I have no particular viewpoint on what central banks should or shouldn't do, and I am no more impressed with Austrian or goldbug or crypto community ideologies about the topic. I just find the discussion unsatisfying. I don't believe that central bankers are brilliant economic engineers with deep insights into the ideal economy that can only be explained to us non-experts through crude temperature/thermostat metaphors. It all seems a bit cargo culty to me.
It is a discipline where even the basic axioms are subject to disagreement and 100s of different viewpoints, yet many economists insist that it is a perfectly exact science. It is in fact a very political discipline and we would all benefit if we realised once and for all that there is no Single Truth, that the "consensus" is not necessarily correct, and that There May Be An Alternative.
In medicine, though, I have more confidence (overall) that establishment views are scientific.
Looking at statements about the housing bubble in 2008 or about inflation a few years ago I don’t trust much in the economics profession either. They seem to always be behind the curve.
I'm not an expert at economics, I think I am merely scraping the surface but everyone else? They aren't even trying to scrape, they just assume that endless growth and positive interest rates are god given.
That’s susceptible to all kinds of excuse making and allegations of sabotage and cruelty and messy edge cases and would be extremely difficult to pull off in a way that satisfies zealots, but it’d have the massive benefit of actually comparing systems outside of any given framework for reasonable people.
My own personal theory is that any given economic system’s benefit is related to the collective psychology of the populace and that there are different local maximums and systems that work better in certain situations than in others.
Ultimately the more I read the more I recognize my own ignorance about a lot of this stuff and think the more most people are more ignorant than they realize. That’s why I tend to gravitate towards systems that maximize freedom at the national/international level, as I think any restrictions that need to exist tend to be emergent locally if allowed.
That's true, but I don't think anyone outside of finance actually pays attention to the MSM narrative around central banks. Rather they get all their information from memes that have little basis in reality.
> I don't believe that central bankers are brilliant economic engineers with deep insights into the ideal economy
They aren't supposed to be. They're just supposed to make sure the money in the economy is circulating in a way that keeps it from spiraling to a point of no return, much like an ER doctor ensures that oxygen is circulating in a patient's body to keep it alive. Most criticism of central banking is akin to criticizing an ER doctor for helping the fat cells more than the heart muscles.
What was the last popular economics meme? Money printer go brrr?
> They're just supposed to make sure the money in the economy is circulating in a way that keeps it from spiraling to a point of no return, much like an ER doctor ensures that oxygen is circulating in a patient's body to keep it alive.
I don't think so. In the US, the current rate increases to control inflation are not a matter of life and death. The bankers are speculating they have an opening to reduce inflation by raising rates with minimal negative side effects. They're pushing toward an ideal (or at least up a believed gradient), not saving us from Armageddon.
I'm not strictly talking about humorous memes like "brrrrr". I mean there are a bunch of ideas that loosely resemble heterodox economics except they're even less sensible. For example:
- The only "real money" is gold/crypto
- "Wtf happened in 1971?" is basically advertising the return of the gold standard.
On the other side, you have memes that justify free money and loan forgiveness like:
-Debt is just make believe that can simply be wiped out with the stroke of a pen with little consequence
- TARP bailouts were handouts to the rich, so we deserve them too
>They're pushing toward an ideal, not saving us from Armageddon.
Most people aren't criticizing the interest rate hikes. They primarily criticize things like quantitative easing and bailouts do prevent economic collapse.
Life is full of fascinating but ultimately misleading coincidences.
Nobody remembers that the gold standard used to be viewed as a "cross" on which poor farmers were crucified, hence we needed to massively expand the money supply with silver.
Yes, in addition to demonstrating the weakness of mono-causal explanations it's also a good use case for Chesterton's Fence. We moved away from the gold standard for a lot of reasons. For example, as bad as inflation can be deflation is unquestionably worse. And we haven't had any major shocks to the economy that are anywhere near as severe as the depressions that were experienced prior to ditching the gold standard. This could just be good fortune, but you at least have to consider it when deciding if you want to go back to hard money.