With the stock market up nicely on the year and to some demonstrating frothy behavior, many professionals are debating whether we are near a top. To some, the fact that the public has not completely bought into the rally means there is room to run. As Brian McGuiness, VP of Equity Research at Morgan Stanley put it: “Its usually not a top until millions of Americans are about to be financially wiped out. We are sure to get there eventually, but aren’t there yet”

The sentiment was echoed by Seth Stringer of Stringer Capital Management. Recalling past bubbles where he saw his retail clients “lose more money than god,” Stringer prefers to rely on anecdotal evidence, like taxi drivers. “Every day, I take a cab to work from my 65th street apartment to my 57th street office. In 2000 I had three different guys give me internet stock tips. In 2007, they were buying homebuilders. So far this year, I’ve only had one driver, a guy named Habib, mention stocks. He was nervous because he sold his gold jewelry to buy Netflix. As I try to teach my junior traders, you gotta keep buying until the Habibs are all in.” Reflecting proudly on the wisdom he had imparted on his protégés, Stringer added “by the way, its not racist if its true”

Arguing the top is here, a widely circulated article in the premium “ProMoney Finanical Monitor” newsletter highlighted the jump in ratings for Jim Cramer’s “Mad Money” TV program. In its concluding paragraph, the article stated “As every professional knows, only the most naive amateurs get investment advice from a ranting clown on TV. With his current ratings the highest in 3 years, we have a critical mass of dumb money participation. In other words, Sell Sell Sell.”

Brian Cheng of Quantitative Analytics prefers a more mathematical approach to measuring just how much the public has been duped back into stocks. As he described in his accented English, he has written software that measures his friends’ market exposure based on social media. When the software determines they have bought heavily, it will trigger a short signal and Cheng will bet on his friends’ demise. As he said to us with a glint in his eyes “maybe then I get big bonus, and my parents love me more than my brother, who went to medical school”

To 35 year Wall Street veteran Harold Colby, its a script he’s seen before. “Look, its just a cycle. Like with Apple. Every financial advisor told their clients to buy it all the way to 700, but when the stock collapsed the clients couldn’t blame us because all their friends lost money too. We make money on the way up and they lose it on the way down. Its not right or wrong, its just business. And if their losses put our firms at risk, we get a bailout. That’s Capitalism.”

Take Warren Buffet, a man often at the center of this debate, as not only is he a billionaire, but also a vocal advocate for higher income taxes on the rich. Mr. Buffet’s focus on taxes on income is curious, as he didn’t become a billionaire by earning a high income, but rather from owning assets, like shares in Berkshire Hathaway. Many are aware of his acumen in making investments that have a “margin of safety” – or minimal downside – but few are aware of the greatest source of such safety for Mr. Buffet in recent years, the US Government.

During the 2008 crisis Buffet’s investment portfolio was full of wobbly financial companies like GE and Wells Fargo. In the span of 2 months Berkshire stock – and Mr. Buffets net worth – lost half their value. In response, Buffet invested more in collapsing financial companies like Goldman Sachs, then went public demanding a bailout. The Treasury Department and Federal Reserve responded with program after program to keep troubled financial entities alive, some of them invented specifically for Buffet holdings like GE. Just two years later, thanks to the impact of the bailouts and the Fed’s programs, Berkshire stock rebounded sharply. Mr. Buffet’s investment in Goldman Sachs, which he himself admitted was a bet on the bailouts, made billions and continues to earn him a profit years later.

Mr. Buffet wasn’t the only person that benefited from the bailouts, but wealthy citizens like him, who tend to hold the majority of assets in America, benefited disproportionately. The untold narrative of how Warren Buffet and others like him “get richer” is how they managed to not get poorer, even when their bad investment choices dictated such.

During the same 2 year span when Buffet’s net worth rose sharply, some 12 million Americans went on food stamps. Countless middle and lower class Americans lost their jobs and their homes. Small businesses were wiped out. These Americans didn’t get a bailout. Those that benefited the least from the boom years suffered the most during the bust. When people tell me that the bailouts saved the economy, I like to ask them, for whom?

On March 5th of this year, the Dow Jones Industrials Average recorded an all time high after an impressive rally from the 2009 lows. It’s widely agreed that the policies of the Federal Reserve are a big reason why. Fed Chairman Ben Bernanke often points to rising stocks as a measure of success for his programs. Perhaps he likes to boast about stock market gains because he can’t boast about major jobs creation or economic growth. In the 4th quarter of 2012 our GDP only grew by 0.1%, and the economy can barely create enough jobs to keep up with population growth. The latest report by the Labor Department showed only a paltry gain of 88,000 jobs in the month of March. Personal Income has been falling for years, and we are amid the worse period for wage growth in over a decade. The stock market has done well, but two thirds of all stocks are owned by the wealthiest Americans. Only the rich have benefited from the Fed’s largess.

The Fed has also lowered interest rates, and billionaire Mark Zuckerberg was able to get a mortgage at a rate of 1%. Most Americans would consider themselves lucky if they could get any mortgage, let alone at such paltry rates. Small business lending remains anemic and credit card rates remain high. Mr. Buffet on the other hand just announced a major acquisition financed mostly by cheap debt. Such leveraged buyout deals are lucrative when rates are this low, but ironically by law only millionaires are allowed to invest in the Private Equity Funds that utilize them.

The disproportionate gain by the wealthy from Federal Reserve actions as via the stock and bond markets is captured in a recently published Pew Research Center report on the first 2 years of the recovery. Their analysis reveals that from 2009 to 2011 the mean net worth of the top 7% rose by 28%, while the mean net worth of the lower 93% actually fell. The sharp rebound for the wealthy had nothing to do with their investment acumen, their risk-taking foresight or their hard work, as it was entirely driven by Government and Federal Reserve action.

There is one aspect of Fed action that impacts everyone, even the poor. The Fed’s easy money policies have driven up commodity prices. Despite gasoline demand being near a decade low, and supplies so plentiful that America now exports gasoline, the national price at the pump recorded another record this winter, and Americans are spending a higher percentage of their pre-tax income on gasoline than ever before. High gasoline prices hurt the poor and middle class disproportionately.

The next time you ponder the governments role in the growing wealth-gap, ask yourself this simple question: Since the start of the crisis our government has borrowed over $6 trillion and printed several trillion more. Into whose pockets did that money go?