E-Mail Exchanges on My Economic Views

From: John Howard Wilhelm
Date: Wed, Oct 19, 2011 at 1:55 PM
Subject: Your Nobel price piece
To: John Kay

Dr. Kay,  On your FT Comment piece I want to say the
following:  Fantastic.  Bravo!

While I am not as knowledgeable as you, I have a lot of
reservations about the state of economics as a discipline.
On this score, I would like to take the liberty of sharing the
texts to two letters with you, one written two years ago
and the other two days ago to the FT which they won’t
publish.  They are as follows:
John Howard Wilhelm

4 West Eden Court
Ann Arbor, Michigan 48108
Tel. 734/477-9942
May 15, 2009

Professor Cecil Bohanon
Department of Economics
Whitinger Business Building, Room 201
2000 W. University Ave.
Muncie, IN 47306

Dear Professor Bohanon:

When I saw the January 9, 2009 Cato statement which appeared in the
New York Times and then the Wall Street Journal, I was rather
appalled.  Given that you are one of the signers whom I had know in
the past, I want to say something to you about my disagreements with
the statement.

I have two basic disagreements with the statement.  First, I think
that the statement about the Great Depression is both irrelevant and
misleading.  It is misleading in that there was no, so-called
“Keynesian,” stimulus during the administrations mentioned until
Hitler started World War II.  Second, it is my contention that
lowering tax rates and reducing the burden of government is extremely
inappropriate in the face of peak oil and its consequences.  With the
exception of a Herman Daly, the focus of those in the profession on
boosting growth or maintaining sustainable growth is increasingly
misguided and shows in my judgement how divorced from reality the
profession is.

As you may remember from the year I taught at Ball State in the early
1980s, I was not a fan of either supply side economics or rational
expectations.  I think that John Kay, in his recent piece in the
Financial Times, copy enclosed, and Bill Janeway in his piece in the
March issue of Significance, copy also enclosed, got a lot right here.
Given the real world, as opposed to the theoretical world which has
come to infest too much of economics, I do not see how any credence
can be given to either the Efficient Market Hypothesis or the
Rational Expectations Hypothesis.  Surely Janeway is right in
suggesting that recent events have shown this to be the case.

To give you additional background where I am coming from, I am also
enclosing a copy of the text of an e-mail I sent Professor Rogoff of
Harvard some time ago and a copy of Chapter 10 from the book I have
put together on “Third Parties and Voting Reform, The American
Dilemma.”  As you may surmise from reading that text and the other
materials, I do believe that the imperatives we face are going to
require a change in the optimum mix of our economic system in terms of
the role of government.  And that will have to be payed for.

I would be interested in any comments on the materials and issues
I raise.

Sincerely yours,

John Howard Wilhelm, Ph.D.,

Enc.:  Four items as per text.
cc: Professor Keil

4 West Eden Court
Ann Arbor, Michigan 48108
Tel. 734/477-9942
October 17, 2011



Once again Martin Wolf (column, Oct. 14) has reinforced my
view that he and others of his persuasion do not seem to realize
that there is a cogent reason to believe that Britain faces a
permanent reduction in potential output and its growth.  The
reason for this can be found in the Financial Times’ recent
(Sept. 29) supplement on Modern Energy.  It can alert a
careful reader to the fact that even the International Energy
Agency has now come to accept the arrival of peak oil, the
maximum level of conventional oil production.

With the advent of peak oil in the last decade and with
declining North Sea production, it is hard to see how Britain
can ever regain precrisis growth rates let alone rely upon
growth to deal with unsustainable government deficit
financing and unsustainable private debt.  Solving, or
minimizing, Britain’s economic problems will require the
development of new stabilization policy tools, not appealing
to monetary and fiscal policy tools appropriate to an
environment that is no longer extant.

Sincerely yours

John Howard Wilhelm, PH.D.,
E-mail: jhwilhelm@gmail.com

From: John Howard Wilhelm <jhwilhelm@gmail.com>
Date: Tue, Nov 1, 2011 at 8:53 AM
Subject: The State of Economics Discourse
To: <skidelskyr@parliament.uk>

Professor Lord Skidelsky, On October 29 when I sent an e-mail
to Professor Paul Davidson I copied you in partly because he
had cited you in the very good essay to which I was responding.
But also in part because, although as you may recall I have been
of a Keynesian persuasion concerning macroeconomics, I find
myself in great disagreement with respect to the Keynesian/
Anti-Keynesian exchanges that are taking place in our more
serious press.  From my perspective both camps are very
divorced from the reality we face.  I have tried, as you can see
from the text of my unpublished letter to the New York Times
and the earlier text of my letter to the FT, to promote some
discussions of the relevant issues we are facing in terms of
trying to craft better macroeconomic policies for the situation
we are in, which as the text of my second letter below indicates
I believe will entail a greater role for government while at the
same time requiring greater downsizing in our economies in
general.  I know you have been able to contribute to the debate
on policy and am wondering if it might be possible to arrange to
discuss some of my concerns with you sometime by phone.
Thank you for your attention.

John Howard Wilhelm, PH.D.,

4 West Eden Court
Ann Arbor, Michigan 48108
Tel. 734/477-9942
September 30, 2011


To the Editor:

Although I agree with Krugman (column, Sept. 30) that “Republican
assertions about what ails the economy are pure fantasy,” I find his
assertions and prescriptions concerning the economy equally
divorced from reality.  In the past I have been a strong advocate
like Krugman of a Keynesian approach to macroeconomic policies
(see my :”Breakdown of Economic Policy in the 1970s,” Congressional
Record, April 1, 1980, pp.H 7421–H 7426).  But I no longer believe that
such an approach is either feasible or desirable given the liquidity and
fiscal traps we have fallen into and the realities of peak oil, which
in its 2010 report even the International Energy Agency has come
to accept.

With the arrival of peak oil in the last decade the idea of sustainable
growth is surely becoming an oxymoron at variance with economic
stability, the maintenance of which will require the development of
new stabilization policy tools.  On this score, the Keynesian, anti-
Keynesian debate which has come to dominate much of our serious
media is largely a sterile exercise which obscures the real choices
we need to discuss going forward.

Sincerely yours,

John Howard Wilhelm, PH.D.,
E-mail: jhwilhelm@gmail.com