Another point I'd make, in defense of the ECB, is that suddenly now you seem to believe that Trichet has bowed to political pressure, when for years you've portrayed him as a responsible central banker, much more so than Bernanke and King. So why the new belief that Trichet is suddenly an idiot and should bow to political pressure from Merkel?
It strikes me as a little confused. If Trichet does something you or Angela Merkel like, he's awesome. If not, he must clearly be bowing to political pressure rather than simply doing his job as the evidence suggests to him he should. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
But Germany is consistent, and so am I, I think. In the long run, we're all dead. John Maynard Keynes
The Bundesbank, her own national central bank, came out today saying Germany would contract 6.2% in 2009. Yet she was making the case, implicitly, for demand-pull inflation. Barring a sudden turnaround in lending that central bankers fail to detect for a prolonged period, I don't see the support.
And, no, I don't think you're being consistent with regard to Trichet. Trichet can't go from The Only Sane Central Banker to Puppet of the Financial Markets based purely on the fact that you've gone from agreeing with his policies to disagreeing with them.
Finally, again, the Very Serious People are not calling for that. You're bringing editorials from groups like the WSJ -- groups which have been the defenders of neoliberal economics for decades -- against a backdrop of every small-s serious economist we've sourced for the last several years saying the opposite, and making the argument that Freedom is Slavery.
And it is the case that the Journal's arguments should be perfectly predictable, because deflationary environments benefit creditors -- the very people the WSJ's editors are members of, and the very people the editorial board there caters to.
I'd agree with Merkel that current circumstances merit vigilance, and that we're probably approaching the point at which it's time to start drawing up plans to begin winding down these programs at the central banks, but I submit the evidence continues to point to a deflationary threat in the near-term. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
