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by matt4077
3359 days ago
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Economic crises today are nowhere near the disasters they were in the past. It's pretty obvious that the system's stability has increased–in the past, depression could mean starvation. > The arrogance of central banks thinking they can manage and control the economic interactions of millions of people in a country... The arrogance of physicians thinking they can manage and control the biological interactions of billions of cells... Just because something has a lot of moving parts doesn't make it intractable. "Complex" is just latin for "put together", and we can always try to take it apart, learn about individual parts, and work our way up. In any case, not doing anything is also a decision. It's a completely arbitrary idea–as if monetary policy were some sort of intrusion into the "natural law" of the economy. |
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Physicians don't think they can manage and control the billions of cells in our bodies; we still don't understand how all of our cells even work. Physicians apply tested practices to individual people and hope that it addresses whatever medical problem is being observed. They understand that treatments are not one-size-fits-all and that mistakes can kill people. They also understand that our bodies self regulate and they are only trying to address a specific imbalance in their specific patient, not something that applies to an entire population.
Central banks think they can turn a couple of knobs (currency supply and interest rates) and control an entire economy made up of millions of people. Using the physician example, that's like thinking that the only two treatments needed for any medical condition are adjustments to our blood level and body temperature.
Monetary policy is a newer invention in the history of human civilization and even then, it wasn't always applied so universally. Monetary policy can only exist with central banks.