While median household incomes in the United States have fallen since the economic recovery began (down almost 6 percent since 2009), incomes at the top (as documented in the chart above) have soared.
The question is, how much of that inequality can be blamed on monetary policy—in particular, on quantitative easing?
As I see it, Richard Barwell, Senior European Economist at the Royal Bank of Scotland and former Senior Economist of the Bank of England, offers the correct answer:
“Given an unequal distribution of income and wealth it is always likely to be the case that a policy which generates a robust and sustained recovery will benefit those at the top more than those at the bottom.”
Of course. Concentrate incomes and wealth in the hands of a tiny minority at the top and a recovery that restores corporate profits and equity share prices will per force lead to more inequality in the distribution of income and wealth.
The issue Barwell and others simply don’t want to address, however, is: has the resumption of the pre-crisis inequality trend, which is a condition and consequence of quantitative easing during the past five years, itself undermined the possibility of a “robust and sustained recovery” going forward?