The Slumlord Fed: A House of Cards Built on Inflation

The Federal Reserve System, known as the 'Slumlord Fed,' has been criticized by economist Robert Wenzel for its failed policies and reliance on printing money. In a speech at the New York Fed in 2012, Wenzel called for the entire system to be shut down, citing its inability to understand human action and the flaws in its constant pursuit of stable prices.

Wenzel's comments were not new; he had been invited to speak after his response to a paper by economists McCarthy and Peach, who argued that there was no housing bubble. Wenzel countered their view, stating that printing money causes business cycles, as per the Austrian Business Cycle Theory (ABCT).

The Fed's reliance on creating money has led to high price inflation, which is necessary for its survival. Without it, the economy would go into recession. This criticism echoes Paul M. Warburg's and John Skelton Williams' views on the Federal Reserve Act, which they believed would prevent financial crises like those in 1873, 1893, and 1907.

Economist George Ford Smith agrees with Wenzel's assessment of the Fed, stating that it is a total failure from start to finish. He compares the Fed's actions to a slumlord, who receives unusually large profits from substandard properties.