America’s Rich are Living it Up While Millions of Americans are Suffering During Lockdowns
According to a piece by Tyler Durden on ZeroHedge, a massive wealth gap is emerging in America.
New figures from the Federal Reserve indicate how the entity has widened the wealth gap throughout the pandemic via its notorious quantitative easing program. Indeed, the level of monetary stimulus has been extraordinary and it was justified on the grounds of keeping the economy propped up during the Wuhan virus lockdowns.
Durden notes that the result of this central bank intervention has been a “K-shaped” recovery, which has been “disproportionately affecting low-wage service workers and households of color, while billionaires, cent millionaires, and millionaires added record wealth.” Central bank intervention has been great for stocks and asset prices, while those who are not asset owners have been forced to get by in the present-day instability.
Last week, Swiss bank UBS and accounting firm PwC released a new report documenting the level of wealth that the world’s 2,189 billionaires have accumulated thus far. In July, that number reached $10.2 trillion, which overtook the $8.9 trillion record reached at the end of 2017.
Easy monetary policies, in combination with the economically debilitating lockdowns have only made these disparities worse. According to Fed data, the top 1 percent of Americans are worth $34.2 trillion, whereas the poorest 50 percent, which is approximately 165 million people, have a net worth of $2.08 trillion. This is less than 2 percent of all household wealth in America.
The top 50 wealthiest people in the U.S. have a net worth of $2 trillion, per the Bloomberg Billionaires Index, which represents a $339 billion increase from the beginning of 2020. Elon Musk most notably saw his wealth increase from $75.6 billion to $103 billion.
Durden provided an overview of how massive the asset ownership gap is in America:
The wealthiest 1% saw their wealth erupt earlier this year as they own about 50% of all stocks and mutual funds. The top 9% own about a third of stocks, which means the top 10% of Americans own about 88% of stocks.
Policymakers need to start talking about the impact that central banking has had on America’s political economy and overall distribution of wealth. The Cantillon Effect, whereby money printing and the resultant price increases creates uneven effects throughout the economy. Those who profit from this effect are individuals close to the money — major corporations, banks, and investors. These actors receive loans and proceed to invest, while the rest of the population doesn’t receive the newly printed for the time being and must readjust to the rising prices that come about as a result of the money printing. This dynamic needs to be brought up more in economic discussions. There’s a time and pace for talks about deregulation and tax cuts. But these measures are not enough to stabilize America or protect its middle class. A return to sound money is needed.