An old friend of mine told me a lot of years ago when both were at the university that he liked electronics because when he was younger he tried to repair an old electric engine from a washing machine to work for some kind of automatism. He had a problem, he could repair the engine but he could not use it for his experimental application because he does not know how to control a lot of power with low power. This little story shows why electronics is so important for our current society, electronic devices provides us with the capability to use low power signals to move large objects as we wish.
Although I consider that I am young yet, I must recognize that I had an experience that many people do not know nowadays. I have got and driven a car without power steering, of course, parking the car was a very hard maneuver. With my following vehicles I could do it with only a finger.
Devices to control high power with lower one are very common in our society and in our lives, but sometimes, we forget that this does not imply that high power continues been used by the machines that move the objects and that the control system is wasting additional energy.
If we think about the economic system, we will be able to understand why the monetary policy is so attractive for governments. They think that they can control the behavior of the whole economy simply increasing or decreasing the monetary mass. As a control engineer I am not going to deny that these actions have an effect on the economic system, but this must be used carefully. Imagine that I am going to get the driving license and I try to park my vehicle using only a finger. I suppose that the examiner would not be very minded to confirm that I had passed the test. Having a power steering does not imply that we do not need to grab the steering wheel firmly with both hands to avoid unnecessary risks.
When you have driven a car without power steering you learn to move the wheels when the vehicle is moving. This action is good for the tires and the mechanic parts of the car. If you move the steering wheel when the car is stopped they will be suffering more that they need. No mechanic technician will recommend it to you.
Perhaps economy needs drivers that move the steering wheel with the car ongoing instead of drivers that try to move the vehicle when it is stopped. The accelerator and the brakes of economy are related to production, and monetary policy can be seen as a steering wheel. We use it to preserve the progress of the vehicle between the limits of the road but an accelerator is a device that increases the power produced by the engine because it lets that more gasoline enters the combustion chamber. Monetary policy does not produce this effect because is linked to the value of the assets. An increase of monetary mass is traditionally turned into an increase of the price of the assets in monetary units, although in a crisis time and with the economy in a process of evolution due to the globalization this effect can be less linear.
Central banks actions as quantitative easing are sold to the citizens as more gasoline for the engine but they are only a way to make easier the work of the financial system at the expense of the health of the families and businesses when the economy is rather stopped. This kind of actions should be always coordinated with other ones to increase the productive activity, in other words, they can be harmful if nobody presses the accelerator.
One of the problems of the political decisions in crisis times is that the policies associated to a certain ideology, that can be reasonable with a normal performance of the economy, can be dangerous without additional actions to compensate the real reasons of the crisis. This is not only specific of monetary policy but every policy.