Of course economics is incredibly complicated and a bit chaotic. But sometimes reducing things to their most simplistic can be informative.
The standard short version of how capitalism works is this: Workers get paid, and with that money they buy the goods that all workers have created, and that pays for costs of producing the goods.
It is circular. It works. Until someone is taking more than their fair share, and removes it from the economy by storing their wealth somewhere. This happens when increased productivity is not matched by increased wages, and the rich get more of the profits.
That means that there are more goods to be purchased than wages can pay for, because some money has been removed from the circular economy by rich people. Elon Musk doesn’t spend billions a year on goods.
To make up for that shortfall of cash to buy the goods we create, we borrow. 40% of Americans (the lowest earners) are spending more in any year than what they earn.
For this to keep happening, interest rates need to keep going lower and lower. So interest rates and inequality may be connected.
Fixing inequality means increasing the income of workers so that they get a share of the productivity increases they are part of. More income means higher interest rates to control spending, and meanwhile inequality decreases.
See this NYT article for some similar thoughts
