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"Although today high levels of inequality in the United States remain a pressing concern for a large swath of the population, monetary policy and credit expansion are rarely mentioned as a likely source of rising wealth and income inequality. [...]
The rise in income inequality over the past 30 years has to a significant extent been the product of monetary policies fueling a series of asset price bubbles. Whenever the market booms, the share of income going to those at the very top increases.[...]
[F]inancial institutions benefit disproportionately from money creation, since they can purchase more goods, services, and assets for still relatively low prices. This conclusion is backed by numerous empirical illustrations. For instance, the financial sector contributed massively to the growth of billionaire's wealth"
Source: https://mises.org/library/how-central-banking-increased-inequality
I'll leave my comments as comments, but note that The Mises Institute is proudly, one might say almost by definition, Austrian School. Both the Institute and the School have had their fair share of criticism. Which of course doesn't mean that individual author is wrong on this particular matter. -- Ed.(FP)
(Score: 1, Troll) by The Mighty Buzzard on Wednesday August 23 2017, @12:26PM (1 child)
Start up a fund and buy your own then.
My rights don't end where your fear begins.
(Score: 3, Interesting) by JoeMerchant on Thursday August 24 2017, @12:24AM
How many plebes does it take to out-bid the billionaires? Virtually all of them, at least all of them that you could mobilize to donate some of their disposable income - just ask Bernie.
There's a funny curve of economic position vs political influence. On an individual basis, you can get some political influence without money, but of course with money your influence is greatly magnified. In both instances, it takes both money and man-hours to get effective political influence - though with enough money you can buy man-hours, so infinite money always wins. But, given the (rough) formula of I = N * t * (k + di) where:
N is the number of people pushing in the same direction
t is the time invested (note that t = t of the individual + t purchased from representatives, so you can in effect substitute di / r for t where r is some hourly rate
k is a constant representing the respect given to individuals regardless of money (let's put this at about $50) and
di is disposable income devoted to influence
At the bottom end, the unemployed have nearly zero di, but high N and very high available t, so they can wield a significant amount of political influence
Moving "up" to the working poor, they have neither t nor di, so their effective political influence is approaching zero, regardless of their N
Then you get to the "middle class" (whatever that is) where you can kick around $50 now and then, and maybe attend a rally once a month or so without destroying your whole life to make it happen, some influence per individual, very high N, but t and di are still really small.
Once you progress to the independently wealthy, their t increases by a factor of 10 or more, simultaneously with a dramatic increase in di - their numbers are small (say ~2%), but if they should choose to become politically active, they have great lobbying power, even as individuals
Then you can climb into the stratosphere of the 0.1% - they command so much disposable income that it can translate directly into political influence simply by hiring lobbyists - effectively out-shouting all other classes combined without investing any more of their personal time than they want to.
This sort of bathtub curve seems to reflect the tax and spend patterns - "incentives" for the rich such that they have the lowest effective tax rate (as a % of income) even while their need for that extra income has nothing to do with survival and everything to do with power and influence - coming down the curve you come into the bulk of the taxpayers, paying the highest rates while receiving the least of the benefits, then at the bottom end the unemployed are actually qhite well taken care of - when I became unemployed my children started receiving the best insurance coverage I ever experienced, for free. We went to all our same doctors, had lower or non-existent co-pays, same choice of treatments as the private pay insurance, and no premiums - all I had to do to receive this $10K+/yr "benefit" from the government was be unemployed.
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