Wednesday, August 3, 2011

Wednesday summary: Bell in Iowa on the gold standard; Kudlow is optimistic; Ford and Vlasenko say QE raised unemployment.

In a must-read speech in Iowa, Jeff Bell makes the case for returning to the gold standard.

On NRO, Larry Kudlow predicts no recession ahead.

At Forbes, William F. Ford and Polina Vlasenko suggest unemployment would be 6.8% without QE1 and 2.

On The Kudlow Report, Stephen Moore debates the impact of spending cuts:




In The WSJ, Stephen Moore reports an item that could explain the market’s nosedive this week: the budget deal may be based on assumptions that the Bush tax cuts lapse, the AMT expands, and new Obamacare taxes kick in, adding $3.5 trillion to the baseline. This will make maintaining lower taxes additionally difficult, on top of the $1.5 trillion of spending cuts already on the table.

At US News, Peter Roff notes on the coming tax battle.

From The Washington Post, Keynesian Larry Summers recommends raising taxes.

In The WSJ, AEI’s Kevin Hassett argues Keynesian stimulus may work for normal recessions but is ineffective after a financial crisis:
Every stimulus effort has not two but three stages. When the stimulus is imposed, there is some positive short-run increase in GDP. When the stimulus is removed, there is an approximately equal and opposite reduction in GDP. But after that, the stimulus must be paid for with higher taxes or ongoing borrowing—causing a further reduction in GDP. Thus the total impact of the Keynesian policy is negative over its life. This fact is visible even in the fine print of Congressional Budget Office analyses so often cited by stimulus apologists, such as its 2009 finding that the Obama stimulus would reduce output in the long run.

At Southern California Public Radio, American Spectator columnist Ben Stein continues to attack tax cuts and supply-side economics, saying there’s no evidence whatsoever that higher tax rates have any impact on the nation’s growth.

In The NYT, Georgetown’s Joseph McMartin suggests Reagan busting the air traffic controllers’ union led to three decades of weak labor.

On COAL, Paul Krugman cites the gold standard's role in the Great Depression.

The Onion spoofs Ben Bernanke (warning: bad language).

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