Money Manager Baker: Fed Policy Helps the Wealthy at Expense of 'Main Street'
Thursday, 07 Nov 2013 12:20 PM
By Dan Weil
While the wealthy benefit from the red-hot stock rally created by the Federal Reserve's gargantuan easing program, many Americans are taking it on the chin, says Simon Baker, CEO of Baker Ave. Asset Management.
"Main Street is a long way from back," he tells Yahoo. "If the question is, 'Is Main Street happy?' I don't think so."
Baker labels the Fed's accommodation "a massive, $3.7 trillion redistribution of wealth" that has helped only Wall Street and the wealthiest 5 percent of the country that owns appreciating assets such as stocks and real estate.
"They're the ones benefiting, not Main Street," Baker argues.
"[Quantitative easing] is not encouraging banks to do more loans, and it's not encouraging people to hire more folks," he contends.
"So it's not helping Main Street." Indeed, sluggish wage growth is increasing the inequality between the ultra-wealthy and average Americans, Baker says.
"The problem is really wage deflation. . . . If you're the average guy on Main Street, your wages haven't gone up over the last 10 years."
And more Fed easing will do nothing to solve that, Baker believes.
But more Fed easing may be just what we'll get. Three central bank officials who vote on policy this year signaled Tuesday that the Fed might continue easing for a while to boost the somnolent economy, Bloomberg reports.
The trio includes Fed Governor Jerome Powell, Boston Fed President Eric Rosengren and St. Louis Fed President James Bullard.
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Poster Comment:
It is all a scam and a fraud. ;)