You're not wrong, but you are wrong...

That 400% increase in "wealth" at the top, lets suggest for a moment that turned into cash for the poor and middle class.

Well, what we have seen over the past 10 years has been tremendous inflation in equities and assets, homes, college, and medicine. If we inject the same sort of capital into the bottom quintile, or even two qunitles of the economic ladder, the inflation on consumer goods would be staggering. In fact, we are already beginning to see it with just three months of $40k a year "UBI" in the form of unemployment.

The ONLY reason inflation on consumer goods has remained in check while the Fed printed trillions is because there was no upward pressure on wages. If we structure an economy where one doesn't have to work because we "bailed out" people to the tune of 2x, 3x, 5x, the region or state's minimum wage, the wage pressure is going to be tremendous and prices are going to spike. This will eventually squeeze out any "gains" the bottom "earners" are receiving in free money.

Im not sure what kind of neighborhood you live in, but ask yourself a question, what do rents look like on your block if real income suddenly doubles? Why is "gentrification" a problem for low income communities? Its because real wage and therefore real rents and prices in an area increase, pushing out low income earners.

I am not for a moment suggesting that bailing out big companies is preferable to bailing out the little guy, in fact, I fully support a unemployment supplmemental to get through the forced economic shutdown to bridge the gap for displaced labor, however, this is not a free lunch.

Written by

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store