"Stabilizing prices is immoral"

Part of the continuing series "Steve Waldman's idiosyncratic theories of U.S. political economy."

Stabilizing prices is immoral:

In the real world, of course, we usually see something between a policy of pure price restraint and a symmetrical price targeting regime. And usually, price stabilization is implemented via monetary policy. We assiduously provide insurance to creditors and the securely employed, but haphazardly reward debtors and the marginally employed when they least need help. Price stabilization is social insurance we provide to the most secure members of our society, while the bill is paid in lost purchasing power and increased risk by the least secure. Further, the benefits of price stabilization accrue disproportionately to the largest creditors and to holders of high-salary secure jobs. Preserving the purchasing power of a billion dollar stash is a lot more valuable than preserving the value of fifty bucks in a bank account. Price stabilization is an incredibly regressive form of social insurance, a program whose distributional ghastliness would be abhorrent to most people if it were not conveniently submerged. But the transfers engendered by price stabilization are politically invisible, obscured by the money veil. Since they benefit the most influential and harm the most marginal in our society, this ghastly policy is politically untouchable.

The point, broadly speaking, is that contrary to what economists on both the left and right seem to assume in their arguments, the point of (neoliberal) monetary policy in practice is not "macroeconomic stabilization," but instead the maintenance of economic conditions conducive to the interests of a specific political and economic bloc.