“The extraordinary postcrash prosperity of the precrash superrich is altogether new in our history. Near-zero interest rates are a godsend to the wealthy, inflating their real estate, stock portfolios, bond portfolios, private equity holdings, and art collections. Middle-class and blue-collar Americans, meanwhile, haven’t made much progress, and many are worse off. Inequality has increased.”Read More
From The City Journal
“Ultralow rates ease the pressure on enterprises to adopt productivity-enhancing innovations, restructure inefficient operations, and dispose of unproductive assets. That’s a major reason that productivity growth has been so poor. Ultralow rates also distort capital allocation.”
by Henry Oliner
The obsessive focus on demand also proved misplaced. Demand and supply ebb and flow in ways far too organic to be managed by central planning. Periods of innovation create new demands. New products precede their demand and subsequent manufacturing technology continuously turns luxuries into commodities.