Trichet’s Inflation Ogre Is Pure Fiction: David G. Blanchflower

European Central Bank President Jean-Claude Trichet says policy makers need to be capable of three things: humility, alertness and swift action. He’s missing one more: flexibility.

At Jackson Hole, Wyoming, last month, Trichet made clear how out of touch he and presumably the majority of the ECB’s unwieldy 22-member Governing Council are to the dangers that Europe’s economy is facing. At a symposium of central bankers on Aug. 27, Trichet emphasized the need for maintaining a focus on price stability, alongside the importance of heavy budget cuts.