In national finance, no good deed goes unpunished. For centuries, every attempt at sound and stable money anywhere has set the stage for yet another crash. When it seems to work, everyone says, “This time is different”. The problem is...well,
Every complex problem has a solution which is simple, direct, plausible — and wrong.
H. L. Mencken
From Continental paper money during the Revolution to the tech and housing bubbles, to Friedmanite tax cuts for the ultrarich! Basing the US economy on gold, silver, land, sugar, cotton, bonds, stocks, clever financial instruments supposedly designed to prevent risk, fossil fuels, war, peace, imperialism, regulation, deregulation…You name it, it has been tried or at least proposed. All have allowed for rapid growth and all have then permitted major panics.
Every aspect of government, society, politics, economics, industry, and finance has been blamed, but none of the proposed diagnoses and prescriptions has taken us out of the bogusly named “business cycle” of boom and bust.
I will take on another aspect of this problem, that of The Blind Men and the Elephant, tomorrow, as a Zen koan.