UPDATE: Mar. 6, 2014, 10:19 PM EST
How Obama & the FED Made Income Inequality Worse
original article written by Net Advisor™
WASHINGTON DC. President Barack Obama is likely to make “income inequality” a theme this year. The idea of income inequality suggests that many in the USA aren’t benefiting from Obama’s so-called “economic recovery,” and thus we need new policies to somehow fix this.
What the income inequality proponents may not have considered is the Obama Administration along with the Federal Reserve have actually made income inequality a wider problem.
[1] How Obama Helped The Rich Get Richer, The Poor & Middle-Class Get Poorer
Taxpayers had enough of the “economic stimulus” plans that just created more debt than jobs (Obama’s video admission mid-page).
Since Congress was not going to get much support for more stimulus spending, the plan was to get an unelected body (The FED) to it. The Federal Reserve first began its stimulus program in 2009 [Report].
A separate 2009 report said the total committed stimulus from the federal government and the Federal Reserve could have been used to just pay off 90 percent of all U.S. mortgages.
“The stimulus package the U.S. Congress is completing would raise the government’s commitment to solving the financial crisis to $9.7 trillion, enough to pay off more than 90 percent of the nation’s home mortgages.”
— Source: Bloomberg, Feb. 08, 2009
Perhaps it would have been better to just pay off 90 percent of the mortgages in the country, or pay the equivalent back to taxpayers. A country with little to no personal debt and sudden free cash-flow: Watch the economy boom.
We probably would have some inflation but with little to no debt people could afford it; instead we have debt and nothing to show for it. The U.S. National Debt increased by about 62.58% since President Obama came to office to currently over $17 Trillion.
[2] ‘Uncle’ Ben (Bernanke) Prints More Paper During an Election Year
By 2012 (and coincidentally during a Presidential election year), the FED rapidly expanded its stimulus program by printing $85 Billion per month. The FED used that money to buy U.S. Treasuries (government debt) and government mortgages. This is all artificial money. The FED isn’t earning this money; again they are just printing it. All this did was send the stock market up. Basically, the FED used paper money to stimulate more paper money.
Now that the election is over, the FED is cutting back its stimulus program currently at the rate of $10 billion per year or another $900 Billion (stimulus) just in 2014. Based on this rate, the FED will continuously print money for this stimulus program over the next 8.5 years. Since 2009, the only people that have really been helped by all the trillions in Obama and FED stimulus programs have been investors on Wall Street.
The Dow is up roughly 166% since the March 2009 lows. So when you hear talk about growing income equality, keep in mind that you now know that the Obama and FED’s policies (via the Obama Administration) have grown income inequality.
“Since the recession officially ended in June 2009, the top 1 percent have enjoyed the benefits of rising corporate profits and stock prices.”
— Source: Portland Press Herald/AP, Sept. 10, 2013
A report suggested that “the richest 85 people in the world own as much wealth as the bottom half of the (world’s) population.” This is kind of a red herring argument, which has nothing to do with the U.S.A. Comparing income inequality of the U.S. to say Congo in Africa is a bit ridiculous. As if it is America’s fault for income inequality in Africa?
Most of the super effluent’s money is tied up in stocks, bonds, and real estate, coincidentally pretty much where all FED stimulus went. Can one really blame income inequality on people who became successful from working hard, verses those who spent their time protesting for what they think they deserve?
[3] Obama’s Biggest Supporters Are Wall Street (Democrat) Billionaires
What the Anti-Wall Street (Occupy, Obama supporters) do not seem to grasp, is many of America’s wealthiest people and who supported Obama’s 2012 campaign are not only Democrats, they also made their money from Wall Street.
Obama’s Biggest Supporters: Wall Street (Democrat) Billionaires (short-list):
- Billionaire S. Daniel Abraham (Slimfast).
- Billionaire Warren Buffett (Berkshire Hathaway).
- Billionaire Bill Gates (Microsoft).
- Billionaire David Geffen (director/ filmmaker).
- Billionaire William Randolph Hearst III (media/ publishing).
- Billionaire Chris Hughes (co-founder, Facebook).
- Billionaire Irwin Mark Jacobs (Qualcomm).
- Billionaire George Kaiser (Kaiser Insurance/ Health Care).
- Billionaire Sheryl Sandberg (COO, Facebook).
- Billionaire Eric Schmidt (Google).
- Billionaire Steven Spielberg (director/ filmmaker).
- Billionaire George Soros (who is not a U.S. citizen).
- Billionaire Oprah Winfrey (TV/ media).
Some left groups like to blame Wall Street firm, Goldman Sachs for one thing or another. What they may not know is Goldman Sachs‘ former CEO, Multi-Millionaire Jon Corzine, Michael Anders ($50,000) Michelle Car ($100,000) all have been large Obama donors.
- Article: How Did The Democrats Become The Party Of The Rich? (Forbes)
We expanded this article here.
[4] Lost in Translation: Obama Policies Creating a 2-Class Society
The gains in the stock market have not translated to the economy. The “rich” have become wealthier with $ trillions of Obama- FED stimulus. The rest of Americans are getting their work hours cut back, losing jobs, and losing their health insurance. Most new jobs are low-wage jobs. A random search found these big layoffs:
[5] Recent Lay Offs in Obama’s “Economic Recovery”
- Hewlett Packard (HP) announces another 5,000 layoffs, for a total of 34,000.
- International Paper to close plant and lay off 1,100 jobs in early 2014.
- Macy’s shares jump on plan to cut 2,500 jobs.
- Intel to cut workforce by 5 percent, a reduction of more than 5,000 jobs.
- Ford to lay off more than 900 workers.
- Just the top 10 hospitals terminating (or laid off) over 8,000 people.
We pointed out that the December 2013 jobs report was the worst since 2011. The previous jobs report (October-November 2013) showed that the economy lost 265,000 jobs after accounting for jobs gained. If the economy and stocks are doing so well, where are the jobs? Why are companies laying off if the economy was really growing?
[6] Birthday Party for the Rich and Famous (Democrats)
Michelle Obama recently had her 50th birthday at the White House and celebrated it not with her poor or middle-class friends (if any), but rather 500 whom among them are multi-millionaire Obama supporters and contributors.
A report came out that said cameras and cell phones were not allowed inside the birthday event because the Obama’s don’t want to show the public an exclusive party full of millionaires and then later chant about “income inequality.” Guests were also told not to tweet about their lascivious experience.
“Guests had been greeted by a “cell phone check” table where they deposited their camera phones on arrival and it was understood that this was not an occasion for Tweeting party photos or Facebooking details.”
Sure, the First lady has every right to celebrate her birthday as she wishes (hopefully not at taxpayers’ expense). But then to carry on about ‘income inequality’ when that party is celebrated with her wealthy friends and political contacts just seems to be in conflict arguing for the so called “working class” and the poor?
[7] How ObamaCare is Making Income Inequality Worse
The way to reduce income inequality is not by income redistribution. Instead of allowing business friendly regulations, reducing taxes or reducing costs burdens on business, the answer has been to demand by law that business pay for employee’s healthcare or be fined $2,000 per employee per year, after the 30th employee [Report, Point 8].
Many businesses already provide employer subsidized healthcare as an employee benefit. Now the Obama Administration via ObamaCare is forcing huge costs on business where many companies are learning they can’t afford to pay healthcare any longer.
The result of ObamaCare is increase costs to business, reducing employee work hours, terminating jobs, and or dropping employee health coverage [Report]. This isn’t exactly a policy that is going to lower income inequality; it will actually make it worse. How?
People will have to pay more money out of pocket now for government-based or qualifying private health insurance which takes away money they could have used for their lifestyle, child’s education, their ability to save for retirement and other needs.
[8] More W̶o̶r̶k̶ (Golf) to Do?
President Obama said in 2009 that he would not rest until the jobs situation was fixed. The Obama Administration is frequently blaming Republicans for not supporting his costly agenda. Plus they are celebrities to hang out with, golf games to play, political fundraisers to attend, and lots of vacation time. After that ‘work’ is done, getting back to the White House to catch up on TV shows while pretending to work.
[9] Review
There will always be income inequality. There will always be wealth and poverty. However with private wealth, over $298 Billion was voluntary given to charities just in 2011.
The Obama Administration’s thinking is to spend trillions of dollars, redistribute that wealth and somehow that will create a certain level of universal utopia. If spending trillions didn’t reduce poverty, welfare, or increase the average person’s standard of living, how will raising the minimum wage another $5-10 an hour suddenly become the magic fix that ends income inequality?
The long-term results of government wealth redistribution programs have only increased poverty in the U.S. over the last 50 years. Wealthy celebrities became wealthy ONLY because of a capitalist free-market system. To trash or blame a system that allows the possibility for individuals to succeed is economic suicide.
Pumping trillions of dollars into Wall Street is good for investors, but to then blame them for investing their money and building their wealth is not their fault.
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