A few weeks ago, I did a two-part interview on Dan Denvir’s The Dig, which in my somewhat biased opinion is the best podcast out there. Of all the views I expressed, the most controversial within the left might be my thoughts on asset price inflation. There are a couple aspects to discuss there, and this post sets out in more detail my thinking about one aspect: the common claim that that the Federal Reserve’s monetary policy since 2008 has increased inequality, specifically wealth inequality.

The basic idea is that sustained low interest rates and quantitative easing lead to an increase in asset prices, and thus (since asset ownership is distributed extremely unequally) to an upward redistribution of wealth. The complaint can be heard left, right, and center, from Jacobin to the Koch-funded Mercatus Institute to the Financial Times. It comes from people with only a casual knowledge of the Fed as well as from brilliant scholars who know more about money and banking than I ever will. Yet, as we will see, the evidence for the claim is extremely thin, bordering on nonexistent.