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Poverty Unchanged By Wall Street Recovery

Though the federal government and Federal Reserve moved heaven and earth to ensure the 1% were made whole after the financial crisis, those unable to buy influence in Washington remain frayed. According to the Census Bureau over 14% of Americans remain below the poverty line while financial markets have made a considerable recovery from 2008 lows. There has been a recovery, for some.

As the recent Federal Reserve survey shows wealth inequality has actually gotten worse during the recovery. The overwhelming majority of assets are owned by the rich and super-rich so when government policy is used to push the Dow up, few Americans go with it. The justification for pumping up financial markets is typically that the wealth will “trickle down,” that when the rich get richer they will pull up the poor and middle class.

But as the data clearly shows that just isn’t happening. And, really, there is no good reason to believe it would. Trickle-down economics has consistently failed everywhere and every time it has been tried. The theory is simply wrong.

Though often celebrated by the establishment press and political class as “job creators” the rich generally pump their money into assets not goods and services given they hit consumption limits and have nothing left to buy with their immense wealth. This asset inflation does not just raise the Dow it creates bubbles that burst like the one in 2008. Instead of trying to get away from the boom and bust cycle policymakers in the Bush and Obama Administrations worked to re-inflate financial markets and have so far succeeded.

The problem for most people being “success” in the government’s eyes is only good for a very small group of Americans. The majority have been relegated to debt peonage and stagnant wages with little chance for advancement. This is terrible if you believe the federal government and related institutions are supposed to serve the interests of the vast majority of the governed, it is unsurprising if you recognize that America is a commercial oligarchy posing as a republic.

CommunityThe Bullpen

Poverty Unchanged By Wall Street Recovery

Though the federal government and Federal Reserve moved heaven and earth to ensure the 1% were made whole after the financial crisis, those unable to buy influence in Washington remain frayed. According to the Census Bureau over 14% of Americans remain below the poverty line while financial markets have made a considerable recovery from 2008 lows. There has been a recovery, for some.

As the recent Federal Reserve survey shows wealth inequality has actually gotten worse during the recovery. The overwhelming majority of assets are owned by the rich and super-rich so when government policy is used to push the Dow up, few Americans go with it. The justification for pumping up financial markets is typically that the wealth will “trickle down,” that when the rich get richer they will pull up the poor and middle class.

But as the data clearly shows that just isn’t happening. And, really, there is no good reason to believe it would. Trickle-down economics has consistently failed everywhere and every time it has been tried. The theory is simply wrong.

Though often celebrated by the establishment press and political class as “job creators” the rich generally pump their money into assets not goods and services given they hit consumption limits and have nothing left to buy with their immense wealth. This asset inflation does not just raise the Dow it creates bubbles that burst like the one in 2008. Instead of trying to get away from the boom and bust cycle policymakers in the Bush and Obama Administrations worked to re-inflate financial markets and have so far succeeded.

The problem for most people being “success” in the government’s eyes is only good for a very small group of Americans. The majority have been relegated to debt peonage and stagnant wages with little chance for advancement. This is terrible if you believe the federal government and related institutions are supposed to serve the interests of the vast majority of the governed, it is unsurprising if you recognize that America is a commercial oligarchy posing as a republic.

Image from US Census Bureau under public domain.

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Jane Hamsher

Jane Hamsher

Jane is the founder of Firedoglake.com. Her work has also appeared on the Huffington Post, Alternet and The American Prospect. She’s the author of the best selling book Killer Instinct and has produced such films Natural Born Killers and Permanent Midnight. She lives in Washington DC.
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