George Gilder: Angry About Inequality? Here’s the Real Culprit… (VIDEO)

George Gilder is most recently the author the ground breaking The Scandal of Money: Why Wall Street Recovers but the Economy Never DoesHe is a founding fellow of the Discovery Institute and a senior fellow at the American Principles Project, which sponsored this book.

Gilder is also the author eighteen other well-regarded books including Knowledge and Powerand Microcosm. After the publication of Wealth and Poverty, he became Ronald Reagan’s most frequently quoted living author.

In the following clip — from a speech Gilder gave at FreedomFest 2016 — he discusses how near-zero interest rates, far from stimulating economic growth, actually create an environment which fosters inequality.

Zero interest rates essentially zero out time.

As Hayek put it, the root and source of all monetary evil is the government monopoly of money. Matt Ridley said the government monopoly of money not only suppresses innovation and creativity, not only retards growth, it also fosters inequality. Because what we have today is a bifurcated economy produced by the government monopoly of money that fosters inequality.

Think of most of us. Most of us get paid by the hour, paid by the day. We are inexorably caught in the economy of time; that’s how we get compensated. But what’s happened in the world economy in recent decades as a result of the government monopoly of money and that exploitation of that government monopoly to allow the unlimited expansion of government power through the creation of money.

What’s happened is a financialization, a hypertrophy, of finance in the world economy.

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Sanders, Trump, and the Pope: Whose Justice Is It, Anyway?

Sen. Bernie Sanders (I-VT) (photo credit: Michael Vadon via Flickr, CC BY-SA 2.0)

Last Monday, Bernie Sanders spoke to a crowd at the largest Christian evangelical school in the world.  While his honest speech and the reciprocating respect of the Liberty University students highlighted the great need for civil public discourse in both our schools and our politics, his remarks also revealed a deeper problem in both American politics and society at large: the practice of selective justice.

Quoting Scripture to the crowd, Sanders reflected that Biblical justice means “treating others the way we want to be treated, treating all people, no matter their race, their color, their stature in life, with respect and with dignity.”  Due to the great income inequality in American today, however, he said that “it would be hard to make the case that we are a just society, or anything resembling a just society today.”

Regardless of the economics behind income inequality or the feasibility of his proposals to eradicate the income gap, Sanders is concerned with the poorest among us, and he cited his agreement with Pope Francis to prove it.

“The current financial crisis originated in a profound human crisis, the denial of the primacy of the human person,” he quoted the Pope.

News sources have also applauded Sanders for not “shying away” from the greatest divide between his views and that of his conservative Christian audience.

“I believe in women’s rights and the right of a women to control her own body. I believe in gay rights and gay marriage,” he said.  Continue Reading

Rand Paul Slams Fed for Favoring Big Banks, Wealthy Americans

Sen. Rand Paul (R-KY) (photo credit: Gage Skidmore)

It’s no secret that Senator Rand Paul is not the Federal Reserve’s biggest fan.  Paul has been steadfast in his support for Audit the Fed legislation, and, as we have reported here, his criticisms of the Fed have not been looked on too kindly by commentators on the Left and even (though, not surprisingly) many establishment Republicans.

Undeterred, however, Sen. Paul has renewed his critique in a column, co-authored with investor Mark Spitznagel, arguing that the Fed’s recent policies have not been friendly to the average American:

In December 2008, Congress summoned then-Fed Chairman Ben Bernanke to provide information concerning the enormous “emergency liquidity” programs that had begun during the financial crisis earlier that fall—all the new acronyms Wall Street analysts would come to know, such as TAF (Term Auction Facility), PDCF (Primary Dealer Credit Facility), and TSLF (Term Securities Lending Facility). Bernanke did not need Congress’ permission to conduct those programs, but even worse, he refused to disclose the recipients of the $1.2 trillion in short-term loans that we now know were being administered behind closed doors.


Americans then and now were lectured that the trillions in loans and asset purchases were all for their own good and eventual benefit, to resuscitate the credit markets and bolster home values. Yet the truth remains—it is Wall Street that benefits from the Fed at the expense of Main Street.  To make things worse, in October 2008—one month after Lehman Brothers collapsed and precipitated the worst of the financial crisis—the Fed began exercising a new policy of paying interest on reserves.

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Hillary Abandons Income Inequality

Former Secretary of State Hillary Rodham Clinton (public domain photo via Department of Defense)

Had you tuned in to Hillary Clinton’s hour-long speech on economics yesterday in order to learn the specifics of how she intends to achieve “strong growth, fair growth and long-term growth,” you would be unsatisfied:

Throughout the campaign, I’m going to be talking about how we empower entrepreneurs with less red tape, easier access to capital, tax relief and simplification. I’ll also push for broader business tax reform to spur investment in America, closing those loopholes that reward companies for sending jobs and profits overseas.

See, she’s FOR small businesses and she’s going to TALK about that.  As for the actual policies by which she will achieve these goals, well that’s for another time.

But as a preview of how she understands the politics of economic issues, the speech was revealing.

First off, she has abandoned “income inequality” as her central theme and instead embraced in a bear hug the central concern of voters: the rising cost of living.  Time and again she came back to this:

Wages need to rise to keep pace with costs. . . Paychecks need to grow. . . The defining economic challenge of our time is clear: we must raise incomes for hard-working Americans so they can afford a middle class life.  We must drive strong and steady income growth that lifts up families and lifts up our country, and that will be my mission from the first day I am President to the last.

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Carly Fiorina Matches Bush’s Four Percent Growth Goal

Former Hewlett-Packard CEO Carly Fiorina (photo credit: Gage Skidmore)

Last month, Jeb Bush promised 4 percent economic growth during his official presidential candidacy announcement. On ABC’s “This Week” yesterday, Carly Fiorina also affirmed that “4 percent growth is a good goal,” especially in stark contrast to “an economy that sort of putt putts along between 1 and 2 percent”:

I think we need to understand what the true engine of economic growth and job creation is in this country. It has always been small businesses, new businesses, family owned businesses, community-based businesses that create two-thirds of the jobs and employ half the people. And we are now crushing those businesses. In fact, we are destroying more businesses in the United States now that are being created for the first time in our history.

Meanwhile, crony capitalism is alive and well, the big are bigger, the wealthy are getting wealthier, because with a very large powerful complicated government, which is what we have and which Democrats want more of, only the big, the powerful, the wealthy and the well connected can survive.

Fiorina also discussed her thoughts on income inequality:

Well, I think income inequality is a huge problem.

The truth is, Hillary Clinton’s ideas create more income inequality. Why? Because bigger government creates crony capitalism. When you have a 70,000 page tax code, you’ve got to be very wealthy, very powerful, very well connected to dig your way through that tax code. So, she made to cry [sic] income inequality, what I will continue to point out is the fact that every policy she is pursuing will make income inequality worse, not better, crony capitalism even worse, not better.

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Chris Christie and Jeb Bush Show Real Leadership By Tackling the Fed

The Federal Reserve headquarters in Washington, DC (photo credit: Dan Smith, CC BY-SA 2.5)

Recent statements by two presidential aspirants, former Florida Governor Jeb Bush and New Jersey Governor Chris Christie, indicting the Fed for its role in inhibiting job creation, causing wage stagnation and paralyzing income mobility, come in the context of a titanic public dispute over the role of the Fed in causing such a sluggish, bad job creation, low wage growth economy.  Both Govs. Bush and Christie deserve high praise for showing leadership in addressing what deserves to be a leading issue in the 2016 election.

Late last April, Ben Bernanke, in his Brookings blog, trenchantly critiqued prominent conservative economist John Taylor.  The Wall Street Journal immediately ran an editorial entitled “The Slow-Growth Fed.”  This triggered a response by the former Fed chairman in his blog.  That promptly was followed by a WSJ op-ed indicting the Fed by Prof. John Taylor, “Taylor on Bernanke: Monetary Rules Work Better than Constrained Discretion.”

The most recent evolution of this altercation came on June 1 when Bernanke attempted to exonerate the Fed for income inequality in his blog:

Certainly, inequality and lack of social mobility are issues of first-order significance for economic policy in general. Should they also be first-order considerations for the making of monetary policy? I have my doubts.

First, widening inequality is a very long-term trend, one that has been decades in the making. The degree of inequality we see today is primarily the result of deep structural changes in our economy that have taken place over many years, including globalization, technological progress, demographic trends, and institutional change in the labor market and elsewhere.

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NYT: Marriage Drives Economic Inequality

Photo via Wikimedia Commons (CC BY 2.0)

For Valentine’s Day, The New York Times offers this essay by Andrew Yarrow, noting how marriage makes people economically better off, and how the decline of marriage among the non-college educated is creating serious economic inequalities:

Studies have shown that married women and men tend to be much better off financially than those who are unmarried, and that those who have fewer assets and more debt early on are less likely to marry or have stable marriages than those who are more financially secure.

‘There are relatively few relationships that are more fully documented than those between economic well-being and marriage,’ said Ron Haskins, who is the author of many scholarly papers on marriage and a senior fellow at the Brookings Institution in Washington. . . . A 2012 study by the National Bureau of Economic Research found that the median 65-to-69-year-old married household had almost 10 times as much in savings as the typical single-person household: $111,600 compared with $12,500. ‘It’s a plain fact that people who are married have more income, wealth and savings that last into their retirement,’ Mr. Haskins said.

Maggie Gallagher is the editor of Continue Reading