But the editor of Grant's Interest Rate Observer also makes another interesting proposal with respect to what he would do if, by some act of market revenge, he were made Chairman of the Monetary Priesthood. He would, as he put it: "commission, staff, and ceremonially open the Fed's first Office of Unintended Consequence."
Economics is, after all, a social science, and as such, is beholden to the unintended consequences brought about by the actions of the observer as much as by those of the subject being observed. Imagine if we designated responsibility for precipitation and cloud cover to executives at "The Weather Channel?" Even if this new politburo had the best of intentions, would you feel comfortable ceding control of the weather to a group of 12, unelected, and highly fallible, human beings?
We think not, and if you believe the weather system is not a fair comparison to the system of money and credit, we would beg to differ. The weather, as well as the economy, are both chaotic systems. They are dynamic, and they are organic. They are not well oiled machines to be manipulated and driven from point A to point B at the discretion of some ceremonially chosen motorist, no matter how pure or benign his intentions.
But how would the economy function without the central planners and their open market operations? How would the sacred rate of interest be determined without the shepherds at the Fed? Surely there must be someone to guide the economy...
To help guide us in our pursuit of answers on this, and other topics, is Jim Grant, author and editor of Grant's Interest Rate Observer.