A major issue in this year's presidential campaign is the growing disparity between rich and poor, the 1% versus the 99%.
The source is not runaway entrepreneurial capitalism, which rewards those who best serve the consumer in product and price. (Would we really want it any other way?) There is another force that has turned a natural divide into a chasm: the Federal Reserve. The relentless expansion of credit by the Fed creates artificial disparities based on political privilege and economic power.
Spitz (I'm sure his friends call him that) reviews the Austrian-school economics criticism of the Fed that its methods of providing liquidity are not neutral, as most simple economics models construe them. Instead, lower interest rates or quantitative easing are directly beneficial to a few big-dollar players who have access to the Fed's open market operations. Those with a financial stake in Goldman Sachs, Bank of America, and a few others disproportionately benefit from expanding monetary supply.
Some important qualifications that Spitz leaves out: when the Fed expands the money supply, inflating the currency slightly, those who own a lot of dollars or dollar-denominated assets lose wealth, and those who have a lot of dollar debt see the real value of their debt shrink. So loose money is not just a giveaway to the wealthy, it's also a form of debt forgiveness. In fact, with inflation of about 2% per year, we approximate the Bible's Year of Jubilee: after 50 years, one's entire debt is forgiven.
Secondly, when the Fed has a contractionary policy - high interest rates - won't that have an equal-and-opposite effect, hurting most those who rely directly on short-run Fed loans to play high-finance games?
To me, a bigger issue is overall government indebtedness, which leads to a long-run transfer of wealth to the wealthiest. It's a triviality that in a model economy with patient & impatient individuals, the patient ones will eventually hold all the wealth (this is also Biblical, incidentally). If the government approximates a representation of the entire country, and it consistently borrows from and pays interest to the 1%, why should we be surprised to see wealth inequality growing? If we, as society, want to shift consumption from the future to the present, should we be surprised when we arrive in the future and find ourselves poor?