A central problem in the demand-side economy is that labor has no pricing power. While this sparked political revolt in the form of Trump's and Sanders's candidacies, little seems to actually be accomplished on solving this central problem. Consequently, companies living in supply-side world are kidding themselves if they think they can sell anything to actual people who earn a living.
There's a lot of simplification in what I wrote, but the point about labor having no pricing power holds. And to a lesser degree if the supply-side economy actually gives a damn about having a reliable floor of demand, they could find it in customers who have jobs that pay enough to drive demand.
I'm seeing this happen to a great degree in Southern California's apartment market. Rents keep increasing, but the incomes in the area don't justify the increases.
I have to disagree with your take on Keynesian macroeconomics, however. Republican protests against raising the debt limit are for show & they always capitulate. Plus, concerns about inflation from Republicans are not as pressing a problem now that they control the purse strings. :)
I think you could have removed anything about Keynes and had a perfect comment. Your note about Sand Hill Road is spot-on.
Scales well enough for grameeb bank and the micro lending industry. Scales reasonably well enough for p2p lending. Scales beautifully for kickstarter style platforms. If Wall Street and VCs wanted and their HNI clientele were willing, they'd set aside a portion of investment dollars towards these borrower-lender marketplaces.
As far as I can see, the issue is this: the Fed is trying to apply a macroeconomic loosening of the money supply to fight the deflation from the financial crisis. For political reasons, the old school Keynesian method of borrowing for more government spending can't be used. So, they are maintaining low rates to try to jumpstart the economy. Unfortunately, this money has to enter the economy through a financial system which is geographically imbalanced. So, we get inflation in SF, and NY, less inflation in cities with less finance industry, and deflation in much of the rest of the country. This seems to be the big economic issue of our time in the developed world.
Why we have two economies, and the financial system isn't arbitraging this difference away, I'm not sure. I recall reading an economist (Harold Innis maybe?) who warned about the centralizing effects of a Keynesian inflationary theory. Anyone know more about this?