The Rich Got Richer During the Pandemic, Bailed Out by the Fed. How it Happened and Why That’s Bad for the Economy

Over 30 million people lost their jobs while the wealth of America’s 600-plus billionaires ballooned by $434 billion, to $3.4 trillion.

By Wolf Richter. This is the transcript of my podcast last Sunday, THE WOLF STREET REPORT. You can listen to it on YouTube, and you can find it on Apple Podcasts, Spotify, Stitcher, Google Podcasts,  iHeart Radio, and others.

The examples are all over the place. The wealth of Amazon’s Jeff Bezos soared by $74 billion so far this year, according to Bloomberg. Mark Zuckerberg’s wealth jumped by $20 billion so far this year. Elon Musk’s wealth soared by around $50 billion. The wealth of Microsoft founder Bill Gates jumped by $8 billion. Rob Walton, Jim Walton, and Alice Walton, of the Walmart family, saw their combined wealth jump by $14 billion. Chairman and CEO of mutual fund company Fidelity Investments, Abby Johnson, who owns nearly a quarter of the company, saw her wealth soar by $11 billion. The wealth of Google founders Larry Page and Sergey Brin soared by $7 billion a piece, and Oracle founder Larry Ellison’s by $5 billion.

These are the wealth gains just this year.

Between mid-March and mid-May, during the lockdowns, the wealth of America’s 600-plus billionaires ballooned by $434 billion, according to a report by Americans for Tax Fairness,  pushing the wealth of those 600 Americans to a combined $3.4 trillion.

And there is another layer of people who are not billionaires, but have a wealth of $50 million or $200 million, or $600 million, and they saw their enormous wealth balloon too during the pandemic. And there are millions of people of lesser wealth that also rode on their coattails up the boom of the financial markets.

The richest 10% of American households own 84% of the value of stocks owned by all households, according to Federal Reserve data. The remaining 90% of the households own 16% of the value of stocks. And the bottom half own nearly none.

And that boom in the stock market, the bond market, and other financial markets since mid-March happened because the Fed threw about $3 trillion at them in a short time, with the specific purpose of raising asset prices and making those folks whole so that they don’t have any skin in this pandemic.

Fed Chair Jerome Powell was asked directly at the FOMC press conference on July 29 about the Fed’s monetary policies’ effect on wealth inequality.

The funny thing is, Powell denied that the Fed’s monetary policies were responsible for this wholesale bailout of the wealthiest Americans causing an explosion of wealth inequality, but admitted out of the other side of his mouth, that the Fed’s monetary policies have caused asset prices to surge, and that was part of the goal of those purchases.

When Powell admitted that the Fed’s nearly $3 trillion in asset purchases caused asset prices to increase, he said the goal was to “restore functioning markets,” which means markets where prices are rising, and markets where price discovery is not allowed to happen, and markets were investors are spared any losses.

What he admitted was, as he put it: “We understand, accept, and are fine with the fact that those asset purchases are also fostering a more accommodative stance of monetary policy,” in other words, that they inflate asset prices as well as “support macroeconomic outcomes.” “So it’s doing both,” he said, “and we’ve understood that for some time.”

He said that inequality is “a serious economic problem for the United States.” And I agree with him on that. Then he pointed his finger at some of the other guilty parties in that wealth and income inequality, including and specifically “globalization.” And I agree with him on that too.

He said that wealth inequality has, and I quote, “underlying causes that are not related to monetary policy and to our response to the pandemic.” That’s what he said. And with sort of a straight face too.

The federal government sent out stimulus checks to nearly everyone, and it sent out extra unemployment benefits of $600 a week, and for the first time ever, it provided unemployment insurance for gig workers. Hundreds of billions of dollars went to these people, and this money was highly welcome.

And then what did these people do with this money? Of course, they spent it. That was the purpose. And they spent it at Amazon, and they spent it at Walmart, and they bought computer equipment with it to get online from home, and they spent it on groceries. And they paid rent and made mortgage payments. And this money was recycled and ended up in the pockets of the rich, from Bezos to landlords.

Take the purchases at grocery stores. They boomed during the pandemic. Last week, Albertsons Companies, which owns Albertsons, Safeway, and a number of other supermarket chains, reported a 53% increase in revenues in the quarter ended June 30.

In prior updates, the company had pointed at the surge in grocery sales. And the enthusiasm in the stock market, driven by the Fed’s $3 trillion in asset purchases, and the surge in sales, allowed the company to pull off its IPO in June, after having had to scuttle it several times in prior years.

The big beneficiaries of this IPO were the wealthy – namely folks at the consortium of private equity firms, led by Cerberus Capital Management, that own the company, and the investors in those funds. The company now has a market value of $7 billion. The pandemic was one of the best things that ever happened to Cerberus and the members of its consortium.

And the stimulus and unemployment money spent at these stores, and at Walmart, and at Amazon, and elsewhere, just drove up the wealth of the wealthiest, after if left the hands of the little people.

In addition, there is the effect that people with high incomes were mostly able to hang on to their jobs, and were working from home, while many people in the lower-paid service jobs lost their work.

The poor lost their work and got poorer, the rich got richer and the high-income earners kept their jobs, and their wealth was bailed out by the Fed.

Inequality is a huge problem for an economy. The wealthy are already spending all the money they spend. The 600-plus American billionaires would have continued to spend roughly the same even if markets were allowed to go their way without the $3-trillion bailout from the Fed.

If the Fed had allowed asset prices to find their natural bottom, wherever that may have been, and they were already on their way in March, and say, across the board, these American billionaires would have lost half of their wealth, then wealth inequality would have been cut in half.

But what happened instead is this: the guy with a low-paying job, who lost the job, got the stimulus money and unemployment benefits, and then he handed this money over to the rich. This money didn’t stay with him. It flowed to the asset holders, to capital.

That’s how the money flows. And it helped produce the corporate results that helped drive up asset prices. Bezos was the biggest beneficiary of them all.

This inequality is a huge handicap for the economy going forward. An economy based on ballooning inequality cannot perform well. Inequality will get in the way of the recovery and has a negative impact on future economic growth.

This type of rampant wealth inequality, where the richest asset holders get bailed out the most, can and does contribute to social resentment over those systematic inequalities. But this social resentment rarely looks at the real causes of that inequality – a system that includes the Fed at its core.

The Fed is depicted as savior and hero. And most Americans know nearly nothing about the Fed, other than that it exists in some mysterious form.

This system has become socialism for the rich, socializing the losses to the rest of the people, and concentrating the gains – huge gains even during the pandemic – with a relatively small number of people. This is not the way to have a thriving economy. This is a way to run an economy into the ground.

What needs to happen is a return to an environment where the rich can lose the most because they have the most at stake – and when there is a pandemic or a financial panic that strikes the economy, the rich will lose the most. They’ll still have plenty left over afterwards. And it needs to be allowed to happen without bailouts and market support. Anything else is socialism for the rich, and it’s causing a lot of dysfunction in this economy.

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  174 comments for “The Rich Got Richer During the Pandemic, Bailed Out by the Fed. How it Happened and Why That’s Bad for the Economy

  1. Memento mori says:

    Inequality is here to stay as it has been with us since beginning of time.
    Nature abhors equality.
    When inequality becomes too extreme, balance is always restored through taxation or revolution.
    I think bigger taxes are coming for the rich one way or the other, it’s the less violent solution that any civilized society will choose first. We have been here before.

    • 2banana says:

      I don’t think folks hold a grudge against rich folks who got rich by taking risks to provide goods and services we all appreciate.

      Steve Jobs, Bill Gates, Sam Watson, Ray Kroc, etc.

      People get upset when they perceive folks getting rich for nothing more than being in tight with government cronies and doing nothing more than pushing paper.

      • MiTurn says:

        2bananas, you are spot on! Bully for people who find success for taking risks, working hard, and chasing a dream. That can be someone’s “American Dream.”

        But financial sciopaths in collusion with other sociopaths — that’s a problem.

        • MCH says:

          Blame the Fed and the bankers for that I guess.

          The US is well on its way to becoming the next Great Britain, loaded with glorified middleman.

          Oddly the most successful builder of note lately (Musk) is considered more as a shyster thanks to his twitter habits and TSLA’s spectular rise.

        • sierra7 says:

          MiTurn:
          “….financial sciopaths in collusion with other sociopaths”
          Bingo!
          That’s what we have……at least in the U.S.
          Including consumer sociopaths who continue to buy more and more garbage they don’t need and then when they can’t stuff their 4 car garages with junk they veer off and rent another space to fill up.
          Our country is filled with “sociopaths”.
          That is the product of the system.
          You cannot harness a wild group of horses to a carriage and not have it crash to smithereens!

        • blntobjt says:

          sierra7: I think you are mixing metaphors here. That is not possible unless one was purchasing crap to torment others, otherwise this is lack of impulse control type behavior in addition to one being manipulated into identifying oneself as a consumer.

      • MarMar says:

        At least three of those have engaged in blatantly monopolistic behavior, so ….

        • two beers says:

          Show me a billionaire, and I’ll show you a ruthless sociopath.

          Not only are billionaires not necessary, but the policies government enacts and enforces at the behest of its billionaire donor class are the cause of most of the earth’s major problems (war, climate change, pollution, poverty, starvation, unemployment and underemployment, et al)

      • Cem says:

        Ahh yes completely missing the point as usual, 2banana. I always keep an eye out for your comments, they have a certain innocence to them that is really heart warming and headache inducing all at once. Competition in the markets is something people like you love to tout, however when it is very apparent that companies of these sizes use anti competitive practices, infunce politics, price out competition, buy and destroy style tactics all of sudden ‘lol well thats ok they worked hard’ becomes your prayer. This -> ‘in tight with government cronies and doing nothing more than pushing paper.’ LMAO that is EXACLTY what they do once they get to a certain size. Do you stick your head in the sand whenever they guys get taken up on anti trust allegations? I mean c’mon.

      • taxpayer says:

        The first billion more or less, for each of them, might be reward for taking risks, innovating and working hard to provide services people need. And luck. But at some point the bulk of their outsize incomes are rewards for monopolization, bribery, intimidation, etc.

      • MonkeyBusiness says:

        Behind every great fortune, there’s a crime.

        — Balzac.

        Take Steve Jobs, because many people seem to think that he is some kind of God. The man for many years controlled the job market in Silicon Valley i.e. many companies in the valley would first ask him if so and so would be allowed to jump ship to a different company.

        https://www.inc.com/jeremy-quittner/silicon-valley-wage-collusion-class-action.html

        One of the engineers behind the lawsuit actually committed suicide because of the pressure.

        But I already said, in America the ones who get ahead are people who live with one eye closed.

        It’s not that “in the land of the blind, the one eyed man is King”, the truth is more “the one eyed man is ALWAYS King”

      • What risks exactly did these folks take? There is a common theme to all these people, they started with seed money. They knew they were never going to end up homeless. They went all in on something. Black or Red. There was a compelling economic reason for their success. Once they crossed the divide between success and failure (Wall St’s beatitude) their position became fixed. It would impossible for Amazon to fail now. The Horatio Alger myth is so cliched that even our businessman president doesn’t repeat it. Becoming rich is a form of celebrity worship. Celebrity is separate from talent, and worship cleaves itself from religion.

        • Ethan in NoVA says:

          Steve Jobs was actually from a modest family. He wouldn’t have been given a chance to return to lead Apple if it wasn’t for his wealth from the sales of the Apple ][ computers though. There could be a ton of Steve Jobs caliber people out there, but in a normal world without luck, timing and the product that Steve Wozniak created they would never be given the chance.

      • rr says:

        Ray Kroc and Bill Gates are in two different categories. There’s a lot of controversy around some of the tech entrepreneurs: Gates, Zuckerberg etc. What exactly did they contribute and how much came from others. With the real world entrepreneurs, it was easier to see who did what. But most tech innovation is a team contribution and yet at the final stage when it comes to inking the contract, many of them are cut out. And then there’s the problem of monopoly power. It’s quite clear that Microsoft, Google, Facebook, Amazon work very closely with government and have been given unfair advantages.

    • M says:

      Great article, Wolf! You are also right, Memento. Most Americans are usually misled by inadequate information.

      When you consider how so many ultra-rich and their companies have used foreign companies and foreign shell companies/trusts to avoid paying trillions in taxes for decades, much higher taxes on the ultra-rich now are clearly justified. Read about a certain phone maker’s tactics for decades to avoid US taxation.

      We should specifically target parasitic persons like banks, banksters, Wall Street companies, their owners, insurers, check cashing providers, paycheck advance providers, and all other financial entities with huge, new taxes. We can call them windfall profits taxes, since those entities have made trillions by deceptive tactics preying on consumers for decades.

      For example, aside from the banksters’ and Wall Streeters’ frauds, insurers design their policies to mislead policy holders: e.g., they have medical providers do fake overcharging such as making a $1.1 million dollar bill for a limited time hospitalization. Thereafter, they get a $200,000 co-payment from their gullible insured and pay off the $1.1 million bill by paying $400,000 pursuant to a confidential deal with the hospital/HMO.

      Once you are over 50 years old, you become more and more a liability to insurers: they make profits that are increasingly matched by the actuarially expected risk of having to pay out. Therefore, they encourage doctors to give less treatment: the quicker you die without their incurring fault liability, the better for them.

      Insurers and HMOs have take over healthcare and parasitize Americans. Thus, the doctors and nurses are not the ones profiting from increasing medical costs overcharging but parasitic HMOs, insurers and their crony hospitals massively profit.

      • Rand Passmore says:

        Maybe the USA needs a new flag with a giant dollar sign. Perhaps it should include some sort of symbol that means decadence and perhaps,ultimately some sort of hellish fascist future. Us Canadians are somewhat nicer and we look at the USA as a less advanced entity

    • Bob Hoye says:

      Those positioned for the bubble thrive so long as financial asset price are inflating.
      Most will not be able to determine the reversal to deflation in financial asset prices.
      Like all post-bubble contractions the next one will be nasty.

    • Finster says:

      Higher interest rates would be more effective. If you look at a long term chart of TBill rates versus the wealth gap, you see a strong inverse correlation. When rates were high circa 1980, for instance, the wealth gap was much narrower, and it has grown right along with the decline in rates closely controlled by the Fed.

      A cynic would see higher taxes as a mere diversion … a way for politicians to pose as Robin Hoods in front of the microphones and cameras, all while doing the opposite behind the curtain.

    • leanFIRE_Queen says:

      Capitalism is over imho. Capital was allocated so badly, the pricing mechanism cannot be allowed to work or the top 1% who the US gov works for would be hurt.

      The US gov will soon start UBI (not really universal though, just to the bpttom 50% of incomes) so that the bottom 50% looks the other way and keep on consuming.

      The top 50% w2 earners will have to fund the government.

      • Jeremy Wolff says:

        eventually robots will do everything. if they are controlled by 1%, then it will have to be 1% who pays for everything and give the 99% ubi. Doesn’t seem so bad. If you are making 99% of the revenue, you can be taxed 99% rate and still walk away will billions.

    • Rand Passmore says:

      What would Jesus say? What would Buddha,the mystics,Einstein or ANY of the best cognoscenti say?

      • sierra7 says:

        Rand Passmore:
        “What would Jesus say?”
        (as an atheist) I find myself asking a similar question more and more in later life:
        “What would Jesus do?”
        My internal answer would be, “I’m outta here!”

    • Brian says:

      TAX THE RICH!!! So the government can give it right back to them after taking a cut for themselves. Do people really not think this through?

    • Nik says:

      Sure it will..Higher Taxes and MORE exemptions and write-offs..we have been here before…..lolol PAY no attention to the ‘Man behind the Curtain’ May I also remind you mon ami Nature its self can be very destructive..when re-establishing equilibrium..correct?

    • Harambe says:

      Read a great book recently called “The Great Leveler” which looked at monetary inequality throughout recorded history. Bad news was that only war, famine, pestilence and revolution ever reversed the ever increasing siloing trend…

  2. Seneca's cliff says:

    Long Pitchforks and Tumbrels

    • happy_man says:

      Seneca, your pitchfork rebellion just caused another financial crises, and the govt responded with more stimulus checks, which flowed right into amazon, walmart, facebook, apple etc.

    • Steve says:

      Going after the wealthy will not solve the problem. STOP re-electing these idiots in Congress.

      Amazon at its beginning provided a much needed service, inexpensive access to books with fast shipping. Lots of competition and no monopolistic power. Same with Netflix. Its is only as they got bigger and began to exercise their monopoly power that things went sideways and your illustrious congressperson did absolutely nothing.

      The root problem isn’t ruthless business people (they will always exist), ITS ineffective Government who will not provide the necessary checks to unlimited power. AND that falls on us or at least used to.

      Sadly, now it is probable too late to change anything because we’ve allowed idiots to remain in congress beyond their shelf life and are like weeds that cannot be killed.

  3. 2banana says:

    Big businesses love big government.

    The uber rich love big government.

    Why?

    They use their friends in big government to destroy smaller competitors and to guarantee their profits no matter how inefficient they become.

    They are the first in line for cheap and easy money.

    Coined as the “Cantillon Effect” a 150+ years ago.

    Wealth inequality grows to massive lopsidiness.

    The rest of you get $800,000 crack shacks.

    And the answer is not even bigger government.

  4. Kevin says:

    If the fed didn’t pump money into the markets they strain on pensions and businesses would be even greater and the working people would suffer more. I’m not disagreeing that the rich didn’t benefit but I believe it minimized the pain to the average person. What say you ?

    • Wolf Richter says:

      Kevin,

      That’s precisely the red herring that has been laid out there by the Fed and others. I have to break it to you: the “average person” doesn’t have a pension in the US.

      And for those that do have a pension, why should the Fed bail out THEIR pensions and do nothing for the retirement of those that don’t have a pension and KILL the retirement of people who just have fixed income investments such as bonds and savings?

      • Just Some Random Guy says:

        “I have to break it to you: the “average person” doesn’t have a pension in the US.”

        32% of Adults have a 401k
        36% of Adults have an IRA

        And then virtually 100% of govt workers, at all levels (fed, state, local) have a pension. And most of that money is invested in stocks.

        A 70% stock market crash would have been a catastrophe. The Fed saved the economy for an entire generation and should be thanked not demonized.

        • Wolf Richter says:

          “A 70% stock market crash would have been a catastrophe” for YOU.

        • OutsideTheBox says:

          Really ?

          How much do those IRAs and 401ks contain ?

          Would they be enough to be considered a ” pension ” or merely tax deferred savings ?

          Really ? You worry about the pensions of government workers while baying at the moon how they shouldn’t even be employed by government?

          Your thesis and reasoning are lacking.

        • rhodium says:

          Stock market valuations are now a moral issue. If investors don’t overvalue that stock to the extreme, think of all the human suffering that would occur. Is the stock market the new replacement for welfare entitlement spending? In this world apparently it is, fully funded by the knuckleheads who swear they have nowhere else to put their money.

        • MCH says:

          I think the point is that assets are what drives the economy, assets such as those in the stock market. But what the Fed is doing is basically devaluing the dollar. The reduction of purchase power is going to be a killer. Let’s face it, $10K from 2000 got you a lot more than $10K today. My guess is that same $10K would get you even less in 2030.

        • Dennis says:

          Fidelity says the median 401k they hold for 50 to 70 year olds has a balance of about $65,000.
          How does that compare with a govt. pension?

        • sunny129 says:

          @Just Some Random Guy

          The top 0.1% own more than the bottom 80%! This Mkt wealt is created by DEBT, favoring those who are near in acessing that Fed’s spigot of easy-peasy money, created out of thin air!

          The top 1% own more than 50% of of Wall St wealth. the next 10% own nearly 90% and the bottom 90% have less than 7% of that wealth facilitated by Fed’s policies in blowing the bubble asset prices.

          The majority of bottom 60% live from pay check to next one. Many don’t even have $400 in savings. Having retirement account is luxary for many including Boomers!

          Fed is at the root cause of wealth & income INEQUALITY from the very beginning, by favoring DEBTORS and punishing the savers, those on fixed income, reitrees. This accelerated since ’09.
          Btw majority in this country rely on SS during retirement.
          Been in the mkt since ’82.
          I tend to agree with Mr. Wolf

        • RightNYer says:

          This argument is asinine. The fact is, a Fed induced asset bubble prevents real wealth from being created. The point in stocks is not to be able to sell it to a greater fool, but to realize the income potential of the underlying company. The asset bubble keeps earnings in the big cap companies, and prevents new companies from taking hold, as the big caps have an inherent advantage in being able to use the bubble to siphon more investor capital to squash the competitors.

          Thus, even if it’s true that most pension money is held in stocks, it’s not held in productive stocks, but in bubble stocks. In other words, if you think of the purpose of an equities market to own a piece of earnings, it’s better for a pension fund to own $50 billion of stocks that represent $3 billion in earnings than $60 billion of stocks that represent $2 billion in earnings.

          A bubble begets further bubbles to keep the game going.

        • SimpleLife says:

          Replying mainly to Dennis who asks about the comparison of median 401k balance and gov’t pensions. Fed employee here. We have a “three-legged stool” consisting of a pension that we pay into .8-4.4% (depending on hire date) and is calculated based on a person’s pay grade and number of years served in a variety of fields and agencies. Federal agencies contribute an additional 10%. The pension is not as high as you might think, for most hired after 1984 it will likely average about $30-35k per year, and about $50-60k if you served as a law enforcement officer (i.e. gun toters, firefighters, military – there are too many different scenarios to list). Second leg is TSP, a gov’t 401k with matching up to 5% with the option of investing in the US and international stock markets, government securities, and bonds. There were 49,620 TSP millionaires as reported by fedsmith.com on 7/6/20. The third leg is social security (including a social security supplement before reaching age 62, proved you meet number of years served and minimum age requirement). Yes, we feds have very secure jobs, but we have pay caps, never ending red-tape, politics, budget shortfalls, potentially lower pay than our private sector counterparts, etc. We don’t have stock options, bonuses are rare and not much if you manage to receive one. Besides any other income streams that we may have built (real estate, personal investments, spousal income) we really have to manage our 401k carefully on our own, which includes trying to figure out all of this financial mess just like the rest of you. I’m still learning, thanks Wolf and contributors for all of the dialogue.

        • cb says:

          SimpleLife said: “Yes, we feds have very secure jobs, but we have pay caps, never ending red-tape, politics, budget shortfalls, potentially lower pay than our private sector counterparts, etc.”
          ________________________________________________

          Good of you to share.

          The three legged stool sounds generous. I always hear the story about government employees making less than the private sector; this always seems to come from government employees, or their unions and spokespersons. Another view is that they make much more, have far better benefits, much greater perks and job security, and far less stress ,,,,,,,,,,,,
          and are a built in voting constituency for the status quo and government largess.

        • VintageVNvet says:

          Simple Life, CB, and all,
          Surely different guv mints have different arrangements, but, in my case, when I went TO try guv mint for a while, the work was easy, but my income was less than 1/4 what it had been, and the benefits similar enough.
          When I went back to private after ”working my way up” in guv mint service for six year, my income more than doubled and benefits were better by far; when I was recruited back into guv mint to fill a definite need and with the possibility of pension confirmation, I calculated the total pension for 20 years would be far less than the delta of income by staying private.
          And, so far, that is still the case.
          And the ”politics” etc of guv mint really and truly suck, as SL mentioned.

        • Jeremy Wolff says:

          For young people, a stock market crash is no problem. If they got another 30 years to invest, it will recover.

          For older people, their money is in bonds and less exposed to stocks.

          Also, pensions should be punished for over-investing in equities. Then pensions will more adequately invest in bonds. And then the Fed can finally let rates go up.

        • Nik says:

          lololol..Really?? a generation,highly unlikely anyway. But if we give you the benefit of the Doubt..only saved those you referenced above..correct. Plenty of babies have been born..between our two comments,most of which will see Multi-National Corporations usurp Governments in the near future anyway. Then,by golly,what happens to all those ‘Costly’ Government pensioners..lolol

      • Kevin says:

        Wolf,
        I guess I see pensions as the government’s responsibility to manage because that is essentially an agreement between an employee and the government. It is a contract that is agreed upon on the first day of employment. In many cases people will take a lower paying job working for the government because of the pension, because they feel the pension is better than they could do investing on their own. Not bailing out pensions to me is equivalent to letting social security fail. Totally different animal than how an individual manages their savings or whatever bonds they buy

        • Don says:

          You Can bail out pensions and 401(k)s without bailing out wailstreet.

        • Brian says:

          The Fed is not a government institution. It is privately owned. Why should they be obligated to bail out pensions?

      • Lisa_Hooker says:

        Well, I paid for my pension by being PAID LESS during the years my company was contributing to my pension. That was the contract. I was willing to forego some compensation for a later remuneration. And, yes I’m being killed by the current returns on safer investments. That’s a lot of money that’s not being spent into the economy every month/quarter.

    • Vegas Vinnie says:

      Kevin: This is something most people fail to recognize. Many think only the “Rich” have investments in “the Stock Market”. Where is everyone’s pension $, IRA $, 401k $, 403B $, etc. invested? The school teacher and union pipe fitter who decry, “Down with the Rich. Who cares about the Stock Market?” fail to realize THEIR $$ is parked right next to Mr. Richie Rich’s. Thanks to the FED’s lowering interest rates; savings and investing in “secure” Government bonds is no longer a solution to maintaining “wealth”. Therefor, even the most conservative of long-term investors are forced to take unnecessary risks with their nest eggs or watch (actual) inflation swallow it up. Wait until NIRPs take hold in the U.S.

      • cb says:

        @ Vegas Vinnie –

        as Don said:

        “You Can bail out pensions and 401(k)s without bailing out wailstreet.”

      • Old School says:

        I think a lot of people will find out if government bonds can’t ‘maintain’ wealth a lot of other assets can’t either. If government bonds are a horrible investment, then probably most other financial assets are too. Long term government bonds yields are low for a reason. Going out on the risk curve doesn’t mean the end result will not be worse.

  5. Rcohn says:

    Wolf
    Excellent points.
    The only problem with your article is that you have not sufficiently discussed the deleterious effects that this wealth disparity has / will have upon most people.
    Even before this recent liquidity explosion , the GINI coefficient was the second highest in our history ( after 1929) and may now be the highest in history.We rank worst than any industrialized country and could be considered a third world country by this standard.
    At the same time that the assets of the very rich have exploded, many of our cities have been under siege by both peaceful demonstrators and criminal looters .
    Overtly these recent demonstrations / riots were about police brutality , but the underlying problem is wealth / income disparity . The former head of BET has suggested that blacks be given $14 trillion in reparations . For many of us , this idea has been a non starter, but has not the FED actions had a similar effect upon those at the very top?
    There seems to be an increasing number of people who are arguing that the US is so indebted that the only solution is via inflating away the debt. The question that I have for everyone is “Will incomes of the vast middle class and those of lower incomes likely to keep up with the increases in wealth of the very richest that any inflationary policy will have or will inflationary policies just increase the super high wealth disparity .
    Many on this board are strong supporters of ability of people to become affluent and rich . But the basis of many of the rich and very rich are subsidies and deals with various governments. From TSLA subsidies to AMZN avoiding state taxes to Senators Feinstein’s husbands real estate deals with the USPS , these deals are the basis of wealth for many. The vast majority do not have government connections and get no subsidies.
    During the Korean War , the highest income tax rate was 90%. It is about time to tax the richest a substantial % of their wealth. Make it a simple tax with NO deductions or exceptions.

    • Just Some Random Guy says:

      “During the Korean War , the highest income tax rate was 90%.”

      Also during the Korean war , FICA was was 2.5%, vs 15.3% today. Sales tax in most states was 1/4 to 1/2 what it is today. For example in 1950 CA’s was 4%, it’s 9% today. Gas was pennies a gallon, which even adjusted for inflation is dirt cheap compared to today, and that is because gas taxes were low. So sure, you want the 50s tax structure back? I’m 100% for it.

      • noname says:

        Quit lying. California’s state sales tax is 7.25%.

      • rhodium says:

        They heavily reduced the highest marginal income taxes while increasing the load of all the flat taxes. How’s modern politics working out for the rest of us closer to the bottom?

        Oh, and they love to brag we have a consumer economy. It starts to slip, so they whack us with financial repression. It still slips so they pump the system with liquidity hoping the banks will lend temporary income to us. Some of us know not to take it, others see it as pay day and then later regret living in debt payment servitude (if only for a lack of self control). Oh, but now none of these borrowers are credit worthy because so many have defaulted or gone bankrupt after dining at this sick banquet. We better just keep on lowering lending standards… How else will we sell them stuff they can’t afford?

      • noname says:

        @NJ Geezer,
        “in 1950 CA’s was 4%, it’s 9% today.”
        That’s simply not true, it’s 7.25%. City and county can add more, just like other states with sales tax (for instance, AZ is 5.6% but some cities are as high as 11.2%).

      • gnokgnoh says:

        JSRG, are you saying that the rich who paid taxes at a 90% rate (above a threshold) cannot afford to pay all those newfangled taxes today, so we need to go easy on them? Is that supposed to be an argument?

    • Memento mori says:

      Taxation of the rich is coming, it’s just a matter of time.
      It will start at maybe 30million and the cut off line will keep coming down over the years until eventually everyone pays more taxes.
      Having people who never owned slaves pay reparations to people who were never slaves is the epitome of immorality and if it comes to pass, our civil society will disintegrate.

      • nick says:

        lol that you think a non sequitur clunky reparations plan would be the epitome of immorality. I mean would it be worse than…. slavery?

        • Memento mori says:

          Yes, because morality evolves and mirrors current times.
          What was moral 200 years ago might be immoral today and vice versa.
          Each man has always vices of times he lives in, that’s a given, that’s why we judge our ancients by their virtues.
          I can state with reasonable certainty that workers during the 18th century industrial revolution in England had it much worse than slaves.

        • Anthony A. says:

          My family never owned any slaves. We were from Lithuania, so why should WE pay someone who was NOT a slave, anything?

          And, BTW, we are minorities here in the U.S.

        • Ensign_Nemo says:

          @ Antony A. : If you want an even better illustration of the inanity of this idea, consider this.

          Former President Obama’s black ancestors immigrated in the 20th century and would therefore have no logical claim for reparations for injuries from slavery, which didn’t exist when they arrived.

          His white ancestors arrived in America earlier, so they were present when slavery existed.

          Ergo, if everyone with with white ancestors present during the slavery era owes money to everyone with white ancestors present during the slavery era, then by this logic President Obama will be forced to pay reparations to black people for slavery and can’t collect any money himself.

          This is a ‘reductio ad absurdum’ argument against this proposal rather than an argument for this proposal. Some people, especially ‘wokesters’, don’t understand elementary logic or sarcasm. I need to explain myself these days when I mock dumb ideas.

          https://en.wikipedia.org/wiki/Reductio_ad_absurdum

        • Zantetsu says:

          I don’t think it’s about paying people who have direct lineage to former slaves, it’s about paying people who have suffered reduced opportunity over centuries due to the fact that slavery existed, Jim Crow laws existed, and a significant segment of our society suffered real harm due to those institutions. If your grandfather was poor and held down, it is virtually guaranteed to have had some impact on you, because reduced resources available within the family typically mean reduced opportunities for the following generations.

          I think *that* is the intention of reparations and is what people should be talking about, not juvenile arguments based on the obvious fact that we cannot know exactly who is a direct lineage to a slave, and even if so, exactly who suffered “the most” due to it. Also please throw all arguments which purport to make the perfect into the enemy of the good away right at the outset so we don’t have to be mired in them, including those that make the obvious point that like every other policy ever created, it cannot and will not be implemented perfectly.

          For what it’s worth, I also don’t agree with the idea of reparations, but I do agree with the idea of reserving a certain part of our national product for the purpose of giving better opportunity to the historically repressed, not through direct payment but through better and more widely available education, all the way up through adulthood, including free job training.

  6. Yertrippin says:

    But those freeloading millennial kids and their avocado toast and iphones!

    Looking forward to the back in my day- insert hard work- comments.

  7. Finster says:

    Excellent treatment of the Fed. If the “mainstream” financial media did more of this, these problems couldn’t survive. Light is the ultimate disinfectant.

  8. MonkeyBusiness says:

    Quoting from an article (Juan Cole in Informed Comment):

    “Americans imagine themselves rugged individualists. A cartoonist did a satire on us showing brawny guys, shirts off, with the logo “Rugged individualism works best when we obey.”

    In fact, Americans are masochistic sheeple who let the rich and powerful walk all over them and thank them for the privilege. …

    The rich figured out in the 1980s that Americans are all form over substance, and if you put up for president a Hollywood actor like Ronald Reagan who used to play cowboys, they would swoon over him. In 1984 when Reagan ran against Walter Mondale, I saw a middle aged white Detroit auto worker interviewed who said he woudn’t vote for Mondale because he was a “panty-waist.” Reagan took away their right to strike and took away government services by running up the deficit and cutting taxes on the rich simultaneously, then claiming the government couldn’t provide the services the people had paid for because it is broke.

    Reagan raised the retirement age from 65 to 67. Why? Most young people don’t realize that their health will decline in their late 60s and they often won’t actually get any golden years.

    What did Americans do in response? They just bent over and took it.

    Actually, it is the French who are much more like Americans imagine themselves to be. President Emmanuel Macron last December tried to raise the retirement age from 62 to 64. I can’t understand why. France has persistently high unemployment as it is.”

    • Rcohn says:

      France has had at least 8% unemployment for over a decade.

      • MonkeyBusiness says:

        Sure, but at least they managed to stem that retirement age increase. I deliberately left that part out.

        At least there’s enough organized resistance to demand something that’s reasonable.

        Look, I am not one of those people who think the government is always right/wrong or the private companies are always right/wrong, but Americans always allow themselves to be rolled over by the rich.

        Home of the Brave?

    • Lisa_Hooker says:

      The rich figured it out in the 1850’s when they started cutting deals with the government and bankers for railroad real estate. They have never stopped.

    • Anthony A. says:

      Reagan took away whos “right to strike”? Did he negotiate that out of union contracts for the auto companies?

    • baldski says:

      MonkeyBusiness: You are so right! A bunch of sheep we are. We pay for the nose for drugs and yet nobody complains about drug companies bombarding you with commercials. Sheep! The French know how to protest., they all go on strike.

      Jeff Bezos made $7 Billion yesterday with a capital “B”. Was that a result of “hard work” or “harder work” yesterday ?

      • Lisa_Hooker says:

        @baldski – too many folks forget the many years that Amazon wasn’t profitable because money went straight back into the company. If JB sold all of that $7 billion this afternoon he wouldn’t get $7 billion as the stock plummeted. Admittedly he owns a lot of paper claims.

      • Steve says:

        Bezos did not make $7B yesterday. His wealth increased by $7B yesterday and could drop by $8B today. Who knows. But there is a lot of confusion between wealth and income.

        Some people have significant amount of wealth but very little income.

        For those who say tax the wealth of billionaires. Consider this;
        The tax would force the sale of at least some assets (billionaires don’t keep hundreds of millions in cash lying around), possible to the point of losing control of their companies. The vary act of liquidating some of their holdings, assuming there is a market for the asset, as not all billionaires own liquid asset that are easily sold, would cause the markets to oscillate even more than they do now.

        There are no simple solutions, but this is definitely not one of the brightest ideas.

  9. Just Some Random Guy says:

    Would the US be better if Bezos lost $50B or made $50B?

    • Wolf Richter says:

      Just Some Random Guy,

      YOU JUST DON’T GET IT, because you don’t want to get it. The world would have been better off by far if the Fed had let markets fix the economy — including the debt overhang. That’s the whole point.

      Now we don’t have a market that functions in that essential role anymore. No one can price risk anymore. The cost of capital is screwed up, leading to malinvestment. Zombie companies just continue being zombies instead of getting restructured. The whole thing is now messed up.

      And then there are people like you running around thinking that’s the way it’s supposed to be. This is totally nuts.

      • MonkeyBusiness says:

        “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

        Upton Sinclair.

        True 100 years ago, true now, true forever.

        • MiTurn says:

          Dang it, you beat me to it.

          Great quote.

        • cb says:

          It is also difficult to get a man to understand something, when his ego depends on his not understanding it.

          or, when his ego depends on rationalizing it.

      • Trinacria says:

        As I post the comment below, just saw Wolf’s comment above to “Random Guy”….Amen to what Wolf posted !!! The Fed has, without a doubt, messed up pricing mechanisms – which are essential to a market system. If left alone, absolutely the market would have fixed it. I read that in the early 1920’s there was a serious economic downturn in US, but somewhat short lived as gov’t did not interfere. However, in 1930’s gov’t interfered, and we saw how long that one lasted. At some point consequences will be very, very bad. I am simply hoping that a movement to simplicity will start on a large scale, as that is something each one of us can do, if we so choose. It is probably the only protection we have at this point. But also feels better along with having some gold and silver. “think locally and act deflationarily” – just made up a word !!! As the Fed tries their best to act “inflationarily”….another made up word.

      • Just Some Random Guy says:

        A world with 30 or 40% unemployment is not a better world than 10% which is what we have now, which is what would have happened had the Fed done nothing. You can think that is a better outcome, and that’s fine. I disagree.

        • Wolf Richter says:

          Just Some Random Guy,

          You know and I know and everyone knows that this is BS behind which a lot of Fed-action lovers are hiding, including the Fed itself.

          For example, look at Japan: The Nikkei is still down about 45% from its peak in 1989, that was over 30 years ago, and the unemployment rate over the past three years has been under 3%.

          Declining stock prices don’t decrease employment, and rising stock prices don’t increase employment.

          In fact, if companies were more focused on investing in US labor (training, pay, hiring of local workers instead of offshoring production to cheap countries), rather than stock prices (blowing billions of dollars on share-buybacks), the real economy in the US would be second to none! But stocks might be lower. So what?

          But that singular focus on stock prices – including at government and Fed levels – is screwing up the real economy.

        • two beers says:

          A world with jobs programs that take up the slack when billionaires are too busy outfitting their survival bunkers in New Zayland to “create” jobs n stuff and be all around Randian supermen, would work just fine, as the New Deal demonstrated.

        • Lisa_Hooker says:

          @Wolf – gee, corporations investing in education and training for their employees. Maybe even investing in plant and equipment in the US for said employees. Whoda thunk. I clearly saw our current evolution when Greenspan cut the rate to 1% in 2001 and companies did not invest in the US. It all went into housing – for a while. Must have been the Y2k virus.

        • Trinacria says:

          Just some random guy: I must agree with Wolf on this and let me give you my own example as to why I believe you are not correct.

          Let me pick on Boeing. It is no secret that Boeing mucked up big time in two ways:

          1. the whole 737 fiasco was fraudulent in IMO…they tried to create a new plane to compete with Airbus A320. The Airbus set up higher off the ground, so the larger, more efficient engines could fit under the wing. Whereas, the 737 was too low to fit these engines, so they had to monkey with them by pushing them forward. This changed the entire aerodynamic of the plane and we know the tragic results. IMO, also criminal behavior, folks should be in jail as many died.
          2. Gorging at the trough of share buybacks, big debt on the balance sheet, all hades breaks lose and the need bailouts.

          On the other hand, no bailouts, Boeing is sold for say 20 cents on the dollar. Execs get hurt big time but lose jobs and should be criminally changed in addition. Many rank and file who have Boeing stock will lose….BUT, BUT…they keep their jobs as they folks that come in at 20 cents still need employees to run the company. There will be pain, but the culprits are punished the hardest and their name should be mud and they should be shunned.

          That is the overview as I see it. This should be happening on a large scale to “fix” our zombie economy….

        • Ensign_Nemo says:

          The best way that I can describe the pernicious effects of the actions of the Federal Reserve in a nutshell is this:

          Creating money without creating any goods or services has the exact same effect on the economy as counterfeiting.

          If you open up an old textbook on economics (old as in from the 1950s), it states that large banks aggregate small deposits from many savers and then make loans to companies to allow them to make large capital expenditures in order to expand production, e.g. building a new factory.

          This is the classic function of large banks, to act as intermediaries between small savers and large companies that need millions of dollars to expand operations.

          The small local banks – the ‘town bank’ of the days of yore, when every small town had a small bank – would handle things such as mortgages, the ‘state banks’ or ‘money center banks’ would handle financing of large corporations such as heavy industry.

          The very largest corporations would be able to sell bonds or shares of stock, but that was only a few thousand or so companies out of the millions in the USA.

          Today it’s completely different. Most banks would rather not even deal with anyone who isn’t a millionaire because the profits to made are tiny compared to the profits made by ‘high finance’. When the Fed pumps $2 trillion into the economy, as it just did, it goes straight into the stock market, where the rich increase their ownership of existing companies rather than create any new ones. The largest companies rarely borrow from banks, unless they are in trouble like Boeing and need to draw upon existing lines of credit to remain solvent. Big banks make profits from trading paper rather than loaning to companies that are building stuff.

          Few, if any, new goods or services are produced by pumping $2 trillion into a frothy stock market. It simply rearranges the ownership of the companies by letting the rich buy stocks and get richer. The Cantillon effect is that the well-connected rich spend newly created money first and get the most benefit, while the poor and working classes get no benefit, but do suffer later from higher inflation.

          If somebody with fingers stained in green ink had printed $2 trillion, and somehow passed the 20 billion fake Benjamins off as real and bought stocks, it would be just about the same as what the Fed did.

          Geroge Floyd was pulled over by the cops and died with a knee on his neck because he had allegedly passed a counterfeit $20 bill.

          The Chairman of the Federal Reserve created 100 billion times as much money, and it had the same effect on the economy as 100 billion fake Jacksons, yet nobody put a knee on his neck.

          The police are sent to chase the wrong class of criminals. The white collar criminals are doing far more damage than the blue collar crooks.

        • Jeremy Wolff says:

          40% unemployment would be great if the economy was strong as measured by output, and the unemployed had a good standard of living, and they got to be with their families and pursue recreation, purpose, and passions. Most people dream of unemployment or least finding employment they can do without worrying about money.

      • cb says:

        @ Wolf –

        it has been messed up for a long time. long before Corona Virus.

      • Don says:

        What you are preaching is capitalism. And as a hard core lefty, I’m all for it.

      • GotCollateral says:

        I disagree wrt “no one”, mispriced risk show up lots of places, least of which in the form of underpricing of puts structurally in models like Black Scholes (which many derivates are priced to, esp those available for retail trading, double esp for exotic ETFs) with 1M+ from expiry (and truncation of taylor series expansion which matters when their are higher rates of change in asset prices [DOI: 10.3905/jod.2011.18.3.035]).

        CBs efforts only push risks to the tails even further. Harder to calculate with simple models: yes.

      • Mark says:

        Here, here Wolf.

        So long as Boomers’ pensions are intact, homes and stocks are at all time highs, all is right in the world! Keep pumping those stocks, Fed – and thank you! Apres nous le deluge!

        In all seriousness, nothing would be so good for the young as generational debt cleansing/deleveraging event with homes and stocks going down 70%+ and staying down for years. America is finally seeing the societal upheaval from the Fed’s policies, and it will only continue to grow the further the Fed pushes it…

      • max says:

        “YOU JUST DON’T GET IT, because you don’t want to get it.”

        Mr. Wolf, FED should not exist, and you are intelligent enough to understand that.

        Problem is not that someone get richer or not –problem is there is not one law for all of us.
        There is one law for government/bankers and another law for rest of us.

        • GotCollateral says:

          And untill people are willing to do something about it besides stepping into their election skinner boxes in nov, it will continue to be this way.

        • VintageVNvet says:

          Exactly Correct max!
          When this republic started, there was a very clear understanding that it was a great leap forward for equality,” a nation of law for all” ,,, (NOT one law for the mass of men, another for the royalty/nobility, etc) ,,,forward toward democracy, though that was not what we got, even at first, and no one in their right mind would call what we have today democracy because:
          First and foremost We the Peedons have allowed the chattering/nattering puppets of the oligarchy class to make and enforce in reality two sets of laws,,, two sets of retirement systems paid for by taxpayers,,, even two sets of criminal laws as was clearly shown by the murder trials of OJ and the other rich fellow who got away with murdering his wife because he could pay for the legal help to do so, as per OJ.
          Democracy without ONE set of laws, rules, and regulations is just as bad as any other social system similarly set up with special laws for designated groups, etc…
          Simple solution is an amendment to the constitution mandating all laws to apply equally to all classes of people, no special laws for guv mint employees, elected or appointed.
          Imagine what would happen to SS alone if all the gazillions of tax payer paid guv mint retirement money were returned into SS where it belongs and should always have been,,,
          IMAGINE if, similarly, there was ONE taxpayer paid HEALTH Care system for everyone, not the ”bargain basement” one for We the Peedons and the elite one for guv mint folks.

      • Dale says:

        Here’s the timeline, in short:

        1. Powell attends Bezos’ party in January.
        2. Powell enriches Bezos by $74B.

        That must have been quite a party.

    • Seneca's cliff says:

      It would be a different story if these guys like Bezos and Zuckerberg were Ford , or Edison, or Thomas Watson, or even Steve Jobs, but they are little more than overgrown electronic carnival vendors. But making this bunch richer while the working class gets poorer will not end well.

      • Lisa_Hooker says:

        Bezos was/is a very creative and innovative guy. Ruthless too. Quite a number of amazing accomplishments, including hiring exceptional people.

        Tell me again, what did Zuckerberg ever do. Sort of a Bill Gates clone?

        • Zantetsu says:

          E-commerce still would have happened had Amazon not come along. It was just the right time for that technology. None of us can ever know for sure, but I feel with great confidence that e-commerce would be at worst only marginally less efficient had Jeff Bezos never been born.

        • Lisa_Hooker says:

          @Zantetsu – yes, e-commerce happens. But show me the list of companies that started when Bezos did and followed through as well. There was plenty of room for any number of companies – back then.

        • Zantetsu says:

          Who knows what company/companies would have succeeded in Amazon’s place. My point is that *someone* would have. Your question isn’t even relevant to my point.

    • cb says:

      if he lost $50B.

    • Mr. House says:

      If that 50B went into mom and pop retailers in local communities who had relationships with their employees and paid them better then an amazon sweatshop, yes. The stockmarket is an illusion. All of the money printing that has been going on since the dollar was cut from gold has been funneled to it. And they hold most hostage, due to their “retirement” funds being invested in it. Kinda like Stockholm syndrome

    • Young says:

      Bezos would not have $50B to lose if his company was forced to pay taxes like anybody else from day one.

  10. Inno says:

    I recall when Greenspan fretted over the declining physical weight (mass) per dollar of GDP…from there we went to the Service economy and then the Gig economy…same underlying cause, removal of “goods” productive power in US economy, and replacement by “services”.

    What I didn’t see then, but do now, is what happens when the Service economy (leisure, retail, consumer discretionary in general, etc…) can’t be serviced by labor, and by necessity is automated, eliminated or replaced by electronic or other non-human means, and how quickly this tips the scales irreversibly toward existing capital structures, and further accelerated by government attempts to “help”.

    The result: All value circles back to the hands of capital-owners. And without free-market mechanisms (due to regulation and/or natural cost structure benefits of scale, such as in software) this degrades to oligarchy.

    I’m no fan of systemic planning, and favor free-market myself, but it is worth pointing out that Marx said capitalism would ultimately result in stripping economic power (“means of production”) from the people, and this would lead to revolution. His theory did not predict or support the past revolutions of agrarian societies foisted by dictators upon the world. Western leaders like to say Marx got it wrong, but in fairness, world economies have yet to reach the point of development where his theory would be tested, not by politics, but by economic science. I’d say current situation took the US a step closer toward that experiment.

    • Sam Lowry says:

      Inno: “…Marx said capitalism would ultimately result in stripping economic power (“means of production”) from the people, and this would lead to revolution.”

      The capitalists have to get their money for the investment in production of goods and services from somewhere. It used to be (more or less) the case that the money came from savers alone (those who deferred consumption). That is, the capitalist had to cut the saver in on a piece of the action in the form of interest. More than that, even those who didn’t save would enjoy improving economic prosperity given the money they did spend could buy more thanks to improved economic productivity.

      The ability of the oligarchy to create money out of nothing (by way of fiat currency and before that “fractional reserve” banking) is what in reality strips economic power from the people. Without it, the capitalists are indeed beholden to “the people,” counter Marx.

      And the ‘capitalists’ and ‘the people’ didn’t used to be such categorically different classes. Any small businessperson is a capitalist, by proper definition. Marx hijacked the notion of ‘class’ to draw attention away from the oligarchy, of which he thought himself a disaffected member.

      I thank Wolf Richter for drawing attention to the Federal Reserve in particular as the means by which the rich get richer. They can simply print money. Nothing more complicated is needed to explain this phenomenon.

      • Inno says:

        Hi Sam,
        Thank you for your response. Indeed, I think we agree, though it might not be apparent on the surface.

        Marx only wrote about the means of production, and the separation of this from the people under the natural process of capitalism, which is not the pejorative connotation, just denotation, of capital-seeking ROI. This effectively is only the IS side of the Keynesian construct.

        What he apparently hadn’t conceived of, and I think would only add to his argument, was the industrialization and abstraction of monetarism…namely representative forms of value, abstracted from physical representation.

        Apologies if this sounds like some abstract wonkian economic theory. In concrete terms, both forces are at work, the concentration of capital intensity under increasingly sparse control, and the govt control of not only the representation of monetarism, but also increasingly removed concept of what that monetary unit represents.

        One could say, “An honest day’s work” has suffered the same unmooring, as monetary policy has suffered the obfuscation of the “value of a dollar”.

        Keynes might even agree…the IS and LM curves have both become unhinged from anything other than an abstract concept.

        Sound money, sound labor, sound capital markets, sound policy. These are not things of the present.

      • cb says:

        Capitalism runs into problems if and when wealth and power become concentrated.

        The focus should always be free markets, which concentrated wealth and power can destroy.

        • VintageVNvet says:

          Correct cb, and very clearly the other way around: Free markets can destroy wealth and power,,, which is exactly why the oligarchy takes whatever steps are needed to destroy free markets as soon as they can do so without total revolution.
          While today we have tons and tons more information available to each and everyone who can (or could until this virus) get themselves to any library and access the internet free, etc., in the past when the oligarchs used their wealth and power to destroy free markets, ( done dozens of times previously in his story to be sure,) there was very little free communication available to even the upper middle classes, almost none other than rumour to the rest of us…

    • Lisa_Hooker says:

      @Inno – extremely well said!

  11. Bruce Sammut says:

    The massive money pumping moves fastest to those who can buy.

    That’s why stocks have soared.

    This will lead to hyperinflation and the final destruction of the middle classes.

    Prepare for the worst and hope for the best.

    B

  12. LifeSupportSystem4aVote says:

    It appears the US economy has transformed from the alleged “trickle down” methodology first coined by Reagan to the “cascade up” we have today.

  13. Trinacria says:

    Yertrippin: and you will get them (comments). IMO what “we” are facing today is absolutely insidious. I say this, because after I read this article and hear the podcast as well; I see in my (twisted) mind – several moves down the grand chess board of humanity, what I believe is the logical conclusion to this insanity…which is….drum-roll please….the masses (read asses) are on the fast track to enslave themselves more and more. This, unfortunately, will affect all of us, even those of us who don’t play this asinine, downright juvenile, pathetic and destructive game of “shop till you drop” – and not to mention all the corresponding debt that is being run up in the process, so folks are / become enslaved financially as well as emotionally and spiritually. This will continue to create a larger and larger peasant / plebeian class. Make no mistake, we will all suffer here as a result of this misbehavior on a grand scale – which by the way, really pisses me off as I have worked hard to keep my life squeaky clean – and I love it that way !!! I don’t put any value in all this crap, nor does it make me happy. Even though I can afford it 100 times over – less is truly more for me. The less stuff I have the happier I am….but again, I am considered weird and counter-cultural and have never felt the need nor the pressure to conform. As my dad used to say in Italian (how we spoke at home)….YOU DON’T NEED TO STEP IN POOP TO KNOW IT STINKS !!! I submit that the masses are now stepping in the proverbial poop on a grand scale.
    So, in addition to my good ol’ dad’s quote above, I go back to two great quotes from two millennia ago that are near and dear to my heart and are guiding principles in one’s life:
    1. It’s all vanity.
    2. Your heart is where your treasures are.
    Therefore, addressing only the commerce aspect for now, the best thing folks can do is cleanse their life of stuff, give stuff away, deleverage, simplify and hopefully do your share to help bring about DEFLATION. As my wife always says to this day….do I need it, or do I want it. Her parents taught her well. Unfortunately for most folks, wants have become needs – aided of course by constant marketing. If deleveraging and simplification start to happens on a grand scale, things the situation has a chance to change. It will be painful… but will beat the alternative that otherwise is coming, which is much worse I have to believe.
    So, the question is; do you have the courage to modify your habits, life, etc. and work towards becoming free of these shackles… or, do you prefer to remain un-free and really un-alive so that you can continue feeding large egos (including your own) that don’t have your best interest at heart.
    Have yourselves a nice day !!!

  14. The Bob who cried Wolf says:

    “from Bezos to landlords”
    I must be doing something wrong; a lot of landlords I know must be doing something wrong. We only got stuck mildly with having to pay for attorneys, no possibility of collecting late fees, paying for and not getting paid back for repairs, returning bulks of deposits just so we could politely get rid of horrid tenants that used us. There’s a lot of landlords right now who fared much worse than we did. I’ve also voluntarily waived many fees, water charges, etc to many of my good tenants just so they can stay afloat. A bunch of landlords I know are doing the same. I’m not so sure they’d consider themselves as occupying either end of the “from Bezos to landlords” gamut, I don’t. Trust a landlord, any money we get stuck on we’re not ever going to see again unless we put up a huge collective fight, and even after the fight, we’re still out tremendous amounts of money.

    • cb says:

      Be lucky to be a landlord. Much better than being a tenant.

      • Beardawg says:

        CB

        I agree. All as stated by THE BOB WHO CRIED WOLF (BWCW) is true, but as a Landlord, at least you have options because you had a plan to BECOME a Landlord and you had to learn a few things along the way.

        My beef (Like BWCW) is the 90% (voters and legislators, not just tenants) put ALL Landlords in the “Bezos” bucket and that may lead to misguided local policies, state/fed legislation and violence.

        • Mr. House says:

          “My beef (Like BWCW) is the 90% (voters and legislators, not just tenants) put ALL Landlords in the “Bezos” bucket and that may lead to misguided local policies, state/fed legislation and violence.”

          When isn’t that the case today in our society? Landlords, white people, asian people, we’ve all been generalized by those that manage the system. They like it that way, keeps the spotlight off them

        • Petunia says:

          Beardawg,

          Rent control is coming, maybe you should sell out and move to Saint Barts.

        • The Bob who cried Wolf says:

          We’re easy targets. I can assure you that had this all happened 10 years ago we’d have been doomed. We were negative cashflow on most everything we owned for years and years and just finally started to see tangible income in the last couple of years. It was a tremendous risk we took. Anyone who just started is in serious doo doo. Even the Air bnb folks who we love to hate are taking a risk and trying to make a better life for themselves. If you’re a landlord in these times you better be very careful who you rent to. The gummit has targeted us, no two ways about it.

  15. Wisoot says:

    Accountants pay attention. You as a member of your accountancy organisation must change your organisation from within.

    Ever since the shareholder went to the top of the pile for reporting purposes in the list of business stakeholders, we have had a problem.

    Business used to exist for serving the public a product and for employing people in a community. Lets get back there. This approach spreads resources around. The current approach is a planet where perceived – media generated – sentiment (stockmarket AI drivers) influences who gets to eat and who doesnt.

    Change what and how it business results are reported and the AI drivers will respond by cutting out the media middleman and feeding from reports.

  16. Rcohn says:

    What % would agree that some amount of government supplement(not $600) was the correct thing to do this spring?

    What % would agree that Wall St hedge funds who had very large leverage bets on cash Treasuries Vs Futures should have been bailed out

    What % thinks that the Fed should buy AAPL bonds and lower the interest rate that it pays . This money is then used NOT for CAPEX but to buy back stock

    • Petunia says:

      I don’t think the $600 was too much and I think it should be extended until the madness ends. Unemployment went up again this week, as opposed to last week. I think the decline last time was about the reinstatement of the looking for work provision, which they didn’t warn claimants about. The system is all about F…ing you when you are down because until lately there have been no consequences.

      Which leads me to corporate bonds being purchased by the fed. The fed could easily direct their member banks to buy this crap, but they don’t because then they would have to price it at market, which could become a problem. When the fed buys them they book it at cost(par).

      As far as hedge funds go, they are quickly disappearing except the few which are extensions of the fed.

  17. LouisDeLaSmart says:

    \\\
    I was reading about communism and the economic failures of the Soviet Union. Turns out the major flaw was the lack of an economic mechanism to “close” unprofitable ventures, due to the ideology of the planned economy model. So, what seems to be happening is that “capitalism” is not anymore a profitability based system, instead it has become an ideology. And it’s symbol, it’s sickle and hammer on the red banner has become wallstreet and stock market indices. And we all know ideologies are about symbols.
    \\\
    It’s ironic, American capitalism turning into an ideological planned economy….Everything it was never planned or intended to be.
    \\\

  18. Joe in LA says:

    America has a “free market” that constantly requires taxpayer money to avoid collapse. When I was a kid, the market created wealth, now we are working to pay off debts created by “the market.”

    At $10+ trillion in taxpayer support since last November, “the market” is now the biggest deadbeat in the world.

  19. Nancy says:

    Great article! Thanks Wolf!

  20. Tbv3 says:

    I totally agree with you Wolf.

    The Fed has repeatedly bailed out the PE industry.

    In June 2010, Lloyd Blankfein told FCIC investigators that his greatest risk exposure during the 2008 meltdown was his levered-loan book:

    “we had tens of billions of dollars—maybe over $50 billion of exposures to leveraged loans in such illustrious names as Chrysler….”

    https://fraser.stlouisfed.org/archival-collection/financial-crisis-inquiry-commission-4967/audio-interview-520787

    In March 2013, the WSJ reported:

    “Nine executives at private-equity firms together will take home more than $1 billion in dividends and compensation from last year, even as some of Wall Street’s top bankers saw their paychecks shrink.”

    http://online.wsj.com/article/SB10001424127887323293704578334651224569798.html

    In March 2014, the WSJ reported:

    “Private equity’s top moguls took home more than $2.6 billion last year as booming markets allowed their firms to cash out of investments and notch blockbuster gains. Nine founders of four of the world’s largest private-equity firms together collected the sum—more than twice as much as they made in the prior year—through dividends and other payouts. The executives each took home more than $160 million….”

    http://online.wsj.com/news/articles/SB10001424052702304815004579417612416453956

  21. tommy runner says:

    when logic and proportion have fallen sloppy dead.. (ty gs)

  22. A says:

    It’s time to tax the corrupt billions the 1% got and redistribute it to the 99%.

  23. Macro Investor says:

    I have no problem with wealth inequality. Not that I love Bezos, but he is rich because he worked hard and created a product everyone wants. That’s a free market in my book.

    Poor people are poor because they don’t have the skills needed in a modern economy. There was work for them in the 50s, but in a global economy they are competing with 5 billion unskilled workers who will work for a bowl of rice. Nothing can be done about this, except to make sure your kids get the best education they are capable of.

    My second point is — don’t blame the fed. Blame congress. Not a dime can be spent that they don’t appropriate by law. The fed is just the tool they use. If the fed was ended tomorrow the money would be printed some other way. Nothing can be done about this either because a majority of voters think they’re getting something free.

    • Wolf Richter says:

      Macro Investor,

      If the Fed had not thrown $3 trillion at the market to bail out asset holders – and that’s all it did – the market would have sorted this out on its own just fine, and 50% to 70% of that fake market value would have vanished. The market was already well on its way to that.

      Then the market separates the wheat from the chaff, and zombie companies run out of money, and the others don’t, and large-scale debt restructuring at the expense of investors takes care of the debt overhang. It also teaches investors about risk. Then the economy can move forward with a lot less debt, and in better and nimbler condition.

      This bailout was the Fed’s biggest mistake ever. Now investors like you think this is the law of God, and risk doesn’t exist, and it’s always going to be that way. This is when the economy can no longer fix itself, and nothing can fix it.

      • cb says:

        The FED is full of mistakes. Their existence started it all. They have been ruinous to free markets and are a government sanctioned racket.

      • MCH says:

        You know that just means Bezos, Zuck, etc still get richer right?

        The top 10 or dozen billionaires still don’t lose a thing. Most of them are riding the pandemic wave like pro surfers… and because their business benefit in some ways.

        Because the small guys getting their $600 per week, but they still get it, and they still spend it with the same guys.

        But at the end your point still stands, because a bunch of guys will have lost a bunch of money, just not the top dozen who now are worth a trillion bucks.

        • Wolf Richter says:

          MCH,

          There is a difference between the price of a stock, and a business having growing revenues. Go check what Amazon might be worth at a PE ratio of 20. That’s where it might be now. Bezos would have lost lots of money. The company would be fine, just valued more reasonably because the blind enthusiasm would be gone. Those would be the winners from the Pandemic.

          The losers would restructure their debts in bankruptcy court and emerge in better shape or be liquidated – all at investors’ expense.

        • MCH says:

          Well, Bezos doesn’t care technically about losing money… especially when it comes in terms of investor money. Like Musk, he made the investors believe. Unlike Musk, he delivered. Look at his track record, he hasn’t cared for 25 years.

          The going comment on Amazon is that any time he wants to, Bezos flips a switch, and Amazon’s earnings goes up. All he has to do is to stop his vanity projects like HQ2, or his relentless expansion targeting consumers. The fact he doesn’t is because he is too busy trying to be Dr. Evil or Jean Luc Picard… not sure what the real difference is between the two.

          And of course, you are right, he would’ve survived easily anyhow even without any Fed help. The price of the stock and his status as the richest are probably byproducts he doesn’t care much about. The zombies deserved to go away in the natural scheme of things

          And as for the investors getting wiped out. There is still that chance. Although AMZN investors comes off better in the long run anyway.

          Right now, it feels like the eye of the storm, and tip things just a little one way or the other, and the whole gig is up. And I don’t mean C19, in the grand scheme of things, it’s nothing. There are literally so many hot spots around the world right now, it feels more like August 1939 than it does March 1991. China/India, India/Pakistan, whatever crap is going on in the Middle East, Turkey vs all their neighbors, Libya version x.x, Syria, China vs its neighbors, Russia vs Europe, the list is endless.

          The only reason we don’t hear much about it is that the US media is so self absorbed, nothing else matters. SCMP is my go to source to real news these days.

        • VintageVNvet says:

          With you on the SCMP mch,,, at least up until the CCP took over HK, then arrested the media mogul who was allegedly helping the folks looking for more democracy in HK rather than more fascism which is now the case and likely to get worser sooner, eh
          For now, and even back since the Brits threw in the towel in HK, the SCMP has done an excellent job of reporting local news, regional news, and even at time global news as was appropriate for a ”world class” city focused on trade as all cities should be.
          However, even before the imposition of more CCP control, SCMP would put up articles, good articles, analyzing trends in all aspects of HK live,,, and sometimes take those articles down within a very short time, to my certain knowledge…

        • MCH says:

          @VintageVNvet

          Like I said, starting to feel a lot more like 1939 than 1991. And wouldn’t you know it, we’re even closer to 2039 than we are to 1991.

          Not sure when things started to go side ways, but this era feels like it’s the time frame between 1880 to 1910. The world is in a lull, things are meandering along, and then… catastrophe.

          Except the consequences of catastrophe are now infinitely worse considering how much destructive potential mankind has gained in the last 100 years.

      • Mr. House says:

        Wolf,

        My question to you is, wasn’t this apparent after 2008? That’s why i started reading sites like yours, because i knew that once they did what they did in 08 they would never be able to stop. Which is why some of us have been raging the last decade that this day would come. Though most decided that things had returned to normal. These bailouts will beget more bailouts, and i think the time frame shortens after each bailout. I’m guessing the markets will crash again in the fall sometime in september or october and the bailouts will be even larger.

        • Wolf Richter says:

          Yes, this will go on until Congress puts a stop to it. But Congress — and I mean 95% of the representatives and senators in it — has no appetite to even think about thinking about curtailing the Fed’s power to print and bail out.

    • cb says:

      @ Macro Investor –

      poor people are poor because they don’t own anything,

      Why not blame the FED? They are complicit and they profit form the misdeeds.

  24. Jennie says:

    Wolf,

    I’m a little confused. Wasn’t it Congress that ultimately decided how that money was going to be allocated? Surely, they’re the bigger players in contributing to the wealth inequality?

  25. baldski says:

    Question: The Fed is a private corporation. Who are the owners? It explains a lot of their actions.

    • Ensign_Nemo says:

      They won’t tell us who owns the Fed. It’s still a secret, a secret that has been kept from public knowledge for over a century now.

      According to the Fed, ‘The Federal Reserve System is not “owned” by anyone.’

      https://www.federalreserve.gov/faqs/about_14986.htm

      There are banks that have ownership in the 12 regional Reserve Banks, but there isn’t precise information available on exactly who they are, or how much each bank owns. Historically the owners of the banks made a fixed 6% profit each year on their investment, but that was discontinued when people started asking why the owners were getting a profit from a ‘nonprofit’ corporation.

      Historically, the banks that bought the first shares back in 1913 must have made an enormous amount of money over the years, especially during the Great Depression when a 6% profit was enormously more than the rest of the country was getting. Exercising influence or indirect control over the Fed was no doubt even more lucrative.

    • Wisoot says:

      Yes Baldski, the Fed has not made any mis stakes, on the contrary it has served the stakes of its corporate owners as it was designed to do.

  26. John says:

    Wolf,
    Pensions are what they are and I myself have a small one. I’m all for pensions for a worker who puts in the time and labor. The problem I have with pensions is the passing down of them for their family members who have not worked and collect them when the original pensioner passes. Is this one of the problems with pensions? I think so!

    • Petunia says:

      The pensioners almost always give up a large percentage of the pension to pass it on to the spouse. When this happens the term of the pension is when the last spouse dies.

      Other than this, some pensions guarantee a minimum payout of say 5 years, and the reminder is paid out if the pensioner dies before that time. All these provisions rarely are to the pensioners benefit.

  27. John says:

    Wolf,
    Siblings not the wife.

  28. Old School says:

    The future is unknowable. A dirty bomb can go off in a big city tomorrow. The Been Graham, Warren Buffet types always talk about a margin of safety so when things go wrong you have cash or t-

    • Old School says:

      Oops. or t-bills to survive and no debt or at least long term debt with very small monthly payments. The pandic shows how fragile the debt economy is that so many companies or individuals can’t go 6 months without income.

      • Lisa_Hooker says:

        The real issue is too many folks can’t go 6 months without buying things they don’t really need. Money has a tendency to accumulate if it’s not spent. See the 1%.

  29. Michael Engel says:

    1) QQQ suffer from a chronic Bearish Divergence condition to lift AAPL to $2T.
    2) $2T is a better milestone than SPX = 3,500. A downturn will clip the top 10% wealth the most. The Pareto top claim that all they wish is to be out of the top 10 list.
    3) $600 unemployment, PPP loans, bailout zombie companies…
    4) US ==> is a socialist country. Socialism is a vaccine against Marxist tyranny.
    5) Riots and insurrection occur in short and long term cycles. They can last 50Y – 60y.
    6) We don’t know if we are in a short or long term cycle.
    7) Revolutions usually happen after a country lost a war.
    8) The loser country finance the war by piling debt and have nothing
    to show for, after all the sacrifices.
    9) US didn’t lose a war. We are in the midst of a war against an invisible enemy, but it’s not over.

    • Island teal says:

      Michael…good to see your comments today.
      Have you been following the digital wallets discussion going on all around us?

    • sierra7 says:

      Michael Engel:
      “US didn’t lose a war”
      The US hasn’t “won” a war since the end of WW2.

  30. Petunia says:

    I’m currently hoarding two pairs of brand new flip flops, NANANANA. Sure to put me in the poorhouse, OH….never mind.

  31. Carl Hagert says:

    Thanks Wolf, excellent article as usual. I enjoy your writings, keep it up!

    The Crisis Cycle of boom – bust – Central Bank Intervention- boom will just continue until the whole thing comes crashing down. The FED / ECB / JCB etc (the “Cabal”) has one sole aim – keep asset prices high and prevent them from readjusting to a true value. Why? Because every single asset is leveraged to the hilt, financed by Global Banks. Any downward change in valuation might bring the whole house of cards down.

    Why were the big banks bailed out in 2008? Why was Greece not allowed to default in 2012? Why did the Cabal bail out the Billionaires in 2020? Because a readjustment of asset values to a lower level would destroy the “world economy” (read stock market / private equity). Not allowed to happen, ever! If Private Equity / Investment Banks disappeared, where would the poor Central Bankers work before and after their Central Bank career? Who would “control” the markets?

    We have now seen a third crash in 12 years, each bailed out by the Cabal with more and more money and markets afterwards zooming higher, ignoring previous lessons and taking more risk. Next time (probably in less than 3 years) there is a trigger event (Enron 2, Dot Com 2, 9/11 v2, Corona v2, Italy / Spain / Greece again) the amount of printed money needed to prevent a bust will make this current crash seem like the “good old days”. Price of gold will skyrocket until it is again outlawed as private property a la FDR. Any competition to USD as World Currency will not be allowed! I bet the Cabal thanks God for the “new” Modern Monetary Theory where the US government can’t go bankrupt because it is the only agency allowed to create dollars. Print baby, print!

    In the text below, substitute fire for Crisis and Forest Managers with Central Bank and get an idea of what the natural thing to do should be.

    “Before the middle of the 20th century, most forest managers believed that fires should be suppressed at all times. However, some researchers argued that this policy should be changed, on the grounds that wildfires in national parks help clean out the understory and dead plant matter. By 1968, the National Park Service determined that fires that started naturally would be permitted to burn if they posed little risk to human life. The prescribed natural fire policy appeared to be an effective way to manage fires.”

    Somehow the endless Crisis Cycle must end and the market must be allowed to find its right balance. A string of smaller crisis will be better than the final nuclear sized crisis that will sooner or later come around.

  32. Mr. House says:

    Carl gets it

  33. Mr. House says:

    Now if regular joes like us can get it, what is keeping the experts from getting it? This bothered me for some time and either they’re too invested in the current system to see, or its all a part of the plan.

  34. Mad Dog says:

    To Realist

    “it doesn’t matter whoever is/will be elected president of the USA. It is the sweeping trends that defines what will happen and the USA of today resembles much indeed the Roman empire of the first half of the 400s”

    I would add that you don’t have to go that far back. Just look at the Hapsburg Empire of Austria-Hungary in 1914 and you have almost an exact parallel to what ails the USA today.

  35. Davidtoo says:

    I’ve been reading you for a while now Wolf, and everything you say makes complete sense, including that the S&P, which has been flat for a while now, should significantly correct….and yet the market is now so deformed with Fed and Stimulus money, it is simply impossible to gauge where we go from here. The Fang stocks just keep growing and growing as if nothing else matters. There is only one say for these stocks to go…up. And why not? Should they falter, the Fed is there to make sure everything is ok again. It makes investing very difficult because we are no in no man’s land and I can’t help feeling that sooner or later this is all going to come crashing down like a house of cards no matter what the Fed attempts to do. Very disturbing.

  36. Kent S. says:

    I really do agree with you Wolf in principal, but I’m just not sure about the application.

    Maybe a bit oversimplified, but the argument seems to go – that money such as stimulus payments and unemployment checks goes to the needy, but ends up in the hands of the rich. That happens because the poor and unemployed buy things like groceries and goods on Amazon which gets in in the hands of the ultra-rich who own the grocery stores, tech giants, and financial centers. The rich then keep the profits and invest in assets such as stocks and bonds, which go up in value, further enriching them.

    Ok, sounds good and seems to make sense; but let’s say the same thing slightly different – Money goes to the poor but it ends up with the rich because poor people buy stuff from the rich people who make the stuff needed by the poor available in the first place. So what are the alternatives?

    The poor can’t stop consuming what they consume. They can’t stop eating or buying clothes. They can’t buy all their stuff from the poor to keep the money there – poor people don’t own the businesses or the goods. Giving it directly to the rich people seems an obvious non-starter.

    So while I’m 100% with you that making the rich richer in a crises seems despicable, it might be argued that it’s the ONLY way the poor can survive at all. During the recession it was argued that the Feds bailed out the banks. True, but if the banks had been allowed to fail, transactions would have frozen up, ATMS would have died, virtually no one would have had money. No money, no commerce. No paychecks, no jobs, no workers, no trucks, no deliveries, no groceries, no medicine, mass sickness, starvation, and deaths on a national and global scale. I should think allowing the banks (or the rich) to carry on, even if “unfairly,” is (SADLY) the only way for the poor (read: all of us) to get through a crisis.

    As sick as that reality makes me, someone please tell me what I’m missing!

    • Wolf Richter says:

      Kent S.

      “… someone please tell me what I’m missing!”

      You focused on the wrong side of the equation. And I wasn’t perhaps that clear about it.

      I’m not against the unemployment & stimulus payments. I’m against the Fed bailing out the markets. What I was saying is that both went to the rich (capital). If you just did unemployment & stimulus payments, that would be enough, and the rich (capital) would get their share, and I’m fine with that. But let the markets do their thing.

      • Kent S. says:

        Thanks, Wolf, I really appreciate the feedback and enjoy your site and read it daily! So refreshing to read honest journalism.

        So specifically, it’s all the Treasury purchases and the zillions being pumped into the system that you’re questioning, and if so, I agree 100%! As long as “not bailing out the markets” happens without crashing down our banking institutions.

        Thanks again and keep it up!!!

      • lenert says:

        Maybe worth asking how Bezos get so fabulously wealthy in the first place just by selling books on the internet?

        For starters, the internet was developed by the public. Then when Bezos opened his “store” he didn’t collect any sales tax like the brick-and-mortars giving him a roughly 10% price advantage. Then Congress granted a tax exemption for all internet commerce so he sells stuff all over the country but collects only local sales taxes. Estimates place the value of these gifts at $4B. Then his capital gains are taxed at a lower rate than the paychecks of his lowest paid workers which are largely set by the minimum wage which Congress hasn’t changed since 1968. Then municipalities across the country started offering up further tax incentives for warehouses and data centers. The Bush tax cuts. The Trump tax cuts. Copyrights on Amazon content that last 100 years. The list goes on.

      • Jeff says:

        First, YOU ARE THE MAN for writing this article. Bout time someone’s talking about it.

        Second, did a video on my YouTube this AM following the press conference Jerome Powell did this morning announcing he was okay with target inflation north of 2% for the time being.

        The man is ATROCIOUS. I’m so disgusted with him and the Federal Reserve right now. They are literally evaporating the middle class.

  37. Olivier says:

    “This is a way to run an economy into the ground.” It is a way to become Brazil or Nigeria. Wondering how much longer it will take.

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