David Stockman reports:
Since Greenspan launched the cult of Keynesian central banking and the financialization of the American economy in the late 1980s, the balance sheet of the Fed has grown from $200 billion to $4.4 trillion—or by 22X. The S&P 500 is up 10X notwithstanding three thundering booms and busts in the interim. Along the way, the great financial markets of American capitalism have been destroyed as agents of productive capital formation, efficient resource allocation and honest price discovery. The have simply become a giant, central bank operated and funded casino where the 1% gamble with make-believe money.Proving Keynesian economics is : something for nothing which just doesn't work.
Meanwhile, consider the four charts below about the actual main street economy. Real median family income is down 12 percent from its unsustainable 2007 housing bubble peak; more importantly, it was no higher in 2013 than it was way back in 1989 when the modern age of central bank money printing was just getting underway.
So there you have it. The Fed’s balance sheet grew at 22X over the last quarter century; median real family income grew at 0X.
Likewise, the count of breadwinner jobs is still 4% lower than it was when the dotcom bubble crashed. Real net capital investment is down 20% during the same 14 year period.
