Wednesday, September 17, 2014
"The Way to Beat Poverty"
Inequality in human societies in many respects is inevitable and perhaps beneficial in some respects. Also, I'm not sure of the extent to which the income inequality argument is really about poverty. For the Far Left, of course, the real issue is eliminating income inequality overall. Robbing Peter to help Paul. I am not unalterably opposed to all government interventions to prevent poverty. This article suggests a potentially fruitful approach.
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The past and present bi-partisan efforts from several Congresses and Administrations are the primary causes of inequality. At the moment, QE is the primary contributor, clobbering savers and enriching anybody with enough disposable income to use the stock market. And egregiously enriching the upper echelons of those of the giant investment banks.
ReplyDeleteOne example: A Bankster borrows a dollar at almost zero interest from the FRB. He then leverages it up to 40 times and buys 10-year treasuries which pay 2.5%. So you put one dollar in and get 2.5% of 40 dollars back. IOW, 100% profit per year. Sounds good to me.
In the meantime, Joe Sixpack's buying power at the grocery keeps going down and down and down.
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ReplyDeleteThanks. Economics was never my strong suit. what is QE?
Quantitative Easement (QE) is the fed's approach to controlling the weather. It may help impulsive buyers who fail to save for rainy days, but anyone who depends on long-term investment income gets screwed. In the end, the middle class can expect to teeter on poverty. Ultimately, only the very rich and extremely poor will exist.
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