One may say that, apart from wars and revolutions, there is nothing in our modern civilizations which compares in importance to it [inflation].
Elias Canetti, Crowds and Power
A poll released in early 2006 told us that Americans opposed more Federal Reserve rate increases by a margin of three to one. What was amazing was not the particular opinion voiced but that voters should have any opinion at all. The going rate for short‐term credit—like that of bread or of titanium bicycles—would not normally be a matter for public debate. But now, voters expected to find it on the ballot along with proposals to expand the number of daylight hours and round off pi to the nearest whole number. The Fed's rates are no longer seen as either interference in the free market or technical adjustments best left to professionals, but as policy to be debated by plumbers and deliverymen.
Those who believe in the perfection of man were greatly encouraged after 2002: Paul Volcker had already proved that the Fed had mastered the art of taming inflation, and now the Greenspan Fed had learned how to avoid deflation, too. The U.S. economy was impregnable—a citadel of growth that would expand forever and ever, amen.
As the skeptics pointed out, however, an increase in firepower doesn't make war a thing of the past; it just makes it more costly. The machinery of central banking may have become more sophisticated, but the engine drivers still have the same heaving, squeezing, ...