David Crump: The Fed and the richer rich

Regarding Kevin Rogers’ March 6 Point of View “Fed up with the Fed”: He lamented that the Fed is targeting a 2 percent inflation rate, and that it needed to provide rising wages. The Fed cannot and does not do this. The function of the Fed is to provide funds to banks for short-term loans so that banks can maintain liquidity.

The “rich” are getting “richer” because of two factors.

First, they can borrow money from the Fed at a rate of zero percent to one-quarter of 1 percent. With that type of interest rate, investors can buy stocks and bonds, repay the loan and make a quick profit in no time.

Second, the rich can borrow money. Thanks to Dodd-Frank banking legislation, whether our banker can give us a loan is based on a playbook somewhere in Washington.

The widening gap between the ultra rich and the rest of us is specifically due to the very policies that Rogers advocates. If we want real job and wage growth, allow bankers to make loans to businesses on Main Street instead of just Wall Street.

This story was originally published March 10, 2015 at 1:27 PM with the headline "David Crump: The Fed and the richer rich."