Monday updates.

At Bloomberg, AEI’s Kevin Hassett challenges C. Fred Bergsten’s case for revaluing the yuan.

NRO’s editorial board explains the flaws in forcing China to revalue.

On CNBC, Song Seng Wun discusses China’s pledge to buy Greek debt and help stabilize the euro:



In The WSJ, Donald Luskin notes the twin threats of a currency-induced trade war and rising tax rates.

On his blog, China basher Paul Krugman claims mutual currency devaluation accomplishes little.

At Café Hayek, Don Boudreaux notes that if China’s currency is undervalued, it amounts to subsidy to American consumers.

On Daily Markets, Mark Perry suggests worker productivity, not the yuan’s price, is why manufacturing jobs declined. (H/T: Café Hayek)

The NYT reports corporations are borrowing cheap but refraining from spending until the economy improves:


At The Sacramento Bee, Robert Higgs of the Independent Institute posits the recession isn’t rooted in declining demand.

Sure, consumer spending accounts for approximately 70 percent of America's gross domestic product, and increases in consumer spending would provide the economy with an immediate boost. But a drop in consumer spending is not what ails the economy. In fact, as a percentage of GDP, consumer spending actually increased during the downturn, the Commerce Department's Bureau of Economic Analysis reports - from approximately 69.2 percent of GDP in the fourth quarter (October-December) of 2007 to approximately 71 percent of GDP in the April-June quarter of 2009.

So the conventional wisdom - that a sharp decline in consumer spending caused the economy's downturn - is wrong.

What did cause the downturn? The answer is: a sharp decline in private investment.

At Forbes, John Tamny argues saving – deferred consumption – is the root of economic progress.

On CNBC, Dan Mitchell debates tax rates.



Also in The Journal, Jeffrey Collins reviews a new Adam Smith biography.

Smith constructed his masterpiece on a few ingenious insights into the workings of a commercial economy. Where his contemporaries calculated national wealth in terms of gold or agricultural output, Smith measured "opulence" by the flow of consumable goods. The division of labor would accelerate the production of goods, he argued, and render manufacture ever more efficient. The division of labor itself was best determined by markets of self-interested individuals. Markets, in turn, operated best when freed of regulation and interference, thus allowing the value and price of both commodities and labor to align themselves.