Last week Federal Reserve Chairman Jerome Powell warned of looming "pain" from the Fed's fight against inflation. Such an assertion, or observation, or excuse is foolish (and wrongheaded) on too many levels to count. What makes it sad is the consensus from Left and Right about the alleged truth of Powell's comments. The Paul Volcker myth just won't die.

Powell's inflation solution, one embraced by both sides, is to raise interest rates. It raises an innocent question: what about the Fed raising the short rate for credit would shrink inflation? If your answer is that the rate hike would raise the cost of borrowing and reduce lending, please go back to school. Or better yet, don't return to school where they teach the fiction that the U.S. economy, or any economy for that matter, is a walled off island of autarkic economic activity. Also, throw out your economics textbooks that you paid way too much for in school.

In the real world defined by a global economy populated by myriad sources of credit, the price controls vainly attempted by the Fed logically won't and don't work. The lending that the Fed will allegedly shrink stateside will, if economic activity rates it, be made up for by endless sources of non-bank credit domestically and around the world. As the late Robert Mundell used to say, "the only closed economy is the world economy." To pretend that the Fed controls the amount of credit in the world's most dynamic economy vandalizes any traditional measure of stupidity.

So is the notion that Fed attempts to control the price of credit won't be maneuvered around by market actors. Really, when have price controls of any kind dictated actual market prices? This question in particular begs response from members of the Right who really should know better. For seemingly forever they've properly bemoaned apartment rent controls as the drivers of scarcity, but when the Fed targets low rates, supposedly settled economic laws go out the window. Supposedly the Fed can "decree" easy credit with artificially low prices. No, it can't. Credit is resources, which means it's produced. The Fed can decree neither easy nor tight credit. Don't worry, dumb begets dumber.

Think about lending. What are we borrowing when we borrow, and what are we lending when we lend? We're either borrowing near-term access to resources at a price, or we're delaying access to resources in order to access resources in greater amounts in the future. Looked at through the prism of inflation, who readily lends dollars (or name your currency) in abundance when the value of the currency loaned is in decline? Inflation is a decline in the value of the unit (in our case, the dollar), yet we're supposed to believe the Fed must step in to stop the rampant lending of something for something less. Yes, you read that right. Without the purportedly wise minds at the Fed (present and past) with names like Bernanke, Yellen, and Powell, we would lend wildly without regard to our wellbeing, or not lend enough such that central bankers must step in and save the economy (with lower rates!) from us. You can't make this up!

The main thing is that inflation is said to be rampant which, if true, would on its own bring on a reduction of lending, or more expensive lending. Think higher interest rates arrived at in the marketplace. No central bank needed. If not, as in if lending remains abundant, that it's abundant is a sign that inflation isn't much of a problem as is. Markets are wise, and exponentially wiser than central bankers.

Assuming there is inflation, what about reducing it would cause pain? Inflation is once again a devaluation of the currency, which means when inflation rears its ugly head those of us who earn dollars see the value of them shrunk. Which means our savings are worth less, the money we earn is worth less, and then let's not forget that there are no companies, and no jobs without investment. When investors put wealth to work, they're aiming to generate future returns in – yes – dollars. Which means inflation is a tax on the very investment that powers progress and opportunity. How then, would a less devalued dollar or a revived dollar or a dollar with a fixed standard of value be 'painful'? Looked at historically, was the pain for Germans the end of the hyperinflation, or the hyperinflation that erased so much wealth? The question hopefully answers itself.

But wait, some will say: inflation is caused by "too much economic growth," by the economy "overheating," so the "pain" Chairman Powell and Volcker hagiographers on the Right are referring to is the necessary contraction of the economy that the Powell Fed must engineer in order to "sweat out" the inflation. This is the Phillips Curve at work; the fork-in-the-eye idiot notion that says too much success is bad for the economy, and will cause demand to outstrip supply. No, all demand is instigated by supply, after which all economic growth is a consequence of investment in ways to produce more and more for less and less. In other words, economic growth is the surest sign of cheaper everything, not more expensive everything.

Furthermore, if you really believe an economy of individuals can "overheat," and that the best way to help individuals is to cut them off at the knees, no amount of schooling can help you. You're just a moron.