You’ve got to hand it to central bankers, they’ve got a lot of nerve.
In the latest lesson in chutzpah, San Francisco Federal Reserve President Mary Daly pushed back against the notion that the U.S. central bank’s easy monetary policy and emergency lending programs are doing more to help the rich than the poor.
Daly told CNN International:
“There really isn’t this bright line that separates Main Street from Wall Street. If we don’t repair the financial markets and ensure they have liquidity, they can’t pass along the interest rate changes to households and businesses that need them the most…our support for the economy supports everyone.”
Hmm. Perhaps she hasn’t noticed that the top 1% of American households by wealth own 50% of all stocks, and the bottom half of American households own just 7.75% of all stocks. When the Fed prints another $3 trillion out of thin air to buy bonds, which pushes more cash into riskier assets such as stocks, the central bank is specifically making the wealthy even richer.
With hundreds of economists on staff, it’s hard to understand how Daly missed such a simple fact.
Daly said the Fed’s policies are indeed saving jobs by repairing the “plumbing” of the financial system and helping companies maintain access to the financing that is critical to their operations.
To be fair, the Fed has been given an impossible job. Congress punted in 1978 when it tasked the Fed with working toward maximum U.S. employment. The Fed only has a few tools, and they all revolve around money. If we wanted actual laws or regulations that helped actual people, they would have to come from Congress, and there’s little hope of that.
So the Fed will keep doing what it does, shoveling more money into a system that rewards people who already have money. Just don’t say they’re fueling inequality.