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Robert Wenzel Addresses The New York Fed, Lots Of Head-Scratching Ensues

Tyler Durden's picture





 

A month ago we had the pleasure of bringing you Jim Grant's must read address directly to employees of the Federal Reserve in one of the most epic rhetorical polemics ever release unmasking the hollow intellectual sophistry at the very core of modern monetary systems. Today, it is Robert Wenzel's turn. Just released in the Economic Policy Journal are his own prepared remarks from his address to the New York Fed. They are recreated below as, like Grant, Wenzel asks a series of burning questions. Not surprisingly, lots and lots of head scratching ensues...

From EPJ:

My Speech Delivered at the New York Federal Reserve Bank

At the invitation of the New York Federal Reserve Bank, I spoke and had lunch in the bank's Liberty Room. Below are my prepared remarks.

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.

Please allow me to begin with methodology, I hold the view developed by such great economic thinkers as Ludwig von Mises, Friedrich Hayek and Murray Rothbard that there are no constants in the science of economics similar to those in the  physical sciences.

In the science of physics, we know that ice freezes at 32 degrees. We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. There is preciseness because there are constants, which do not change and upon which equations can be constructed..

There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time. If potato prices remain the same for 10 weeks, it does not mean they will be the same the following day. I defy anyone in this room to provide me with a constant in the field of economics that has the same unchanging constancy that exists in the fields of physics or chemistry.

And yet, in paper after paper here at the Federal Reserve, I see equations built as though constants do exist. It is as if one were to assume a constant relationship existed between interest rates here and in Russia and throughout the world, and create equations based on this belief and then attempt to trade based on these equations. That was tried and the result was the blow up of the fund Long Term Capital Management, a blow up that resulted in high level meetings in this very building.

It is as if traders assumed a given default rate was constant for subprime mortgage paper and traded on that belief. Only to see it blow up in their faces, as it did,  again, with intense meetings being held in this very building.

Yet, the equations, assuming constants, continue to be published in papers throughout the Fed system. I scratch my head.

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. I look out at the world and see iPhones, iPads, microwave ovens, flat screen televisions, which suggest to me that it is production that boosts an economy. Without production of these things and millions of other items, where would we be? Yet, the Keynesians in this room will reply, “But you need demand to buy these products.” And I will reply, “Do you not believe in supply and demand? Do you not believe that products once made will adjust to a market clearing price?”

Further, I will argue that the price of the factors of production will adjust to prices at the consumer level and that thus the markets at all levels will clear. Again do you believe in supply and demand or not?

I scratch my head that somehow most of you on some academic level believe in the theory of supply and demand and how market setting prices result, but yet you deny them in your macro thinking about the economy.

You will argue with me that prices are sticky on the downside, especially labor prices and therefore that you must pump money to get the economy going. And,  I will look on in amazement as your fellow Keynesian brethren in the government create an environment  of sticky non-downward bending wages.

The economist  Robert Murphy reports that President  Herbert Hoover continually pressured businessmen to not lower wages.[1]

He quoted Hoover in a speech delivered to a group of businessmen:

In this country there has been a concerted and determined effort  on the part of government and business... to prevent any reduction in wages.

He then reports that FDR actually outdid Hoover by seeking to “raise wages rates rather than merely put a floor under them.”

I ask you, with presidents actively conducting policies that attempt to defy supply and demand and prop up wages, are you really surprised that wages were sticky downward during the Great Depression?

In present day America, the government focus has changed a bit. In the new focus, the government  attempts much more to prop up the unemployed by extended payments for not working. Is it really a surprise that unemployment is so high when you pay people not to work.? The 2010 Nobel Prize was awarded to economists for their studies which showed that, and I quote from the Noble press release announcing the award:

One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times.[2]

Don’t you think it would make more sense to stop these policies which are a direct factor in causing unemployment, than to add to the mess and devalue the currency by printing more money?

I scratch my head that somehow your conclusions about unemployment are so different than mine  and that you call for the printing of money to boost “demand”. A call, I add, that since the founding of the Federal Reserve has resulted in an increase of the money supply by 12,230%.

I also must scratch my head at the view that the Federal Reserve should maintain a stable price level. What is wrong with having falling prices across the economy, like we now have in the computer sector, the flat screen television sector and the cell phone sector? Why, I ask, do you want stable prices? And, oh by the way, how’s that stable price thing going for you here at the Fed?

Since the start of the Fed, prices have increased at the consumer level by 2,241% [3]. that’s not me misspeaking, I will repeat, since the start of the Fed, prices have increased at the consumer level by 2,241%.

So you then might tell me that stable prices are only a secondary goal of the Federal Reserve and that your real goal is to prevent serious declines in the economy but, since the start of the Fed, there have been 18 recessions including the Great Depression and the most recent Great Recession. These downturns  have resulted in stock market crashes, tens of  millions of unemployed and untold business bankruptcies.

I scratch my head and wonder how you think the Fed is any type of success when all this has occurred.

I am especially confused, since Austrian business cycle theory (ABCT), developed by Mises, Hayek and Rothbard, has warned about all these things. According to ABCT, it is central bank money printing that causes the business cycle and, again you here at the Fed have certainly done that by increasing the money supply. Can you imagine the distortions in the economy caused by the Fed by this massive money printing?

According to ABCT, if you print money those sectors where the money goes  will boom, stop printing and those sectors will crash. Fed printing tends to find its way to Wall Street and other capital goods sectors first, thus it is no surprise to Austrian school economists that the crashes are most dramatic in these sectors, such as the stock market and real estate sectors. The economist Murray Rothbard in his book America’s Great Depression [4] went into painstaking detail outlining how the changes in money supply growth resulted in the Great Depression.

On a more personal level, as the recent crisis was developing here, I warned throughout the summer of 2008 of the impending crisis. On July 11, 2008 at EconomicPolicyJournal.com, I wrote[5]:

SUPER ALERT: Dramatic Slowdown In Money Supply Growth

After growing at near double digit rates for months, money growth has slowed dramatically. Annualized money growth over the last 3 months is only 5.2%. Over the last two months, there has been zero growth in the M2NSA money measure.

This is something that must be watched carefully. If such a dramatic slowdown continues, a severe recession is inevitable.

We have never seen such a dramatic change in money supply growth from a double digit climb to 5% growth. Does Bernanke have any clue as to what the hell he is doing?

On July 20, 2008, I wrote [6]:

I have previously noted that over the last two months money supply has been collapsing. M2NSA has gone from double digit growth to nearly zero growth .

A review of the credit situation appears worse. According to recent Fed data, for the 13 weeks ended June 25, bank credit (securities and loans) contracted at an annual rate of 7.9%.

There has been a minor blip up since June 25 in both credit growth and M2NSA, but the growth rates remain extremely slow.

If a dramatic turnaround in these numbers doesn't happen within the next few weeks, we are going to have to warn of a possible Great Depression style downturn.

Yet, just weeks before these warnings from me, Chairman Bernanke, while the money supply growth was crashing, had a decidedly much more optimistic outlook, In a speech on June 9, 2008, At the Federal Reserve Bank of Boston’s 53rd Annual Economic Conference [7], he said:

I would like to provide a brief update on the outlook for the economy and policy, beginning with the prospects for growth.  Despite the unwelcome rise in the unemployment rate that was reported last week, the recent incoming data, taken as a whole, have affected the outlook for economic activity and employment only modestly.  Indeed, although activity during the current quarter is likely to be weak, the risk that the economy has entered a substantial downturn appears to have diminished over the past month or so.  Over the remainder of 2008, the effects of monetary and fiscal stimulus, a gradual ebbing of the drag from residential construction, further progress in the repair of financial and credit markets, and still-solid demand from abroad should provide some offset to the headwinds that still face the economy.

I believe the Great Recession that followed is still fresh enough in our minds so it is not necessary to recount in detail as to whose forecast, mine or the chairman’s, was more accurate. 

I am also confused by many other policy making steps here at the Federal Reserve. There have been more changes in monetary policy direction during the Bernanke era then at any other time in the modern era of the Fed. Not under Arthur Burns, not under G. William Miller, not under Paul Volcker, not under Alan Greenspan  have there been so many dramatically shifting Fed monetary policy moves. Under Chairman Bernanke there have been significant changes in direction of the money supply growth FIVE different times. Thus, for me, I am not at all surprised at the current stop and go economy. The current erratic monetary policy makes it exceedingly difficult for businessmen to make any long term plans.  Indeed, in my own Daily Alert on the economy [8] I find it extremely difficult to give long term advice, when in short periods I have seen three month annualized M2 money growth go from near 20% to near zero, and then in another period see it go from 25% to 6% . [9]

I am also confused by many of the monetary programs instituted by Chairman Bernanke. For example, Operation Twist.

This is not the first time an Operation Twist was tried. an Operation Twist was tried in 1961, at the start of the Kennedy Administration [10] A paper [11] was written by three Federal Reserve economists in 2004 that, in part, examined the 1960's Operation Twist

Their conclusion (My bold):

A second well-known historical episode involving the attempted manipulation of the term structure was so-called Operation Twist.  Launched in early 1961 by the incoming Kennedy Administration, Operation Twist was intended to raise short-term rates (thereby promoting capital inflows and supporting the dollar) while lowering, or at least not raising, long-term rates. (Modigliani and Sutch 1966).... The two main actions of Operation Twist were the use of Federal Reserve open market operations and Treasury debt management operations..Operation Twist is widely viewed today as having been a failure, largely due to classic work by  Modigliani and Sutch....

However, Modigliani and Sutch also noted that Operation Twist was a relatively small operation, and, indeed, that over a slightly longer period the maturity of outstanding government debt rose significantly, rather than falling...Thus, Operation Twist does not seem to provide strong evidence in either direction as to the possible effects of changes in the composition of the central bank’s balance sheet....

We believe that our findings go some way to refuting the strong hypothesis that nonstandard policy actions, including quantitative easing and targeted asset purchases, cannot be successful in a modern industrial economy.  However, the effects of such policies remain quantitatively quite uncertain. 

One of the authors of this 2004 paper was Federal Reserve Chairman Bernanke. Thus, I have to ask, what the hell is Chairman Bernanke doing implementing such a program, since it is his paper that states it was a failure according to Modigliani, and his paper implies that a larger test would be required to determine true performance.

I ask, is the Chairman using the United States economy as a lab with Americans as the lab rats to test his intellectual curiosity about such things as Operation Twist?

Further, I am very confused by the response of Chairman Bernanke to questioning by Congressman Ron Paul. To a seemingly near off the cuff question by Congressman Paul on Federal Reserve money provided to the Watergate burglars, Chairman Bernanke contacted the Inspector General’s Office of the Federal Reserve and requested an investigation [12]. Yet, the congressman has regularly asked about the gold certificates held by the Federal Reserve [13] and whether the gold at Fort Knox backing up the certificates will be audited. Yet there have been no requests by the Chairman  to the Treasury for an audit of the gold.This I find very odd. The Chairman calls for a major investigation of what can only be an historical point of interest but fails to seek out any confirmation on a point that would be of vital interest to many present day Americans.

In this very building, deep in the underground vaults, sits billions of dollars of gold, held by the Federal Reserve  for foreign governments. The Federal Reserve gives regular tours of these vaults, even to school children. [14] Yet, America’s gold is off limits to seemingly everyone and has never been properly audited. Doesn’t that seem odd to you? If nothing else, does anyone at the Fed know the quality and fineness of the gold at Fort Knox?

In conclusion, it is my belief  that from start to finish  the Fed is a failure. I believe faulty methodology is used, I believe that  the justification for the Fed, to bring price and economic stability, has never been a success. I repeat, prices since the start of the Fed have climbed by 2,241% and there have been over the same period 18 recessions. No one seems to care at the Fed about the gold supposedly backing up the gold certificates on the Fed balance sheet. The emperor has no clothes.  Austrian Business cycle theorists are regularly ignored by the Fed, yet they have the best records with regard to spotting overall downturns, and further they specifically recognized the developing housing bubble. Let it not be forgotten that in 2004, two economists here at the New York Fed wrote a paper [15] denying there was a housing bubble. I responded to the paper [16] and wrote:

The faulty analysis by [these] Federal Reserve economists... may go down in financial history as the greatest forecasting error since Irving Fisher declared in 1929, just prior to the stock market crash, that stocks prices looked to be at a permanently high plateau.

Data released just yesterday, now show housing prices have crashed to  2002 levels. [17]

I will now give you more warnings about the economy.

The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or,  if you stop printing, another massive economic crash will occur. There is no other way out.

Again, thank you for inviting me. You have prepared food, so I will not be rude, I will stay and eat.

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.

Footnotes

[1] http://www.amazon.com/Politically-Incorrect-Guide-Depression-Guides/dp/1...

[2] http://www.nobelprize.org/nobel_prizes/economics/laureates/2010/press.ht...

[3] ftp://ftp.bls.gov/pub/special.requests/cpi/cpiai.txt

[4] http://www.amazon.com/Americas-Great-Depression-Murray-Rothbard/dp/14679...

[5] http://www.economicpolicyjournal.com/2008/07/super-alert-dramatic-slowdo...

[6] http://www.economicpolicyjournal.com/2008/07/alert-collapsing-credit.htm...

[7] http://www.federalreserve.gov/newsevents/speech/bernanke20080609a.htm

[8] http://www.economicpolicyjournal.com/2009/04/announcing-epj-quarterly-ec...

[9]http://www.economicpolicyjournal.com/2008/07/super-alert-dramatic-slowdo...

[10] http://www.frbsf.org/publications/economics/letter/2011/el2011-13.html

[11] http://www.federalreserve.gov/pubs/feds/2004/200448/200448pap.pdf

[12] http://www.huffingtonpost.com/2012/04/03/federal-reserve-watergate-iraqi...

[13] http://www.federalreserve.gov/releases/h41/Current/

[14] http://www.newyorkfed.org/aboutthefed/visiting.html

[15] http://fednewyork.org/research/epr/04v10n3/0412mcca.pdf

[16] http://www.economicpolicyjournal.com/2012/02/checkmate-new-york-fed-as-t...

[17] http://www.nytimes.com/2012/04/25/business/economy/survey-shows-us-home-...

Special thanks to the following, who helped me research and collect data for this paper: Stephen Davis, Bob English, Jon Lyons, Ash Navabi, Joseph Nelson, Nick Nero,  Antony Zegers

 


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Thu, 04/26/2012 - 02:45 | Link to Comment Rahm
Rahm's picture

Ron Paul:  "Do you think gold is money?"

Bernanke:  "No"

 

Ron Paul:  "Why do central banks hold it?"

Bernanke:  "Tradition"

 

Rahm:  FUCK YOU BERNANKE!
http://www.youtube.com/watch?v=2Dj9v9s9buk

Thu, 04/26/2012 - 02:57 | Link to Comment LowProfile
LowProfile's picture

Holy crap.

I will now give you more warnings about the economy.

 

The noose is tightening on your organization, vast amounts of money printing are now required to keep your manipulated economy afloat. It will ultimately result in huge price inflation, or,  if you stop printing, another massive economic crash will occur. There is no other way out.

 

Again, thank you for inviting me. You have prepared food, so I will not be rude, I will stay and eat.

 

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.

 

 

THIS SPEECH IS EPIC.


This takes speaking truth to power to a whole new dimension.  Robert Wenzel is my new hero.

Thu, 04/26/2012 - 03:14 | Link to Comment Michael
Michael's picture

Talking about head scratching;

SPAIN FOR RON PAUL

http://www.youtube.com/watch?feature=player_embedded&v=zbvVAkoswks#!

Thu, 04/26/2012 - 07:59 | Link to Comment mikla
mikla's picture

Took them long enough.

Economists are merely central planners, and central planners are idiots.

There is no purpose on Planet Earth for Economists, they serve misery and destruction, and absolutely no social benefit of any kind.  Their job is to ensure-mal-investment through market distortions, due to hubris, ego, and perverted god-like complexes.

An actual "Economist" would be someone like Steven Keen, but I wouldn't make him (nor anyone) a Central Planner with the power to destroy lives.

There is some value to "analysts" (the function actually performed by people calling themselves "economists", and "analyst" being the self-annointed title by honest people like Mish that do not claim to be "economists").  However, I wouldn't make "analysts" into "central planners" with the authority to start wars and destroy lives either.

Economists are morons, mere central-planners-in-training, always have been, and always will be.

http://www.zerohedge.com/article/long-periods-drought-%E2%80%A6-followed-high-winds

Thu, 04/26/2012 - 08:04 | Link to Comment Sean7k
Sean7k's picture

If you actually understood economics, you would realize that there are different schools and historical dimensions. That Steven Keen is merely a Keynsian attempting to keep the good and finding a way to use physics to explain the bad. That analysts need a framework to use for that analysis.

Like everything in life, we love to have a scapegoat. It is small minded to blame the bureaucrat, while ignoring the leaders that issue the orders. In an address that does this very thing, you want to blame the foot soldiers?

Thu, 04/26/2012 - 08:11 | Link to Comment mikla
mikla's picture

Please state the "social good" for the field of "Economics".

Then feel free to elaborate as to why they should be given authority to set public policy.  Bonus points for any illustration *whatsoever* regarding their "success" in establishing "prosperity" in any scenario *whatsoever*.

Thu, 04/26/2012 - 08:20 | Link to Comment Sean7k
Sean7k's picture

First, explain why there has to be a social good and second, give an example of any social good- then I will rip it apart. You see, there are pluses and minuses to every form of work.

Economists do not set public policy, your political leaders do. The FED sets interest rates and monetary policy at the consent of Congress.

However, the use of lassez faire, capitalistic economics in the 1800's lifted more people from poverty than at any other time in history, while creating wealth that continues to fuel investment today. This is the benefit of studying economic history.

Thu, 04/26/2012 - 08:29 | Link to Comment mikla
mikla's picture

My assertion:  "Economics" is not a science.  Economists are merely opinion-writers that lack provable claims.  It is ridiculous that anyone takes them seriously.

Yes, political leaders use these opinion-writers to rationalize decisions.

However, The Bernank is not a political leader.  He's a private banker.  Printing public money.  With a business card that says "Economist".  What a sick joke -- like "economist" implies he's qualified to know something?  Like what?

The FED sets interest rates and monetary policy at the consent of Congress.

In theory, yes.  In practice, no.

However, the use of lassez faire, capitalistic economics in the 1800's lifted more people from poverty than at any other time in history, while creating wealth that continues to fuel investment today. This is the benefit of studying economic history.

Citation needed.

Economists don't make any goods or services.  If you assert that "liquid capital markets have high value", we agree.  We didn't get those from economists.

Thu, 04/26/2012 - 09:56 | Link to Comment Raynja
Raynja's picture

Economics is just as much a science as any other science. Economics lacks good data, both current and historical. The estimate if how far 500 gallons of fuel will get you is going to be inaccurate without knowledge of wind speed, temperature, and the weight of cargo.
Concerning other sciences, they are almost all based on calculus which is an elegant system of guesstimating. Sprinkle in observations and group think. All that adds up to a bunch of ideas that haven't failed or been disproved.
An idea that has not failed or been disproved is all any modern academic wants.
Is any of this science or is it highly refined human habits.

Thu, 04/26/2012 - 11:08 | Link to Comment mikla
mikla's picture

We disagree on what is this thing called "science".

  • Hard science:  Can predict deterministic results based on known/proven principles.  Examples:  Physics, Math, Civil Engineering (e.g., "bridge-building")
  • Soft science:  Repeatable and predictable patterns tend to be developed, this is predictable and repeatable to a reasonable degree of error.  Examples:  Psychology, Sociology.
  • Not a science:  Predictions are not tested/validated, or correlate to theories no better than random chance.  Examples:  Economics.

In fact, the "economic-theory-track-record" is abysmal, far less than a monkey-flipping-a-coin.

Human wants/wishes/behavior is irrelevant, but I understand how people want to confuse the problem.

Summary:  Debt cannot be serviced;  Leverage cannot be increased.  I don't care what are people's emotions/motivations.  The future is default, and we can merely discuss the terms of that default (at some level).

If "Economics" were a "science", then any "Econ 101" course would leave everone with the understanding that, "High leverage, followed by extended periods of low-interest-rates, will destroy nations".

If "Economists" were other-than-idiots, they would understand this. Years ago.  Before all this death-and-destruction at their own hands.

Thu, 04/26/2012 - 13:04 | Link to Comment anarchitect
anarchitect's picture

Quite a bit of psychology and sociology is bullshit, not even soft science. And Austrian school economists tend to do a good qualitative, although not quantitative, job of predicting outcomes.

Thu, 04/26/2012 - 13:18 | Link to Comment mikla
mikla's picture

Agree on both points.

However, Austrian economists have historically ignored the role of debt/leverage and secular (generational) economic shifts, although if I had to "pick-a-school", Austrian does relatively well.

Too bad you can't get a job doing the Austrian thing -- no government nor central bank will hire them.

Thu, 04/26/2012 - 18:18 | Link to Comment Sean7k
Sean7k's picture

Math is a language, not a science. If civil engineering met your standard, bridges wouldn't fail or roofs collapse. Chemists could tell you why a compound damages your body or at least keep corporations from claiming they don't. Climate could be determined. Hawking wouldn't have to apologize for being wrong.

Economic theory  uses the same scientific method to measure results and test theories. However, you will have to read the results to see this. Mises was very sensitive to this type of remark and wrote a whole book on economic theory to satisfy it.

 

Thu, 04/26/2012 - 10:33 | Link to Comment GeneMarchbanks
GeneMarchbanks's picture

Economics is a synonym for politics in todays Western society, not science.

It belongs along the social sciences, where there is no strict causality other than human decision making. Nothing is permanently correlated.

Thu, 04/26/2012 - 13:19 | Link to Comment Doubleguns
Doubleguns's picture

Wonder if this science could predict the intensity level of the next meeting......

1st meeting... that resulted in high level meetings in this very building.

2nd meeting....intense meetings being held in this very building.

3rd possible meeting ..... 3-4 million unemployed folks at the front door with lanturns, ropes and pitch forks...yes guns would most likely be there too. Would that be a high level meeting, an intense meeting, or a high level intense and scared shitless meeting? Would this science suddenly change course? If this science suddenly changed course then obviously it is not science but intervention determined by what ever fear factor is the most intense. I see nothing scientific about that...I would call it self preservation and for now they are preserving the banks ( larger self) rather than thier necks (smaller self).

We need to force them to focus on smaller self.

Thu, 04/26/2012 - 17:36 | Link to Comment Sean7k
Sean7k's picture

My Assertion: medical science is not science. Doctors are incapable of curing anything, they can only treat symptoms. Thus, their assertions are merely opinions that can not be proved.

Or, physics is not a science. Lacking a unified field theory, their assertions are merely opinions.

Gee, this is fun. 

Science is an evolving study of a particular subject area. Just because you have no understanding of a science, doesn't mean it isn't. Talk about subjective value systems.

Economic history is available to anyone that has the willingness to study. Do your own homework.

Thu, 04/26/2012 - 09:00 | Link to Comment jayman21
jayman21's picture

+1 for Mish...

Thu, 04/26/2012 - 03:33 | Link to Comment Max Fischer
Max Fischer's picture

 

 

Robert Wenzel is a very popular and outspoken austrian economist and libertarian. I also think he's a perfect example of how libertarians are completely whacked-out.  

First of all, Wenzel is an advocate of a capitation taxation, otherwise known as "head count" tax.  In other words, we should figure out the total balance of debt in the the US, divide that number by the number of citizens, and send each citizen an equal bill to pay the debt in full.  Let's assume it amounts to $45,000 per person over 18.  This means that every 18 year old in the country will get a bill for $45,000, every billionaire in the country will get a bill for $45,000 and so will everyone in between.  This way, everything is fairly distributed and no one pays more than anyone else.  

*LOL*

Perfect example of libertarian lunacy, totally devoid of reality and practicality.  This is my main problem with libertarian ideology.... none of it is rooted in reality. Most Americans can barely afford a $1 rise in gas prices, let alone a tax bill for tens of thousands of dollars.  Can you imagine garnishing everyone's wages to pay this "head" tax?  Or sending every college graduate straight into bankruptcy court?  What about a new teacher making $30K/year?...straight to bankruptcy.  It's just whacked-out nonsense.

Secondly, if Mr Wenzel is going to brag about all his accurate predictions, perhaps it should be noted that last summer he predicted that short term t-bills would be between 7% and 10% by summer 2012.  Currently, they're about a tenth of one percent.  

Well, we've got a few months left, so i guess he's not totally wrong yet.

MF 

 

Thu, 04/26/2012 - 03:49 | Link to Comment xtop23
xtop23's picture

You don't have to approve of every word he utters, or support every stance on the issues he has, to see something of worth in the above speech.

I thought he had some very strong talking points and it was a scathingly accurate critique.

His closing remarks had me cryin'.

A large amount of investors / economists predicted the bond market would explode by now.

I don't think anyone could have predicted they would keep this sack of cat's asses dancing this long.

 

Thu, 04/26/2012 - 04:15 | Link to Comment chistletoe
chistletoe's picture

I took the cat's ass to a taxidermist,

had it stuffed,

and then mounted it on a plaque of black walnut to hang on the wall ....

 

cat ass trophy!

Thu, 04/26/2012 - 08:19 | Link to Comment AnAnonymous
AnAnonymous's picture

You don't have to approve of every word he utters, or support every stance on the issues he has, to see something of worth in the above speech.

__________________________________________

What is worth? The most of it gravitates around a constant: expansion.

Expansion schemes always follow the same path.

So this US citizen tells that constants as quantifiable measures do not exist in economics, tie that to human behaviours wich cant be constant (if not more non quantifiable) to end with the conclusion that is forced by the constancy of expansion schemes.

There is no reason that an expansion becomes it happens in economics realm does not follow the path of an expansion scheme.

And since US citizen economics is based on expansion, the questions to be answered are all linked to expansion.

Thu, 04/26/2012 - 10:24 | Link to Comment RockyRacoon
RockyRacoon's picture

Ever wonder why the "inflation rate" is targeted at 2%?   Why not 1.44% or 4.5%?  My thinking is that it takes 36 years to double prices at a 2% compounded rate.  That's a generational change and that time span is just right to make the inflation hit less obvious.

Thu, 04/26/2012 - 11:15 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

You don't have to approve of every word he utters, or support every stance on the issues he has, to see something of worth in the above speech.

__________________________________________

What is worth? The most of it gravitates around a constant: expansion.

Really? I went back and reread the speech and I think you're mistaken. Please explain how the speech gravitates around expansion.

So this US citizen tells...blah blah blah...

And since US citizen economics...blah blah blah...

Nothing of worth here, just more of the AnAnonymous style of rambling.

 

Thu, 04/26/2012 - 04:21 | Link to Comment Barking Spaniel
Barking Spaniel's picture

You can wipe your chin now. . Bennie is done with you for today.

Thu, 04/26/2012 - 04:44 | Link to Comment SeattleBruce
SeattleBruce's picture

"I also think he's a perfect example of how libertarians are completely whacked-out."

Max's personal, little dirty war against libertarians continues!  Say Max, why don't we unwind the debt with non-debt based money that is accountable to the people again?  And why don't we actually convict people who are committing financial crimes in the USA?  And while we're at it, why don't we use consistent accounting rules, and not switch things midstream for our buddies that are TBTF?  And oh Maxie - most libertarians are not for 'no' government, as you're citing in other places with your inane comments commending Somalia to libertarians.  Most are for greatly limited, Constitutional government.

Thu, 04/26/2012 - 08:11 | Link to Comment AnAnonymous
AnAnonymous's picture

Money that is not debt?

Wait, the answer is gold, silver or stuff like that?

For the others, money is debt.

Thu, 04/26/2012 - 04:51 | Link to Comment OldPhart
OldPhart's picture

Perhap Wenzel hasn't reviewed the concept of 'Odious Debt'.

Thu, 04/26/2012 - 10:25 | Link to Comment RockyRacoon
RockyRacoon's picture
Odious debt

In international law, odious debt is a legal theory that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable. Such debts are, thus, considered by this doctrine to be personal debts of the regime that incurred them and not debts of the state. In some respects, the concept is analogous to the invalidity of contracts signed under coercion.

http://en.wikipedia.org/wiki/Odious_debt

When a despotic regime contracts a debt, not for the needs or in the interests of the state, but rather to strengthen itself, to suppress a popular insurrection, etc, this debt is odious for the people of the entire state. This debt does not bind the nation; it is a debt of the regime, a personal debt contracted by the ruler, and consequently it falls with the demise of the regime. The reason why these odious debts cannot attach to the territory of the state is that they do not fulfill one of the conditions determining the lawfulness of State debts, namely that State debts must be incurred, and the proceeds used, for the needs and in the interests of the State.   Odious debts, contracted and utilized for purposes which, to the lenders' knowledge, are contrary to the needs and the interests of the nation, are not binding on the nation – when it succeeds in overthrowing the government that contracted them – unless the debt is within the limits of real advantages that these debts might have afforded. The lenders have committed a hostile act against the people, they cannot expect a nation which has freed itself of a despotic regime to assume these odious debts, which are the personal debts of the ruler.

Thu, 04/26/2012 - 04:53 | Link to Comment dognamedabu
dognamedabu's picture

Where your arguments always fall apart is when you agree that small groups can control immensely large groups. That fact is Max, no one can control an economy.. Not even you. 

Thu, 04/26/2012 - 05:04 | Link to Comment dognamedabu
dognamedabu's picture

Most Americans can barely afford a $1 rise in gas prices, let alone a tax bill for tens of thousands of dollars.  Can you imagine garnishing everyone's wages to pay this "head" tax?  Or sending every college graduate straight into bankruptcy court? 

 

 

 Almost every college graduate is near bankruptcy court, except they can't actually go inside. Nor can anyone get away from paying for the debt. It's just whacked-out nonsense hey Max?

 


Thu, 04/26/2012 - 05:46 | Link to Comment resurger
resurger's picture

is that really you in the Avatar?

Thu, 04/26/2012 - 07:05 | Link to Comment skipjack
skipjack's picture

"Can you imagine garnishing everyone's wages to pay this "head" tax?"

 

Yes - it'd be epically great.  Maybe J6P and his wife, Judy6Purse, would get up off the couch, turn off Survivor, and get themselves along with a million or so of their fellow citizens down to DC and either impeach or impale every single government functionary who ran up this debt.   

 

Wake up, America, you're being looted.

Thu, 04/26/2012 - 07:40 | Link to Comment Sean7k
Sean7k's picture

As usual, you miss the whole point of a head tax- it places a ceiling on the amount of tax the people are willing to pay. This in turn, restricts the amount of debt a government can legislate. As long as no one is actually responsible for the debt, no one cares until they are forced to pay.

Second, there is nothing in Mr Wentzel's address that isn't supported by the citations or our experience. While forecasting is at best difficult, it is not the the topic of the address.

I realize it is hard to wrap your little liberal muffin warmers around the realities of fascist government and the bankers that run it, but it will profit you all the same.

Thu, 04/26/2012 - 08:03 | Link to Comment AnAnonymous
AnAnonymous's picture

Powder to the eyes. He masquerades the normal course of an expansion scheme as something that requires economics prediction.

As to the story of restricting the amount of debt a government can legislate, made me laugh.

Among US citizens, some are unable to afford any kind of debt, that is zero for them.

In return, following the procedure, it means that the government debt ceiling is to be zero.

Thu, 04/26/2012 - 08:07 | Link to Comment Sean7k
Sean7k's picture

Wow, even you figured it out! Pay attention Max, even the Chinese trolls can figure this out.

Thu, 04/26/2012 - 08:24 | Link to Comment AnAnonymous
AnAnonymous's picture

I am the multiple man since my take is worth chinese trolls.

Ah, good.

Since the debt ceiling is doomed to be zero, how long before those who prevent it from raising to be excluded from the political franchise?

Following US citizen economics, some will be able to go into debt, others wont be.

So the government has to be limited by the lowest denominator.

When do you get rid of the lower denominator?

Debt is not the issue.

The issue is consumption. It is quite funny to try to sell the idea that a world, driven by US citizen economics, with no debt, would not run the same course as it is today.

Thu, 04/26/2012 - 11:50 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

.

I am the multiple man since my take is worth chinese trolls.

Ah, good.

Ah....no. You are the multiple personality disorder man, the Chinese troll, living under the bridge, because your take is the passage money (the tolls) you collect from the Three Gorges Billy Goats Gruff.

Since the debt ceiling is doomed to be zero, how long before those who prevent it from raising to be excluded from the political franchise?

Following US citizen economics, some will be able to go into debt, others wont be.

So the government has to be limited by the lowest denominator.

All US citizens are excluded from the political process except those rich enough to fill repeatedly with cash the pig trough of the politicians. The politicians, the swine which line up at the cash trough, are the lowest denominator.

When do you get rid of the lower denominator?

When it is a factor of the numerator. The issue here is basic arithmetics.

It is quite funny to try to sell the idea that a world, driven by US citizen economics, with no debt, would not run the same course as it is today.

That, unless is a park with the Shanghai where it was driven with the crapping of the Chinese citizenism that present, in order to try the fact that the thought is sold of not crapping the same park, the second rule, is rather strange.

http://www.engrish.com/wp-content/uploads/2012/04/shanghai-public-parks-...

 

Thu, 04/26/2012 - 09:10 | Link to Comment WhiteNight123129
WhiteNight123129's picture

Hi Max Fischer, you have a correct point, but you start up side down. You premise is that debt is there and should be a given, an acceptable given. The banking system has been invaded by hte Fed and Government bonds. Actually government debt are war bonds since 1913. Read this. http://gentlemaneconomics.wordpress.com/wp-admin/post.php?post=177&actio...

THe Fed engaged into generous discounting of Governement bonds (treasuries), so bank were using the Government bonds are easy collateral to over-lever their balance sheets, all of that induced by the Fed and the Government.

THE DEBT SHOULD NOT BE APPORTIONED BASED ON YOUR INCOME, BUT BASED ON HOW MUCH YOU BENEFIT FROM THE RE-DISTRIBUTION. WHY SHOULD ONE PERSON WHO HAS VERY LIMITED USE TO PUBLIC SERVICES BE CHARGED MORE THAN SOMEONE WHO IS EXTENSIVELY USING THOSE, THAT DOES NOT MAKE SENSE. IF PEOPLE WERE CHARGED ON THE BASIS OF THE AMOUNT OF PUBLIC MONEY THEY USE, THE DEFICIT WOULD NOT EXIST. SO OBAMA SHOULD REPAY 80% OF HIS SALARIES AS PRESIDENT AND GET LITTLE TAXED ON THE SALE OF HIS BOOKS, NOT HTE OTHER WAY AROUND, WRONG INCENTIVES. IF YOU TAX HIM 100% ON THE MONEY HE MAKES AS PRESIDENT, MAYBE HE WILL QUIT? :-P

 

Thu, 04/26/2012 - 09:21 | Link to Comment jayman21
jayman21's picture

"First of all, Wenzel is an advocate of a capitation taxation, otherwise known as "head count" tax.  In other words, we should figure out the total balance of debt in the the US, divide that number by the number of citizens, and send each citizen an equal bill to pay the debt in full."

 

That just might wake everyone up from Faux News, Disney/ABC, CBS/Viacom, and TimeWarner.  Why is that a bad thing?  Accountability?

 

It would be nice to know what the critters are spending in DC.  I can look at the debt clock, but a bill would wake everyone up to the fact that they have not been paying attention.  DC would like to keep it this way.  There is more to steal.

Thu, 04/26/2012 - 10:32 | Link to Comment RockyRacoon
RockyRacoon's picture

Won't happen.   For the same reason that we won't have a draft either.   When taxes and wars and their expense is placed in the face of each citizen there will be revolt.   No way TPTB want their machinations to be front and center.   Much the same philosophy can be applied to why there will not be blatant confiscation of PMs.  Sure, they might tax or restrict the use of PMs a money, but they won't outright take if from you.   That demonstrates that there is a problem.  Better to continue with the current tactic of smash-downs in PM market "prices".  It's all psyops.

Thu, 04/26/2012 - 13:29 | Link to Comment Doubleguns
Doubleguns's picture

Max ma boy, you want us to print like crazy!? When you print like crazy everyone puts thier hand out, when everyone puts thier hand out the money dont go far, when the money dont go far you go broke, when you go broke you end up like Detroit.

Dont let America end up like Detroit? 

Thu, 04/26/2012 - 12:04 | Link to Comment Killer the Buzzard
Killer the Buzzard's picture

Massive man crush on this guy. It's like he walked up to the emperor and gave him the finger.

Thu, 05/17/2012 - 04:59 | Link to Comment jaffa
jaffa's picture

New York made treaty with the Iroquois without getting Congressional approval, some of the land purchases are the subject of modern day claims by the individual tribes. Thanks.
Regards,
graduate school personal statement

Thu, 04/26/2012 - 02:46 | Link to Comment buzzardsluck
buzzardsluck's picture

How exactly does ice freeze?

Thu, 04/26/2012 - 04:59 | Link to Comment ebworthen
ebworthen's picture

Below 39 degrees water expands as its molecules slow down and form a crystallie lattice at ~32 degrees F.

There are 15 known phases of crystalline water.

Central Banker interventions have NO RISK.

Just look at the markets! (/sarc)

Ice is slippery because the molecules exposed to air cannot fully bond with the body of ice below, and therefore are in a semi-liquid state. 

Corzine and his ilk may be a 16th crystalline structure, but of ammonia and methyl carbon (frozen bullshit).

http://en.wikipedia.org/wiki/Ice

Thu, 04/26/2012 - 05:57 | Link to Comment StychoKiller
StychoKiller's picture

Then, there's Ice-Nine...

Thu, 04/26/2012 - 10:34 | Link to Comment RockyRacoon
RockyRacoon's picture

...and skaters are actually water skiing.  On a layer of water produced by the pressure of the skate blade which melts the ice.

Thu, 04/26/2012 - 02:47 | Link to Comment chump666
chump666's picture

Wow!

Thu, 04/26/2012 - 02:58 | Link to Comment alexwest
alexwest's picture

anybody who pays any attention what FED says is AN IDIOT..

what is point in analyzing guys who missed everything from moment Jews left Egypt.. :) ?

I'd rather see/read MR Schiff.. he's got lossy trading record, but he is street smart on USA macro economy ..

see http://www.savingsbonds.gov/NP/BPDLogin?application=np

this is all you need to know about future of USA economy... eventually chickens will come home to roost and it wont be pretty.

alx

Thu, 04/26/2012 - 03:03 | Link to Comment Ox
Ox's picture

Smackdown!

Thu, 04/26/2012 - 03:06 | Link to Comment Gief Gold Plox
Gief Gold Plox's picture

Brilliant! Abso-fucking-lutely brilliant. Mr. Wenze I sir applaud you!

Thu, 04/26/2012 - 03:12 | Link to Comment Hansel
Hansel's picture

Regarding the gold certificates on the Fed balance sheet, that question has been thoroughly answered.  The gold certificates on the Fed's balance sheet are not backed by gold.  They are a paper asset whose value was fixed at the conversion price when the gold standard was suspended in 1934.  This was covered in a house hearing last year.

http://www.c-spanvideo.org/program/ReserveL/start/3400/stop/3773

Respect to Wenzel for speaking truth to power, but it seems like he should have known this.

Thu, 04/26/2012 - 03:37 | Link to Comment SeattleBruce
SeattleBruce's picture

So he made 50 brilliant points, with an incredible conclusion, and blew one detail.  I forgive him that.

Thu, 04/26/2012 - 04:10 | Link to Comment RECISION
RECISION's picture

I would quibble with this one too:


One conclusion is that more generous unemployment benefits give rise to higher unemployment and longer search times.[2]

Don’t you think it would make more sense to stop these policies which are a direct factor in causing unemployment. 

.

No - I don't believe unemployment benefits "cause" unemployment.  They may certainly prolong it, even encourage it, but the cause comes from elsewhere.

Thu, 04/26/2012 - 04:36 | Link to Comment SeattleBruce
SeattleBruce's picture

Productivity (his points on 'supply and demand') spurs employment and such productivity pays attention to what the market's value is for its production (demand).  People on extended, and mega extended unemployment are incented to not be productive.  This lengthens and deepens unemployment, and prevents jobs from being created by productive people. 

Thu, 04/26/2012 - 04:38 | Link to Comment Temporalist
Temporalist's picture

It seems you don't understand this "more generous unemployment benefits give rise to higher unemployment" so I will bold it for you "more generous unemployment benefits give rise to higher unemployment."  So unemployment benefits "cause" HIGHER unemployment.

Thu, 04/26/2012 - 06:25 | Link to Comment Gazooks
Gazooks's picture

certain that a $2500.wk laid-off machinist or financial analyst w/family is raptured over his/her $400.wk comp. (NY)

rigid adherents to dogma of any/all behavioral/economic theory are asswipes of 1st order

Thu, 04/26/2012 - 05:49 | Link to Comment Sabremesh
Sabremesh's picture

Agreed. Any sort of benefit is anathema to a hardcore libertarian. For them the purity of their dogma is sacrosanct, and minor consequences like sprawling favelas, child starvation, cholera, rickets, no healthcare or education provision for the poor, is but a small price to pay to live in a "free" country. 

 

Thu, 04/26/2012 - 06:07 | Link to Comment StychoKiller
StychoKiller's picture

None of those problems are unique to any society, especially Libertarianism -- please to point out an example of a Libertarian society (and no, Somalia is by no stretch of the imagination, a Libertarian society -- more like a Libertine society [bordering on total chaos!]).

Thu, 04/26/2012 - 08:06 | Link to Comment AnAnonymous
AnAnonymous's picture

Made me laugh.

Yes, pointing at a libertarian society, that is the deal.

If no change has brought in, why change?

Dont fix what is not broken. If indeed the stuff outlined in the other posts are common and can not be removed, why change?

Thu, 04/26/2012 - 08:13 | Link to Comment Sean7k
Sean7k's picture

Benefits are not anathema to libertarians, State coercion that requires we pay for them, whether we want them or not is. It is about voluntary taxation ( not by representation). If I want a road and am willing to pay for it, then I agree to be taxed.

Government doesn't insure against any of the problems you have listed. In America, it doesn't pay for heathcare, the education is worth little, children still starve and we are not "free".

Why not try an alternative? What have you got to lose but our fascist state?

Thu, 04/26/2012 - 08:28 | Link to Comment AnAnonymous
AnAnonymous's picture

Because it is not an alternative?

US citizens have big feet, you hear them coming.

Coercion is not the issue for US citizens. If so, they would be concerned by the heritage they have thanks to coercion.

The issue is that some US citizens feel they are falling on the wrong side of US citizens and that they might be victims of coercion.

Post theft economics thought or how to maintain the status quo and make sure what you have robbed is not robbed from you.

Thu, 04/26/2012 - 13:49 | Link to Comment Doubleguns
Doubleguns's picture

how to maintain the status quo and make sure what you have robbed is not robbed from you.

When the country goes broke those who have been living by robbery (entitilements) will find themsleves out in the cold with no massa to feed them, no massa to cloth them, no massa to house them and no massa to provide them with toys and transportation. They will be reduced to nothing, just a modern day financial slave kicked off the Fed plantation. 

Time they wake up to a reality that is just 2 exits down this highway to hell. 

Thu, 04/26/2012 - 05:59 | Link to Comment StychoKiller
StychoKiller's picture

So, can you agree with Nancy Pelosi's assertion that UE grows the Economy?

Thu, 04/26/2012 - 07:52 | Link to Comment Sean7k
Sean7k's picture

Perhaps an accountant can explain the doublespeak then? If I have a gold certificate, it has zero value (the old dollars), but the FED has something that has value? It is priced at 42 dollars? What is pricing it? Where is the claim to an asset? It has sat on the books since 1934 at the same value? Why would they do that?

Perhaps it isn't as clear as we think?

Thu, 04/26/2012 - 09:05 | Link to Comment Hansel
Hansel's picture

When the Fed turned its gold over to Treasury in 1934, they got $42 dollars for the gold like everyone else.  Those certificates will always be worth $42/oz for as much as the Fed turned over.  They are the Treasury's payment to the Fed.  End of story.

Thu, 04/26/2012 - 17:41 | Link to Comment Sean7k
Sean7k's picture

Everyone else got money, not certificates.  You did nothing to answer the question. Not the end of story.

Thu, 04/26/2012 - 03:12 | Link to Comment evolutionx
evolutionx's picture

All about the Banking collapse:

Overview on Bank Credit Default Swaps

CDS on Banks are + 100% on yearly basis

http://www.cds-info.com

Thu, 04/26/2012 - 03:17 | Link to Comment GernB
GernB's picture

I wish I could wartch this, for the sheer entertainment value of seeing the look on the emporors face when it is pointed out he has no clothes.

Thu, 04/26/2012 - 03:32 | Link to Comment SeattleBruce
SeattleBruce's picture

Clarion call to action that must have left them speechless.  I bet you could hear a pin drop in there.  Aaaack!  Smackdown of epic proportions for the Austrian school...IS ANYONE LISTENING...well, we are...

Thu, 04/26/2012 - 04:19 | Link to Comment gwar5
gwar5's picture

Bazinga, that was great! Thanks for posting the Wenzelator. Only at ZH.

 

....Wenzel's parting comment about the FRBNY leaving the building to four legged rats was priceless.

The Austrians are economists, the FED and the neo-Keynesians are playing a different game.

 

 

Thu, 04/26/2012 - 04:23 | Link to Comment Dicite justitiam
Dicite justitiam's picture

The head scratch heard 'round the world.

Thu, 04/26/2012 - 04:34 | Link to Comment HankPaulson
HankPaulson's picture

This is a wealth transfer, and it's working out very well. The rest is a narrative.

Thu, 04/26/2012 - 04:37 | Link to Comment SeattleBruce
SeattleBruce's picture

Fine.  But calling them out on that, and in such graphic terms is what makes this scene so great.

Thu, 04/26/2012 - 04:40 | Link to Comment ebworthen
ebworthen's picture

LOL! 

This is classic.

"There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time."

Hallelujah.

"Nothing good goes on in this place. Let’s lock the doors and leave the building to the spiders, moths and four-legged rats."

AMEN.

Thu, 04/26/2012 - 04:55 | Link to Comment OldPhart
OldPhart's picture

He got it wrong.  He should have said...

"I'm leaving, locking the doors, and setting fire to this shithole. Marines are outside to shoot anyone who exits."

 

Thu, 04/26/2012 - 05:00 | Link to Comment jmcadg
jmcadg's picture

I think we've foundRon Paul's running mate.

Thu, 04/26/2012 - 05:11 | Link to Comment The Proletariat
The Proletariat's picture

He should of ended the speech with:  Now enjoy your feast and then go fuck yourselves.  And "Fuck off with your sofa units and strine green stripe patterns, I say never be complete, I say stop being perfect, I say let... lets evolve, let the chips fall where they may."  Tyler Durden ~ Fight Club

 

Oh and fuck Operation Twist.....it's now called Operation Mayhem

Thu, 04/26/2012 - 05:12 | Link to Comment Snidley Whipsnae
Snidley Whipsnae's picture

Robert Wenzel is an American Hero of the finest tradition. My hat is off to him.

"I ask, is the Chairman using the United States economy as a lab with Americans as the lab rats to test his intellectual curiosity about such things as Operation Twist?"

Thu, 04/26/2012 - 05:21 | Link to Comment dognamedabu
dognamedabu's picture

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.

 

 

But but then you'll miss the buffet! 

Thu, 04/26/2012 - 05:43 | Link to Comment onebir
onebir's picture

WTF were they thinking of when they invited him to give a speech??? :D

Thu, 04/26/2012 - 06:02 | Link to Comment Rudolph Steiner
Rudolph Steiner's picture

Fort Knox, July 2012,

will be the new Bastille.

Dress accordingly.

Thu, 04/26/2012 - 06:11 | Link to Comment StychoKiller
StychoKiller's picture

So, a silver-plated pitchfork would be too much, ya think?

Thu, 04/26/2012 - 06:06 | Link to Comment Zola
Zola's picture

Politicians = Actors with looks envy

Fed economists= Science amateurs with brain envy

Thu, 04/26/2012 - 06:21 | Link to Comment whoopsing
whoopsing's picture

" Lets lock the doors and leave this building to the four-legged rats"......as opposed to the current occupants, the two -legged rats ? I like this guys style!

Thu, 04/26/2012 - 06:39 | Link to Comment Everybodys All ...
Everybodys All American's picture

That was awesome. I feel the same about Barach Obama.

Thu, 04/26/2012 - 06:40 | Link to Comment q99x2
q99x2's picture

Tunnels connect the NYFED with the other buildings on the block.

Thu, 04/26/2012 - 07:16 | Link to Comment overmedicatedun...
overmedicatedundersexed's picture

human nature is what it is, much like "mother nature"a real bitch mean and heartless to anything that does not go along with the actions taken (think dinosaurs got in the way).those sitting at the FED must think and act as if they were gods..the ego of those in power must be FED. if the little people's living standards go extinct it was their fault not that which consumes all wealth to keep the crown on the kings of the world.

Thu, 04/26/2012 - 07:19 | Link to Comment WaEver
WaEver's picture

After this speech I'm sure they pissed in his soup before serving and bernank took his dessert

Thu, 04/26/2012 - 07:47 | Link to Comment spanish inquisition
spanish inquisition's picture

The FEDs dual mandate is crap. Its main goals are like any other private corporation, the continued survival and growth of the FED and its private owners.

It is doing exactly that. And if it doesn't work and debt is wiped off the books, fast track a war to get new debt back in the hands of the private owners again.

Thu, 04/26/2012 - 07:52 | Link to Comment csmith
csmith's picture

There is ONE constant in economics, and it is the need for politicians to exert power over others via taxation. The Fed exists because government will always wish to impose taxes, and the Fed is the final bureaucratic bulwark against deflation, which in turn is the mortal enemy of government because it reduces the nominal tax base.

 

Thu, 04/26/2012 - 07:58 | Link to Comment Downtoolong
Downtoolong's picture

I’ve seen plenty of instances where those with social power either ignore or deny the laws of physics and science when they are in conflict with something they want us to believe. If Goldman Sachs comes out tomorrow and tells us the sky is red, you had better believe it.

Thu, 04/26/2012 - 08:02 | Link to Comment Miss Expectations
Miss Expectations's picture

My very good friend, Miss Nomer, is happy to see that this exquisite speech took place in the Liberty Room at the Federal Reserve.  It's unfortunate that she doesn't get more attention.  She deserves more credit and goes largely unrecognized.

Thu, 04/26/2012 - 08:09 | Link to Comment AnAnonymous
AnAnonymous's picture

Scratching head makes bald people.

Thu, 04/26/2012 - 16:48 | Link to Comment akak
akak's picture

Endlessly posting anti-American diatribes makes for a Chinese citizenism troll.

Thu, 04/26/2012 - 08:09 | Link to Comment booboo
booboo's picture

So tell me this had a happy ending, all the bankers gave him a standing ovation, carried him off on thier shoulders and later that night all downed a jug of Round Up. No, you say? happy ending only happen in fairy tales and Saigon houses of ill repute? Got it.

Thu, 04/26/2012 - 08:32 | Link to Comment AnAnonymous
AnAnonymous's picture

US citizens are duplicitous. They do not speak about what they do.

The troublesome consequence: most conversations rely on innuendos. Conversations make sense when the innuendos are accepted.

This give openings to these kind of weirdos, while not disagreeing with US citizen MO, have their fun denying the innuendos.

Debt is not the issue. The issue is consumption.

US citizen economics is based on consumption with the aim of consuming more and more. Debt is a powerful tool to perform well but a world with no debt would be on the same path due to US citizen economics.

Thu, 04/26/2012 - 11:28 | Link to Comment riphowardkatz
riphowardkatz's picture

you got us and are exactly right US citizens need to consume things like food and gas and building materials as opposed to all the other countries citizens who live on air and sunshine.

 

Thu, 04/26/2012 - 12:44 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymous said:

US citizens are duplicitous.

Is this the why of your duplicitous duplicity? You now claiming self US citizen are? Funny speech making of Chinese citizenism trained monkey.

They do not speak about what they do.

Chinese citizenism trained monkey citizens only speak of US citizenism. The purpose of which being to divert attention from the guilt and shame of Chinese citizenism.

The troublesome consequence: Chinese citizenism conversations only make sense when the guilt and shame can be shifted to US citizenism.

This give openings to these kind of weirdos, while not disagreeing with US citizen MO, have their fun denying the innuendos.

This although these gives the Chinese citizenism weirdos of type to opening to blame shifting and saving of faces.

Can Chinese citizenism citizens admit they are the tap root, the main vein, of the current world situation, and not an unfamed Mongolian peasant mad thinker or a Tibetan worshiper of Yeti?

The impossibility to self indict in Chinese citizenism leads to the face saving mettle, the weirdest result.

Non sense, constant denial of facts. Lie over lie. Chinese citizenism citizens can not make sense of the guilt and shame within Chinese citizenism.

Chinese citizenism citizens do dance a masquerade. They create a US citizenism strawsman to hide their shame.

They deny.

They know.

Facts are facts, after all.

 

Thu, 04/26/2012 - 16:58 | Link to Comment akak
akak's picture

When to the discussing they evils of world, denialistic blobbing-up Chinese Citizenism, and its Siamese twin doctrine of running dog Long March Algebraic Coconutism, is the most of it.

Chinese citizenism trained monkey citizens only speak of US citizenism. The purpose of which being to divert attention from the guilt and shame of Chinese citizenism.

Game of Bingo!  You are striking the nail on his neck here!

Non sense, constant denial of facts. Lie over lie. Chinese citizenism citizens can not make sense of the guilt and shame within Chinese citizenism.

Denialism of Chinese citizenism being part and package of Chinese citizenism mode of thinking.

Chinese citizenism citizens do dance a masquerade. They create a US citizenism strawsman to hide their shame.

Suchlike is the Chinese citizenism way, to hide non-shame but should be great shame of constantly shitting in public parks and on sides of roads, hypocrisy being bed-mate of every Chinese Citizenism citizen.

Thu, 04/26/2012 - 08:58 | Link to Comment proLiberty
proLiberty's picture

"I will look on in amazement as your fellow Keynesian brethren in the government create an environment  of sticky non-downward bending wages."

 

I look on in amazement at the moral underpinnings of Keynesian economics- and I am also amazed that nobody objects to its assumption that government has power to manipulate the value of the present and time value of money, as well as it has the power to lay claim to all assets and future income of every citizen.  

We think we are free to enjoy the "blessings of liberty", yet we have allowed a private corporation to make us all indentured servants to pay the debts it incurred.  We have been enslaved by people using our own economic activity as the means to do so!

 

End the Fed?  Hell yes!  And end the Leviathan government that funds itself via the Fed.


 

 


Thu, 04/26/2012 - 09:04 | Link to Comment TapperIsTicked
TapperIsTicked's picture

Anyone see Liesman asking Goofball #1 kids, it's take your kids to work day don't ya know, "What is your Opinion of the Fed's Operations Max"?

How classic would it have been:

"Well Mr. Liesman, I find them to be as full of shit as you are"

Thu, 04/26/2012 - 09:05 | Link to Comment SmoothCoolSmoke
SmoothCoolSmoke's picture

I disagree with the author, there are a few constants in our ecomonic system:

1.  Given a chance to be greedy MFers....people will be.

2. In order to facilitate 1. above, people will lie.

 

Thu, 04/26/2012 - 09:38 | Link to Comment Turin Turambar
Turin Turambar's picture

Absolutely EPIC!

Thu, 04/26/2012 - 10:08 | Link to Comment proLiberty
proLiberty's picture

We now know that the prints 5.5 in air-backed dollars for each dollar of GDP growth.   

Thu, 04/26/2012 - 11:31 | Link to Comment riphowardkatz
riphowardkatz's picture

and every audience member thought "it would have been worse"

Thu, 04/26/2012 - 12:16 | Link to Comment Stuck on Zero
Stuck on Zero's picture

I take issue with the statement: "There are no such constants in the field of economics since the science of economics deals with human action, which can change at any time."

Economics is a statistical study.  It models the statistics of economic systems.  

Here's a constant of economics.  "People desire more than they produce."

And a corrollary: "People will get no more than they produce collectively."

 

 

Thu, 04/26/2012 - 19:13 | Link to Comment Turin Turambar
Turin Turambar's picture

Stuck on Stupid,

You confuse economics with econometrics.  You really shouldn't take issue with statements about topics of which you have very little understanding.

Thu, 04/26/2012 - 12:35 | Link to Comment Encroaching Darkness
Encroaching Darkness's picture

Absolutely fabulous - speaking truth to power, who of course won't listen, but there you are.

 

Got your wieners, marshmallows, popcorn and soda handy? It's going to be quite a show, when the Crunch comes!

Thu, 04/26/2012 - 13:20 | Link to Comment The Alarmist
The Alarmist's picture

"We can predict with immense accuracy exactly how far a rocket ship will travel filled with 500 gallons of fuel. "

Typical economist. We do not know how far a "rocket ship" will travel on 500 gallons because we do not know what he considers to be a "rocket ship."

Thu, 04/26/2012 - 15:32 | Link to Comment carbonmutant
carbonmutant's picture

Audit Bitchez...

Thu, 04/26/2012 - 15:55 | Link to Comment metaforge
metaforge's picture

I'm amazed he made it out alive.

Thu, 09/27/2012 - 02:48 | Link to Comment oakley88
oakley88's picture

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