The Staggering Incompetence of the European Central Bank

Mario Draghi, President of the European Central Bank, (ECB) addresses the media during a press conference following the meeting of the Governing Council in Frankfurt/Main, on December 6, 2012.

Photo by DANIEL ROLAND/AFP/Getty Images

It gets boring to write this kind of stuff every month or so, but it really is worth taking note of the stunning ineptitude of the European Central Bank. Earlier this week they published new forecasts revising their projections for growth and inflation downward but taking no action on interest rates “because of concerns about the negative signal a cut might send.”

Imagine you’re piloting a ship. You think you’re in good shape. But it turns out you misestimated the currents and now with your revised estimate you see you’re going a bit further north than you’d thought and are probably going to arrive late. Then you decide to refuse to change the heading of the ship because steering would send a bad signal about your likely trajectory. But then you publish the revised estimates anyway. And then leak that you’re refusing to steer because you don’t want to send a negative signal.

It’s bizarre. It’s insane.