f inflation on wealth and income.-Indecision about the appointment of Paul Volcker.The interaction between Wall Street, Main Street, and Pennsylvania Avenue can be a confusing one. Many times Pennsylvania Avenue, The Fed, has to make decisions that will either have a positive effect on Wall Street, the investment markets and it’s wealthy shareholders, or Main Street, individuals without large market investments. Also, many times the group that is not positively affected is negatively affected. As Greider stated they are many times at odds with each other. This occurs, because if The Fed helps out Wall Street they are only helping out the top 10 percent of the population. This is true because these people held 86 percent of the financial wealth according to Greider. By helping out this group The Fed was in effect making it more difficult for the other 90 percent of the people. However, if The Fed only worries about Main Street, Wall Street will be hurt. It may seem quite simple that The Fed should worry more about Main Street than Wall Street. The problem that arises is that Wall Street is where most of the money is and therefore cannot be ignored. Ignoring Wall Street effectively ignores much of the nations wealth and economic growth sources. As can be seen, the line that The Fed must walk between watching out for Wall Street and Main Street is a very important one. These are the reasons that The Fed is shielded so heavily from political influence.Another point that Greider makes in this chapter pertains to inflation and it’s real and perceived effects on wealth and income. As is stated in the chapter, it is perceived that inflation hurts everyone in the economy. This, however, is not necessarily true. It can be said that inflation hurts those who have assets that are tied to interest rates. These people are hurt greatly when the spread between inflation and the interest rate tightens. This is why during hig...
