Which is to blame?
There is the problem that some people don’t understand how money works. But then, there are people who don’t understand how a car works and they still drive. That is, it is possible to use something without knowing how it functions. It is also possible to abuse just about anything–to, in this case, accumulate and hoard money, instead of passing it around.
On the other hand, accumulation and hoarding are instinctive behaviors which, especially in humans, can become obsessive. That, I think, it what has happened. Some of the people who come in contact with or are attracted to dealing with money turn into obsessive hoarders.
Now, when material substances are hoarded (books, cans, car parts, stamps, etc.), either there’s a limit to the substances, or the hoarders runs out of space to keep the stash, without someone else calling a halt. Neither of those conditions pertain to money. It can now be produced in unlimited quantity and it takes up almost no room (electronic blips in a computer). Money hoarders have discovered nirvana, except for the fact that their obsession is socially disruptive and it is in the nature of obsessions never to be satisfied. Some outside force has to call a halt and that, I think, is why we need taxes on money accumulators (or “savers”), not to punish them, but to keep the money moving.
Warren Mosler, the propagandist for Modern Money, used to talk about “leakage.” It took a while for me to figure out he was referring to the dollars that are lost to the exchange of real goods and services be being extracted and hoarded for other purposes (being transformed into options and CDOs and other “vehicles” and hedge funds). The problem with the leakage designation is that it refers to something that just happens to a fluid substance and leaves out the source of the function. Who is causing the regular withdrawal of currency from the current of the real economy and using it (or not using it) for other purposes?
Accumulation for gilt by association is such a purpose. The money hoarder accumulates dollars in accounts because the number alone make him feel powerful (for a minute or two).
“I am important because I have lots of money in a bank account” is a kind of gilt by association — i.e. not very different from “I live in the same building as Donald Trump” or, on a more modest scale, “the President sent me a christmas card to show his appreciation for my support.” Being gilded by association is not necessarily bad. It’s just that, like everything else, it can be taken too far.