If you think low interest rates create problems (bubbles, inequality, whatever) the solution is to make the budget deficit bigger not tighter money from the Fed.
Money is tight. Wealth is hoarding it. Banks are raising rates on consumers. The only exception is housing, and that is driven by a bubble in the escape from cities.
Yglesias mistakes Fed Taxes for low rates. Rates are not low, Fed taxes are headed up, up to over a hundred billion and banks are closing down. That is money is tight.
Yglesias was taught by the flat earthers, so he gets most of this wrong. We are headed for very tight money, five years of tight money and deflation.
Yglesias did not get confused about this in the Harvard philosophy department. This is strictly what he was taught in the last ten years by the Keynesians. Sumner tends to agree, money is tight right now. Think of the thousands of students who were mis-educated by economic departments around our colleges, a disaster.
Here is tight money:
Note the drop in velocity means no longer have granular banking, retail banking for the middle class has become exteremely tight as the Fed increases taxes to cover the boneheads in banking who have no clue, Like Yglesias.
Note, the total collapse of velocity comes with the onset of Fed taxes. It is coincident with the shrinking of the retail banking network. The tight money was pushed by Bernanke, Krugman and Delong. It all contributes to inequality, it is based on foul flat earth theory, like the stuff they teach Yglesias and Drum.
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