Even if we accept your premise that that is what is happening, what is it that you think the 0.1% are doing with that money? They're doing one of two things:
1. Reinvesting it in other companies, who are then using that capital to invest in their business.
2. Buying goods and services from companies who use that revenue to invest in their business.
> If I were the next president I would establish a national investment bank and use it to undertake infrastructure improvement / development by US companies in both the US and abroad (because stimulating the economy else where would be pretty useful to the US as well).
Why do we need to establish a national investment bank to undertake infrastructure projects? The federal government undertakes infrastructure projects all the time.
> I would mandate that the fed would have to invest in the national bank first and the national bank would be allowed to bail out other banks (with "liquidity") only if it received substantial near term reward from the investment (therefore definitely only liquidity).
Are you aware that the US government made a very healthy profit by bailing out the banks in 2008[1]?
> The problem with this operation by the fed is that every banks finance department has priced it in for this quarter, so they're all going with the begging bowl now - moral hazard write large!
That's...actually exactly the point of it. There is no 'moral hazard' here. The fed wants the market to anticipate its actions, and react to them pre-emptively. This allows the fed to actually do less than they otherwise might have to. If the Fed's goal is to drive rates down to a certain point, and the market knows they'll spend the money to do it, the market will do it for them. That's how arbitrage works. This is the system working exactly as intended.
1. https://www.washingtonpost.com/business/economy/bailout-high...