There have been many appeals to ignorance over the last several years with respect to the effectiveness of monetary policy.  One popular tactic of policy goons is to point to an improved economic statistic – like unemployment – and self-adulate for maneuvering it down.  The fading print media rarely questions these spurious claims.

But just because one action was taken doesn’t mean it was the cause of a later result.  For correlation does not imply causation.  Or, as the post hoc fallacy claims, “after this, therefore because of this”…post hoc ergo propter hoc.

“Gross domestic product has increased,” a policy conspirator may hold up as evidence of their handiwork, “therefore, quantitative easing must have worked.”  Maybe so.  Or maybe not.  Without a control group, and all other things being equal, how can you really know if quantitative easing caused GDP to increase?  You can’t.

One of the great vanities of our time is that government officials and academic bureaucrats control the economy.  That, somehow, upon assuming their positions, they take on god like qualities, which allow them to manifest outcomes by decree.  This is far from the truth. Continue reading →