More supply of money to Capital thanks to Fed

But weak job growth in the face of big corporate profits. As I explained in the video of a previous post, the supply of money to capital income has increased, and they are enjoying the cost savings from low interest rates. They give many thanks to the Fed’s monetary policy.

Meanwhile, lower interest rates are not helping labor income. The supply of money to labor has decreased which is a drag on real GDP.

Here is a video by Fora TV that explains further. They present a graph for nominal consumer spending showing its decline. The idea is that the supply of money in the money market for labor income has decreased, while it has increased in the capital income market.

 

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