It isn’t really surprising to us these days when we hear that — gasp! — the Federal Reserve isn’t being forthright about its operations. It doesn’t necessarily know where nine trillion dollars went? Oops! Oh well! The simple act of auditing the Fed as proposed by Congressman Ron Paul was met with outrage when proposed, as it would “politicize monetary policy.” But can monetary policy really ever be nonpolitical?
I can respect the drive of economists to attempt to take their field out of the normative realm (the process of making moral judgments) and placing it square in the realm of positive science. This isn’t necessarily an unreasonable pursuit, but it faces major methodological limitations. To practice economics in a way which is exclusively descriptive is helpful only in understanding the most effective and ineffective ways humans have dealt with the confrontation between their unlimited wants and the world’s limited resources.