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Required Reading

Jeffrey Dorfman nicely condenses everything we've been talking about for months now concerning the Fed and Wall Street. Here's a taste:

The Fed's actions have depressed interest rates to such a low level that the stock market has become the only investment game in town.

The manner in which the stock market indices slide on any hint that the Fed's easy money policies may be approaching an end show that the Fed is artificially inflating the stock market. Clearly, the stock market's boost from the Fed is not permanent as the market has made clear it will drop as soon as the Fed turns off the pump.

To the extent that the Fed has a proper role in supporting economic growth, it should be pursuing policies that create actual economic growth: increased production and the associated employment gains. Stock market gains are not economic growth. Surely the Keynesians running the Fed are not boosting the stock market so that the wealth gains of the large investors and banks can trickle down to the rest of the population.

Of course, that's precisely what the Fed has been doing. It prints the money and then banks and big investors pump up equities in an effort to create a "wealth effect" that will trickle down.

There's just one problem. Wealth can't be printed. Wealth must be manufactured, engineered, or dug or harvested out of the ground.

And where are our wealth creators? Sitting on their hands, apparently, as their own President hikes their taxes and makes it more difficult for them to do their thing -- while slamming for being greedy.

Now go read the rest of Dorfman's piece -- it's required.