Tuesday items.

John Tamny calls the Dodd financial regulation plan pointless.

At the Asia Times blog, David Goldman analyzes U.S. employment numbers.

At the Huffington Post, Keynesian Robert Kuttner makes a smart point that fiscal austerity does not lead to prosperity. Of course, he favors more spending stimulus to ramp up economic demand.

Right on schedule, congressional Democrats have rolled out a stimulus spending bill.

How do Republicans respond? With a growth package of their own focused on supply-side measures such as a stable dollar and lower taxes? Or do they focus on austerity, i.e. spending cuts, which is generally thought to be counter-stimulative?

Right now, most conservative commentary favors the latter approach. The Cato Institute even goes so far as to suggest spending cuts are stimulative.

But without a proactive growth message, the GOP risks appearing to have no answer to unemployment. And spending cuts in contraction/slow growth periods tend to be unpopular.

This is exactly what just happened in Britain, which is why despite Labour's unpopularity, once the electorate focused on the Tories' austerity program, the conservatives lost steam and failed to win a strong victory. Now they are stuck with a centrist coalition government that probably won't last 18 months.

Here's a Human Events' obituary for the greatly-missed Jack Kemp. It makes the point that:

Jack’s view of the world persuaded Republicans to stress hope, optimism and economic growth in their campaigns, rather than the dreary -- though sometimes necessary -- message of the need to cut government benefits and rein in the federal deficit. (Jack always wanted to lead with optimism, which he possessed in exuberant and infectious abundance.)

Because of Jack’s vision, Republicans could comfortably go before any group, including college kids, minorities and working men and women (both union and non-union), and, with conviction, tell them that the GOP had a terrific strategy to lift wages, expand employment and fatten retirement accounts. Far better than the tax, spend, big-government mantra of the Democrats, Jack insisted. And, under Reagan, it all worked.

And here's Jude Wanniski's Two Santas Theory for further context.