… is from page 251 an op-ed titled “There’s Only 1 Cause for Inflation” that the late Armen Alchian had in 1979 in the Los Angeles Times, as this op-ed is reprinted in The Collected Works of Armen A. Alchian (2006), Volume 1 (“Choice and Cost Under Uncertainty”; Daniel K. Benjamin, ed.):
To make more respectable their unwillingness to restrain the creation of more new money, the Fed argues (and they even have official committees of economists to lend credibility) that (1) restraint would cause a depression and unemployment, and (2) the inflation is necessary to maintain full employment.
The latter point is simply false, but I won’t explain why here. And the first is a cop-out. Restraint will cause a depression only because the promise of restraint would not be believed by the public, given the past record of the Fed.
