Quantifying the harm done by quantitative easing

In an interesting Business Insider article, Mike Norman quantifies the harm done by quantitative easing by comparing the net increase in salaries since 2008 to the private sector's lost interest income since 2008.  He finds the loss of interest income is greater than the gain in salaries.

This finding is not surprising.

As their interest income declines, savers offset this decline by cutting back on current consumption.  As current consumption declines, demand declines.  As demand declines, businesses cut back on hiring and salary increases.

The Fed, having locked itself into the pursuit of quantitative easing, continues to purchase interest bearing securities.  This puts more cash into the financial system and further reduces private sector interest earnings.

In turn, savers offset this decline by cutting back on current consumption...

Of course, the Fed could stop pursuing destructive monetary policies like zero interest rates and quantitative easing.  This would imply that the Fed was capable of following Walter Bagehot's rule to never lower interest rates below 2%.  Mr. Bagehot is an authority on modern central banking having invented it in the 1870s.

Every time the Fed announces another round of QE we hear the "know-nothings" in the media, on Wall Street and in the mainstream economics community tell us that we're getting more stimulus....

For as the chart below clearly shows, the Fed actions have removed an enormous amount of interest income from the economy. In fact, it has removed over $100 bln more in interest income than the total net gain in private wages and salaries since it began undertaking these extraordinary measures.... 

So while the net change in wages and salaries since 2008 has been an increase of $317 bln, personal interest income dropped by $425 bln. That's not a stimulus by any means. It's mind boggling that the mainstream economics community and the Fed itself, doesn't understand this when they incessantly call for more "stimulus."