Some combination of that timeless admonition has been around since the discovery of sugar. Children love sugar. It tastes absolutely delightful (our tongues evolved to prefer sweet foods with higher energy, rather than bitter foods with potential poisons)! More importantly, the benefits of sugar (great taste!) were realized immediately, while any potential downsides (if any) were differed until another hour...
Luckily, good parents rarely leave children to their own devices. Being of greater wisdom, parents recognize the longer term consequences of excessive sugar consumption: obesity, cavities, hyperactivity, fatigue (not to mention the extreme long-term consequences: cancer, diabetes, kidney/liver problems, etc). Our parents applied their greater wisdom through methods ranging from the gently paternalistic, to the harshly draconian, in order to influence our behavior with regards to sugar consumption... so that we may live to adulthood, in order to one day pass on these simpler truths to future sugar-fiends...
"No more soda & candy... and money printing!"
Often, when we grow older, we become infect with the condition of 'log in eye'. While we have outgrown our infatuation with sugar, we have merely replaced our old lusts with new addictions... for example, paper wealth! While we busy ourselves with reproving children, we cheer for the sweetness of easy solutions to difficult problems.
During the recent However, let us curb our enthusiasm, lest we celebrate too soon...
Is quantitative easing the penicillin to all of our economic ailments?
Or is it merely a grown-up version of the now-forgotten sugar-high?
Does not the printing of money have long-term negative consequences?
Is this the free lunch we were all seeking?
Or are we merely children who have rediscovered the time-honored joys of inflation, without the wise-parents of youth to warn us about the potential consequences to follow these short-lived joys?
Parents, and future parents... let us consider carefully the consequences of our own actions. When we were children, we thought, reasoned, and acted as children, but, as has been said, there comes a time when we must put away childish things. Let us forgo the short-lived-sweetness of greed and easy money in favor of the long-lived-savoriness of austerity and prudence!
it's all a matter of balance. some quantitative easing is needed during a recession (unless you think the market is perfectly rational). too much is bad. where do you draw the line? you have to have metrics.
ReplyDeletemarkets are not always rational... but regulators are always biased (towards positive growth)...
ReplyDeleteI trust quantitative easing in responsible hands... but i no longer view our current leaders in that view... the Fed has explicitly stated an unwillingness to allow deflation, at any cost, through any means possible... not exactly words of moderation & balance...
In addition, the intervention of the Fed into markets has created tremendous amounts of moral hazard already... the market is (imo) already pricing in the probability of further quantitative easing (at the first signs of deflation) as a near certainty... we are addicted...
metrics are tricky... most mainstream metrics are created by the govt (ie CPI), who have a perverse incentive to understate true inflation... all I know is the cost of eggs ($1.5 vs $1.0), fuel ($2.50 vs $1.75), fruit punch ($1.50 vs $1.0), and a variety of other goods has gone up substantially... all in the last 6-7 years... those are metrics that I trust