How the Fed Screws the Middle Class

‘Don’t get me started,’ said the taxi driver.

But it was too late. He had already started. And he wasn’t going to stop until we arrived at our destination: an island in the Bois de Boulogne.

The Bois de Boulogne is a large park on the western edge of Paris. It includes a lake and an island. On the island there is a nice restaurant. And in the restaurant were some colleagues who had invited us to lunch.

‘I started working when I was 15,’ our driver began, in French with a thick Italian accent.

‘I had no choice. I’ve been working ever since. That was 1971. I worked hard, you know. I saved my money. And I opened a restaurant. Here in Paris.

‘It was a big success. A real money machine. But that was back when people had money to spend. Businessmen came in for lunch. They had three courses and a couple of bottles of wine. I did really well.

‘But then, people had less and less money to spend. Yeah, salaries have gone up. But so have taxes and social charges. Back in the 1970s, you got to keep most of what you earned. And you could afford to go out to a decent restaurant and have a decent lunch. But now, nobody’s got any money. They get their salary, and they see that most of what they earned has already been taken away.

‘And the cost of things you have to have. I mean, you’ve got to live somewhere and now rents are much higher. And the cost of gasoline. And electricity. Now people earn more. But they have less to spend. I see it everywhere. People who used to take a cab now take the metro.

‘And in my life, I used to buy a new car every five years or so. Now, I don’t want to buy anything.

‘And now, nobody’s got any time or money to spend having a decent meal. So, they go to McDonald’s, where they can fill their bellies for 4 euro in 10 minutes. I had to sell the restaurant. And now I’m back driving a cab.

‘But it’s a hard way to earn a living. The tourists don’t have any money either. They get in the cab. The first thing they ask is, ‘do you speak English?’ The second thing they ask is, ‘Can you take us to the nearest McDonald’s?’ It’s pathetic. Good restaurants are disappearing because people can’t afford to eat decently anymore.

‘The middle class is getting screwed. The poor get money from the government. And the rich have their schemes. When the politicians go out for dinner, they don’t go out with poor people. They go with the rich. They take care of the rich and the rich take care of them. And we — the people in the middle — pay for it.

‘I don’t know how much longer this can go on. I’m fed up with it. I know others are too.’

Our taxi driver had a fairly accurate view of what is going on. He knew nothing of central banking. We decided not to bring it up. But we could have explained how central bankers were helping to pinch the middle class too.

Middle-class savers, for example, are penalised so that upper class bankers and speculators — no matter how greedy or reckless — can stay in business.

Small businesses, too, are starved of the resources they need so that big businesses can continue making campaign contributions and offering employment to incompetent political hacks. The food stamp and disabled lists grow…while honest workers’ wages fall.

The feds call this a ‘stimulus program’. But all it stimulates is the zombie economy — full of chiselers, layabouts, hustlers, schemers, malingerers, and corrupt SOBs. Did we leave anyone out?

Some are rich, such as the folks who own and run Booz Allen Hamilton. Some are poor, such as the residents of Hale Country, Alabama, where one out of every four people is on disability.

All are beneficiaries of the Fed’s QE and ZIRP programs.

Everybody else loses.


Bill Bonner
for Markets and Money

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Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America’s most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind Markets and Money.

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