The Koch-funded Cato Institute has gone completely mad if their recent Monetary Conference is any indication of what is going on at the Institute, where the great economist Murray Rothbard was a founding member.
Under the direction of the billionaire Koch brothers, the institute appears to have drifted so far from its roots that it is barely recognizable as the libertarian institution it once was.
Now, monetary conferences are held where no one, that is no one, discusses business cycle theory from an Austrian School perspective, where no one discusses the madness of Federal Reserve money manipulation.
To be sure, there is nothing wrong with having a conference where many different views are discussed, but for an institution founded on the basis of scholarship and study of such great economists as Ludwig von Mises and sound money, to host a conference of money cranks without opposing views, signals the collapse of an Institution that, to paraphrase the words of Marlon Brando, an Institute that could have been an intellectual heavyweight libertarian contender, Charlie.
Rothbard was, of course, anti-Fed and anti-central bank. He correctly viewed central banking to be the creator of the vicious boom-bust cycles that the economy regularly experiences.
Judging by this year's conference, that anti-Fed spirit has completely been evicted from the Cato conference premises.
Tom Clougherty has summarized the discussions at this year's gathering and it is clear the conference discussions were more about alternative means to keep the bankster created Federal Reserve serving bankster money needs, then it was about ending the money printing that distorts the economy.
As Clougherty noted, the conference "covered topics ranging from the rights and wrongs of monetary rules, to the ins and outs of the Fed’s long-awaited 'exit strategy' from quantitative easing and near-zero interest rates."
In other words, the themes were "How should we feed money to the banksters, by rule or whim?' And "What do we do if we have stuffed more money into the coffers of the banksters than they can manage given the current regulatory environment?'
Incredibly, featured at the conference were some Fed money printers themselves. Clougherty reported:
St. Louis Fed president James Bullard...kicked things off with the keynote address, noting that while he favors policy normalization — that is, a return to the kind of monetary policy (and Fed balance sheet) that prevailed between 1984 and 2007 — there is a risk that we’ll get stuck at “Permazero” if the economy fails to take off, or suffers new negative shocks.Rothbard would have choked at hearing this kind of Keynesian nonsense. As if the Fed wasn't responsible for the crisis in the first place and as if Fed money printing "normalization" or "Permazero" money printing is a sound solution rather than getting the Fed completely out of the money printing economic distortion
Next up, Richmond Fed money printer Jeffrey Lacker made an appearance on a panel. Clougherty again:
There was a broad consensus among the panelists — the Richmond Fed's Jeffrey Lacker, the Bank of Mexico’s Manuel Sanchez, and George Tavlas of the Bank of Greece — that monetary policy should focus on price stability, while steering clear of objectives it is less suited to, like boosting growth, guaranteeing financial stability, or pricking asset bubbles.As if price stability was a worthy goal, when there is a natural tendency for prices to fall, like they even do now, despite Fed money printing, in the computer, cell phone and television sectors.
The Fedsters were followed by a team of monetary economists, including a Catoite, who favored money printing by equation:
Monetary rules were the focus of the next panel, which featured John Taylor (he of the eponymous rule), former Philadelphia Fed president Charles Plosser, the Mercatus Center’s Scott Sumner, and our very own George Selgin. Although all four panelists favored a shift towards rule-based monetary policy, each took a different approach.Then a Catoite managed, after lunch, to distort Hayek's thinking, as though Hayek would be in favor of a central bank money printing:
The monetary conference’s third panel discussion focused on Hayek’s knowledge problem in the context of monetary policy. Cato senior fellow Gerald O’Driscoll suggested that the knowledge problem explains why rule-based monetary policy is superior to central bank discretion — we don’t know enough to design an an optimal monetary policy, so we’re better off using rules to create a monetary order and anchor expectationsHow about, we don't have any clue what money equations will work either, since there aren't any? And why do we need central bank money printing in the first place?
There were others in attendance calling for different methods of Fed money printing:
David Malpass of Encima Global LLC added his voice to calls for monetary policy normalization, arguing that the Fed’s zero-interest rate policy is actually weighing down economic growth.There were a few other speakers, but not one raised the question of whether the Fed should be manipulating the money supply at all?
The Cato monetary conference, in other words, has turned into a meeting of money printing madmen and mad advisors to the madmen. This is nothing but mainstrean nonsesne propoganda that can be found on the pages of The New York Times or at any other mainstream media outlet or Keynsian controlled economics department.
Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics