Monday, January 31, 2011

Monday items.

At Asia Times, David Goldman reports brain drain from Egypt and other depressed economies.

On Conscience of a Liberal, Paul Krugman denies that dollar inflation impacted food prices in Egypt.

In The WSJ, Brett Arends notes CPI statistics are unreliable:

According to one rogue economist, John Williams at Shadow Government Statistics, if we still calculated inflation the way we did when Jimmy Carter was president, the official inflation figures would look about as bad as they did when ... Jimmy Carter was president. According to Mr. Williams's calculations, if we counted inflation under the old system the official rate wouldn't be 1.5%. It would be closer to 10%.
At New World Economics, Nathan Lewis analyzes the gold standard in Italy, 1861-1914.

Cato’s Dan Mitchell notes Clint Eastwood’s support for the flat tax.

Also at Conscience of a Liberal, Krugman argues recessions were worse under the gold standard.

On Gold Standard Now, Ralph Benko responds.
Chuck Kadlec, writing in The Wall Street Journal, October 28, 2010 presents a rather decisive counter-argument:

From 1947 through 1967, the year before the U.S. began to weasel out of its commitment to dollar-gold convertibility, unemployment averaged only 4.7% and never rose above 7%. Real growth averaged 4% a year. Low unemployment and high growth coincided with low inflation. During the 21 years ending in 1967, consumer-price inflation averaged just 1.9% a year. Interest rates, too, were low and stable—the yield on triple-A corporate bonds averaged less than 4% and never rose above 6%.

What's happened since 1971, when President Nixon formally broke the link between the dollar and gold? Higher average unemployment, slower growth, greater instability and a decline in the economy's resilience. For the period 1971 through 2009, unemployment averaged 6.2%, a full 1.5 percentage points above the 1947-67 average, and real growth rates averaged less than 3%. We have since experienced the three worst recessions since the end of World War II, with the unemployment rate averaging 8.5% in 1975, 9.7% in 1982, and above 9.5% for the past 14 months. During these 39 years in which the Fed was free to manipulate the value of the dollar, the consumer-price index rose, on average, 4.4% a year. That means that a dollar today buys only about one-sixth of the consumer goods it purchased in 1971.
On Forbes, John Tamny discusses the Constitution’s limitations on government.

From Globe Asia, Cato’s Steve Hanke offers an interesting history of the Constitution.

The WSJ reports HBO’s upcoming documentary on President Reagan includes an interview with Art Laffer.

In TNR, Jonathan Chait outlines Democratic plans to attack Republican budget cuts.

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