It’s not just public sector workers and benefit recipients who are suffering from fiscal austerity. So too now are bank shareholders.

The FT reports that the sharp fall in banking stocks so far this year is due in part to fears of more negative interest rates. This is because negative rates are in effect a tax on banks: banks have to pay the ECB and BoJ to deposit with it. JP Koning might be right to say that banks will eventually find a way of passing this tax onto others – say, by charging customers for deposits – but stock markets don’t agree with him (yet?).

The link between this and austerity should be obvious. Negative rates are a response to weak economic growth. But growth is weak because fiscal policy isn’t loose enough. A looser fiscal policy would prevent the need for negative rates, thus removing the potential pressure on banks’ profits.

In this sense, the costs of fiscal austerity are widespread. Not only do they fall upon public sector workers and benefit recipients, but they are also being suffered by savers who face nugatory interest rates and bank shareholders (and bankers themselves!) who are hit by fears of a de facto tax.

This poses the question: why isn’t this more widely realized? Why is anti-austerity seen as a minority left-wing position when it would in fact have wider benefits?

One reason, as I’ve said, is that people are lousy at making connections: they just don’t join the dots between fiscal austerity and low interest rates. And our illiterate media don’t help them.

A second reason is that anti-austerity comes as part of a package. A fiscal expansion might be good for bankers. But in many countries, this would come with policies they don’t fancy so much, such as higher taxes and more regulation. For some reason, right-wing anti-austerity isn't on the table.

A third possibility is Kalecki’s famous one:

Under a laissez-faire system the level of employment depends to a great extent on the so-called state of confidence…This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness. Hence budget deficits necessary to carry out government intervention must be regarded as perilous. The social function of the doctrine of 'sound finance' is to make the level of employment dependent on the state of confidence.

I confess to being unsure about this: do capitalists really prefer control over policy to economic stability? However, if you discount this possibility, we are left with an awkward question: why do so many people not favour policies which would seem to be in their own interests?