History of Economic Mismanagement - Part I

For as long as governments have realized such control, they have exhibited a profound interest in manipulating the supply of money, interest rates, and exchange rates. As perhaps the least understood of all sciences, the mistakes in macro-economical policy have burdened societies and devastated nations. While reckless spending and spiraling inflation under the reign of Commodus spelled ruin for the Roman Empire, monetary policy remained a conundrum as history repeated itself during the time of Louis XVI in France. The coals under the financial crisis that became the Great Depression were stoked by a government that failed to comprehend the function of interest rates, taxes, and monetary policy. In Asia, it was an asset bubble followed by mismanagement of interest rates that led to the financial meltdown in 1997. Even today, there is no clear consensus as top economists debate the correct path for legislatures to take during the current recession. Clearly, thousands of years of recorded history should have provided us with testimony of successes and failures that could lead us to make intelligible connections and rationale decisions. With all of the existence of case studies available for review, why does the correct medicine for economic stability remain so difficult to ascertain today?