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 The Daily Reckoning Australia

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Bill Bonner

Bill Bonner

Best-selling investment author Bill Bonner is the founder and president of Agora Publishing, one of the world's most successful consumer newsletter companies. Owner of both Fleet Street Publications and MoneyWeek magazine in the UK, he is also author of the free daily e-mail The Daily Reckoning.
Bill Bonner

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2 Comments on "How the Fed Screws the Middle Class"

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3 years 4 months ago

That taxi driver could have been talking about Australia

slewie the pi-rat
slewie the pi-rat
3 years 4 months ago
TAXI was one of the best pinball games ever made. if you could pick up Gorby [Gorbachev], you could play all day! union iron worker i hung out with for a while was great at it. his son was even better. this kid also taught me how to find the hidden levels in Super Mario Brothers. some of those bricks in the wall had hidden agendae, and led to new venues, new secrets, new hidden levels of play. after 2-3 years of “family play” i didn’t even know these levels existed, but it turned out that the kids coming through… Read more »
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