Friday, June 1, 2012

It all makes sense now

A belated part II to my Money and Wealth post

I talked at length about how a shortage of money is not the same thing as a shortage of wealth, and being short on money is what makes this economy suck.  What I didn't talk about was why there is a shortage of money, since its easy to print more.

The answer of course, is that by printing more money and giving it out to people who might spend it, you dilute the value of the money that rich folks have.  A successful effort to fix the economy will inevitably involve the 99% having more money, which will make the money held by the 1% less valuable, and so will involve a redistribution of wealth downwards. 

When I was an impressionable young kid, I thought that perhaps the Fed was run by people who's goal was to make the economy function in a way that benefits the median citizen. The last four years have taught me that, without a doubt the Fed (and even more the European Central Bank) is run by rich people, for other rich people's benefit.  Because really, the only people who benefit here are folks who, like Scrooge McDuck, are sitting on huge piles of cash (and cash-like stuff).

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