Competition has been shown to be useful up to a certain point and no further,” said Franklin D. Roosevelt, “but cooperation, which is the thing we must strive for today, begins where competition leaves off. … If we call the method regulation, people will hold up their hands in horror and say ‘un-American’ or ‘dangerous.’ But if we call the same process cooperation, these same old fogeys will cry out ‘well done.’”

Change in the meaning of social institutions is rare, but it takes place more often than you might think. Dueling, public education and marriage are all good examples. Occasionally—and only when political systems undergo the existential stress of potential collapse—this dynamic of change impacts the meaning of the market itself, and that’s what’s taking place today, just as it did in the 1930s.

Through their words and deeds, politicians and central bankers are transforming capital markets into political utilities.

Why? Because we’re drowning in debt. There’s more debt in the world today than before the Great Recession kicked off in 2008. All the deleveraging that was supposed to happen … didn’t. Whatever overwhelming debt levels you thought triggered a super-cyclical, structural recession then, well, you’ve got more of it now. Moreover, it’s essentially impossible to grow our way out of these debt levels. Japan, France and Italy would have to more than double their current GDP growth rates to begin delevering. Spain needs a triple. Even the United States, the best house in a bad neighborhood, needs growth of 3% or more from here to eternity to start making a dent in its debt.

The intractable problem with these inconvenient facts is that there are only three ways to get out from under massive debt. You can grow your way out, you can inflate your way out or you can shrink your way out through austerity or the assignment of losses. Door No. 1 is now effectively impossible for most developed economies. Door No. 3 is unacceptable to any status quo regime.

So that leaves Door No. 2. The only way forward is inflation, so that’s what it’s going to be. I’m talking about policy-directed inflation, not inflation based on real investment decisions by real businesses, because just as in the 1930s (the last time the world was drowning in debt), most business decision-makers are sitting this one out, thank you very much. Or just as in the 1930s they’re “investing” in stock buybacks and profit-margin improvements, which doesn’t help real-world inflation at all.

When FDR took office in 1933, the flash point of his existential threat was the labor market, not the capital market. Sure, the stock market took its hits in the Great Depression, but the relevance of the stock market to either the overall economic health of the country or FDR’s ability to remain in office was dwarfed by the relevance of the labor market. To succeed politically, Roosevelt had to create labor stability and wage inflation, and that’s exactly what he did with the creation of the Tennessee Valley Authority (TVA) utility and the rest of the alphabet soup of New Deal labor policies.

To make these policies stick, FDR needed to change the popular notion of what the proper role of government should be in the labor market, and so he engaged in a very active narrative management effort, with photographers and journalists hired by the White House to document the “success” of the programs. And it worked. Yes, there were plenty of grumpy old men to complain about FDR’s injection of government-directed stability into the U.S. labor market, but he was re-elected three times on the back of these labor market policies and their widespread popularity.

I know it seems strange to think that words are as important as actual policy in changing the meaning of social institutions like the labor market in the 1930s or capital markets today, but it’s a fact. This is what the Fed calls “communication policy,” and as Ben Bernanke said in his last speech as Fed chair, it’s been the most effective tool in the toolbox. Here’s how it works. First, unless you’re speaking apparatchik to apparatchik, you don’t want to use the word “inflation” at all. It’s just like Roosevelt banning the word “regulation” from his cabinet’s vocabulary. Don’t call it “regulation.” Call it “cooperation,” he said, and even the grumpy old men will applaud. So today China calls it a “market malfunction” when its stock market deflates sharply (of course, “inflating sharply” is just fine). Better fix that malfunctioning machine! How can you argue with that language?