In early 1997, I wrote a commentary called "Growth Is Good." The commentary sparked a lot of spirited criticism, ranging from my underestimating how growth would lead to inflation to my ignorance about the environmental damage from growth. In other words, fast economic growth was bad.

This was at a time when the economy had expanded at a 4% pace over the previous year and the unemployment rate had slipped below 5%. Investors feared that inflation was about to spiral higher. Many policymakers and mainstream economists shared a strongly held belief that the economy couldn't grow faster than a 2%-plus pace, and unemployment drop below 6%, without ushering in deadly inflation. Of course, as we now know, the economy continued to grow at a 4% pace, the unemployment rate dropped to some 4%, and inflation trended lower.

Today, we're going through another inflation scare. The reason? The unemployment cost index had its worst showing in nine years. This time around, no one doubts that the Fed will hike interest rates once again to slow the economy. The only question is whether the Fed will raise rates by a quarter-point or by a more dramatic half-point. Still, signs that inflation may be stirring are at most a cyclical blip.

Yet the idea that too much growth is bad lingers. Over the past quarter century, the idea took root that not only couldn't the economy grow very fast, but also that faster economic growth wasn't all it was cracked up to be. It couldn't alleviate poverty. It didn't raise the incomes of society's least advantaged. And, at least according to Greenspan, fast growth encouraged too many people to spend beyond their means.

Yet today's social and economic story is that a rising tide does lift all boats. The wages of low-income workers are rising rapidly, and income inequality has stopped widening. The welfare caseload has fallen by 50%. Unemployment is at a three-decade low.

Growth is good, and the Fed should err on the side of giving a high-tech economy room to run.