Central banks in the US, Europe and Japan have been pouring new dollars, euros and yen into the system in an effort to “nudge” consumers to buy.  People must be encouraged to act against their ‘irrational’ selves which can’t count on the future.

Bankers worry too that consumers may create ‘deflation’ by deferring their purchases and driving prices down.  Deflation is the opposite of inflation and its downward spiral is harder to stop.  The US Federal Reserve succeeded in doing this by the policy of quantitative easing.

Japan has tried to effect ‘reflation.’  The Bank of Japan governor will push about $720 billion into the economy.  WIll it work?  The Japanese are more skeptical than Americans.  They see themselves as just as rational if not more rational than bankers.

Draghi in Europe prefers to state things as they are and tell the truth.

Soft paternalism is complicated.  Are people really not capable of reasoned reflection?  Do they really need to be governed by careful ‘choice architecture?”  Answers to these questions are being given by the actions of central banks across the world.