The Greatest Increase in Wealth Inequality in American History Occurred During the Obama Administration

Source: David Stockman Email

I just received an email from David Stockman's newsletter, and it included the upper graph taken from Edward N. Wolff's "Has Middle Class Wealth Recovered."  There are a number of ways to look at the question of rich versus poor; the above graph uses one, the relative shares of the top one percent and the bottom  ninety percent. (Disclaimer: I'm one of the nine percent in neither category.)  

The gap narrows in the 1970s, but observe  the lower graph, which is of real wage growth.  Real wages stopped growing in 1973.  The reason the wealth inequality declines during the 1970s in the upper graph is that the stock market was falling in the 1970s. Hence, the decline in wealth inequality during the 1970s is a measure of joint pain and only of theoretical importance.  The solution put forward by Richard M. Nixon in 1971 was pumping money into the economy via the Federal Reserve Bank. 

The pure paper money system established in 1971  helped the wealthy but not the majority.  Notice also that the third-most-rapid increase in wealth inequality, according to the upper graph, occurred during the Reagan administration. It began to solidify during the Bush I years, 1988-1992; it remained constant during the Clinton years; then, following the tech bubble bust of 2001 it escalated during the Bush II years, which were the years of the second-greatest gains in wealth inequality.  However, Bush and Reagan were pikers compared to Obama, who oversaw the most massive wealth transfers, which followed the 2008 crisis via the expansion of the Federal Reserve's balance sheet, the creation of massive amounts of reserve IOUs called Federal Reserve bank credit, quantitative easing, and so on. 

The lower graph tells a slightly different story.  Since the early 1970s, when the Fed was given a free hand to redistribute wealth via the creation of paper money, real wages have stagnated.  The GDP has continued to grow, although the meaning of GDP is questionable because it includes government spending and make-work projects that do not create value.  There is little difference between Democrats and Republicans.

Republican Mathematics

David Rockefeller = Nelson Rockefeller = Nixon = Kissinger = H. W. Bush = W. Bush = Romney = Cain = Santorum = Gingrich = Obama.

Or, to put it as a poster here just did, choosing between Romney and Obama is like choosing between Chase and Wells Fargo.

Obama's Presidency Meant Change from Bush's: It's Anti-Semitic

The Wall Street Journal weekend print edition carries the stark headline "Israeli Leader Clashes with Obama." Until now I haven't been clear about how Obama and George W. Bush differed. On economics, both agreed that it was absolutely essential to give $12.4 trillion to badly managed financial concerns. Both felt free to give similar grants to corrupt business interests: Bush gave billions to Halliburton and, via his stimulus, Obama gave even more to interests like George Soros.  Bush left office with rising unemployment, and Obama's administration has seen the highest average unemployment since the Carter years. Bush started two wars, and Obama has started a third war. Bush's Fed doubled the money supply, and Obama's Fed more than doubled it again. Bush claimed to be a conservative who was compassionate, but handed hundreds of billions to the pharmaceutical industry via his ill conceived prescription drug plan; Obama claimed to be a Democrat who was compassionate and handed hundreds of billions to the insurance industry via his ill conceived health reform plan. Bush permitted the United Nations to send environmental inspectors to American parks for unknown reasons (based on a treaty that George H. Bush signed); Obama is advocating allowing the UN to rescind the Second Amendment.  Bush stomped on Americans' sacred liberties with the Patriot Act. Obama got elected by claiming that he is in favor of civil liberties, lying to his supporters.  When elected, Obama renewed the Patriot Act and, with the support of the Democratic Party-led Senate, will renew it again.

There is one big difference.  Obama is an anti-Semite who will relish seeing Israel fall. Bush wasn't.

If You Are Profiting from Wall Street's Current Merger Boom, Then the US Government Works for You

The Democrats claim to be the party of the poor, but if you have been following my blog you know that is pap.  Since November 2008 the economy has done poorly for the average American.  According to the Bureau of Labor Statistics, unemployment is 9.6 percent. Americans on Social Security saw no increase but local taxes increased, leaving them short.  Inflation, at 1.1 percent, has been modest, but people are beginning to suspect inaccuracies in the BLS numbers.  I hear complaints about food prices' going up.  In any case, there is no reason to think that anything will reduce the unemployment rate in the near future.

Thus, the stimulus and the bailout have failed to produce significant results.  This is not surprising. Keynesian policies failed during the Great Depression as well.  Pundits assert that as a result of the recent failure of the Bush-Obama policies (failure on paper, not in their intent, which is to help Wall Street, not to reduce unemployment), Larry Summers and Rahm Emanuel have handed in their resignations.

One of the Bush-Obama strategies has been to massively expand the monetary base and the money supply.   The argument for this policy is monetarist, and the monetarists don't differ much from Keynesians. Both believe that printing money can beneficially stabilize the economy.  Neither accedes that the new money is a wealth transfer device to Wall Street.

Forbes reports that the wealthiest Americans have gotten wealthier this year.  The wealthiest among them are Warren Buffett and Bill Gates, both of whom are Democrats.  According to the Los Angeles Times mergers and acquisitions are at an all time high.  A guest on Bloomberg radio today was saying that Wall Street has never had a better year.  Although this is never stated in the Wall Street-controlled media, Wall Street's economic flourishing depends entirely on the Federal Reserve Bank. It is not attributable to free markets and it is not capitalist.

The Wall Street investment banks and law firms are profiting handsomely due to the Fed's monetary creation and the Bush-Obama administration. The merger activity is directly due to the administration's new money.  It has had no hand in reducing unemployment, in improving the economy or making the public better off.  Rather, it serves to harm the economy by reducing competition and paying commissions to bankers and Wall Street lawyers for destroying rather than creating wealth.

If you have seen a commission check or have a salary that depends on the recent expansion of merger activity, the US government is working for you.  If not, you are its patsy.

What the Banker Owned Media Will Not Show You

Federal Government Debt.  Obama increased the rate at which it increased under Bush. It is hard to believe that the Democrats found a bigger clown than Bush.  Graph courtesy of the St. Louis Fed.

I Told You So

During last year's presidential campaign I came to the conclusion that Barack Hussein Obama was the spiritual successor to George W. Bush and that the best way to continue Bush's policies was to elect Obama. Obama claimed that he would turn around the economy and end the Iraqi War, the two glaring areas in which President Bush demonstrated his incompetence. Especially with respect to these two areas Mr. Obama's promise was "change".

The concept that President Obama represents "change" with respect to the economy is illustrated by his recent reappointment of the architect of President Bush's economic policies, Ben Bernanke. Mr. Bernanke is the best friend Wall Street ever had, and it seems obvious from Mr. Bernanke's reappointment that President Obama is Wall Street's president. With respect to Iraq President Obama reappointed another Bush appointee, Robert Gates. As well, he has done nothing to change the Bush policy in Iraq.

Perhaps we might consider the meaning of the word "change" to have been permanently bastardized. According to Obama, the meaning of "change" is to continue Bush policies, and add a few, like his absurd health reform proposal, that are even worse than Bush's.

One good result of the 2008 election: the American Democratic Party propaganda institutions can no longer be taken seriously. The propaganda system's aggressive support for Obama, a Bush clone, has not only made it into a laughing stock but has convinced us that the left can produce its own George W. Bush. Only Democrats and fools read newspapers or watch televised news.