Quantitative Easing Transferred Trillions and Trillions to the Uber Rich

 During the 2008-2009 financial crises the U.S. Government stepped in to stop the bleeding on Wall Street. It provided a vast loan package and continuing support with trillions and trillions of zero and very low interest loans to wealthy financial institutions. Big banks are free to issue in electronic loans five dollars more or less (I am not a banker) for every dollar they have on deposit so those trillions (maybe 16 trillion) allowed  big banks to produce from thin air 80 trillion dollars. Fortunately Senators like Rand Paul are concerned about the $600 dollar direct payments going to Americans in the present financial stimulus observing that ‘money doesn’t grow on trees’ (as if it were the Tongass National Forest the administration seeking to strip log with clear cuts and a spaghetti plate of roads).

 https://www.atlanticcouncil.org/blogs/econographics/global-qe-tracker/

 https://www.statista.com/statistics/1121416/quantitative-easing-fed-balance-sheet-coronavirus/

 When money was based on some valuable commodity like gold the value of a currency was tied to its relative scarcity. If one printed out many dollars each would become worth less if the quantity of gold remained the same. When President Nixon took the dollar off the gold standard the dollar had nothing besides its value to none in particular to determine its worth. In an age of general relativity that isn’t too unreasonable; the dollar is a commodity used as a tool for economic exchanges after all instead of something valuable in itself.

 Still, the idea of giving the super rich trillions of free dollars to keep their Wall Street index value from crashing below 10,000 is difficult for many Americans including myself to understand very well. The treasury prints out paper dollars and the Federal Reserve loans out electronic dollars. Most financial transactions are done electronically these days and there actually isn’t too much cash as a percentage of all of the dollars in circulation. Why doesn’t inflation occur so dollars buy less when so many are being made to keep banks and big business afloat and to send $600 direct payments to Americans that earn fewer than $75,000 annually? Why haven’t Starbucks coffees reach $100 dollars a cup yet one wonders. The answer may be that all of the cash that Wall Street got from the Federal Reserve wasn’t put directly in to circulation. The original loan amount goes back to the Federal Reserve so the Street had just the paltry sum of 64 trillion dollars to play with. With that they could buy up Wall Street- or the one percent could, and the inflation occurred in the indexed rise of Wall Street shares to the point that the DOW is now over 30,000.

 

Just because the rich are much richer and Wall Street much more costly it doesn’t mean that Wal-mart needs to charge more for groceries although they might anyway. There is a difference between real goods, physical corporations and such capital and dollars. A brick is still a brick if is priced at $1 or $100 dollars. So long as Wall Street average share prices rise more or less together there need not be too much of an effect on the over-all relationships toward production and corporate welfare. CEOs can still get 5000 times the salary of an average worker (just guessing).

I.M.O. a guaranteed minimum income is requisite to assure that no citizen is excluded from substantial economic participation. Business sadists and networks can have hidden semi-overt and covert agendas and policies that render work impossible. With a totalized national economy under the power of network financial elites any citizen can be deleted from real income.

 The tremendous hyper-inflation of Nazi Germany before the war occurred not because Hitler had too many reichmarks printed; it happened because there wasn’t enough gold to back up the reichmarks value proportionately. The dollar though is on an economic relativity foundation. With so many ought in to the corporatism kickback loop it is wrong to leave anyone who is poor out of the benefit. A Guaranteed minimum income and free health care for the poor should be something Senator Paul should think about the next time a Pat Paulsen imitator of Darth Vader says to him; “Rand, Rand- I’m your father; money doesn’t grow on trees.”

 In the free-floating currency of the dollar context money supply may not be as important as the real material and intellectual properties that can be counted as capital. Money supply need be adequate to allow the flow of trade and commerce and tight money could be a problem itself. It is possible that avarice in the owner class could prompt corporate to raise retail prices to consumers if consumers have any money to spend in order to have all of the money they possibly can. Political economy managers need to be concerned with such matters as well as for keeping the real capital based on sustainable environmental parameters.

 One of the problems of civilizations that bring them to fall is the tendency to develop a particular economic model until it crashes from over-use. The physical infrastructure of a civilization may grow to be inappropriate and destroy the human spirit of workers and designers in addition to building mass species extinction and environmental collapse. It may be the case that those most invested in the present economic system would be the last to know and most resistant to rational realistic transition to a new economic continuum.

 A government may rightly help citizens in time of emergency- that is good behavior. yet it should be impartial and stay with the principle of equal justice. When the government simply serves the rich that is bad conduct for a democracy. Providing perhaps 130 trillion dollars of free cash to the rich via the 5 to 1 electronic mint root based on quantitative easing deposits was wrong yet should not be held as a reason to further victimize the poor. The revolution of the rich in a decade long financial coup need be corrected somewhat presently.