| > Growth in inequality correlates very nicely with expansion of the money supply. This gets complicated. The money supply has to expand to keep up with growth; getting the flexibility to do this is the reason why the world abandoned the gold standard. Failure to expand the monetary base adequately leads to deflationary economics, which is another kind of hell entirely. That said, the fed's response to the last two economic disasters (2008 and 2020) has been to do quantitative easing in ways that do concentrate wealth in the hands of asset owners. Buying questionable assets with printed money does give the owners of those assets money at the expense of non-asset holders. There are ways to respond to economic disasters without increasing inequality, but these choices are not politically feasible in America as they would involve giving money directly to people who don't have much of it. Giving money to rich people (through monetary or fiscal policy) is seen as politically good, while giving money to anyone else is 'welfare' and is a political third rail. Economists do know how to deal with these issues. The problem, as with everything else in America, is that the politicians (hello, Mitch McConnell) and interest groups (hello, Koch network) who have a veto over policy don't want to deal with them. |