The COVID-19 pandemic was the greatest transfer of wealth, from the poor and middle class to the very rich, in the history of the world.
But the transfer wasn’t done by Donald Trump.
It was done by Federal Reserve chair Jay Powell.
The $2.3 trillion the Federal Reserve created out of whole cloth in March went almost entirely to people who already had money.
Powell bailed out every bad and stupid bet the market had made. He bailed out the airlines. He bailed out the cruise lines. He bailed out the casinos and the oil companies.
Capitalism is supposed to be about private risks that can go bad, and risks that work fueling the greater good. At a stroke, Powell turned that truth on its head, removing the risk markets are built to protect, and socializing it. The vast majority of people were told to pay their rent and buy food while tens of millions were losing their jobs.
Carnival Cruise Lines should be out of business. They bought back stock and handed out big dividends when times were good. Technically they’re not even an American company. While they have offices in Miami, they’re legally run out of tax havens. But if you bought Carnival when I said sell, on May 15, you’re up 50%. That’s because, after Powell’s actions, Carnival was able to borrow $6 billion from investors desperate for yield, something that was only possible because of the Fed’s money creation efforts.
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