In a speech today, Federal Reserve Bank of Dallas President Richard Fisher said that the Fed's purpose with its quantitative easing policies was not to make the rich richer.
This is patently false.
The purpose was, indeed, to make the rich richer. And it was conscientiously so. One of the purposes stated for the quantitative easing policy was to give rise to a "wealth effect" which would then lead to increased demand.
Bernanke stated as much directly, in a Washington Post op ed. I cite (bold highlight is mine):
This approach eased financial conditions in the past and, so far, looks to be effective again. Stock prices rose and long-term interest rates fell when investors began to anticipate the most recent action. Easier financial conditions will promote economic growth. For example, lower mortgage rates will make housing more affordable and allow more homeowners to refinance. Lower corporate bond rates will encourage investment. And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.
So there you have it. One of the purposes of quantitative easing is to inflate assets, and amongst these, stocks. It's the so-called "wealth effect." This purpose obviously increases wealth only for those already holding assets (wealthy) to begin with. It increases wealth for the wealthy. It increases wealth the most for the wealthiest.
It makes the rich richer, by definition. It thus makes no sense for someone from the Fed to say that the purpose was not to make the rich richer. It was. It's ugly to admit it, but it's the most basic of realities.
It's also obvious that the policy provided nothing for those that are poor. The poor don't have the assets that are inflated by the policy. Indeed, the poor mostly only reap the downside of such policy, through inflation.
These are basic realities, there's nothing to interpret here. Making the rich richer was central to the policy the Fed decided to follow. Inflating wealth to produce a wealth effect is just that, making the rich, richer to see if they spend some more.
Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.