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Long and Winding Road to Normality
Date 04/05/2011 14:23  Author webmaster  Hits 969  Language Global
04 MAY 2011

By Geoffrey T. Smith | WSJ


The Weasel's Dictionary is an essential aid to speech writers and journalists alike. How would societies with long-term traditions of open discussion but an immediate need for consensus get by without the constructive ambiguity created by applying subjective judgments to the meanings of certain words?

"Terrorist" and "liberal" are the two classic examples of the genre, but the Weasel's Dictionary is fast expanding, thanks to the euro zone's policy makers. First came the addition of "Sustainable (adj.): a level of debt that no reasonable person thinks can be serviced but which is too frightening to admit to." Then came "Competitiveness (n.): the art of preventing one's neighbors from having lower tax rates than oneself." I'll skip over "Restructure," "Stress Test" and "Transmission Mechanism" and proceed straight to "Normal (adj.), see also normalize (vb.), normalization (n.)."

The lexicographic jury is still out on this one, but I would take a guess that the final definition will be something like "to find every excuse to raise interest rates as fast as possible before the commodities rally brings growth to a shuddering halt; See also 'to normalize liquidity'—to keep ATMs in Greece and Ireland stocked without giving a free ride to the rest of the region's banks and governments."

The "normalization" of monetary conditions is going to mean a lot of different things to different people. But the European Central Bank's road back to normality is a long and winding one. Remember that its policy is divided into two separate moving parts: interest rates on the one hand, and "non-standard" measures, such as unlimited lending, bond purchases and loose collateral regulations, on the other.

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