Ben Bernanke’s Federal Reserve will create out of thin air trillions of dollars in the coming months and years, maybe doubling the amount of money in the U.S. This is called Quantitative Easing, and because he has done two similar pushes in recent years, this one is called QE3.

QE is supposed to goose the economy and get people spending and investing again, so as to create jobs. I’m pretty agnostic on monetary policy, but I naturally question the plans of central planners — including Central Banks. Not only do central planners’ plans often fail, they typically end up benefitting the well connected at the expense of everyone else.

And QE3 might do just that: help the big banks and the wealthiest 10% of Americans while hurting everyone else.

QE3 will drive the stock market up while also increasing the price of commodities, argues Anthony Randazzo of the Reason Institute. So, to the extent you’re invested in the NYSE, you benefit. To the extent your income goes to buying food, gasoline, and electricity, you suffer. You can see some pretty regressive distributional effects there.

Also, Randazzo points to a paper at the Dallas Fed arguing that QE wil benefit “the senior management of banks in particular.”

Finally, to the degree that QE makes it harder to engage in traditional banking — borrowing short, lending long — it benefits the larger, riskier, more sophisticated banks.

There’s a broader argument on this score laid out by the likes of Ron Paul and other adherents of the  ”Austrian School” of economics (so-named after Ludwig von Mises and Frederick Hayek, rather than Austrian government policies).

Here’s my stab at the Austrian argument, in brief:

More dollars in the economy, all else being equal, dilutes the value of the dollar, thus applying an upward pressure on prices. But the financial sector and wealthy people get their hands on the new money earlier, before it has had its full diluting effect.

When the Fed creates new money, it does so by buying Treasuries and other financial assets, such as mortgage-backed securities. So, the money first lands in the hands of the primary dealers from whom they buy the assets. Bernanke points out that a primary aim of QE will be making it cheaper for corporations to borrow. That’s because one of the first things done with this new money is lending it corporations.

Eventually, this new money will trickle down to regular people — but only after the money has had the diluting effect.