Troubling Fed and the path of production

Something is seriously amiss in America's economic policy. It feels like the 1970s again. The Democrats in Congress are raising taxes and threaten to do more, and now we have this troubling Bernake statement has indicates he's a believer in the dicredited Phillips curve, ie, slow growth cures inflation. It's phony flipside is that easy-money and cheap dollars cures slow growth. Wrong.

Taylor Frigon blog point to this Production versus consumption dichotomy. Productionists see the problem of economics as one of production; we are "supply-siders", if you take care of production, the rest takes care of itself because human wants and needs are unquenchable. The consumptionist sees idle factories and does not think "Why is production ailing?", they assume "Aha! There is not enough consumption." The consumptionist view is a wrong view of economic health. The giveaway 'stimulus' is pure consumptionism, giving an illusion of wealth since it displaces economic activity. But displacement is not creation, it is merely moving money from one pocket to another. The classic way to 'create consumption' in history has been to inflate the money supply. Like a drug, it creates a temporary high, but then a downside later; either you keep printing money to debauch the currency and create ruin, or you . You do not create wealth with such policies. A return to the Phillips curves, Keynesian myths and a cheap dollar is not the way to wealth. The way to wealth is through production and maximum productivity and utilization of assets.

UPDATE: Kudlow agrees.