>Well, I don't know which "populist assumption" you're referring to, since
>I'm not sure what populist means these days. But the loose money
>argument is not so much that inflation is "good" but that deflation and
>tight money are "bad." There is a difference. Inflation is tolerable,
>may, with institutional changes to protect wages and minimize conflict,
>be socially beneficial. The idea of democratic money is that such
>debates as we are having now should be held in public forums, not
>in FOMC meetings.
I'm all for that. But I think Friedman has a point when he argues that monetary policy is limited in its ability to change real values. Obviously tight money can create a depression, if it's tight enough for long enough, but I wonder how much difference loose money really makes beyond a certain point. I'd rather focus on other things, like unionization, public health insurance, income support, etc.
I don't know about minimizing conflict; I think we could use a lot more conflict, but maybe I'm just being cranky.
And I also don't know about the social benefits of inflation. I know that it's better for debtors than creditors, but I also think there's too much emphasis on borrowing as a substitute for, say, higher wages or affordable housing. After a certain point, inflation can be psychologically destabilizing, giving rise to a sense that things are out of control, and in need of a strong hand to bring them back under control. There's some sense in which the high inflation of the 1970s made the Thatcher/Reagan ascendancy popular.
>PS - And Doug, I apologize for jumping in just to argue with you when
>we haven't spoken in a while.
No apologies necessary; argue away.
Doug