Trickle-down economics. We know it doesn't work, and yet we're still married to the idea. At least, those in charge of the political economic system and their bagpeople in Congress are still married to the idea. And that's bad enough.
In the past thirty-five years, wealth plainly hasn't trickled down. It's trickle up to the investing class, and out to tax shelters. It sits in banks as a hedge against the fear and trembling brought about by the near-crash of 2008. God forbid that should happen again, say the Wall Streeters, because we know that we can't con the voters into bailing us out again. We'd rather let our money rot in banks than take a chance on investing it in something that actually might make even more money, both for us and ourselves
And we know we don't have to worry about tax hikes, because we've got the public convinced that, if Washington comes after us, they'll come after Main Street as well. So we're sitting pretty, right?
Maybe the answer is negative interest rates, a de facto market-based penalty against hoarding cash. Maybe, if people won't jump off the investors' diving board, they need to be pushed. Maybe, if we push them hard enough, they'll start spending, and interest rates can start to climb again, along with everything else, including wages.
It's worth a try. Something's got to give, if we're ever going to get out of the liquidity trap.