Moving from the lofty epistemologyical/metaphysical realm of yesterday's quote to the questions of national character. A thought from a wise French observer of our country. I accost an American sailor and inquire why the ships of his country are built so as to last but for a short time; he answers without hesitation that the art of navigation is every day making such rapid progress that the finest vessel would become almost useless if it lasted beyond a few years. In these words, which fell accidentally, and on a particular subject, from an uninstructed man, I recognize the general and systematic idea upon which a great people direct all their concerns. [ Democracy in America Vol. II, Part One, Chap. 8.]
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Every once in awhile we hear econo pundits telling us how evil deflation would be. Why? Well ... deflation is often a symptom of bad times. If a lot of people are out of work and have no purchasing power, demand for a wide range of products will drop and so will the general level of prices, i.e. there will be deflation. This is one way of getting to deflation, and the causes of that symptom are, to those directly affected, bad things indeed. BUT ... deflation there is only a symptom, not a cause of the trouble, and this doesn't rule out the possibility that deflation in other contexts may be harmless, or better-than-harmless. One often encounters a suspicion of deflation that goes beyond any real justification, and this is the background of an expectation that a central bank should program into an economy a mild level of price inflation, say 2 to 3%. Just to keep those deflationary demons away? These thoughts are motivated by Apple's product launching event on March 2...