Worries grow over a “K-shaped” economic recovery that favors the wealthy
But no one, or at least almost no one will explain the real reason why this split between Main Street and Wall Street has happened. Some will blame lack of unions, or the offshoring of jobs, or new technology. But the real reason is because we now have a centrally planned economy, through the Fed, that focuses almost entirely on getting federal debt bought, which consequently favors the banks with which it partners, and the large companies that then partner with the big banks.
The Fed is printing money at an alarming rate. Our national debt will never be repaid and everyone knows it. Stocks after the initial Covid hit have soared as the new Fed conjured money has worked through the financial system. Those with assets have benefited.
Meanwhile independent businesses, mom and pop outfits, the small fry of the economy are being decimated.
Your editor recently visited Nags Head on the Outer Banks of North Carolina, a place he knows well. But it no longer looked like Nags Head. Many stores, even in the face of Labor Day weekend were boarded up or empty. Lights were out in parking lots. Even in the Great Recession it didn’t look like it does now. The Fed does not care about this.
(From CNBC)
“The K-shaped recovery is just a reiteration of what we called the bifurcation of the economy during the Great Financial Crisis. It really is about the growing inequality since the early 1980s across the country and the economy,” said Joseph Brusuelas, chief economist at RSM. “When we talk K, the upper path of the K is clearly financial markets, the lower path is the real economy, and the two are separated.”
This article was originally posted here: https://www.ac2news.com/2020/09/worries-grow-over-a-k-shaped-economic-recovery-that-favors-the-wealthy/.
