“Quantitative easing was the father of millennial socialism” by David McWilliams, an Irish professor (Financial Times), says that the bailouts following the Collapse of 2008 helped out older property owners, by reflating the prices of the stuff that they had unwisely purchased, on the backs of millennials.
He notes that “the worst of investments are often taken in the best of times.” (Maybe good to point out to anyone with money or income considering getting married and living in one of the U.S. states that provides for winner-take-all divorce litigation!)
He notes that average hourly earnings have gone up 22 percent in the past 9 years while property prices are up 55 percent in Houston, 67 percent in LA, and 96 percent in San Francisco: “The young are locked out.”
(The article says that 79 percent of the same folks who can’t afford apartments also think that “immigrants strengthen the US”. Certainly every landlord would agree that more demand is a good thing, but why are landless peasants happy to see another caravan of housing-seekers arrive?)
Why are people so obsessed with wealth inequality these days? The author says that “wealth inequality was not the unintended consequence, but the objective, of [quantitative easing] policy.”
For the purist, capitalism without default is a bit like Catholicism without hell. … what if the day of reckoning was only postponed? What if a policy designed to protect the balance sheets of the wealthy has unleashed forces that may lead to the mass appropriation of those assets in the years ahead?
Appropriation? Could it happen here? Elizabeth Warren has proposed to take wealth gradually, via a 2 percent tax on rich bastards (over $50 million in wealth). If they try to escape by renouncing their U.S. citizenship, she’ll hit them with a 40 percent exit tax. (Slate) Not too scary to the merely comfortable, right? Remember that income tax started out in 1913 between 1 and 6 percent and it was limited to those with incomes over $103,000 in today’s mini-dollars ($4,000/year for a married couple at the time). Once the structure is in place, the rates and thresholds can be tweaked as necessary.