Inflation targeting, it appears, is a failing experiment. Unfortunately monetary policy is far too slow to see it yet. The concept of a positive inflation rate

Inflation targeting, it appears, is a failing experiment. Unfortunately monetary policy is far too slow to see it yet. The concept of a positive inflation rate is a noble one, but unachievable. This is because, imho, it is just a high level way to reach for what is actually an unattainable goal, which is control over spending habits. On the outset, a policy maker realizes a 'simple solution' is to increase spending when a recession or pullback arises. If they can force everyone to spend, then recessions obviously cannot happen. On its face, we all can see immediately that this can't work; if you reach into peoples' pockets and force their money on the table there will be knock off effects on other discretionary spending habits; besides that it is politically distasteful as well. So some bright policy maker realized, well, if we can't force them to do it, how about we apply more carrot and less stick instead. Then we can achieve the impossible without the use of force. This creates a false environment where people feel they have control, but really they are doing just what policy makers asked. It can be done through inflation targeting. Viewed through this lens, the rest of what happened should begin to come clear. It reached the desired goal immediately, and the unattainable was suddenly possible! That is until the knock off effects are piled so high and so deep that the whole thing craters, only now it is much worse. It is a bit like forest fires. At first blush it is obvious to anyone that the fires cause the damage. Stop the fires, and stop the damage. So we tried this for years with Smokey the Bear, fire lines, and other measures with success. Eventually fires became less frequent, but highly destructive events. After years passed someone realized that controlled burns were probably a smarter idea. At some point it should become clear that it is probably not necessary due to the considerable expense and effort to create controlled burns. Maybe we should just let them unfold naturally, with minimal interference where needed, and just move people and property away from the areas of danger. Just like in the case of forest fires, inflationary targets won't be recognized as the menace they are until we are all forced to suffer from it. Then, and only then, politicians will feel forced to move. "It is difficult to get a man to understand something, when his salary depends upon his not understanding it!" - Upton Sinclair