Page:Stabilizing the dollar, Fisher, 1920.djvu/283

2, F] mitigation. If an 18% correction is needed we cannot argue that we ought to make no correction rather than correct by 12%! Furthermore it should be noted that ultimately, of course, after the rapid spurt had abated, the accumulated weight of the dollar would overtake the escaped price level and bring it back to par.

E. "It is too inelastic." This is the opposite of the last objection. The one objector who makes this claim thinks the limitation complained of in the preceding objection is a positive advantage of the plan. He would prefer to limit the possible change of the weight of the dollar to 2% per annum! His idea is that only secular, or long continued, changes in the purchasing power of money are injurious while shorter cyclical changes are desirable as an expression of the changing spirit of business.

To me this is more fanciful than practical. The "credit cycle " is one of the very evils which stabilization aims to remedy. The satisfaction the enterpriser has while the boom phase lasts is partly gained because of false hopes and therefore nullified later when the depression comes—like the joys of a drunken debauch—and partly gained at the expense of others of more "fixed" incomes—a species of social injustice.

I have little doubt that crises and panics would be practically impossible if we had a stable dollar and that the wide fluctuations in credit which precede and follow a crisis would be practically out of the question. In short, crises would be nipped in the bud. If there be, ideally, a normal credit cycle it has never been shown and any hit or miss restriction would be just as apt to make the actual cycle less normal as to make it more normal.

But, even if it could be granted that there is some substance to this objection, it cannot be denied that the plan proposed would be a great improvement over the present system.

F. "The correction comes too late." It is objected