Tuesday, December 14, 2010

Monday round up.

On NRO, Larry Kudlow counters Charles Krauthammer on the tax cut deal.

Rush Limbaugh notes the attacks on supply-side economics.

At The Kudlow Report, Larry discusses Fed policy:

On Forbes, John Tamny profiles the producer of the forthcoming Atlas Shrugged film.

At New World Economics, Nathan Lewis analyzes government spending.

In i view magazine, Ermira Kamberi examines Robert Mundell’s call for a global currency.

On MSNBC, Joe Scarborough sees the tax agreement as a victory for “Jack Kemp style supply-side economics,” but bemoans the deficit.

At The WSJ, Stephen Moore reports some conservatives may oppose the tax deal over higher estate tax rates.

On RCM, Benn Steil explains how floating currencies create bubbles and break down the global economy.
Consider first how the United States and China would interact under a classical gold standard. If the United States sent a dollar to China, China would have to redeem that dollar for American gold. A fall in the U.S. gold stock would necessitate a rise in U.S. interest rates, which would reduce credit growth, reduce prices, and reduce the trade deficit. This is the mechanism by which the gold standard automatically corrected global imbalances.

Compare this with today's actual monetary structure. When the United States sends a dollar to China, China immediately returns it in the form of a low-interest-rate loan. That dollar is then recycled through the U.S. financial system, causing further credit growth and, critically, no countervailing Federal Reserve action.

The bubbles and imbalances that have marked the past decade-as they did the 1920s-are features of a monetary regime which operates in precisely the opposite fashion as the one which operated during the great globalization of the late nineteenth century. America is not, as Fed chairman Ben Bernanke would have it, a passive victim of "a global savings glut." It should not, therefore, be surprising that bubbles will continue to emerge in one asset market after another, and will continue to burst with damaging consequences.
From Cato, Greg Mills suggests that Africa is poor because its economies are illiberal.

On Bloomberg, Kevin Hassett argues Ireland should be allowed to default.

AEI’s resident floating currency advocate says – surprise! – the euro in its present form is doomed, because it restricts nations from devaluing their currencies and therefore defaulting on their debt.

In The Washington Times, Patrice Hill reports on economists who say the US-China current account deficit costs America jobs.

From earlier this year, on the Freeman, David Henderson explains trade deficits are irrelevant.

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