Handmaids Of Wall Street—Trickle Down Still Doesn’t Work

At some point, enough is enough. We are referring to the endlessly destructive machinations of the Federal Reserve. It has truly become a rogue agency at war with the essentials of middle class prosperity, even as it functions as the handmaid of Wall Street and shameless benefactor of the speculative classes.

So there is no alternative to root and branch reform. Everything the Fed has been doing for the last five decades has been dead wrong. During that long interval, which has seen the steady obliteration of the middle class, it has seized a level of financial domination and control that is profoundly anti-democratic, anti-constitutional, anti-market and deeply antithetical to a thriving main street economy.

At the end of the day, the Fed has fostered four very bad things—inflation, debt, speculation and malinvestment. All of these ills, in turn, are owing to the Fed’s abject subservience to Wall Street and the decades of mission creep it has encouraged in the name of an ersatz Keynesianism.

Put simply, modern Keynesian economics is the invention of power-grabbing government apparatchiks and crony capitalist looters. Their root presumption is that market capitalism is dangerously and chronically unstable, and that the macro-economy therefore requires centralized, continuous and heavy-handed direction by what amounts to a monetary politburo consisting of 12 unelected “experts” and purported economic scientists.

The official body through which these twelve financial dictators operate is called the Federal Open Market Committee (FOMC), but its operations are neither expert nor scientific. That’s because the FOMC operates cheek-by-jowl with Wall Street traders, speculators and money-shufflers and is utterly dependent upon them to execute its policies and pursue its objectives.

Accordingly, “agency capture” is endemic, inescapable and pernicious. In fact, the short-hand name for what the Fed actually does— continuous fiddling with interest rates and massive government bond purchases—tells you all you need to know. It’s called “wealth effects” management and is designed to make Wall Street investors and speculators feel wealthier on the theory that windfall gains generated by the Fed’s money-pumping will eventually trickle-down to main street in the form of higher business investment, more housing and stronger consumer spending.