia).

          Second, even 30 years out, it’s still funded at 70% current #s.

          Lastly, it’s the most successful social program in US history, cutting elderly poverty by half or more!! IT WORKS.

          PS: Without SS (which my Dad paid into for 40 years and didn’t get to take a cent out), I would have ended up in an orphanage. We can’t let these greedy SOBs ruin everything.

      • wkevinw says:

        The Trustees now project that OASDI annual cost will exceed total income beginning in 2021—one year later than projected in last year’s report—and continuing throughout the projection period. After the projected trust fund reserve depletion in 2035, continuing income would be sufficient to pay 79 percent of program cost, declining to 73 percent for 2094.


        Several government officials have made public statements before congress saying that dollars will be paid out, but the value of those dollars is not guaranteed.

  3. Panamabob says:

    Wolf your report pulls no punches but sadly no one can change these policies except the politicians in Washington D.C. How can that ever happen since those same politicians crafted all this crap.
    I fear we are in a losing battle until this all blows up someday and we find ourselves in a Deep Depression, Civil War, or some other horrible event.
    Capitalist systems can get out of control as we have seen in the past with excesses of wealth, monopoly, etc. They were dealt with then through regulations of corporations and Progressive taxes(90%+ in the 50’s).
    I hope it will happen again but fear that we have a lot more suffering before the onset.

    • Wolf Richter says:

      I’m trying to do my little thing to apply a tiny little bit of pressure to move things in the right direction. If enough people push a tiny little bit in the same direction, something might actually move.

      • Panamabob says:

        The very few dedicated politicians are a rare breed and are way outnumbered. I used to vote for Marci Kaptur from Toledo until I moved to Michigan circa 1986. She was principled then and is true to form being the longest woman Representative in Congress. Her net worth is squat from not taking the deals thrown to the takers in her pier group.
        Today both political machines only pump out sociopaths to run for office.
        Not much to get excited in the world of US politics in this century.

        • MonkeyBusiness says:

          The only right action here is to push for collapse. Why? Because the other direction is one step forward and 10 steps back.

        • nodecentrepublicansleft says:

          I disagree and don’t believe the false equivalency (aka bothsiderism).

          For me the modern GOP has almost nobody of any value, but I have found a few folks on the Democratic side of the aisle that actually care about and fight for regular people.

          I’m fortunate. My family didn’t try to force me to follow a political party. I know too many people who either got brainwashed and follow blindly Mom & Dad’s “team” or rebel against the same.

          It’s too bad more people don’t have my experience. I was left to my own devices to develop my own beliefs. I don’t care about political parties, just good people and good ideas.

          Sadly, over the last 2 decades or so, the GOP isn’t offering anything or anybody of use. At least the Dems have a few good people. They offer a more likely path forward than a group that could put forth a dangerous and destructive imbecile like DJT.

          He will do down in US history as the person who:
          1) Disbanded the cabinet level Pandemic Response Team;

          2) Defunded CDC and other groups stationed in China, etc. to deal w/pandemics;

          3) Threw the Pandemic Playbook (aka Pandemics for Dummies) in the trash (since Obama left it for him to use);

          4) Called Covid-19 a “hoax”, said we’d be “down to 0 cases soon”, “the virus will just go away”, refused to wear a mask for 6 months, etc, etc, etc,

          Hundreds of thousands dead, dying and sick people while we have NO NATIONAL STRATEGY. This incompetent buffoon spends his time tweeting, golfing and watching Fox “news” while the nation burns to the ground.

          What more do you need to see? What more evidence do you need that this is not both sides? The House can’t force this imbecile and the Senate to act.

          DJT crapped the bed on the Covid-19 response and the GOP owns him and all of the death and destruction he has brought forth.

          What “excites” me in US politics? Getting the incompetent madman who drove this ship onto the reef off the ship. You want to fix things? Start with the biggest, most obvious problem first.

    • Joe in LA says:

      I think the age of riot is upon us. Tens of millions of productive people are now being thrown away by American capitalism. They join the previously thrown away, and that’s an awful lot of people — maybe 100 million able-bodied Americans with nothing at all to lose.

      These folks don’t have jobs at which to strike for better pay, they don’t have money for rent, they can’t afford anything, and there is no way for them to sell their labor. Locked out, their best option is to riot. It’s the rational thing to do. Start with the freeways, disrupt everything, and go from there.

      As Donald Trump famously asked: What have you got to lose?

      • 2banana says:

        Riot….for what end?

        So that power mad mayors and govenors open their economies?

        Or more free stuff from government?

        • rankinfile says:

          Well,they can’t very well commute to their jobs that were sent overseas.
          What did you think an entire generation was just going to lay down and die by the dumpster?

        • Joe in La says:

          Riots are uncommon in periods of productive economic expansion, for the obvious reason that labor is in demand and can leverage increases in wages with strike.

          During periods of less production of capital and more circulation (rentier capitalism), labor can’t strike effectively because it is in surplus. America has just this labor surplus now, and more and more money is being devoted to rents (financial and otherwise).

          Everything is getting more expensive and 100 million people have no effective way of selling their labor for a living wage. This creates the context for riot.

          You may not like it, but rentier capitalism ends up in chaos and violence. This is the Boston Tea Party of 1773, which I am sure you, no doubt, regard as a demand for “free stuff” from the Crown. In reality, it was a riot about the price of things.

          America is using mass incarceration and police to contain the surplus labor problem. How long will that work? The spreading pattern of riot suggests — not long.

          The young in America are getting bounced checks from the American dream, and they are connecting with populations who got their bounced checks earlier. This explains the mass support for BLM that led to weeks of riot in Portland.

          I’m an older guy without kids, so I don’t have a horse in this race. But it’s fascinating to watch and try to understand. If you have a better explanation for current events, I’d love to hear it.

        • Jon says:

          Riot for what end ?

          If I am one of the disadvantaged one with no future for myself and my future generations.
          If I am one of the honest hard working people whose livelihood and quality of life has been feed to the greed of the rich to me them richer
          If I see my life is desolate and the rich people are raking in billions and billions

          Then, so what I may achieve nothing, I’d make sure these elite don’t sleep in peace.

          Remember, Fear most the people who have nothing to lose and thus nothing to fear subsequently.

      • Erle says:

        Blaming Capitalism for this mess is beyond refusal to read economic history.
        These leeches are getting richer on paper by the actions of a central bank that was rejected twice before and must be again to save what is left of productive capital in the US.

        • wkevinw says:

          People like to blame “capitalism” whenever something goes out of balance in the US economy.

          The father of free market/”capitalist” thought, Adam Smith, wrote extensively about monopoly problems and many other items.

          Monopolies, etc., not ever thought of before?

          Not. Even. Close.- ~1750 is when they were being examined.

          If there is a problem with the “American” form of markets, it is usually a failure of regulation. Regulation is needed, but if done poorly will destroy practically anything.

          The usual analogy is playing tennis without a net. I think you can see the ridiculous outcomes that are possible. Sensible regulation= just put up a sensible net.

        • eg says:


          It’s hard to get any net set up (let alone a sensible one) when you have players paying the referee NOT to put one up …

      • Nate says:

        Next up, a shooting war with China to take care of all those extra One Child Policy boys they have floating around over there and all our Gotta have a Riot types. Nice economic crash to make the Army the only employment option. Hate it when stuff lines up like this. A long shot I hope.

    • sunny129 says:

      ‘Capitalist systems can get out of control’

      True Capitalist system with transparency and price discovery wouldn’t let system run amok. What we have is Crony capitalist (share holder) being managed by FEd without allowing price discovery and keeping the price of capital arteficially LOW! Not to mention suspension of Mkt to Mkt accounting standard

      Our good ole genuine American Free Mkt Capitalism breathed it’s last in the March of ’09, thanks to our Federal Reserve system!

    • NBay says:

      Agree. Also per the above many founding fathers DID know the dangers posed by corporations, and they were severely restricted and monitored and then completely disbanded when their charter (purpose) expired.
      The “borers” (now called lobbyists) went to work immediately and by Lincoln’s time he said, “….the corporations are enthroned……and all the wealth will be in the hands of a few and the Republic destroyed”.

      To me, they are merely sovereign fascist states, allowed to exist within so-called democracies, with immense power, accountable only to this mythical “free market” they now write the rules for.

      • NBay says:

        That’s “agree” with Panamabob… both posts…..sheesh…..this commenting moves fast.

  4. BrianC - PDX says:

    I wonder if this is a linear relationship or not. If 30 Million *more* people lose their jobs, will Billionaire wealth increase by another ~430 Billion? Maybe it is exponential… after the next 30 Million lose their jobs maybe the wealth will increase by $4300 Billion?

    Maybe as the percent working with jobs goes to zero, the wealth creation becomes infinite?

    Maybe we will find out!

  5. carbpow says:

    For US citizens to upend the government and make radical change would take radical action. Currently they are like the frog in water being boiled so slowly he doesn’t notice his own imminent death.
    The most radical action I can think of that MAY result result in change would be this. Everyone vote to reelect all incumbents in Congress and reelect Trump.

  6. William Smith says:

    I am really surprised that none of the gangstas have tried to “rub you out” because of your squealing on their scams. I wonder what the “opiate of the masses” is that keeps ’em all (the “rubes”) so firmly asleep that the gangstas don’t have to care about any squealers. We are headed for a revolution: thank goodness for the second amendment!

    • RightNYer says:

      Which is exactly why the “elites” of both parties support disarming the people. They don’t want millions of people fed up with their corporate cronyism and other treason showing up in D.C. with AR-15s.

      • Zantetsu says:

        I don’t want that either. I want the changes to happen peacefully. And before you say that there is no way to make these changes peacefully, I will point you to Ghandi and MLK as two examples of the most superlative humans who figured out how to do it. We can as well.

        • RightNYer says:

          “Peace and friendship with all mankind is our wisest policy, and I wish we may be permitted to pursue it. But the temper and folly of our enemies may not leave this in our choice.” – Thomas Jefferson

      • baldski says:


        And the government in DC shows up with a M1 Abrams tank to go against your AR-15. How many Abrams have you got? The government has over 6,000 and building more.

        • RightNYer says:

          The tanks are staffed by people on the side of ordinary Americans, not the elite.

        • wkevinw says:

          baldski- this is a typical argument, and is as usual overly simplistic.

          The point is that if the M1 tank is ordered to be used, a few things will happen.
          1. military personnel who will be in the tank will evaluate the order for i. being lawful ii. having to live with the consequences
          2. Many/most Americans will go ahead and try to engage the battle (e.g. with ARs). The mess will be horrific- thus the military leaders and rank and file will ask the question- to what end?

          The garbage in Waco is a case in point. What stupidity by the government. The church people in Waco were wackos and the government was completely made a fool of by them- lots of lives lost because people in the government don’t understand these simple consequences.

          That’s one reason for the 2nd amendment, but not the only one.

  7. roddy6667 says:

    If a billionaire loses 90% of his money, he still has $100 million left. Joe Sixpak and Larry Lunchbox don’t fare so well.

  8. polecat says:

    600+ billionaires ..

    Hang em all by their ill-gotten bootystraps!

  9. Bobber says:

    When was the last time the US had a president who made decisions for benefit of working people, as opposed to Wall Street and big business?

    Trickle down theory and lip service doesn’t count.

    • rankinfile says:

      Hope and Change?

    • Panamabob says:

      I’m old enough to know, it happened before Reagan. Then we got deregulation, first huge deficit increase(that has never stopped), interest rates through the wazoo, breaking the first Union air traffic controllers, etc.
      It’s been a 40 year scam, glad I bought gold and silver a dozen years before and added until retiring

      • NBay says:

        The Heritage Club, (I mean Foundation) was the main Club that brought you Reagan….and still sending out the nominations and $$$$s.

        I always liked what other “club members” said about Teddy Roosevelt……”He is against anyone that has more money than he does”

  10. MCH says:

    Not to worry, the rich will not be allowed to become richer if they are in CA. Enter AB2088. But with Covid blowing a hole in the budget of state governments, I can see where this is going to go. After all, who would possibly oppose this.

    Everything is awesome.

    • rankinfile says:

      This additional is just to keep the civil servant class in their paychecks and benefits.
      I hate to break it to people but the latest generation of have-nots view the civil servant class as rich too.
      If the tax money doesn’t go to where it needs to be the riots will grow exponentially.

      • MCH says:

        Well, Wolf pointed to the biggest problem which is the Fed causing unsustainable push into assets, exacerbating the income inequality in this country. The fiscal stimulus also hasn’t helped. I think if there is one thing that everyone agrees on is that zombie companies should die, the shareholders need to take the haircut.

        The insanity that was Hertz was literally unimaginable just a year or two ago. But hey, way to go Robinhood… nice job Robbin’ the Hood.

      • eg says:

        When civil servants at current pay levels are considered rich, that is some indictment of the private sector.

  11. SaltyGolden says:


    I feel like you tend to be apolitical in your reporting and I appreciate it, yet this seems like the most overtly political report you’ve put out.

    Why now?

    • sierra7 says:

      We cannot exclude the “political” in our discussions anymore because it is the political legislation (by both parties) that has plunged us into this morass.
      De-regualtion, saturated financialization of much of our economy; globalization of the labor ranks with nowhere to go when all the good paying jobs are moved to the lowest common employer; a complete dependence on a consumer (ravishing) economy with no consequences for the horrid detritus left behind…….
      These conditions could not be possible without political legislation dismantling that which seemed to work for so many years after the Great D.
      This is what happens when the populace allows capital and corporations to rule their world. Complete ultimate collapse; the rich run to hide in their secluded enclaves and the commons erupting in flames.
      It’s now too late to turn the clock back.
      How can the FED or the politicians turn back now????
      Their social souls have been sold and bought and paid for by the capitalists/speculators.
      The time for a 180 degree turn would have been in 2009; our politicians caved in and here we are.
      Politics is deeply involved in this mess.
      A revolt is coming. So far the “great unwashed” are a bit bewildered; they’ll eventually figure it out and then the corrupt gov/politicians/speculating capitalists will hear the swish of the blade.
      By the it’ll be too late for repentance.

    • DeerInHeadlights says:

      Because he’s short the market. :)


      I agree with his conclusions. ‘Tis the time for revolution.

    • Wisdom Seeker says:

      Wolf has been “political” for years, in a nonpartisan way.

      When neither party stands for the national public interest, this is exactly what concerned citizens should do, and a big part of why I participate here.

      • lenert says:

        Puhleez – one party passed a second aid package over 2 months ago including $25B for the post office and $15B for contact tracing. The other party has done nothing except dismantle the post office, cut unemployment, promise loans to defunct companies (then un-promise them after the stock crashes) and told people not to take precautions all while demanding corporate liability indemnification from corona.

        • Petunia says:

          I recently called a national appliance repair company and got transferred to a “medical person to answer a few questions” scam. I hung up but think it was a covid testing or tracing scam.

    • Petunia says:

      Money is the most political thing on the planet, as I have stated in the past.

      • DeerInHeadlights says:


      • lenert says:

        Nobody wipes their nose with an invisible hand?

      • NBay says:

        Yep! Classical Economists were all Political “scientists”…Marx, Ricardo, etc.

        That’s why there IS NO Nobel Prize for Economics. Look it up!

        It’s not science and the Nobel family hates it.

  12. Bernadette Ferrer says:

    Thank you Wolf for your poignant report! September & October will be interesting months. Hold on to our seats while we ‘surrender & let it be’.

  13. Whatsthepoint says:

    History tells us that rampant extreme inequality usually ends badly for everyone, including the rich. So what’s the endgame and will they all make it to New Zealand?
    (BTW the comments on your threads are suddenly not displaying on my phone. Is it something I said?:)

    • California Bob says:

      The comments section was MIA from late last night until this morning (this on Firefox on a PC).

      • California Bob says:

        Looks like comments now have a link under user handles (sometimes, those are called ‘anchors’ in the biz). Is this Step 1 for email notifications of comments?

        • Wolf Richter says:

          California Bob,

          No. I turned off email notifications years ago. But we had to change systems because the WordPress update killed the comment system I was using.

          That link was available before, but it was on the right side of the name, as part of the time stamp. Same as now, only the location has changed.

          That’s the link to the specific comment. So if you want to share your comment, you can copy this link. That has always been available.

  14. breamrod says:

    Spot on Wolf! Give em’ H–l. Some of your listeners may think you’ve gone socialist but a free market would sort things out just fine. Creative destruction, capitalism at it’s best! Come on folks Let’s get behind this END THE FED!

    • lenert says:

      Pharmaceuticals would trade in a free market without the patent protection provided by the Bayh-Dole act. Without that protection, all drugs would be cheap generics. We chose to finance the research this way to enrich pharma execs.

      • wkevinw says:

        While there are big problems with the pharma pricing system, patent protection is very important- it saves and improves millions of lives.

        Part of the problem, so I have read, is that if the US does not offer some kind of subsidy/price break for pharma products, other countries will simply not honor the patent.

        No profit (big profit), no new pharmaceuticals. That needs to be regulated properly. It could be done better, for sure. But, pharma companies, and their skilled employees, need to be rich.

        • lenert says:

          Patents direct Uncle Sam to protect the patent owner from competition for a period of time to compensate them for their creative work. Yes other countries don’t have to honor US patents – just as US companies did not honor British patents in the industrial age – that’s why pharma wants deals like TPP to protect them against manufacturers in other countries where drug research paid for by the public is in the public domain. In the US we spend $15B on NIH for basic drug research which big pharma starts with but then privatizes their own work so we don’t really know how safe their work is until people start getting addicted to Oxycodone because the company lied about it’s testing because the incentive is to get and own the patent. The only “contribution” by the Sacklers was a controlled-dosage of an old off-patent opioid which actually didn’t work long enough causing people to take more and get addicted. If we direct-funded the research, either with direct employ or by contract, but owned the IP, then the companies would be compensated for their work and the drugs could be made generically for $6. But pharma CEOs, CFOs, COOs, CMOs, and all their VPs wouldn’t get rich trading on the stock. And then instead of just changing the color of the pill to extend a patent on a $400 acid reducer work could get done on the diminishing capabilities of anti-biotics – but people don’t take anti-biotics every day so there’s no market incentive. But, people will die from infections – what about that? It is what it is.

    • Fat Chewer. says:

      End the fed? That is a completely simplistic solution. It is so fatuous as to be meaningless. That is why no one will get behind your end the fed push. This problem is bigger than the fed and the US government. What is happening is the result of 40 years of laissez-faire politics. If you really want to know, study the demise of the French ancien regime. Remember this, the petty bourgeois are us, the middle class. The French compiled books listing their grievances, they are called the cahiers. If you look through the cahiers, you expect to find the gabelle, the hated salt tax, but what really stands out are the day to day deprivations that were common throughout the realm. Then you realize it was all caused by an absolute monarch who was treated like a god. To enable his unlimited power, the finances of the entire state were at his disposal. The French central bank did whatever was necessary to provide these funds. Versailles was built while the population lived like dogs. Not so long later a revolution happened. Who woulda thunk it? Yet the French have a central bank today. The EU has central bank too. Why? Because the real problem is political. It wasn’t the French central bank doing whatever was necessary to provide the king with unlimited funds, the problem was the king demanding unlimited funds. Think about it.

  15. Drunk Gambler says:

    Corporation go down, poor go down with them. 60 mln people will be out of work.
    How is this better?

    • Just Some Random Guy says:

      We have 2 options:

      1. Some are rich some are poor
      2. Everyone is poor

      Too many people are happy with #2.

      And no there is no 3rd option of everyone is rich despite what AOC and Bernie might tell you.

      • Wolf Richter says:

        Just Some Random Guy,

        That’s a false choice. The options are:

        1. Let the market handle problems in the economy, and the market is very good at doing this. And the government provides a safety net for people who lose their jobs during the process.

        2. Bail out the rich so that they don’t take losses, thereby screwing up the functioning of the market, and disallowing the market from fixing economic issues. That’s the situation we now have. This market cannot fix anything anymore.

        • lenert says:

          But the “market” is STRUCTURED this way to distribute incomes to the top through a variety of means – longer, stronger patent protections for the info-tainment-pharma complex, financial derivatives in the Graham-Leach-Bliley act, no sales tax in the finance industry, weak corporate governance, regulatory capture, trade deals favoring capital over labor (except in highly paid professions like doctors who are protected), and fiscal, tax and monetary policies that have disadvantaged labor for 40 years.

        • MCH says:

          The market should not be structured like the modern day Robinhood where the masses are robbed and the $$$ goes to the rich.

          This is Wolf’s entire point, the Fed has effectively gone rogue, they looked at their mandates and decided employment wasn’t their concern, only market stability. And they are stabilizing the market by tossing tons of ill-considered cash at the problem.

          Inevitably, this leads to complaints about inequality, and likely this means we get responses like AB2088, because the politicians want to stay in power, so they will do the easiest thing they can to appease the masses. Publicly trying to soak the rich is the easy way to go.

          Of course, the risk is gutting their own tax base like NYC is doing. Then, they will have to go after the middle class, whatever is left of it to make up the shortfall. Then, all we end up having is the inevitable death spiral. As successively more people and companies seek more accommodative locations.

          I figure Schwab is probably not a big deal when it left SF, but a Facebook or a Google packing up (however unlikely that is) will be a shocker. Much easier for the CEOs to work from out of state in this age of C19.

        • wkevinw says:

          “Bail out the rich so that they don’t take losses, thereby screwing up the functioning of the market, and disallowing the market from fixing economic issues. That’s the situation we now have. This market cannot fix anything anymore.”

          Bailing out the rich is not a market. It is a failed regulatory/government activity.

          The market always exists and always wins in the end. It can take a very long time- decades. The market finally killed the USSR, for example. It took a very long time.

      • Zantetsu says:

        False dilemma JSRG. But you must know that. Does it get tiring for your politics to constantly override your sense of reason?

        • Endeavor says:

          True capitalism would fix what ails us. But the crony operation today would never allow it. So what is the end game? Look to the Chinese state system for the answer. Technology as the new Mandarin class, human or digital, in service to the elites. The policy papers and strategic plans are all over the internet for those who care to inform themselves.

      • cb says:

        How about –
        A few, based on merit, are rich, a great many are comfortable, a very few are poor

    • sierra7 says:

      Drunk Gambler:
      “How is this better”
      That’s really the question that is asked throughout revolts (historical).
      It does somewhat for a period of time “level” the playing field. It makes the poor feel better. That’s the best part.
      Yes, millions of rich will still be ensconce in their hiding places around the world.
      But, those that are caught will be sorry they were born.
      Nobody makes out with bloody revolutions but it does contribute in the long run to hopefully a better world.
      As I said above, many people are just confused and bewildered for now.
      When all the gov support devices are withdrawn the wounds will be exposed and the blood will flow.
      That begs the question:
      “Can the FED (GOV) (I know the FED is not part of the government but they take their marching orders in the clutch from the wealthy; and the wealthy are the gov.)
      lift the support programs and payments…….ever again?????
      In any case the system is ruined.
      And, maybe for the best.
      It will force the “commons” to focus on what is worth living for and what is not.
      Factory food or good health?
      Clean water and environment or leftover filth from the consumer economy?
      Properly educated young that includes the arts and consideration for the “commons” instead of “individual liberty and freedom to crush your neighbors”??????
      Stifling the hideous military spending in exchange for a global health care system than excludes (EXCLUDES) profit motives……..
      I’m not against capitalism per se……I’m against criminal capitalism.
      It’s strangling our growth all in favor of “trinkets and beads”.
      We need to return to capital punishment for speculators who rape the commons and then leave to the commons to clean up the mess.
      Stay safe and healthy.

  16. Crazy Chester says:

    The Wolf Street Report is back. See, a return to ‘Normal’.

    This one, however, is mistitled.  It should be titled: ‘Damned if you do; Damned if you don’t’ – no matter what, the money still flows up.  The only difference is how fast.

    So if the Fed injects money by way of the hoi polloi – one of them there SAT review words I learnt almost 50 years ago when I thought college was the answer – the super rich get it.  And if the Fed doesn’t inject money to anyone, then the super rich still get richer from their investments in ubiquitous (extra credit!) security cameras and guards, tactical riot control gear for a hoi polloi police (I wanted to go with ‘hoi polloi poli’ because I liked the way it looked, but it produced a paradoxical statement – yes, look for those hidden SAT words for the content portion of the test) force which believes following the rules ultimately leads back to a nice middle class life with a giant TV and a zillion shows to occupy the time before gettin’ it up and doin’ it again tomorrow, along with the promise if we just stay calm there is a new multiplayer multilevel crowd control video game coming soon as a free gift.  I’ve been told it’s unlike anything we’ve ever seen before.  Awesome!

    So let’s try something new: “Defund” Congress.  This won’t be the answer for much but it just might inspire some content, perhaps a couple of NetFlix dramas and an Amazon Prime comedy.  Comedy, you say?  Yeah, you’re right: hard to improve upon the comedy right before our misty eyes.

    • lenert says:

      Chester, you got some good shit there man – sour diesel 24 or just some lysergic diethylamide in your coffee?

      They could do story on a dirt-poor senator from Georgia whose husband just happens to be president of a stock exchange.

    • Erle says:

      Good one Crazy. You make a me laugh.
      I’d give it a good grade for composition. Otherwise, I see what goes on in your brain and it isn’t pretty. Perhaps you should take up birding to keep your mind off of economics.
      Thank me later.

  17. Dave k. says:

    I think most of us can agree this stinks. It’s not like one party is against working hand in hand with corporations. But how do we truly fix it?

    • lenert says:

      We can rely more on publicly funded open research and less on government-granted patent and copyright monopolies to support innovation and creative work.

      A modest financial transactions tax will sharply reduce the size of the financial sector, without hurting its ability to allocate capital efficiently (shareholders have been getting ripped off for 40 years – see earnings yields and dividend yields).

      The rules of corporate governance can be changed to make it easier for shareholders to keep boards accountable. For example, mutual funds can be prohibited from voting except where they have been given explicit guidance from investors. Also directors can be made to suffer real consequences for allowing excessive pay, such as losing their annual salary if shareholders vote down a compensation package on a “say on pay” vote.

      To bring pay of doctors and other highly professionals in line with other wealthy countries, our trade deals can be focused on making it easier for qualified foreign professionals to practice in the United States.

      To limit unemployment and ensure that workers at the middle and bottom of the wage ladder have the bargaining power to secure wage gains, we can have fiscal and monetary policy that is focused on maintaining full employment, rather than being obsessed with budget deficits and inflation.

      • Crazy Chester says:

        We have a winner!

        A straightforward, first step, feasible, rant free plan.

        Contact Wolf (“Contact Us” Tab above) for your free Mug (he needs shipping info).

    • Endeavor says:

      Elvis has now been dead for longer than he was alive.
      And he’s not happy about it either!

  18. Marbles says:

    Why can’t I see comments?

  19. Danno says:

    Excellent as always..thank you.

  20. Dale says:

    A clear a concise situation report. Thanks Wolf!

    The Fed can increase inequality and thus social tension because it can print money at will. This was described as the Cantillon Effect nearly 300 years ago, and it provided impetus to the French Revolution. Basically, this created wealth has to first flow through the entitled before it reaches the rest of the economy.

    Too bad the FOMC members don’t read.

    Incidentally, apparently I can post but I can’t read other comments starting this morning.

  21. Say It Aint So says:

    Many of us who are not in the top 1% continue to hear of this phenomenon with regards to the rich getting richer…most of this due to the Fed’s actions…which many posit are against the law…So when is there going to be change? Glass Stegal contributed in a big way but in the end…No One Is Ever held Accountable

  22. Just Some Random Guy says:

    2/3 of people on UE are earning more than they did while working thanks to the $600/week federal bonus. So essentially 15-20 million people got a 5 month paid vacation. Let’s be real, lots of people, poor, rich and in the middle made out OK during the Corona.

    • Wolf Richter says:

      Someone who didn’t lose their job got $2 billion, the other who lost their job got $5,000. How did that not increase wealth disparity by a HUGE amount?????????????

      • Just Some Random Guy says:

        First off, it’s not $5K. 5 months of $600/week is more like $13K.

        Second tens of millions got that $13K which as a % of their net worth is pretty high.

        Meanwhile a handful of people got $2B which as a % of their net worth is probably lower than the % of the people on UE.

        In either case, I don’t really care if Zuckerberg and Bezos have 100,000 times more money than me or 125,000 times more. It does not affect me in any way. I’ll never understand why anyone else cares. Worry about your own finances folks, not Bezos. Your life will be a much better.

        • Wolf Richter says:

          Just Some Random Guy,

          “In either case, I don’t really care if Zuckerberg and Bezos…”

          You don’t care because the Fed bailed out your portfolio. Without the Fed bailout, your portfolio might be down 50-70% now. And that would have been the market way to handle this pandemic. That’s how it should have worked.

          The state steps in with a safety net for those that lose their jobs, and the rest is market driven. The market and efficient bankruptcy procedures can solve all kinds of problems, including debt hangovers. You guys really get to me with your sense of entitlement of socialism for the rich.

          Your comment proves that this Fed bailout was likely the biggest mistake the Fed made in history. It has now cemented this sense of entitlement of socialism for the rich into your thinking for all times to come.

        • sunny129 says:


          ‘Without the Fed bailout, your portfolio might be down 50-70% now. And that would have been the market way to handle this pandemic. That’s how it should have worked.’

          Thanks for stating that crue HARD fact to many of the newbie investors(post GFC), who have been riding behind Fed’s put, is definitely NOT palatable one.

          For many of them Stocks go only up! Bear mkts doesn’t exist in their realm of existence! For them the Fed is doing the ‘right’ thing in supporting the mkts at any cost! Clueless about efficient allocation of resources under true Capitalism (prior to ’09)
          (Been in the mkt since ’82)

        • cb says:

          @ Wolf –

          I share your sentiment, but I think the biggest mistake in FED history was the FED being founded,
          Rotten from the start.

        • Wolf Richter says:

          Yes, but that was a mistake Congress made. Congress could undo that mistake, but won’t, no matter who is in charge.

        • MCH says:

          Heh heh, can you imagine if somehow the Congress mandated that they or the executive branch have directions to the Fed. It would be a complete riot.

          One would have to somehow cut out the rot from the Bernake, Yellen era, JP is just the most egregious example of this rot. Although one has to probably thank Greenspan for starting the problem.

        • nodecentrepublicansleft says:

          It reminds me of when Baby Bush the Lesser gave a trillion dollar tax break to the rich (average millionaire got $50K), I got a check for $300 (my hush $).

          I didn’t want the $300 and the millionaires didn’t a tax break (nor did they need the one DJT gave them). Bush started a war AND cut taxes! Heckuva job, Brownie.

          You want to put these people down for getting some crumbs as the entire ship just hit an iceberg and is taking on water. What do you want those poor saps to do? Turn down the money out of principal?

          Are they living the high life? I’m surprised you don’t roll out the old trope about the “Welfare Queen driving the Cadillac”. These people are on the precipice of a disaster, possibly a worldwide Depression. And it’s not Bezos’ greed that bothers you but these lazy Thirteen-Thousand-Naires? Really?

          Odd, you don’t care about Bezos or Zuckerberg having 125,000 times more money than you, but you are very concerned (because you keep talking about it) that some poor schmucks that got $13K. I don’t get it JSRG…..

        • eg says:

          Um, it affects you because they buy the politicians and policies that enrich them at your (and my) expense.

          So you ought to care — unless, of course, you’re being paid not to care, or worse, to convince others not to care.

      • Mr. House says:

        the 1,200 and the UE of 600 a month was your hush money from the looting.

    • Chillbro says:

      Please note that extra 600 stopped already. I am always amazed how proles like to crap on other proles for getting a free anything as a huge moral hazard but turn a blind eye on the state being used a wealth transfer conduit from the w2 slaves to legal entities and ultimately to high net worth individuals.

    • Petunia says:

      I have at least five people in my family who have gone on unemployment since March. Not one of them was better off being unemployed. Two have been recalled. One got his hours cut in half in March and is still at half pay, never got a penny of UI. Most had no health insurance while being on UI.

      I have no idea who is getting rich on UI, can somebody post a picture? Or just stop pushing the propaganda. If you want some real UI news, go to N O L A dot C O M and read the story about 200,000 people on UI who get less than $100 a week, and don’t qualify for this last extension of $300 a week.

      • Just Some Random Guy says:

        I didn’t say people got rich, I said they made more not working than they did working. There was a study released earlier this month that showed 68% of those on UE, made more on UE than their previous income. If you call that propaganda, fine. I call it reality.

        • OutsideTheBox says:

          Here’s the reality: front line employment pays TOO LITTLE.

          C suiters get paid TOO MUCH.

          See ? Simple concept.

      • Juanfo says:

        Down here entire families on $50 a week. Party on Garth.

  23. Ridgetop says:

    So true Wolf. I have always been a fiscal conservative. So a couple years ago POTUS and congress goes and cuts tax’s without cutting spending, and gets us into another 1 trillion dollars of debt ,during good times no doubt. That irked me!

    And the past 12 years the FED has social welfare for the rich, essentially eliminating any type of “free market capitalism” and turning it into “free money for the rich”. I hate to see what the long term consequences are for us all.

    I am all for being rich, and would too like to be very rich, but really, what past 20 or 30 million? dollars do you really, really need to enjoy the rest of you life! To be worth billions, just so your wife can buy $16,000 handbags that are really only worth $50, or you buy a painting for $500,000 from an artist that looks like they just threw the paint at the canvas!

    More problems left for the young to deal with in the future. Sigh…

    • Paulo says:


      Be careful for what you wish for.

      I too am a fiscal conservative, but would never want to be rich. You will always be looking over your shoulder.

      We just want to be left alone and remain welcome in our community. We’re doing okay and people know it, but newcomers around here that flaunt their wealth have targets on their back. In bigger communities they are forced to live in gated developments. It would be terrible, imho.
      You would have to either hire security, or be forever incognito.

      If things turn bad you definitely do not want to be a rich outsider, anywhere.

    • nodecentrepublicansleft says:

      Couldn’t agree more! What do they want….an ostrich skinned jacket like Paul Manafort? Even his own daughter said his money was “blood money.”

      I saw a study a few years ago that said once you surpassed $85K/year in salary that your ‘happiness’ didn’t really go up much more.

      Think about the wealthy folks who turn out to be incredibly unhappy.

      If you hoard cats, you’re crazy.
      Hoard books and magazines, you’re a hoarder with a mental problem. But if you hoard $……we put you on a pedestal and sing your praises.

  24. Brant Lee says:

    The techies got richer but how much stocks could they cash in on with their own company? Not a lot, but it’s that feeling of bliss and euphoria, right?

    Except for Musk, you know he wants to bail, but what to do?

  25. michael earussi says:

    The rich through their greed, arrogance and short term thinking have destroyed this planet’s ecosystem and so have potentially murdered all higher forms of life on it within 50 years.

    This scenario isn’t speculation but the conscience of a great many ecologists and other planetary scientists unless we make drastic actions to stop this destruction soon. But the inertia in the system and the reluctance of those in power to even admit their failings preclude any drastic positive change from happening.

    • MonkeyBusiness says:

      Takes a planet to destroy the planet. How do you think these people got rich? That’s right, we made them rich.

      Other than rich vs poor, the rest of humanity are equally guilty of the rest i.e. arrogance and short term thinking.

  26. Wolf Richter says:

    Dear Readers,

    The comments are now back, as you can tell. A WordPress update Sunday night caused a compatibility issue. As a result, comments didn’t display though they were still there. So now everything is back. Apologies.

    • BuySome says:

      Come on…we know the secret police were bracing you over a central bank heist and you talked your way out of it by fully explaining to them in detail just how their pension plan is getting set to implode. Once they released you the comments were restored. Tell the truth Wolf. Not the time to stop.

  27. dpy says:

    Mostly agree, but we re bailouts we are leaving out pension funds and insurance companies and the like, who are also heavily-invested in broad baskets of things that are part of the everything bubble, and thus relying on there being no price discovery to stay solvent. Collapse of these things would hurt lots of middle class folks who get pensions and expect insurance to work. Surely there are other examples of big collective entities invested in risk assets.

  28. The tea leaves are turning brown. The Fed is not going to monetize the current round of spending. Treasury will allow the markets to set interest rates at auction. The presumptive candidate should that happen, may try to restart the monetization process. With rates rising, stocks rising and the dollar rising, the urgency is not there. Personal savings rate starts rising, consumer credit drops. GDP flat lines. Banks are in terrible (S&L) shape, paying depositors X and no borrowers at X + 1.

    • Endeavor says:

      The tea leaves are turning brown. The Fed is not going to monetize the current round of spending.
      Causing a deflationary depression and buy up the rest of the productive assets. It could happen.

  29. Mr. House says:

    Yeah its funny, they don’t even talk about recession anymore. Its all covid all the time, and everything that is going wrong is blamed on covid. Which has been raging for 8 months now and killed a total of 773,279 world wide.

    • Wisdom Seeker says:

      Natural death background level is about 8-10 million per month, 60-80 million since COVID fired up, 100 million per year in an Earth with 6-7 billion people at life expectancies of 60-80 years…

      • Mr. House says:

        So the death toll is higher then 773,279? I’m not sure what you’re getting at.

      • The global death rate has been falling. The world population now has more people alive than were ever born and died in the entire history of man. Humans have thrived despite all efforts to eradicate one another. I feel certain that if we ever find cause to hold life as precious, and work together to erase all obstacles to our mortality, that we should soon be extinct.

      • lenert says:

        Elvis has now been dead for longer than he was alive.

  30. Just Some Random Guy says:

    For the past 7-8 years, bulls like me have been saying invest in stocks and real estate. Bears have replied back to me with a version of “you’re crazy it’s all going to crash”. And now that people like me were proven right, bears are saying it’s unfair. Well yeah, life is unfair. You made your choices, now live with them.

    • Wolf Richter says:

      Thanks to socialism or the rich, the Fed bailout you out. Your portfolio would be down 50-70% without the Fed. The Fed destroyed the functioning of the market in the process, something to be really proud of.

      • Just Some Random Guy says:

        See above for the 50-70 number.

        Either way, I invested one way and profited. Others invested another way and lost out. That’s how investing works. If you want to call me a socialist for prudent investing, so be it.

        • Wolf Richter says:

          You were bailed out by the Fed, and now you feel smart because of it. And you’re not the only one. That’s exactly what I was saying: The Fed has now created a situation where markets no longer have a function in the economy, and people, including you, are now proudly acknowledging that. And this is a terrible thing for the economy — an economy with a market that no longer fulfills any kind of economic function, such as pricing of risk.

      • sunny129 says:

        Mr Powell claims all the things he is doing to keep the markets ‘functioning’ smoothly, aka support the bubble at any cost!!!
        It is just sickening to hear him talk!

    • RightNYer says:

      So basically, you’re saying that if someone made a choice not to participate in a legalized robbery (not knowing how far your “accomplice” would go to do so), then he “made a poor choice/”

      • two beers says:

        Just Some Randian Guy won’t comprehend your argument. Plutocrats – and even more so, their appeasers – believe the end justifies the means. If you’re poor, it’s your fault for not being born into a wealthy family. If you were born into a wealthy family, you’ve earned all the wealth your forebears plundered to acquire.

        If you don’t have the shrewdness like Just Some Randian Guy to hitch your wagon to corrupt plutocrats, you deserve your fate!

    • RightNYer says:

      Also, if these assets do become worthless, are you going to take your lumps, or are you going to whine and wail for another bailout? I suspect I know the answer.

    • Alku says:

      Are you still saying the same?

  31. MonkeyBusiness says:

    Still, there’s no anger towards the rich in general. Zero people demoing in front of the Fed.

    People WANT to play the Hunger Games.

    So the Hunger Games will happen.

    Brazil with nuclear weapons indeed as some people have called this country.

  32. Petunia says:

    I home schooled my child because I finally realized the education system, whether public or private was not reformable. The only way to fight for reform was to withdraw from the system. I am only sorry I didn’t do it sooner.

    That was not my first battle with fighting the system. Years earlier I left NYC because I could already see it was not a place to grow old in, so why stay. I was early but not wrong. Now people are realizing your vote is really your feet.

    I have also withdrawn my money from any business I don’t support. NBC and CNN can lie all they want, I won’t support it with my money. Overpaid sports stars can have their say, but I’m not paying for it. I cancelled cable, don’t miss the propaganda, feel glad not to be supporting the madness.

    These are just a few of the small battles I have confronted, but I continue in my journey.

    • lenert says:

      If you have a cable subscription, you’re paying ESPN who is paying the sports team owners, who are paying the players.

      • sierra7 says:

        Corporate World has a huge propaganda machine that churns 24 hours day.
        That system squeezes dry the weaknesses of humans for the desire to succumb to the “7 Deadly Sins”……”Pride, Lust, Anger, Greed, Sloth, Wrath, Envy”……
        This “program” was “discovered” during WW1 when the then politicians had to sucker the commons to go to war to slay the “Huns”…..etc…….
        It was then applied to consumer advertising and the rest is history. (All this is easily researched; there is voluminous writing on the subject)
        Another commenter said that one way to combat the system is to “opt out” of the destructive parts.
        That takes enduring commitment and courage.

    • BrianC - PDX says:

      Every choice we make in our lives is a *moral* choice. Some have more impact than others. Where to spend your money, what causes to support, whether to “just slide by that stop sign”, driving just a “little bit” faster than everyone else… all have a moral dimension.

      I am in the same boat and feel the same way.

    • Endeavor says:

      Good to stop doing business with the worst of them. I stopped two. But bailouts from the Fed mean we still pay for these through price inflation due to the free money they get.

  33. Crush the Peasants! says:

    Everyone has skin in the COVID-119 game, as we are all vulnerable human beings.

    Belonging to a particular wealth percentile is not a permanent assignment. Those in the bottom 60% can rise to be in the top 10%.

    Everyone who holds assets gains as the value of the assets increases via Fed actions. (Well, except folks who have shorted.) If you hold more, you gain more.

    What is lacking here is any discussion of the percentage gains, and whether they are disproportionately enjoyed by the upper 10%. If everyone makes the same precentage gains, SO WHAT!

    People in every class get ahead when the value of their assets increases. This is not a bad thing.

    What is also lacking in the discussion is an analysis of an increase in nominal versus real value.

    • Wolf Richter says:

      Crush the Peasants!,

      A household with a net worth of $2,400 gets a stimulus check of $2,400 — representing a 100% gain in net worth (until one of them gets a little sick, and then, it’s gone). Someone who has a $100-billion net worth gets $10 billion via Fed action… so that’s only a 10% increase. And you’re saying the household getting the $2,400 got a better deal that the household getting $10 billion???

      Folks have been hiding behind this self-righteous “percentage gain” nonsense forever.

      And you forget that this was a Fed bailout, and not the market doing anything. This was engineered by a handful of people to bail out asset holders. I’m all for markets, but the Fed didn’t let markets run. They bailed out asset holders. And they killed the functioning of the market in the process. And that’s what I’m decrying.

      • sunny129 says:

        @ Wolf
        On July 24th at WSJ, Morgan Stanley analyst Mr. Ruchir Sharma wrote a lengthy opinion essay under the Review section titled
        ‘Rescuing ruining the Capitalism’ mentioned all the long term ill effects, to materialize in the future on the American Economy. Just like yours, his voice was alone in the wilderness of wild party at Wall St

        • Wolf Richter says:


          I read it. It might be a career-ending piece for him; it’ll be harder to get rid of me.

          But if he gets fired from MS, and wants something to do that doesn’t pay anything, he can write for WOLF STREET ?

    • RightNYer says:

      Ahh, yes, so if the Fed prints $6 trillion, ruining our currency in the process, the fact that a middle class guy’s 401(k) went from $50k to $70k excuses it, when the top 10% were given most of the $? Do you people really believe this?

    • BrianC - PDX says:

      When I picked up my BS in Computer Science in the early 1980’s the legislature of my state paid 90% of the tuition at my State University. I could pay under $2000 for a full year. 3 quarters, full credit load, and stay on campus using their meal plan. At a time when I could work in the woods running a chain saw and make about $2400 in two months.

      If you made it onto a hot shot crew and it was a good fire year, the money flowed in like water. Food was provided at the camps and you would work 24hours on and then 12/12 there after. No place for the money to go but into the bank.

      Those kinds of opportunities are *no longer* available for the picking now. At U of AZ full ride for a year is about $50,000 (out of State). At Montana State it is going to be about 30k to 35k a year (out of State). University of OR instate is about what Montana State out of State tuition would be.

      What summer job is going to pay for a *year* at a public U?

      Sure, the exceptional can make the ride from the bottom 10% to being well off, but the ride is a heck of a lot tougher now and it’s getting worse.

      That Boomer Gravy Train gave me a hella ride, my kids and grandkids won’t have it so easy.

  34. andy says:

    Don’t forget hundreds of Billions of dollars that were printed to benefit mega-rich communists in China, like Jack Ma of Alibaba.
    They are all on the US exchanges for good reason. All their junk will of course end up in 401K plans and pension funds.

  35. Yertrippin says:

    Good god, people like getting free things, rich or poor. Though the more affluent though seem to be in denial of this fact because their free is more “deserved.” The inability to see things from a perspective of relative wealth, it’s affect on the real lives of fellow citizens, and it’s relationship to societal stability is what allows this nonsense to continue. Being rational was much cheaper and would have had a better outcome for everyone. This is shaping up to be the most satisfying woulda, coulda, shoulda’s in the history of humanity and what clearly we deserve for our unparalleled shortsightedness. Our hubris ate us until we squandered the civilization. Overly dramatic? We’ll see.

  36. sierra7 says:

    “Tick-Tock”, Tick-Tock, Tick-Tock, Tick-Tock………Tick…..Tock……..Tick…………………….Tock!

  37. Doubting Thomas says:

    Wolf & everybody,

    For 35 years I was an orthodox “total market / dollar cost averaging” index investor with Vanguard. I never flinched, and the rewards were handsome. However, as of June 22 of this year I lost all ability to understand financial asset valuations in today’s markets… this after spending my career in present value analysis, financial analysis and financial management at international corporations with market caps in the billions of dollars. Long story short, on June 22 I liquidated my U.S. and foreign index holdings and went into cash. I still have the same amount of money (US$) now as I had on June 22. However, my purchasing power for U.S. equities has gone down 8%. My purchasing power for the Euro has gone down 6%. My purchasing power for gold has gone down 12%. This happened in the short span of 57 days. I won’t do the compounding math (I could, but it hurts too much), but in a very real way it feels like rampant inflation during a period of deep economic downturn. Am I reading this situation clearly? What am I missing? Thanks to all, especially Wolf, for the thought-provoking discussion.

  38. kitten lopez says:

    Wolf being “political”?
    nah.. i’ve been rolling that around in my mind for awhile but it’s “Radicalized”!

    That’s the word for what’s happening to Wolf and it just tickles me to death because this is what i saw in him from jump. James argued and said from hearing Wolf the Wolfmeet, “no he’s not radical, and he even said so himself.”

    and i said, “well both of you are wrong.”

    and thus this is where we are! my ego loves being right about people standing up and daring to care enough to put their asses on the line.

    it gives you the chills when people DON’T say, “i’ve got no kids, thus no dog in the fight,” and fight for the rest of the dogs and starfish to mix my parables and cliches, as they’re all hitting the fan now anyhow.

    as terrifying as i’m finding this site lately, as it only keeps going beyond confirming but enumerating new horrors that aren’t just NY Times/PBS/Mainstream media barking at every shadow and doorbell like nervous fearful yappy chihuahuas, as terrifying as all this is, this sausage Peta photo secret nightmare site is oddly grounding. i’m giggling as i type that.

    i still haven’t ever been able to watch “Faces of Death” and yet i keep returning here to the scene where our intestines are intertwined on the asphalt under the mattress along with the rest of America’s small businesses who’ve long since bled out from the slit to their collective hookerish necks.

    i went to the art store and a father with matching blue glasses and mask was buying out all the sculpey clay because he was fighting to keep his son from totally being lost to the screen world. he said, “before this pandemic it was already like trying to keep an alcoholic functioning but now i’ve lost my 8 year old son and i don’t know how i’ll ever get him back after this comes down.”

    he doesn’t get that he won’t. i just listened as his face got alarmingly red under his matching blue mask and glasses. he was panicking and backing from me, yelling and then i couldn’t understand what he was yelling under the mask just like the baby feminist girl at trader joe’s who’d come to love it and feel secure and safe underneath.

    AIDS/HIV killed art literally and then figuratively as i saw my own family members get creepy asexual./not good asexual. creepy asexual is avoiding out of fear and then lurching / good okay asexual is ‘get offa me/i’m over the MESS of humanity’. i’m not there yet and when i am then just pull the plug because life is hard nipples to me as good writing good ANYTHING was a hard dick to Tom Robbins (“Still Life with Woodpecker” author for those of you who used to read actual paper books… man… talk about hard nipple nostalgia… when cheap paperback books were plentiful and fun to read).

    sorry i’m babbling, Wolf. just here to say: Nah.. .you’re RADICALIZED.

    it’s exciting to see you burst forth in all that FUCK NO! IT’S NOT RIGHT OR OKAY and putting your ass on the line for you very much are.

    i’m shaken and stirred and all the rest of it just like everyone else…

    we’re on our own so i’m glad at least someone gives a fuck about something other than their own followers money fame. it’s existential at this point so thanks for getting it.

    and you have beautiful intense eyes and i’m not hitting on you. i love when beauty and power and strength aren’t just wasted on the shallow or the whores.


    much love, Wolf. thanks for being my friend and not fearing me ever and just being kin…


    (today’s a drawing day / been up all night thinking and writing like when i first lost my mind and “died” as i was.. but it’s GOOD. it’s Leo Time/ art is big now …just thinking a lot about forgetting the world going to hell so’s i can focus…/ and sorry this got long. hope i’m in After Hours territory.. but i’ve seen others pull the tab on the bottle and let ‘er rip here. thanks for giving us a place to scream. thus i’m done with Everyone. back to third party. blame whatever the outcome on the likes of me / i’m not eating poo anymore / not yet anyhow)

    • coalman says:

      In a time of universal deceipt, telling the truth is a revolutionary act. GO WOLF!

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