Thomas Donlan‘s latest Barron’s editorial commentary challenges a central notion of central banking.

A leading business daily summed up the mood of investors after the wild market action last Wednesday: “Global stocks plunged, driven by heightened concerns about growth and fading confidence in the willingness or ability of central banks to boost their economies.

“The concern is the outlook for inflation, which in small doses is crucial to a healthy economy and which monetary-policy makers around the world have failed to accelerate. Another sharp fall in oil prices and weak consumer-price data in the U.S. on Wednesday gave traders fresh reasons to doubt what already were dismal expectations for the year.”

We would give our colleagues at The Wall Street Journal a long argument about the allegedly crucial need for a bit of inflation, but the reporters only reflected what the central bankers have been saying for most of the last 15 years. Central bankers believe intensely in the crucial role of central banking, and they will say anything to keep the game going.

The game, you see, is the magical elevation of the price of assets: First stocks, then real estate, then commodities and stocks again. There was unhealthy inflation in one market after another as the Federal Reserve tried to hold up the world on its shoulders.

People are already blaming the Fed for scaring the markets last month, when it attempted to let U.S. interest rates rise a little. They should blame the Fed for its long devotion to low interest rates in the name of stimulating growth with a “wealth effect.” (That’s when markets go up, consumers feel confident, they buy stuff, and markets go up some more.)

Any resemblance of the wealth effect theory to a chain letter scam is strictly speculative, of course.