How did this guy get invited

[harley]

to speak at the federal Reserve?

Robert Wenzel spoke at the Fed last Wednesday, and said some pretty interesting stuff to them. The article I saw was Robert Wenzel to Federal Reserve: "Leave the Building to the Four-Legged Rats" - Forbes

The full text of the speech is at EconomicPolicyJournal.com: My Speech Delivered at the New York Federal Reserve Bank

He makes some pretty damning points about the Fed and it's actions over time. I agree on much, disagree on some, but overall think it's the most interesting commentary on politics and economic policy since Stephen Colbert spoke at the 2006 White House Correspondents Dinner. Since I think the Fed's actions directly impact all of our lives, both in retirement and while still working, I hope (but doubt) they at least consider some of what he said.

My favorite part was his finale -

Quote:

Let’s have one good meal here. Let’s make it a feast. Then I ask you, I plead with you, I beg you all, walk out of here with me, never to come back. It’s the moral and ethical thing to do. Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats.

[Independent]

Quote:

I also find curious the general belief in the Keynesian model of the economy that somehow results in the belief that demand drives the economy, rather than production. ... Do you not believe that products once made will adjust to a market clearing price?”

I had a college prof who said there was a big debate in the 19th century between "Supply creates demand" and "Demand creates supply". He said that the answer turned out to be "both".

In the long run, supply creates demand. It appears that human wants are elastic enough that the more we can make the more we'll consume.
However, in the short run, producers only make what they can sell in the near term. If consumers decide to dial back consumption for a while, they set off a decreasing cycle.

Some will say "But in the long run, the Market will reverse that cycle, markets will eventually clear."
Others will say that it takes a long time for some markets to reach new equilibrium, especially labor markets. Or, in shorthand, "In the long run, we're all dead."

Like Wenzel says, he and the other side are simply starting from assumptions that are so far apart, it's hard to imagine a resolution.

[TargaDave]

He's not the only one. Jim Grant made a speech to the Fed in April and was just as brutal with a similar theme. Why do I get the feeling most people on this forum don't even know who Von Mises or Keynes were......

http://csinvesting.files.wordpress.c...april-2012.pdf

[MichaelB]

Quote:

Originally Posted by TargaDave He's not the only one. Jim Grant made a speech to Fed in April and was just as brutal with a similar theme. Why do I get the feeling most people on this forum don't even know who Von Mises or Keynes were...... http://csinvesting.files.wordpress.c...april-2012.pdf

Thanks for the link, I always find Grant entertaining. My feeling is different than yours regarding Von Mises and Keynes. Lots here know who they were but not so many care.

[TargaDave]

Quote:

Originally Posted by MichaelB Lots here know who they were but not so many care.

Well, it's a start.....and at least we can all recite Buffet's 30 second sound bite on gold in perfect fashion (of course I'm still trying to imagine dinner conversations between a young Warren and his father....)

Enough Fed bashing. Time to get back to the real world and take bets on when Ben will instruct Brian Sack and the boys to whip up another trillion or so in mouse click asset purchases after Twist is finished (should be a clear vein somewhere without too many needle marks) so we can deal with this pesky employment participation rate..

[JeremySVilla]

I love this review I really love it

[haha]

Quote:

Originally Posted by MichaelB My feeling is different than yours regarding Von Mises and Keynes. Lots here know who they were but not so many care.

More's the pity.

[MichaelB]

Quote:

Originally Posted by haha More's the pity.

I know what you mean.

[Independent]

Quote:

Originally Posted by MichaelB Thanks for the link, I always find Grant entertaining. My feeling is different than yours regarding Von Mises and Keynes. Lots here know who they were but not so many care.

It's not a matter of "don't care". It's hard to discuss them without lots of "political" talk.

[jclarksnakes]

Quote:

Originally Posted by Independent It's not a matter of "don't care". It's hard to discuss them without lots of "political" talk.

I think you are exactly right. People who think either one or the other of Mises or Keynes was brilliant and the other totally wrong should read more about both of them.