From Forbes, Chris Barth reports David Malpass argues the dollar should rise due to tighter money, not the falling euro.
In Bloomberg, Amity Shlaes challenges Paul Krugman on fiscal austerity.
A reader comments: Amity Schlaes pens an austerity-can-lead-to-growth op-ed, dismissing Paul Krugman's call for more Keynesian spending, but commits a startling error:
...There is evidence that austerity did lead to growth in the past, and that it did not cause fascism. These examples may be less known, but they suggest that austerity can bring recovery faster than spending can.
A strong example in U.S. history is the recession of the early 1920s. Responding to a downturn, the federal government didn't spend; it cut itself in half. Recovery followed so rapidly few people even remember that recession.
Brian Domitrovic has written how there was virtual consensus between Presidents Wilson's and Harding's money men on reducing top marginal rates before the election, so how could Shlaes forget Mellon’s tax cutting agenda that kicked off the Roaring Twenties? The Revenue Act of 1921 brought the top marginal tax rate down to 58% in 1922 from 73%, and with subsequent reductions, Mellon was able to get that top tax rate down to 25% by 1925. The austerity of the 1920s did not take place without efforts to foster economic growth. In this, Shlaes was sloppy.
On NRO, Larry Kudlow reports Senate Minority Leader Mitch McConnell (KY) pushing for the Keystone Pipeline in exchange for the payroll tax cut.
On The Kudlow Report, Steve Forbes discussesNational Review’s editorial opposing Newt Gingrich:
From Forbes, Louis Woodhill argues pro-growth policies explain Gingrich’s rise.
At The American, James Pethokoukis suggests Gingrich’s Iowa lead is softening.
In The American Spectator, Ben Stein predicts President Gingrich and Vice President Huntsman.
At The WSJ, Dan Henninger portrays Gingrich as Mitt Romney’s sparring partner, toughening the former governor up to debate President Obama.
On NRO, Elise Jordan sees Jon Huntsman failing to capitalize on recent opportunities.
At Forbes, Jerry Bowyer highlights the role of interest rates to functional economic and financial systems.
From First Trust, Brian Wesbury predicts unemployment will be down to 8% by Election Day.
On The WSJ, Steve Cortes argues the Chinese economic model won’t work in the long run:
In The WSJ, conservative Keynesian Martin Feldstein pans the Eurozone economic deal.
On C-SPAN, PIIE’s C. Fred Bergsten – Keynesian and key intellectual driver of the 1970s dollar devaluation and subsequent Great Inflation – argues more American jobs will come from rebalancing world trade by lowering the dollar’s exchange rate to a competitive level (around minute 13).
On NRO, Larry Kudlow bashes the President’s tax attack.
From The Fiscal Times, Steve Forbes opposes tax increases on the rich.
At The WSJ, Paul Gigot comments on the President’s tax proposal:
At RCM, John Tamny notes that three years after the bailouts, the banking system is weaker.
On Café Hayek, Don Boudreaux echoes Douglas Irwin’s claim that Smoot-Hawley played a minor role in the Great Depression.
In The WSJ, Bret Stephens predicts the eurozone’s break up.
Alhambra Investments foresees a breakup of the euro.
The WSJchides Mitt Romney for his rhetoric on China’s currency.
London’s Chatham House features documents from its 1929-31 conference on The International Gold Problem.
Sanjuktamoorthy.com explains Robert Mundell’s desire for a single world currency.
In The Washington Times, Richard Rahn notes that elevated inflation combined with ultra-low interest rates means a huge tax on savers.
On Bloomberg, Caroline Baum reports the Fed’s upcoming replay of Operation Twist.
On The Kudlow Report, James Pethokoukis debates the President’s low poll numbers:
In The NYT, Bruce Bartlett advocates rolling back tax code expenditures.
From First Trust, Brian Wesbury argues a new recession is unlikely.
At The Weekly Standard, Jonathan V. Last suggests China’s One Child Policy will prevent it becoming a great nation.
The Huffington Post reports Newt Gingrich will unveil a Contract with America 2012. No word as to whether currency and exchange rate reform will be on the agenda.
In The NYT, conservative Keynesian Ben Stein supports for higher taxes on the rich.
At COAL, Paul Krugman claims the current crisis is caused by a failure of demand, but that supply-side problems may be emerging.
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 Onionspoofs Ben Bernanke (warning: bad language).
From The WSJ, conservative Keynesian Martin Feldstein of Harvard argues the weak dollar is helping the US economy.
On Forbes, Charles Kadlec reports the beginning of global monetary reform is taking shape.
Also at Forbes, Ralph Benko sees the political landscape turning back towards free markets.
On CBS News, commentator Ben Stein blames supply-side economics for the deficit. (Ben’s father, Herb, was Nixon’s chief economist when the US left the gold standard.)
