Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Party of the Rich Obama Policies Have Been Helping Fat Cats

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Party of the Rich Obama Policies Have Been Helping Fat Cats

Article excerpt

Real (inflation adjusted) median household income last year was $51,371, 4.44 percent lower than in 2009, the Census Bureau says.

The number of Americans living in poverty rose by the equivalent of the population of Massachusetts during President Barack Obama's first term. By the time his second ends, "black people will have lost ground in every single leading economic indicator category," television talk show host Tavis Smiley said last month.

From 2009 to 2012, the top 1 percent received 95 percent of income gains, a study by University of California-Berkeley economist Emmanuel Saez indicated.

That's where you find the "superstars" who make megabucks in sports, entertainment, technology and finance, said economists Steven Kaplan and Joshua Rauh. You'd expect them to do better.

But during the presidency of George W. Bush, the top 1 percent garnered just 65 percent of income growth, Prof. Saez said.

The stock market has set all-time highs despite mostly dismal economic news - thanks to "quantitative easing" (money creation) by the Federal Reserve Board. The top 1 percent own 83 percent of U.S. stocks.

The boon to Wall Street has been a blow to the middle class. Near-zero interest rates undermine savings.

QE was supposed to make credit available to "Main Street" businesses crunched by the recession. That didn't happen, said Andrew Huszar, point man for the Fed's bond purchases.

"My program wasn't helping to make credit any more accessible for the average American," Mr. Huszar wrote in the Wall Street Journal Nov. 11. "QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash."

The banks also "enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed's QE transactions," he said.

Wall Street investment banks also get from federal loan guarantees what amounts to an $83 billion subsidy. "It's tantamount to giving the banks about 3 cents of every tax dollar collected," said the editors of Bloomberg View.

A major cause of the Great Recession was the recklessness of Wall Street bankers. …

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