Must-Read: Paul Volcker: Cardiff Garcia’s Long Chat with Paul Volcker

Must-Read: This from Paul Volcker strikes me as really substantially wrong:

Paul Volcker: Cardiff Garcia’s Long Chat with Paul Volcker: “I would never interpret it as you have to have [inflation] exactly zero…

Prices tend to go up or down a little bit depending upon whether the economy’s booming or not booming. And I can’t understand making a fetish of a particular number, frankly. What you do want to create is a situation where people don’t worry about prices going up and they don’t make judgments based upon fears of inflation instead of straightforward analysis of what the real economy is doing. And I must confess, I think it’s something of a moral issue…. You shouldn’t be kind of fooling people all the time by having inflation they didn’t expect. Now, they answer, well, if they expect it, it’s okay. But if they expect it, it’s not doing you any good anyway. Those arguments you set forward don’t hold water if you’re expecting it…