Re:Does QE Cause Wealth Inequality?
by notahacker on Tuesday November 16, 2021 @01:53PM
(#29244812)
If wages also go up by 7% then the absolute gap definitely is uncoverable by wage income.
Sure, they often don't but the reason they don't has little to do with QE. After all, the entire point of QE and monetary stimulus in general is central banks are concerned that not enough jobs are being created and real wage cuts and layoffs will result. And in that scenario where credit is expensive and businesses are looking at layoffs, our wealthy investor is still getting 7% returns, just from offering expensive short term credit to struggling businesses rather than seeing the long term shareholder value of thriving businesses rise. But the worker is even further from catching them up, because they're struggling to find a job.
Sure, they often don't but the reason they don't has little to do with QE. After all, the entire point of QE and monetary stimulus in general is central banks are concerned that not enough jobs are being created and real wage cuts and layoffs will result. And in that scenario where credit is expensive and businesses are looking at layoffs, our wealthy investor is still getting 7% returns, just from offering expensive short term credit to struggling businesses rather than seeing the long term shareholder value of thriving businesses rise. But the worker is even further from catching them up, because they're struggling to find a job.