

Fed Policy May Have Widened America’s Wealth Inequality - randomname2
http://blogs.wsj.com/economics/2015/06/08/fed-policy-may-have-widened-americas-wealth-inequality-philadelphia-fed-paper-says/

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randomname2
From the paper:

"It might be also true that the gain to society’s well-being from stabilizing
the overall economy is greater than the loss coming from associated
redistributive effects, in which case we could safely focus on the overall
effects and ignore the redistributive effects."

"One could also argue that, in the long run, the redistributive consequences
of monetary policy might average out. In other words, if the same type of
households that tend to gain from monetary policy during economic expansions
also tend to lose from monetary policy during recessions, then over time the
average effect could be a wash."

So they suggest that while the rich "may" get richer during boom times,
recessions equalize wealth inequality, so in a perfect world it might all even
out.

It's actually quite noteworthy that just admitted that deflationary forces are
wealth equalizers and inflationary forces benefit the rich.

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randomname2
And as Fed policy creates endless artificial booms, and limits recessions,
they reduce the possibility of equalization and creates a continuous money
transfer mechanism from poor to rich, as they note:

"There is a good chance that the redistributive effects do not average out
because business cycles are known to be asymmetric —expansions tend to be long
and moderate, while recessions tend to be short and sharp."

And recessions are short and sharp precisely because the whole modus operandi
of the Fed is to shorten recessions and lengthen expansions. So it's admitting
its (inherently inflationary) core policy thesis makes the rich richer and the
middle-class poorer.

