There’s A Debt You Gotta Pay: Obama and His Fed

 The Fed’s Quantitative Easing (QE) policy doesn't expand the money supply uniformly. It doesn’t go to just any Financial Institution, i.e., small banks. Rather, it directs capital transfers (money) to the largest banks; whether by overpaying them for their financial assets or by lending to them on the cheap; minimizes their borrowing costs; and lowering their reserve requirements. All of these actions result in enormous handouts to the financial elite (Goldman Sachs, J.P. Morgan, etc.), with the hope that they will subsequently unleash this capital, raising demand and prices wherever they do. The operative word being “hope,” and so far there has been very little.

Hypocritically, Mr. Obama and the Fed are transferring immense wealth from the middle class (taxpayers) to the most affluent (those Bankers and Hedge Fund managers who so generously contribute to his campaign war chest); from the least privileged to the most privileged. This redistribution has been a far more outrageous source of disparity than the president's presumption of tax unfairness (if there is anything unfair, it is that approximately half of a population are paying zero income taxes). So, why don’t Mr. Obama and his Federal Reserve Chairman, Mr. Bernanke, stop redistributing it to the most privileged?

Charity is a virtue. A parasitic lifestyle is a vice. There are no merits to redistributing wealth in any direction. The expectation should be that people work. The expectation should be that people want to work. The expectation should be that welfare is a temporary condition. The expectation should be that if you bring children into this world, that you, and not your neighbor, is responsible for their well-being such as a stable home environment, food, clothing, education, etc..

What there is – is a debt that we are going to have to pay. So, in the words of Tracy Nelson* and Mother Earth, Mr. Obama and Mr. Bernanke should remember this:

Mother Earth is waiting for you, there’s a debt you gotta pay.

I don’t care how rich you are,

I don’t care what you were, 

When it all comes down, you have to go back to Mother Earth.

You may have a billion dollars, 

You may drive a Mercedes Benz,

But, Mother Earth is waiting for you, and there’s a debt you gotta pay.

* I don’t know Ms. Nelson’s politics, and I don’t much care. In the end, we are all accountable.