One of the biggest issues facing the U.S. since the global financial crisis has been the ever-expanding wealth gap. Everything from corporate greed to an unfair tax code has been blamed for this development.
A much bigger contributor, in my opinion, has been artificially low interest rates.
Think about it. The Fed funds rate has been at essentially zero since the crash of 2008. The only folks left to invest were the wealthy, since most retail investors, shocked by equity volatility, either would not or could not invest.
Adverse market moves have been met with more easing. The result is a dramatic reduction in market volatility and big gains – as if the Fed guaranteed a return on risk. This only seems to be receding now, as stocks have been flat so far in 2015.
In this environment, the rich got richer. The middle class was left struggling with the economy and tepid wage growth.
