Inflation fears

Following the financial news in the last year, I have become convinced that Goodchild’s Theology of Money is even more clearly relevant than it was during the peak of the crisis. My reason is the pervasive “inflation fears” that continue to dominate public discussion and, much more importantly, central bank policy, despite the fact that inflation is very low and falling. The Federal Reserve is content to ignore the second half of its dual mandate to control inflation and maximize employment, while the European Central Bank appears to be narcissistically obsessed with its “credibility” as an inflation fighter — in both cases, widespread human suffering brought on by unemployment and cuts in government services are to be preferred over not just present inflation (which is, again, not really happening), but over the prospect that there might be inflation at some future time.

Rarely has the worship of money been so obvious — worship extending even to the sacrifice of merely human concerns on the altar of the credibility of our money. Let the weak suffer, so that our currency may be strong!

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2 Responses to “Inflation fears”

  1. Daniel Kuehn Says:

    It’s a very interesting issue. I agree with you that the ECB is being too timid, but I think there are important reasons to question how much more the Fed could do. I would not be as critical of the Fed as you are.

    I just wrote a blog post about some of these issues this morning. My brother pointed your post our to me, and I discussed it as well towards the bottom of this post. I’m not familiar with the Goodchild piece you cite, but it sounds interesting.

    Here’s mine:

    http://factsandotherstubbornthings.blogspot.com/2010/05/macro-musings.html

  2. Adam Kotsko Says:

    Thanks for the link. I do recommend you take a look at Goodchild’s work.


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