It is amazing how quickly conventional wisdom can shift. Just a few years ago, most people would have considered as heretical a proposal that central banks should make decisions independent of the influence of the executive and legislative branches of government. Today, central bank independence is universally seen as key to macroeconomic stability and is a litmus test of political maturity.

There are several reasons why opinions shifted toward favoring the independence of central banks. First, many central banks pursued monetary policies that caused inflation or delivered cycles of illusory booms that gave way to destructive busts.

We learned that the impact of monetary and credit policy is so pervasive that political influences should be minimized. This same reasoning is reflected in the movement toward market-based economies seen in the wave of privatization and the transition from socialism and communism. Citizens and policy makers have discovered the community benefits from depoliticizing economic and social life. Those who suffered under Mao's Cultural Revolution or were brutalized by apartheid or genocidal policies understand the dangers of allowing politics to determine life outcomes.