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.
Joe Biden Places Two-Month Moratorium on New Oil Leases and Drilling Permits in New Mexico, A State He Won in November
What is he thinking?
President Joe Biden has placed a 60-day moratorium on new oil and natural gas leases and drilling permits in New Mexico, an action that’s a major cause for concern, according to the Associated Press.
New Mexico’s Permian Basin is often considered one of the best regions in the United States for the production of oil and natural gas. Local leaders in towns near the basin have expressed worry over Biden’s two-month moratorium on leases and permits, arguing that a permanent suspension would spell disaster for the New Mexican economy.
“During his inauguration, President Biden spoke about bringing our nation together. Eliminating drilling on public lands will cost thousands of New Mexicans their jobs and destroy what’s left of our state’s economy,” said Carlsbad Mayor Dale Janway. “How does that bring us together? Environmental efforts should be fair and well-researched, not knee-jerk mandates that just hurt an already impoverished state.”
It is also worth noting that Biden won the state of New Mexico in the 2020 election. He obtained 54.3 percent of the vote to former president Donald Trump’s 43.5 percent. Biden performed best in cities and the north and west, while Trump’s victories came in less populated areas and the southeast, the latter of which is home to the Permian Basin.
New Mexico ranks toward the bottom of all states in per capita income, rendering them one of the poorest in the US. The oil and gas and service industries comprise a significant chunk of their economy; hence one can imagine that they’ve suffered somewhat acutely as a result of the pandemic and the subsequent fall in oil prices.
Biden’s actions against the oil and gas industry will be something to keep paying attention to going forward.
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