MAKING “FUNDAMENTAL TRANSFORMATION” MORE PALATABLE, OR AT LEAST LESS NOTICEABLE: Low Interest Rates Mask the Effects of Job-Killing Policies:

Seven years of relaxed monetary policies have caused U.S. household wealth to soar, but for most Americans this tremendous accumulation of wealth has not translated into robust wage growth. . . .

In other words, while the Federal Reserve’s quantitative easing has not led to the consumer price inflation that many feared, it has led to asset price inflation. (The WSJ concludes by noting, ominously, that wealth-to-GDP ratios have only come close to their current level of 4.8 during notorious bubbles). Soaring household wealth levels aren’t a bad thing per se, but job growth, not asset price inflation, is the best way to promote economic growth.
To grow the economy, cheap interest rates are not going to work as well as reforms that make business formation and job creation more attractive. Yet Democrats these days have ever-lengthening lists of job-killing policies they want to enact, from tighter environmental regulations to dramatic minimum wage increases (especially in cities where unemployment is high) to tax increases. Paradoxically, that leaves liberals cheerleading for Fed policies that increase inequality and concentrate wealth because only ultra low rates (or truly massive deficits, which can’t be rammed through a GOP Congress) can mask the effect of left-wing microeconomic policies on the economy as a whole.

There is no shortage of capital today, but there is a dearth of attractive opportunities to invest that capital in ways that will stimulate employment.

Those offer insufficient opportunities for graft.