Robert Wenzel gave an address to the New York Fed earlier this week. It is worth reading in its entirety (here). You can read some positive reviews by Vox Day (Vox Populi) and Tyler Durden (Zero Hedge, see some of the comments).
On economic 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. …
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.
On Bernanke’s reign at the Fed:
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.
On Bernanke’s appeal to Operation Twist, Wenzel notes that it seems quite peculiar, given that a 2004 Fed paper coauthored by the current chairman concluded:
“Operation Twist is widely viewed today as having been a failure, largely due to classic work by Modigliani and Sutch”
“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.”
After additional comments on the Fed (none of them positive), Wenzel ends on a delightful note:
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.
The address contains a nice primer on Austrian economics, a lively critique of current policy, and a lot of head scratching. One can only imagine how it was received at the New York Fed.