Wednesday items.

Note: Sorry to miss yesterday. Was hit by a 24-hour flu.
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In The WSJ, Judy Shelton explains that devaluation is the wrong way to promote exports. (Full text here from The Atlas Sound Money Project.)

On Forbes, Charles Kadlec makes a strong case that pushing China to raise the yuan will only increase that nation’s financial power.

At The Kudlow Report, Larry analyzes the President’s plan for taxes and spending:



Also on Forbes, Brian Domitrovic explains the folly of government investment projects.

Seeking Alpha quotes David Malpass on the State of the Union speech.

At NRO, Larry Kudlow touts Gov. Chris Christie’s (NJ) desire for deeper spending and entitlement cuts.

The WSJ editorializes that poor federal monetary and spending policy misallocates scarce resources and damages the productive economy:

The third way [to encourage economic growth] is through the more efficient use of capital, both human and monetary. These resources are scarce in any economy, and growth will be fastest if they are allowed to find their highest return. If resources are allocated to less productive uses or create asset bubbles due to bad policy, then overall growth will be slower than it should be.

In our view, this third point has been the largest but least appreciated problem in the U.S. economy in recent years. First the Federal Reserve's subsidy for credit and other policies pushed resources into the financial industry, and especially into real estate. When that bubble burst, triggering the 2008 financial panic and recession, the U.S. responded over two years with a huge expansion of the federal government.

Both periods were marked by the misallocation of trillions of dollars into wasted investments. One reason the current recovery has been so lackluster is that it takes time for an economy to retool from these mistakes. Money that went to build now-empty condos on the Vegas Strip—or to government transfer payments—can't be reclaimed to rebuild American manufacturing and technology.

On Financial Sense, Michael Kosares recounts the rising support for a gold-backed dollar.

Naples News reports on Steve Forbes’ three ingredients for economic growth.

At The Washington Times, Cato's Richard Rahn challenges the President to enact serious regulatory reform.

In The Journal, Dartmouth’s Matthew Slaughter highlights the benefits of comparative advantage in world trade.

On Rayedio Lounge, Wayne Jett discusses China’s role in the world economy.