Crime Against Humanity: Pensée Unique in Economics, 69

And in order to dissolve any possible last doubts about their intentions and motivations, here’s some Werner’s remarks:
“Firstly, the logic of the argument remains flawed: the Bank of Japan argues that stimulative monetary policies would be counterproductive to its long−term goal of structural change precisely because they would be effective in achieving their goal of creating a recovery. This recognizes that the economy would respond to cyclical policies, and hence admits that neoclassical … theories do not apply to Japan’s economic situation. If such theories do not apply, then the longterm goal of structural change cannot be logically justified. In other words, by admitting that a short−term downturn may be necessary to implement structural changes, proponents of structural reform deprive themselves of their main argument for just why structural reforms are necessary. Those who agreed with structural changes, because they felt that the old system does not work, have been misled. The Bank of Japan effectively agrees with many of its critics that the economy, in an unreformed state, could have produced higher growth than has been the case for much of the 1990s. If this is the case, then just why did the Bank of Japan want to change Japan’s economic structure at all? Higher growth cannot be the motivation.
Secondly, social welfare cost−benefit analysis is stacked against the Bank of Japan’s large−scale live experiment. Cyclical policies aim at economic growth, hence at boosting the size of the national income pie. Structural policies aim at efficiency. While structural reform may indeed succeed in marginally increasing the efficiency of the economy, as measured by certain indicators, it seems clear that the enormous economic and social costs of the ten−year recession have greatly outstripped the potential benefits. To prolong the recession for sake of implementing structural change is like shrinking a cake to tiny size, only to be able to cut it up more easily.
There is therefore no good economic rationale for pursuing the types of policies that the Bank of Japan has pursued over the past decade. This leaves us with the fact that the decision about structural reform is ultimately a political one. Irrespective of the ultimate goal, the question here is whether the implementation of a long−term structural change agenda that affects income and wealth distribution, social and economic institutions and society in general is really the task of unelected central bankers. Nothing in the Bank of Japan Law, old or new, has ever awarded the central bank such a mandate. In Posen’s … words: ‘no Japanese citizen elected the Bank of Japan to pursue this policy of promoting restructuring, and in fact no elected official delegated this task to the Bank of Japan or put the goal of "encouraging creative destruction" into its mandate’. To create the public consensus for the ‘need’ for structural reform by purposely creating a recession must constitute an abuse of power. Does the population really want to be manipulated in such a costly and dishonest manner?”

Crime Against Humanity: Pensée Unique in Economics