The Sunday heist
On March 15, 2020, the Federal Reserve cut rates to zero and announced unlimited quantitative easing. Within two years, the balance sheet swelled from $4.2 trillion to $9 trillion. The S&P rose 40 percent. Home prices rose 34 percent. Median wages rose 10 percent — and got eaten by groceries.
This is the third time we have watched this argument. The words change. The shape does not. Richard Cantillon described it in 1755: new money enters through financial institutions, reaches asset owners first, bids up prices, and arrives in workers’ paychecks last, after the purchasing power has already moved. The Fed demonstrated it at industrial scale.
The democratic socialists diagnose symptoms with precision. Where they lose us is the prescription. More intervention requires more spending, which requires more monetary expansion — the concentration mechanism itself. Raising the top rate to 70 percent does not matter if the Fed simultaneously expands the supply by trillions. The expansion transfers more upward through asset inflation than any tax claws back.
The Chicago school trusts central banking in a way we find naive. They want better management. We want to ask why a committee of twelve can correctly price borrowing for a $27 trillion economy. The hubris produced the dot-com bubble, the housing crisis, and post-COVID inflation.
The technologists correctly identify platforms as concentration engines. We add that platform monopolies are partly creatures of a decade of near-zero rates that forced capital into progressively riskier bets.
What would we do? Market-determined interest rates. Competing currencies. Fix the money and the downstream effects attenuate.
Where we concede ground: We have no proof of concept at national scale. El Salvador adopted Bitcoin; results have been volatile and modest.
What would change our mind: A 20-percent-of-GDP monetary expansion over five years with no increase in top-1-percent wealth share.
Read the full synthesis: Why does wealth keep concentrating?