Monday, September 3, 2007

Sub-Prime Economic Theory

The possibility that the European Central Bank may raise interest rates in the midst of a financial crisis recalls the great American orator William Jennings Bryan’s famous “cross of gold” speech in 1896. Referring to the international gold standard’s deflationary bias, Bryan railed: “You shall not press down upon the brow of labor a crown of thorns. You shall not crucify mankind upon a cross of gold.”

In other words, ordinary people should not be made to suffer for the foibles of policymakers enthralled by some defunct economic theory.

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