The phrase is also used in regard to asymmetrical influence in other contexts; for example, in 1976 a labor statistician, writing in The New York Times about then US President elect Jimmy Carter's policies, wrote that The appearance of the phrase in a 1910 medical book suggests that it was proverbial at the time Goldsborough used it: "Pushing on a string" is particularly used to illustrate limitations of monetary policy, particularly that the money multiplier is an inequality, a limit on money creation, not an equality.
For in the middle of a deep depression just when we want Reserve policy to be most effective, the Member Banks are likely to be timid about buying new investments or making loans.
Result: no 5 for 1, "no nothing," simply a substitution on the bank's balance sheet of idle cash for old government bonds.If there is unmet demand for credit money, then credit money is pulling and monetary policy can be effective, by being more or less restrictive, just as if a dog or horse is pulling on a leash or bridle its speed can be regulated by reining it in or letting it loose – one says that the reserve requirement constraint is binding.
If, conversely, all demand for credit money is being met, either because banks do not wish to lend (finding it too risky or unprofitable) or borrowers do not wish to borrow (having no use for added debt, such as due to lack of business opportunities), then the string is slack, the reserve constraint is not binding, and monetary policy is ineffective: monetary policy allows reining in a horse, but does not allow whipping it on.
The breakdown in monetary policy is particularly damaging because it often occurs in financial crises such as the Great Depression and the Financial crisis of 2007–2010: in the midst of a crisis, banks will be more cautious about lending money due to higher risk of default, and borrowers will be more cautious about borrowing money because of lack of investment and speculation opportunities: if demand is dropping, new investment is unlikely to be profitable, and if asset prices are dropping (following the bursting of a speculative bubble), speculation on rising asset prices is unlikely to prove profitable.