Trickle Down Recovery: Monetary Expansion, Excess Bank Reserves, And Leftovers For Main Street

“Trickle-down theory - the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”
John Kenneth Galbraith

"There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below."
William Jennings Bryant

"Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.

When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. You tell me that if I take the deposits from the Bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin.

Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out!
Andrew Jackson

It is not quite as straightforward as this, but the two charts below help to illustrate a point that the Fed, and the government, are pursuing a 'top down' approach to a recovery from the banking crisis as a matter of policy.

And one of the most consequential flaws in this policy error is that the financial system, and a fiscal policy that largely favors the one percent, are largely unreformed. Big money has thoroughly corrupted the political process.

I cannot tell from the Fed's descriptions whether these excess reserves include any funds which they may have committed to foreign owned banks that are not included within the Fed's definition of their own 'depository institutions.'

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