Clearly, supply and demand are out of whack - there is too much capital ready to produce stuff, and not enough consumer cash to buy all that which can be produced.
And yet central banks keep pumping money into the supply side. It boggles the mind. Why? Why not pump the money into the demand side?
It's ideology. That would be "giving handouts" to "lazy people," etc.
Oddly enough the strongest support base for this ideology is among those who would benefit from pumping the demand side the most. Many of the wealthier people I've talked to or who I've heard speak on the subject seem to get that we are in a demand-constrained economy.
IMHO it emerges from the fact that human beings are genetically programmed for scarcity. When we feel threatened we tend to respond by pushing for others to have less. "I'm poor, so you should be poorer." Our emotional and social brains simply do not compute abundance and definitely do not compute large-scale economics.
> And yet central banks keep pumping money into the supply side. It boggles the mind. Why? Why not pump the money into the demand side?
Central bank monetary policy is a fairly limited, blunt tool. It can make borrowing cheaper, which in principle has effects on both the producer and consumer sides, but it can't really focus all that well.
Focussing stimulus is more government fiscal policy than central bank monetary policy, but those are controlled by different actors.
And yet central banks keep pumping money into the supply side. It boggles the mind. Why? Why not pump the money into the demand side?