Friday, June 20, 2014

Warsh and Druckenmiller Echo NBfPB

Long-time readers know that I have mentioned several times the current economy, the economy delivered to us by the Obamacrats, is great for owners and crappy for workers.
So as the world beyond our borders recovered, having indulged in less over the top business bashing, US manufacturers have been able to secure alot of business exporting our great products to the world, but have little incentive to hire (ObamaCare) and expand here at home (card-check, EPA, NLRB, etc). Ergo the profits but not too much hiring. So that's how we got an economy that stinks for "workers" but is OK for "owners". (I use quotations marks because these terms are the false dichotomies of our political discourse as if "workers" don't own and "owners" don't work.)
Well, today the WSJ has an op-ed by Stan Druckenmiller and Kevin Warsh, saying the same thing.
The aggregate wealth of U.S. households, including stocks and real-estate holdings, just hit a new high of $81.8 trillion. That's more than $26 trillion in wealth added since 2009. No wonder most on Wall Street applaud the Fed's unrelenting balance-sheet recovery strategy. It's great news for those households and businesses with large asset holdings, high risk tolerances and easy access to credit. 
Yet it provides little solace for families and small businesses that must rely on their income statements to pay the bills. About half of American households do not own any stocks and more than one-third don't own a residence. Never mind the retirees who are straining to make the most of their golden years on bond returns.
Warsh and Druckenmiller place the onus, it seems, squarely on the Fed's monetary policy, and undoubtedly that is a contributor, but I think they miss the significant role of fiscal and, especially, regulatory policy.  Also, not helping is the political rhetoric and the dubious legal assaults on business coming from this administration.


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