The legislation Obama lavishly praised redistributes wealth upward by raising prices consumers pay. … The geyser of subsidies assures that farm households will continue to be 53 percent more affluent than average households.
Seventy percent of Agriculture Department spending funds food services. Nearly 48 million people — almost as many live on the West Coast (in California, Oregon and Washington) — receive food stamps.
Between 2000, when 17 million received stamps, and 2006, food stamp spending doubled, even though unemployment averaged just 5.1 percent.
Nearly two-thirds of households receiving food stamps qualify under “categorical eligibility” because they receive transportation assistance or certain other welfare services. We spend $1 trillion annually on federal welfare programs decades after Daniel Patrick Moynihan said that if one-third of the money for poverty programs were given directly to the poor, there would be no poor.
In this sixth year of near-zero interest rates, the government’s monetary policy breeds inequality. Low rates are intended to drive liquidity into the stock market in search of higher yields. The resulting boom in equity markets — up 30 percent last year alone — has primarily benefited the 10 percent who own 80 percent of all directly owned stocks.
Richard Fisher, president of the Federal Reserve Bank of Dallas, says the total reserves of depository institutions “have ballooned from a pre-crisis level of $43 billion to $2.5 trillion.”
And? “The store of bank reserves awaiting discharge into the economy through our banking system is vast, yet it lies fallow.” The result is a scandal of squandered potential:
“In fourth quarter 2007, the nation’s gross domestic product (GDP) was $14.7 trillion; at year-end 2013 it was estimated to be $17.1 trillion. Had we continued on the path we were on before the crisis, real GDP would currently be roughly $20 trillion in size. That’s a third larger than it was in 2007. Yet the amount of money lying fallow in the banking system is 60 times greater now than it was at year-end 2007.”
The monetary base having expanded 340 percent in six years, there is abundant money for businesses. But, says Fisher, the federal government’s fiscal and regulatory policies discourage businesses growing the economy with the mountain of money the Fed has created. This is why “the most vital organ of our nation’s economy — the middle-income worker — is being eviscerated.” And why the loudest complaints about inequality are coming from those whose policies worsen it.
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