The Krugginator has been on a roll these past couple days, discussing the blowhards who whine about how the Fed is robbing from grannies by keeping interest rates artificially low. You know the type.
Krugman - more on class and monetary policy. He presents the data showing who actually depends on interest for income, and then notes:
So interest is a significant source of income only for people high in the distribution; it gets really big for people with very high incomes. These are the people who have a lot to lose if inflation erodes the values of their assets, and a lot to gain if inflation comes in below expectations or there is actual deflation.
So hard-money ideology is, to an important extent, a reflection of class interests — not so much the one percent as the 0.01 percent.
Krugginator - on losing interest. Quote:
Yes, there are some middle-class retirees collecting interest on their CDs. But the big losers are people with very high incomes. Again from the Piketty-Saez data, we can track the decline in interest incomes from 2007 to 2011 (measured in 2012 dollars) and compare it with income in 2007 at different percentiles. [...]
It’s not a big deal for people in the bottom half of the top 10 percent, who might well consider themselves middle class. But among the top 0.01 percent, low interest rates have actually been a bigger income hit than Obama’s tax hikes (partial reversal of Bush cuts plus the ACA surcharge).
You’re living in a fantasy world if you don’t think this has something to do with the diatribes against currency debasement and all that.
The Kruggatolah - the monetary fever swamps. Quote:
I was aware that there were a fair number of people on the right attacking the Fed, not for running the risk of inflation or financial instability or something, but for expropriating the property of right-thinking, clean-living people who deserve higher interest earnings.Does that sound like anyone you know?
The starting point seems to be the notion that the Fed is keeping interest rates below their “free market” level.Does that sound like anyone you know?
And then there is the assertion that there are lots of salt-of-the-earth regular Americans who are having their rightful incomes stolen by this anti-free-market policy. Actually, interest income for retirees is both fairly small in aggregate and highly concentrated among a small number of people. The AARP tells us that the average senior had more than $3,000 in interest income in 2012, but that the median was only $255. That’s saying that interest income is minor for the great majority.You'd think that the supposedly-proletarian, populist, "dispassionate", anti-Fed, hard money advocates out there would be in favour of Fed policy of "suppressing" interest rates to increase employment and stimulate wage growth. That helps the "honest working man" a hell of a lot more than giving more risk-free interest income to the richest 1% of grannies, doesn't it?
But no, don't let reality get in the way of the right-wing plutocratic John Bircher propaganda that you parrot every day on your free blog!