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J. Charles Partee, a governor of the Federal Reserve Board, which is usually cast as the villain of high interest rates, says that those pushing for costly credit are not nearly as vocal as farmers, homebuilders and others demanding cheap money. Even the strongest advocates of tight money, including many businessmen and conservative economists, are not arguing for high interest rates in order to make a profit. They simply realize that while the high cost of borrowing will slow business at first, it will eventually beat down price explosions. Inflation to an economy is like cocaine to a drug addict. Rising prices feel fine for a while, but ultimately they destroy business. If temporarily high interest rates succeed in breaking the momentum of inflation, then the big winner will be the U.S. economy as a whole.
