And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
–Ben Bernanke, Washington Post Op-Ed, 2010
And they laughed at old Ben.
“That’ll never work,” they said.
“This won’t benefit Main Street,” they said.
Well, who’s laughing now, goddamn it?…
Obviously that’s sarcasm. Bernanke’s assessment ignored the rather obvious fact that in order to benefit from inflated financial assets you have to own financial assets in the first place and it goes without saying that those assets are concentrated in the hands of the wealthy. So yes, when you adopt a policy that’s specifically designed to drive up the prices of assets that are concentrated in the hands of the rich, you’re likely to exacerbate wealth inequality.
Which reminds me…