DEFROCKING THE FED

...the Soviet wheat deal complete with the devastating farm price increase it produced the next year...

...When the congressman leaves he's got two things in his mind...

...It is generally agreed that the recession can't end until interest rates come down, and the Fed, by focusing exclusively on the money supply, is no longer officially concerning itself with interest rates...

...Are investors currently "overheating" the economy...

...Burns's 1972 rapid expansion of money supply, for instance, did indeed contribute to the inflation that followed, but it played nowhere near the role monetarists attribute to it...

...Afraid of Appeasement If you believe, as monetarists do, that reducing the growth in the money supply is the only way to stop inflation, then you also tend to believe that this same money supply was itself the only cause of inflation...

...That has a way of breaking down arrogance a bit...

...These congressional breakfasts traditionally have been held by Fed chairmen once or twice a week, and they are enormously effective in holding Congress at bay...

...Milton Friedman has confessed that he is "puzzled" by the failure of the economy to respond this way...

...Even today the questions asked on Sunday morning television interview programs are almost always political ("Will President Reagan support Chairman Volcker...

...Why such a remarkably long leash...

...What this argument ignores—and this is an essential point—is the distinction between longterm and short-term interest...

...Much of our history has featured low interest and low inflation side-byside...

...When that was fixed by the Fed's trading efforts, short-term interest was also fixed...

...The arsenal of the Fed was left to blast away all alone...

...But according to economists who follow the bond market, those institutions that care about long-term inflation don't watch money supply very closely...

...On long-term interest, the Fed has a case...

...It is not a question often raised by the rest of us...

...With the exception of the money thrown toward defense-related industries by the Pentagon, this hardly sounds like an au courant explanation...

...Congress should also not hesitate to direct the Fed to change its money supply targets to meet current circumstances...

...The rate in today's deep recession stands in the 12- to I3-percent range...

...With a few recent exceptions, the press has never shown much interest in hard reporting on monetary policy...

...In fact, the breaking of OPEC's hammerlock through reduced oil imports helped reduce inflation well before the Fed's plan did, and with none of the pain...

...Morgan as his carriage rolled past grew up to buy Henry Luce's magazines celebrating David Rockefeller...

...The long-term trends these people worry about are things like five-year projected federal deficits and multi-year labor contracts...

...If you wonder what lies behind those checks (or electronic transfers) the answer is Federal Reserve-backed "legal tender," or dollar bills...

...Volcker, so proud of his toughness, so noblelooking if you happen to still have a job, somehow made a virtue out of shutting down the economy...

...Long-term interest rates hovered around one percent in those years, and so did inflation...

...Economists of almost every persuasion stand in total awe of the institution...

...During the Depression, the banks were the ones who foreclosed on your house or lost your money by going bust...

...Because the press has never made it the big issue it should be, most congressmen know very little about the Fed, and care to know even less...

...The classic definition of inflation is "too much money chasing too few goods...

...The cause is high interest rates, which in turn are commonly and correctly believed to be the product of two other things: excessive government borrowing that results from deficits, and the monetary policies of the Federal Reserve Board...

...The common interest, he wrote portentously, could best be handled by a "specialized class...

...Reining in today's Federal Reserve doesn't mean smashing it, though Congress could do that if it wanted to...

...The closer it approximates the aura of a tasteful, trustworthy bank, the less likely it is to get pushed around like just another agency...

...The only thing that many understand about the Fed, he adds, is what its chairman tells them in genteel lobbying sessions...

...It might, however, require eliminating the Fed's special exemptions, starting with the appropriation process...

...A major effect of the bill was to expand the number of banks that fall under certain Fed regulations...

...If you wonder how so critical an element in the greatest economic collapse since the Great Depression can avoid greater scrutiny, look first to the press...

...It argues that once financial markets become convinced that the Fed is abandoning its monetarist anti-inflation fight, they would grow so disconsolate and embittered they'd keep interest rates at least as high as they are now...

...Thus Volcker has leverage over bankers, who in turn have leverage over congressmen, not only directly, but through their own borrowers: small businessmen, real estate owners and others who know it never hurts to do a little lobbying to keep their bankers happy...

...But we also would have had catastrophic unemployment...

...The toughest of reporters, the ones who spend dozens of weeksand as many column inches scrutinizing a less influential figure like James Watt, somehow find Volcker and his power unfathomable...

...Byron Dorgan...

...If there is a call, the phone is simply brought into the dining area...

...Take the late 1940s, a comparable period because the country was then also coming off a period of high inflation, prompted by World War II...

...It used open market operations to control short-term interest rates through the "federal funds rate," which is the amount of interest banks are allowed to charge each other...

...But New Deal reforms such as deposit insurance brought with them an unusually durable kind of respectability...

...Before explaining why that's so, it might be helpful to run quickly through the way the Fed controls the money supply...

...Now the Fed must release the targets twice a year, but only long after they have been decided...

...Of course the problem with this specialized class idea has always been that for all its supposed advantages, it clashes quite strongly with another idea—namely American democracy...

...Whatever its true economic performance (and it is by no means stellar), the success of that imagery has meant that the Fed gets treated differently than other agencies—so differently, in fact, that over the years it has almost ceased to be viewed as an agency of representative government at all...

...Friedman and other purists have jumped all over Volcker for technical reasons related to the way he operates various Fed spigots, but basically the Fed and the purists and everyone else who wants to let the market handle interest rates now must eat crow...

...Billions of dollars in securities get exchanged in an average day—all within little more than a half an hour...

...Hasn't Congress bungled fiscal policy...

...It is exempt, in its monetary responsibilities, from currently popular regulatory reform efforts to gain greater control over unaccountable agencies of government...

...According to any freshman supply and demand curve, if the banks had more, they would lend more at a lower price, thus helping to revive the economy...

...If Burns had become, say, secretary of HEW, he would have been chewed up all over the Hill...

...The 1913 legislation was a compromise between easy credit Democrats who had battled the idea of a central bank since before Andrew Jackson, and Republican-represented financial interests who used the debilitating panics that frequently buffeted the American economy as an argument for greater control...

...We need not condemn ourselves to the chaos of those years noraband on professionalism in order to reassert the right of the people at the receiving end of monetary policy to have more influence, through their elected officials, in the shaping of such vital decisions...

...In other words, instead of actually printing more bills, the Fed increases the money supply simply by writing a check out of nowhere for the securities it buys...

...Galbraith's view, that "bankers are not above the law," is one that once held a place of honor in the American mind...

...That impulse, first felt around the turn of the century, was to delegate society's important tasks to groups of professionals believed to have greater expertise than everyone else...

...The problem with the monetarists, says James Tobin, 1981 Nobel laureate, is that they don't believe OPEC had much to do with inflation...

...They knew that interest rates would be more volatile after the change, but according to monetarist gospel, the rates should be fluctuating at a much lower level...

...Maybe it was too dull or complicated, but whatever the reason, inadequate coverage of the economy as a whole grew to the point where in the 1970s, when the world cried out for sharp, analytical reporting about what went wrong, it wasn't to be found...

...If it were, of course, every billion-dollar increase in the money supply would mean a lot of late-night cranking over at the Bureau of Engraving and Printing...

...Instead, he went to the Fed, where he was cleansed overnight...

...According to the committee's instructions, they then start trading in various kinds of securities...

...Jimmy Carter failed, but he did not discredit other means of fighting inflation...

...These objections are best answered with yet another question: Have we liked the effects of the monetary policy brought to us by Lippmann's specialized class...

...The issues at stake are not the value-free formulations of scientists, but matters of wealth and fairness and just about everything else at the very heart of representative government...

...One reason the press never developed a strong interest in the Federal Reserve was that in the years after World War II the public lost much of the resentment it had long harbored toward bankers...

...Of course, the ability of the Fed employees to "intellectually blow you out of the water with their torpedoes," as one Senate aide puts it, is largely the function of the particular profession to which they belong...

...The Phone Never Rings Despite the allure and mysticism that always has been attached to money, the Fed was not an exceptionally prestigious institution at its birth...

...Or the current status of a merger...

...looks very different from the department of interior building across the street...

...Exhibit A nowadays among some Fed staff members is the case of G. William Miller, the highly successful businessman whose short tenure as a Carterappointed chairman is recalled at the Federal Reserve with a rolling of the eyeballs...

...The searing historical memories that have come to haunt our views—the "Munichs," to borrow a foreign policy metaphor for misused history—date from the late 1960s and early 1970s...

...If we're lucky it might be just beginning to dust off its derriere to return to work...

...If the squash courts don't convince you, consider the art exhibits in the elegant foyer...

...This is despite the fact that the broad outlines of monetary policy are only a little more complicated than telecommunications or energy or any number of other subjects that routinely come to their attention...

...These are complex matters that are too difficult for mere mortals and distracted congressmen to understand...

...Restraint in these areas is essential because it determines in their minds whether there will be inflation in the future...

...The skepticism has historically been the responsibility of a vigilant and free press, but in the case of the Federal Reserve, it didn't quite work out that way...

...The children of the people who heckled J.P...

...But when you start talking about the Fed, their eyes get cloudy...

...Meanwhile, the rest of us were suckered into believing that there was actually no other choice, that it had to be done...

...It is exempt from civil service requirements...

...It's easy to say we wouldn't have had inflation in the wake of OPEC if we had stuck to our money supply targets," Tobin concludes...

...The exhibit this spring was entitled "The Hague School and Its American Legacy...

...Credit controls imposed by Carter brought it down artificially for awhile, but its "market" level is clearly higher than when it was controlled...

...As far as the Fed itself was concerned, the culmination of all this new respect was the rise of the monetarist school of economic theory, which places the most important function of the Fed— control of the money supply—at the verycenter of economic policy...

...That entails a whole new liberal agenda of things like standby gas-rationing authority and a policy to prohibit wage increases unless they are accompanied by productivity increases...

...To understand this scheme and how it helped cause the recession, we have to go back to October 1979, when Volcker changed the Fed's operating procedures...

...Control of the rates was a major preoccupation of all Fed boards...

...This air of Smithsonian refinement conveys not only the way the Fed views itself, but the way it hopes others will imagine it...

...Paul Volcker apparently thinks so...

...Well, it didn't have to be done, and we don't have to condemn ourselves to a lifetime of this kind of medicine...

...Superficially, they're right...

...If money supply targets were expanded, how could they possibly develop "inflationary expectations" that would mean anything in the short time-period in which they operate...

...When it sells, money is getting drained...

...We sometimes forget that it is indeed possible to have it all...

...rather than economic ("Is there any contradiction between the president's pro-growth position and the chairman's tight money position...

...It's impossible to over-emphasize the almost languid confidence and solidness the place exudes...

...Jake Lewis, a long-time House banking committee staff member points to the example of Arthur Burns, who left the White House staff in 1970 to become chairman of the Fed...

...These things can be done, as we learned last year with OPEC, which once seemed so invincible...

...After the October surprise, which represented the official Fed acceptance of the monetarist approach, these rates became unfixed...

...As this aura filters through to the rest of the respectable world of leaders and thinkers, Congress itself cannot help but be caught up in it...

...Despite the anguished cries of constituents peering over the precipice, most members still know next to nothing about the Fed and believe, wrongly, that it is somehow an independent agency beyond their control...

...The Fed would have to appear each year like every other agency, hat in hand, waiting for an appropriation from its rightful master...

...He also knows how to establish a hold over them...

...So far no one has been willing to make him think otherwise...

...But if it took decades before the Federal Reserve reached the status it holds today, something else was happening in those years that would eventually bode well for an institution like the Fed...

...If monetarism is the economics of utter hopelessness (only dead economies, not human beings, can stop inflation), then the logical response must be an attack on inflation that places as much responsibility as possible on us...

...Non-economists at the Fed find themselves at a near total loss...

...Nancy Teeters, the first and only woman appointed to the board, notes that it would take six months to a year for a non-economist, however smart, to "get up to speed" as a governor...

...Maybe it's Brussels calling the chairman...

...All of this open-market business has been true since 1934, but before October 1979 the Fed did something else, too...

...Sit a man of affairs down for a chat on the origins of inflation, and he'll more than likely subject you to a discussion of how Lyndon Johnson pumped up the economy to fight in Vietnam and Richard Nixon convinced Arthur Burns to help him get reelected...

...Both ideas are equally daffy...

...Although a recent survey indicated the Washington press corps believes Fed Chairman Paul Volcker is the second most powerful man in the country, he continues to puff away on his cigar virtually undisturbed...

...Seven out of seven of the Fed's governors are economists by training, and although most of them have experience in banks, all but one or two should be considered economists first and bankers second...

...In any event, the new money the Fed creates in this fashion ends up in the reserves of the nation's banks, which then have more to lend out, thus increasing the total amount of money in the economy...

...But the Fed doesn't buy that...

...Try ten-percent unemployment, zero GNP growth, a rash of bankruptcies, and the lowest corporate profits in years...

...no more, in fact, than the effect Neville Chamberlain's appeasement at Munich had on a generation of people facing very different foreign policy questions...

...Are merchants shooing eager customers away from their counters with the words, "Stop, don't chase my goods with your money...

...That still leaves the second half of the problem...

...If you talk about a naval base closing, their eyes bulge," says North Dakota Rep...

...The loose money supply of the 1970s was a response to inflation caused by other things, like OPEC and wild swings in commodity prices...

...The monetarist credo is that if you just concentrate on steadily reducing the growth in the money supply and ignore interest rates, inflation will be stopped and those rates will come down on their own accord...

...If the bond market—a long-term institution—believes that inflation cannot be stopped, it will remain very hesitant about the future, and long-term interest rates will not drop...

...First, the supply has little to do with printing presses...

...I can already hear the clucking from the editorial writers and think-tank experts...

...Although Volcker makes several trips each year to Capitol Hill, his most effective lobbying is conducted at the Federal Reserve's Washington buildings, the grandeur of which provides some indication of why smitten congressmen mistake the Fed fora fourth branch of government...

...In addition to having responsibility for the money supply, the Federal Reserve also handles a large share of banking regulation...

...There are three major ways the Fed uses the targets to control the money supply: reserve requirements (how much the banks and other financial institutions have to keep in the freezer), the discount rate (how much interest the Fed itself charges when it chooses to lend to banks), and open market operations...

...A former senior staff member at the Federal Reserve who also has worked on Capitol Hill recalls the effect of the ambience on a congressman who had driven over for a small private breakfast with the chairman: "Your car pulls into the Fed garage and you are whooshed up to the chairman's private dining room, which looks out over the Washington Monument, the Jefferson Memorial, and half the rest of the city...

...But even if it doesn't, there is little evidence that short-term markets would fear inflation in the short-term, the 90 days or six months from now when these loans must be paid off...

...In 1922 Walter Lippmann wrote a famous book called Public Opinion, expressing the growing feeling...

...Just as many economists of the 1930s looked back to the experience of hyper-inflation after World War I and pronounced that the economy must "expel its poisons through depression" (Joseph Schumpeter), so today we hope to "squeeze out" what ails us...

...Indeed, the remedy for the imperfections of democracy is not less democracy, but more...

...Monetarists do not often approve of the Fed's behavior...

...What happens instead is that the Federal Open Market Committee, which consists of seven Fed governors plus five of the 12 presidents of the regional Fed banks, meets in secret every few weeks to set targets for money growth...

...Not only does Volcker grant few interviews and hold no news conferences, according to his spokesman there is no demand for news conferences...

...Suffice it to say that the inside of the headquarters at 20th and Constitution N.W...

...Politicians and parties rose and fell on these issues...

...Consider what else was happening in a one-year period around the time of Burns's action: the lifting of wage and price controls...

...It is exempt from any GAO audits of its most important function—monetary policy...

...in fact, today, although the Fed is pursuing a broadly monetarist policy, the purists of this school are among its fiercest critics...

...A Procrustean Fed So where has this deference to the priesthood of the Fed taken us...

...There wouldn't have been enough money around to pay for anything but oil...

...These congressmen have just come from noisy offices where phones and buzzers and constituents are ringing in their ears all the time...

...Congress and the president didn't do anything last year to create these conditions...

...Take the interest on six-month treasury bills as an indicator...

...The Fed has about 400 economics Ph.D.s in Washington, giving it a substantial advantage in any paper wars with Congress or the White House...

...They were the enemy...

...It is this activity that determines the money supply...

...As Reuss notes, Volcker knows how to call out the banking constituencies when he needs them...

...Then 12 Fed employees in the bookie joint scramble to their phones and call securities dealers to determine the day's prices...

...The Fed is exempt from the congressional appropriation process...

...The post-war years were so prosperous that the classic popular image of financiers as bloodsucking conspirators seemed gone forever...

...But the real issue is the attitude of the person who holds the punch bowl, who decides when the guests are too drunk, and when, as it looks like now, they are too sober...

...First, a lot of new information from what he considers to be a very important, respectable source, and second, a belief that no matter how confident he is, no matter how much he thinks he knows about money, they know more...

...Open market operations are based in a room in the Fed's New York bank that resembles a big bookie joint...

...Assuming a normal ratio of credentialed economists to statements of obfuscation, it isn't too hard to figure out how congressmen and reporters become a little confused...

...It is exempt from certain Freedom of Information Act inquiries into the operation of its all-powerful Federal Open Market Committee...

...Most congressmen are simply unaware that they ultimately bear almost as much responsibility for monetary policy as they do for fiscal policy...

...The assumption is that the economists will take care of it, and they have—with about the same success rate as astrologers...

...Why let it get its paws into monetary affairs...

...Reuss suggests that part of the problem is ignorance...

...What does an increase of this percentage or that in the money supply in a given month or year have to do with what will happen ten years down the road, which is the bond market's primary concern...

...But don't forget the power of the respectable idea...

...Every weekday morning at 11:15, an economist there talks on the phone to a representative of the committee in Washington to receive target instructions...

...Who is going to bring the Federal Reserve Board under control...

...Everything's very slow, and impressive for its slowness...

...So that brings us back to the same old bottomline answer to inflation that, rhetoric aside, always comprised the monetarist and Republican position: start a recession...

...Reining in Righteousness Former Fed chairman William McChecnev Martin 0171= Ac-scrihcd j.0 of the Federal Reserve as "taking the punch howl away lust when the party is getting merry " This is not an objectionable function, and the Fed is not, by definition, an objectionable institution...

...The old theory of the Fed is that democracy can't be trusted," says Galbraith...

...Does it strike you as our major problem today...

...Why have the press and Congress refrained from concerning themselves with the Fed's business, even when the product of that business is a recession that throws millions out of work...

...The answer is that the Federal Reserve has succeeded in disarming potential critics by creating an aura of mystery and wonder around itself—a sort of banker's Bali Ha'i...

...But having let themselves be intimidated by "M lb" and "velocity" and other jargon, most have given up trying...

...By early 1980, when the market determined it, the range was 14 to 16 percent...

...Contrary to the fears of those who oppose politicizing the Fed, easy credit didn't often win out...

...The economy won't be roaring back in six months...

...Now it's time for business, either here or back in his office...

...But the Fed has an even more potent weapon in the form of what Milton Friedman calls its natural constituency: commercial banks...

...I can't accept that...

...Constitution gives Congress the right to "coin money, regulate the value thereof' (Article I, Section 8...

...It is exempt from the iron rules and often tasteless aesthetics of the General Services Administration...

...The first hundred years of our history were marked by inspired public debates over monetary issues like silver and, for many years, interest rates...

...As for representing farmers or small businessmen or others who might have some sense of what it is like to go out and get a loan, the Fed handles those concerns through "advisory councils...

...There is some truth to these stories, but little sense in the degree to which they have come to shape our attitudes...

...and the 1973 Arab oil embargo...

...The reason Volcker decided to let them float freely within a much broader range is that according to monetarist doctrine, the Fed should be concentrating on measuring its money supply (through a gauge called M-1) rather than determining interest rates...

...Neither Henry Reuss nor his predecessor as chairman of the House banking committee, Wright Patman, was ever able to get his colleagues interested in joining their crusades against the Fed...

...Banking and financial interests were strong, too—stronger, in fact, than the creditors—and their influence usuallycarried the day on Capitol Hill...

...Or some very up-to-date information about economic conditions in your area...

...Nonetheless, the monetarist faith in the function of the Fed is now so strong, and the monetarists themselves are now so dominant (all but a handful of university economics departments around the country are run by them), that the Fed is revered as the temple in which all should pray...

...Many economists see this as self-evident...

...The Federal Reserve was set up by Jonathan Alter is an editor of The Washington Monthly...

...But those are not the historical analogies called to mind by today's economists...

...In the months before October 1979, when the Fed cared about watching things like this, the open market committee assured that the rate stayed in the ten-percent range...

...In the years since professionalism firmly entrenched itself, the best way to make sure the two ideas didn't clash has been to develop some form of popular supervision, or at least some skepticism...

...As for short-term interest rates, if the Fed would be willing to reconsider its October 1979 decision, it could simply lower them...

...Joseph Coyne, the appropriately named Fed spokesman, confesses that when reviewing economic reports he sometimes just throws up his hands in despair, uttering the familiar metaphor about Greek...

...It is not only highly elegant, but quiet, very quiet...

...In short, the inflation of those years was not just the product of an increase in the money supply, it was also the product of external events—events that monetarism doesn't even begin to address...

...The result was a jerry-built central bank without much authority...

...On no matter is their instruction of the young in the subtlety and benignity of established institutions more admiring," John Kenneth Galbraith writes...

...As an indication of the Fed's attitude toward the outside world, consider that these targets for money growth—as critical as they are to the economy— were entirely hidden from Congress before 1975...

...The Fed theoretically promises to print more bills if security-holders demand them, which explains the printing-press metaphor...

...But you wouldn't know it from looking...

...Lashing out at politicians in Congress and the administration for the condition of the economy is so much easier for most people than attacking professionals and experts...

...Theyclaim it was the accommodation of OPEC by the Fed, not oil shocks, that did us in...

...That helps explain why two years ago the Fed chairman was up on Capitol Hill lobbying hard— much harder than usual—for something called the Monetary Control Act...

...In truth, the U.S...

...The chairman may tell you about some pending applications from big financial institutions in your district...

...If the Depression of the 1930s can be dated back to October 1929, the Recession (so far) of the early 1980s can be said to find some of its origins in actions exactly 50 years later...

...Congress in 1913 as a way of fulfilling that responsibility...

...This leads us to the gist of where the Fed has gone wrong...

...Suppose for a minute that by sheer dint of effort the government's deficit spending is actually brought under some control...

...It means cracking down on the follies of the commodities markets that have added so much to the cost of food, and regulating the doctors and hospitals that have so driven up the cost of health care...

...The situation parallels that of defense, where men in uniform, particularly before the Vietnam war turned into a disaster, could go up to Capitol Hill and say, in effect, "Look...

...Now we are back under the spell of inflation history...

...How can Volcker or anyone else believe that in the short-term—that is, right now—inflation is the major evil we face...

...But he's in no hurry...

...They simply endorsed Volcker's scheme for fighting inflation, which is to make money a little tighter each year, regardless of what else is going on in the economy...

...That's what this kind of respectability can do for you...

...This is a question often raised by gold bugs, populists, and destitute homebuilders who send sawed off two-by-fours to Washington...

...Trust, the bankers like to call it...

...This obvious point has to be made because the metaphor is used so often that people actually believe it is true...

...When the Fed buys securities, it is injecting more money into the economy...

...Through its insistence on ignoring interest rates, it has locked itself into a policy—reduction in money supply growth even when the economy is in decline—that is by its nature oblivious to the real world...

...The board's staff spends hours accumulating just this kind of detail about congressional districts...

...Inflationary expectations," the argument is called, and it lies at the very heart of the Fed's unwillingness to loosen up...

...You might think that the Fed could bring interest rates down simply by increasing the money supply—that is, giving the banks and everyone else a little more oxygen...

...That person should be someone who lets the guests play some role in deciding what they want to drink...

...No major newspaper has ever laid a glove on him—or even really tried...

...It is in no way autonomous...

...Most of all, it means ending the widespread and suicidal automatic cost-of-living increases in wages and benefits that have made the disease of inflation a permanent part of our lives...

...More concretely, Congress should require that the Fed reverse its October 1979 decision, and begin to determine short-term interest rates again...

...If the local editorial page editor has to choose between his congressman's attack on the Fed and the smooth, seasoned judgment of a Walter Wriston or Paul Volcker, the congressman is a likely loser...

...A related reason the Fed gets off so easily is Congress...

...Now they're in the Fed and the phone never, ever rings...

...Volcker shrugs his shoulders a lot these days, predicting interest rates will come down "soon...

...One might expect these days that congressmen would feel a little anti-Fed pressure from home, and once in a while they do...

...The last of these does the lion's share of controlling the money supply...

...This is particularly true for the people in the community whose voices would carry the most weight in the first place—namely other professionals and experts...

...Lippmann urged a generation to reject the "insatiable and unworkable fiction that each of us must acquire a competent opinion about public affairs...

...The shameful thing is that this has become not just the favored way, but the only way of assaulting inflation...

...From time to time the party does get a bit too merry, as it did in the 1960s...

...Low interest rates, contrary to today's unchallenged wisdom, are not by themselves inflationary...