Obsession, Paranoia & Stupidity

I´ve been using those words with some frequency lately (Benjamin Cole in the comments even more so!). So read the whole James Surowiecki New Yorker article – Europe´s big mistake – to really grasp their meaning:

In July, 2008, on the eve of the biggest financial crisis in memory, the European Central Bank did something both predictable and stupid: it raised interest rates…

Policymakers make bad decisions all the time, of course. The E.C.B.’s failures, however, are the result not of mere bad judgment but of obsession. That obsession may not have created Europe’s problems, but it has amplified them…

To be fair, the E.C.B. isn’t alone in its paranoia about inflation…

3 thoughts on “Obsession, Paranoia & Stupidity

  1. Trichet is quoted today saying now that growth has surprised to the downside, inflation risks will have to be reassessed. How nice! Maybe China’s 21.5% reserve requirements will collapse their boom (and thus crude oil prices) in time for Trichet to ease enough to save the eurozone from outright collapse. He (Trichet) reminds me of Jack Nicholson in the movie A Few Good Men, “Did you order the Code Red (rate hike/s); you’re God**** right I did!”. The man sees to have a rendezvous with a 1936-1937 destiny. And the world is paying the price for his madness.

  2. Obsession, fetish. Misguided politically correct monetary rectitude. A perverted piousness postulating the sanctity of money.

    Crockey-Almighty, can we have some boom times before we worry about inflation?

    Excellent blog.

    Some people obsess about inflation. Others obsess about growth.

    I think my obsession is more beneficial.

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