December 5th, 2008

Excerpt from a blog posting on the National Post website for December 04, 2008, 10:31 PM by NP Editor Peter Foster, monetary policy :

"According to a piece in Wednesday’s Globe and Mail by Kenneth Rogoff, a former chief economist with the International Monetary Fund and now professor of economics and public policy at Harvard, 'It’s time for the world’s major central banks to acknowledge that a sudden burst of moderate inflation would be extremely helpful in unwinding today’s epic debt morass.'"

Hmm.

Here's a true story:

I had a sensitive tooth and mentioned it to my dentist. She scraped and drilled at it, and ended up having to plug a cavity of her own doing--there was no decay before she deliberately damaged it.

Next, its sensitivity went up some more, so I took it back to her and she decided that there might be some infection under the filling, so she drilled it out and cleaned it and replaced it with another, larger filling.

Pain stayed the same, so I took it to another dentist who promptly did a root canal.

Pain went away, but tooth got brittle from having no nerve left. So the next time I was at another dentist, he suggested a post to strengthen it. I foolishly agreed, and not soon afterwards a chunk of tooth broke off while I was eating an apple--the post had weakened another part of the tooth.

Last time I was at this 3rd dentist, he said that he should immediately add a crown to prevent further breakage, and I told him I'd do it some other time. But I lied--I'm not letting those butchers do any more yacht-payment-making work on that poor tooth; when it falls out it falls out.

If I'd tolerated that little bit of initial discomfort--which might very well have been transitory, this mess would never have begun in the first place; I'd have had a strong tooth still.

* * *

My point is this: Every time you poke and prod something, every time you try to improve it, you run the very real risk of just making it worse. Professors of Economics from Harvard all the way down to City College instructors should get that one into their little brains. If you keep fiddling with the economy (in this case, introducing inflation to make debts more serviceable) you run the risk of breaking something else.

Let's stop this madness: Financial pokery jiggery extended and deepened the Great Depression, let's not start letting our egos guide us into making the same mistakes this time around.

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