Robert Wenzel's speech at the NY Fed, April 2012

From the Economic Policy Journal;

   Thank you very much for inviting me to speak here at the New York Federal Reserve Bank.

Intellectual discourse is, of course, extraordinarily valuable in reaching truth. In this sense, I welcome the opportunity to discuss my views on the economy and monetary policy and how they may differ with those of you here at the Fed.

That said, I suspect my views are so different from those of you here today that my comments will be a complete failure in convincing you to do what I believe should be done, which is to close down the entire Federal Reserve System

My views, I suspect, differ from beginning to end. From the proper methodology to be used in the science of economics, to the manner in which the macro-economy functions, to the role of the Federal Reserve, and to the accomplishments of the Federal Reserve, I stand here confused as to how you see the world so differently than I do.

I simply do not understand most of the thinking that goes on here at the Fed and I do not understand how this thinking can go on when in my view it smacks up against reality.

Aging Japan / Keynesian theory / Inflation or Deflation

Andy Xie writes yesterday about the impact an aging population has on an economy, using Japan as the study case. In this article, he describes the point-of-view (POV) decisions people make. In other words, seniors have a POV that will be different than that of someone two generations younger. The impact will have economic implications that simply cannot be swayed when the numbers of people in the less productive older labor population are greater than the younger and physically productive working labor population. Most of his article addresses issues building over many years. The title of his article is "Our Next Economic Plague: Japan Disease" and includes a brief critique of Keynesianism because it is being promoted in Japan too. He says "Keynesianism is a prescription for a short-term economic hiccup. It's like a painkiller, not a cure. It tries to minimize output loss during a down cycle. It doesn't mean much for an economy in the long run. Without Keynesian stimulus, an economy is supposed to adjust properly. Using Keynesianism to explain or cure long term economic problems is just plain wrong." Using Keynesian theory makes for good policy when politicians are running for re-election, and after the election they can resume partisan games that produce token repairs to the damage brought on by Keynesian policies, like unlimited government borrowing and money printing.