Federal Reserve: Bizzaro Robin Hood?

Bizzaro World is a land featured in the Superman comics where everything is the opposite of our world. While Bizzaro World is a fictional creation, at times it seems that some individuals and institutions from Bizarro World have stepped off the pages of the comics and into real life. Take the Federal Reserve for example. Michael Gray of the New York Post is the latest to point out that the Federal Reserve is a Bizzaro Robin Hood, since it steals from the poor and gives to the rich:

When people use the term Great Recession, they are playing into the charade laid out by Federal Reserve and the Treasury Department.

The years 2008 through 2015 should be known as the Great Fleecing.

During that time, the greatest transfer of wealth in the history of the world occurred.

Some $4.5 trillion was given to Wall Street banks through its Quantitative Easing program, with the American people picking up the IOU.

“If liberals are angry about inequality, they should look no further than President Obama.” This is the primary reason the US economy has not been able to recovery from the bank implosion of 2008.

Surely if you inject $4.5 trillion into the economy, you will get economic growth. You will get a 4% to 5% increase in Gross Domestic Product for at least a year or two.

Yet the Obama administration is the first two-term presidency that has not posted a 3% GDP growth on an annualized basis for 8 years.

Even Franklin Delano Roosevelt posted 3% growth year during the Great Depression. That’s because the $4.5 trillion was not given to any infrastructure program — it was given to banks, under the misguided notion that they needed the money to remain solvent.

The banks promptly invested this money, which kept the stock market humming, but did nothing for jobs, wages or the GDP. This was by design.

The Fed could not allow the bank’s largesse to be circulated into the public for fear of rapid inflation. The banks also funded company mergers, company debt offerings and stock buybacks.

This activity kept the money sequestered and allowed a greater return for the banks. After all, they were getting free money to invest — there was no way to lose. Who did this help? The 1%, and pretty much only the 1%. These actions are the reasons the American middle class has been decimated and no longer makes up the majority of the population.

Read the rest here.

Unfortunately, Gray embraces a number of economic fallacies in his article. For example, he suggests that pumping money into the economy could have helped the middle class if the money went to "infrastructure projects" instead of sending the money  to the banks. He also claims that the Bernanke-Yellen Fed has successfully kept inflation low, which is a highly debatable proposition, to say the least. He also does not address how government regulations imposed by the Dodd-Frank law have acted as a disincentive for banks to loan money, harms small banks and credit unions, while benefiting big banks.

However, his thesis that the Fed serves the interest of the "one percent" to the detriment of the average American is sound, and it is a sign of progress that even mainstream commentators are addressing how the Federal Reserve causes income inequality.

Campaign for Liberty will continue to work to expose the full truth about the Fed by passing the Audit the Fed legislation.Please support our efforts.

Print Friendly Version of this pagePrint Get a PDF version of this webpagePDF

Tags: ,