I complained about somebody mistaking observations for causes. The topic was the business cycle. JzB agreed:
This cycle does not cause recessions, the cycle is observable because recessions happen.
Exactly. We can see it, because it happens.
It's a common mistake, I guess, thinking that we see a thing, so it exists, so it must be the cause of [whatever]. I don't understand the logic. Maybe it's the tendency to go immediately to conclusion: I have seen the cycle, therefore the cycle must be the cause of recessions.
I wrinkle up my nose at that and shake my head and am left speechless. But it doesn't stop. Wikipedia does the same thing under the heading Endogenous money:
Proponents deny any practical impact of the money multiplier on lending and reserves.
Why are they even talking about the "impact of the money multiplier"? What is it, like a strong wind? Blowing your neighbor's garbage into your yard...
No. The money multiplier is a ratio of two numbers. It tells how much "money-and-credit" there is for each dollar of non-credit money. (It is sort of like my DPD ratio, actually!) There is in fact some amount of non-credit money in the economy, and some amount of money-and-credit. So you can figure the ratio. You can observe it. It exists.
But does it have an "impact"? No. The money multiplier is not the wind. The money multiplier is how much litter you picked up off your lawn. It is an indication of how strong the wind was. The wind is the economy, or something.
The wind is the reliance on credit.