They've been doing that since 2009 (and arguably before).
The problem is that the money is distributed through the broken financial system which isn't distributing the money through the entire economy efficiently. This is why we currently have local inflation in San Fransisco and New York, and local deflation in Mississippi and Nebraska.
To use a hydraulic analogy, the central bankers have two things: control of a spigot, and an average water pressure gauge. The gauge shows decent water pressure throughout the pipes. But some parts of the system have very high water pressure, and in other parts the pipes are almost dry. Someone needs to solve the real problem, which is that the pipes are blocked.
Personally, I think the issue has been caused at least in part by the confluence of two factors: consolidation in the retail banking industry, and the growth of venture capital (which tends to predominantly fund ventures in geographically limited areas). This is why people with just an app idea could get plenty of funding in certain regions, but getting a small business loan in fly-over country requires showing 5 years of profitability. The risk profile of funding is very geographically distorted, with most of the country dealing with risk-averse funding and too many risk-takers concentrated in certain cities.
Your analogy of the pipes seems spot on. I’m currently selling an underwater condo in Norfolk, VA for 40% less than I bought it ten yours ago while I was in the military. Now, I’m working in Silicon Valley where no one can afford a house, where friends and family’s houses have doubled in price over the same period. It is two different worlds. One has Trump bumper stickers, the other Hillary. One never recovered from 2008, the other is doing great.
More than broken pipes though, I feel this is the natural tendency of easy money. As the central banks hand out money, they hand it to the well connected. This money is then misallocated since it wasn’t distributed by the market but by fiat and this is the underlying cause of the decline in productivity. Raising rates, paying off debt, and less government micromanaging, while painful in the short term, is required in the long term for stable, efficient markets.
A land value tax would help to start fixing the high house prices in Silicon Valley.
(Directly, it would decrease the capitalized price of land that the house sits on. More indirectly, it would decrease incentives for NIMBYs, thus helping with more supply of housing in the longer run.)
The problem is that the money is distributed through the broken financial system which isn't distributing the money through the entire economy efficiently. This is why we currently have local inflation in San Fransisco and New York, and local deflation in Mississippi and Nebraska.
To use a hydraulic analogy, the central bankers have two things: control of a spigot, and an average water pressure gauge. The gauge shows decent water pressure throughout the pipes. But some parts of the system have very high water pressure, and in other parts the pipes are almost dry. Someone needs to solve the real problem, which is that the pipes are blocked.
Personally, I think the issue has been caused at least in part by the confluence of two factors: consolidation in the retail banking industry, and the growth of venture capital (which tends to predominantly fund ventures in geographically limited areas). This is why people with just an app idea could get plenty of funding in certain regions, but getting a small business loan in fly-over country requires showing 5 years of profitability. The risk profile of funding is very geographically distorted, with most of the country dealing with risk-averse funding and too many risk-takers concentrated in certain cities.