… is from page 154 of the late, great Wesleyan University economic historian Stanley Lebergott’s insightful 1975 book, Wealth and Want:
But William Astor, Payne Whitney, and a thousand others saved a substantial share of their income, then invested that share for further returns. By so doing, the rich expanded the supply of loanable funds. Such expansion must tend to drive down interest rates.
Who benefits from the resultant decline in interest rates? One likely candidate is suggested by the century-long cry of American populists for cheap money, for bimetallism, and for any other means of lower interest rates. Which suggests that when the rich avariciously invest, rather than consume, they end up benefitting the populists – presumably to the confusion of each.
