Tuesday items: Kadlec on Europe's tax hike failures; Benko on Rueff; Forbes on Ron Paul.

From Forbes, Charles Kadlec notes the failure of Europe’s tax-increase austerity.

At TGSN, Ralph Benko highlights Jacques Rueff’s critique of the post-war gold exchange standard.

On C-SPAN, Steve Forbes supports US Rep. Ron Paul (TX) for Fed Chairman:



At The American, Alex Brill examines tax fairness.

In The Washington Times, Richard Rahn lambasts the Obama Administration’s new foreign reporting requirement for US banks.

From Alhambra Partners, Joe Calhoun investors stay in cash.

On NRO, Larry Kudlow analyzes the weak recovery.

At The WSJ, James Swanson discusses Bill Clinton’s claim that President Obama is ahead of the curve pulling the US out of the financial crisis:



In The WSJ, Stephen Moore reports a congressional debate over highway spending.

From The Washington Post, Ezra Klein notes the return of many GW Bush economists on the Romney campaign.

At The WSJ, Cass Sunstein highlights an executive order to harmonize US and foreign regulation.

On Salon, Michael Lind argues the era of globalization is over.

The coal industry highlights the financial strain of rising energy costs:



In The NYT, Bruce Bartlett argues current tax rates aren’t blocking economic growth.

From Bloomberg, Rich Miller argues higher tax rates won’t discourage the wealthy from working harder.

Thursday update: Woodhill on growth vs. fairness; Rickards on gold and the IMF; Kudlow on Geithner and Bernanke.

From Forbes, Louis Woodhill argues for economic growth rather than fairness.

In US News, Currency Wars author James Rickards explains the hidden role of gold at the IMF.

From The WSJ, George Melloan highlights US Rep. Kevin Brady’s Sound Dollar Act.

On CNBC, Larry Kudlow critiques Tim Geithner’s political rhetoric and Ben Bernanke's refusal to raise inflation:



In The WSJ, Cato’s Dan Mitchell applauds Switzerland’s fiscal restraint law.

From Bloomberg, Caroline Baum examines the 2013 fiscal cliff.

The WSJ urges Mitt Romney to explain what he will do differntly than Presidents Obama and GW Bush, including on the dollar.

From First Trust, Brian Wesbury highlights Wednesday’s Fed policy statement.

In The WSJ, Stephen Moore reports the Senate’s Postal Service bailout.

On his website, Dilbert creator Scott Adams defends the rich.

The Sound Money Project features a video on inflation:



From Project Syndicate, Keynesian Stephen Roach defends China on trade and the yuan.

At Bloomberg, Jared Diamond notes Japan’s tremendous demographic challenges.

Thursday items: Forbes talks to GW Bush; Woodhill on Obamacare; Rove urges Romney to focus on growth.

From Forbes, Steve Forbes talks taxes and trade with President George W. Bush.

At Forbes, Louis Woodhill quotes Jude Wanniski to argue Obamacare must be repealed.

The Washington Times reports Mitt Romney leading the President on the economy.

In The WSJ, Karl Rove urges Romney to counter the President’s class warfare with focus on growth.

The Spectator features a symposium with Stephen Moore and US Rep. Paul Ryan (WI) on the budget and taxes:



In The WSJ, Dan Henninger parallels the President’s rhetoric with FDR’s in 1936.

Reason highlights the President’s scapegoating of oil speculators.

At TGSN, Ralph Benko recounts the history of the post-Civil War Legal Tender Cases.

From National Review in 1978, Alan Reynolds and William Peterson promote the gold standard.

Also from the NR archive, Bruce Bartlett argues for supply-side tax cuts.

Thursday round up: Ryan on tax competitiveness; Baum on inflation; Moore on the Buffett Rule.

The NY Post excerpts US Rep. Paul Ryan’s (WI) speech on tax competitiveness to the GW Bush Institute.

In The WSJ, Dan Henninger reports the Left’s attack on Ryan’s budget.

On The Kudlow Report, Steve Forbes discusses the economy:



At Bloomberg, Caroline Baum opposes calls for higher inflation.

From The Council on Foreign Relations, Benn Steil critiques the Volcker Rule.

Reuters reports on China economic and currency liberalization initiatives.

On C-SPAN, Stephen Moore discusses plans to raise tax rates:



From Heritage, John Stossel discusses media opposition to free market ideas.

Wednesday items: Domitrovic on Reagan's falling oil prices; Lenzner on the recent GW Bush tax event; Moore on the Buffett Rule.

From Forbes, Brian Domitrovic explains how Reagan got gas prices to drop.

In The NY Sun, Ira Stoll notes this week’s tax competition conference in New York.

At Forbes, Robert Lenzner reports on the recent George W. Bush Presidential Center event on tax competition where panelists stressed the need for a four percent growth rate.

On The Kudlow Report, Stephen Moore rebuts the suggestion that Ronald Reagan would support the Buffett Rule:



Money News features Lew Lehrman on the need for a gold-linked dollar.

At The American, James Pethokoukis formulates some genuine Reagan Rules for President Obama.

In The WSJ, Brian Gaines and Douglas Rivers suggests most people oppose high tax rates on the rich.

In Forbes, Janet Novack reports the widening gap between high and low tax states.

From City Journal, Guy Sorman highlights a World Bank report on global economic liberalization and the decline of poverty.

At Reason, Art Laffer discusses how to reform California’s economy:



From National Review, Jonah Goldberg worries that Mitt Romney favors business rather than free markets.

Reuters reports Brazil’s President complaining to President Obama about US monetary policy.

On TGSN, Ralph Benko recounts the monetary roots of Civil War Reconstruction.

Why didn't the Bush tax cuts work?

A frequently asked question is if tax cuts are so economically positive, why did the economy collapse following the Bush tax cuts? Here's my view of the proper supply-side answer:

1) The 2001 Bush tax cuts were largely consumption-oriented rebates and credits that did little to incentivize new economic production.

2) The 2003 tax cuts were on the supply side, meaning oriented towards lowering the penalty on additional work and investment, and they did improve the economy. Growth accelerated from 2003-2007, unemployment fell rapidly, and despite high federal spending the budget deficit shrank as a percentage of GDP.

3) Unfortunately, at the same time US monetary authorities were pursuing a weak dollar policy which encouraged investors to shunt capital into hedges like gold, oil and real estate. The effect was: A) reduced investment in the productive economy; and B) soaring prices in commodities and real estate, the latter of which became a bubble that burst in summer 2007.

4) As supply-side eminence grise Robert Mundell has explained repeatedly, almost a year after the apex of the mortgage crisis, Ben Bernanke's Federal Reserve compounded the damage by suddenly tightening* money, causing the dollar to soar 30% in three months, the largest such appreciation in such a short time in peacetime history. Tight money sent the over-leveraged economy into a liquidity crunch, crashed the financial system, and broke the economy's back.

5) Since then, the dollar has see-sawed back and forth by wide margins, creating elements of both deflation (tight credit, low interest rates, generally moderate CPI) and inflation (high commodity prices), ensuring continued economic malaise. Combined with pending tax increases and additional costs associated with Obamacare and added regulation, it is an inhospitable climate in which to take economic risks. Investors and entrepreneurs are sidelined.

6) The bottom line is: supply-side tax rate cuts work, but not in a vaccum. The supply-side policy mix requires tax cuts and a stable dollar. The last decade proved Art Laffer's maxim that in terms of economic impact, if regulation is a one, tax cuts are a 10, and monetary policy is a 100. Get money wrong and you're sunk, no matter how good your fiscal policy.

*Note: tightening in this case refers to ceasing to loosen at the expected pace. From May to September 2008 the Fed paused its fast rate cuts at 2%, catching markets by surprise and leading to a mad scramble for cash. The dollar soared and gold plummeted. Bernanke may have paused due to CPI rising to 5.5% and oil hitting $140/barrel.

Wednesday items: Domitrovic on Reagan's deficit and growth record; Woodhill notes the impact of tax increases on Britain; Moore debates soak the rich.

From Forbes, Brian Domitrovic argues that although President Reagan’s tax increases after 1982 were a mistake, the effect of the 1981-83 marginal rate cuts, plus deregulation, plus plummeting inflation, enabled the historic expansion and increased federal revenue.

At Forbes, Louis Woodhill cites Britain’s current economic mess as proof that raising taxes to solve budget deficits doesn’t work.

On The Kudlow Report, Stephen Moore debates soak the rich rhetoric:




At RCM, Steve Hanke suggests that Europe’s heightened capital-asset requirements are responsible for economic and financial weakness.

On NRO, Larry Kudlow argues the Gang of Six plan is pro growth and worth considering.

IBD features part 2 of Thomas Sowell’s Senate testimony on taxes, focused on Andrew Mellon.

On Kudlow, David Goldman and Dan Mitchell discuss the US credit rating:




At TGSN, Ralph Benko argues the new monetarism requires focus on monetary quality, not quantity.

On his blog, former George W. Bush Secretary official John B. Taylor explains he is a New Keynesian but opposes key elements of Old Keynesianism.

From First Trust, Brian Wesbury predicts stronger growth in the second half of the year.

At TGSN, Lew Lehrman explains that the gold standard is a yardstick:




Bloomberg suggests Starve the Beast is discredited.

Weekend update.

On Forbes, Brian Domitrovic notes the best policy mix remains tighter money and lower tax rates.

At Hindu Business Online, distinguished Indian economist S.S. Tarapore defends Robert Zoellick’s recent gold proposal. (Hat tip: Ralph Benko)

Mr Zoellick is being burnt at the stake by anti-gold zealots as he has sounded the death knell of their religion.

As the new international monetary order emerges, however, Mr Zoellick may well be beatified and could be on the way to sainthood as the founder of a new religion. Charles de Gaulle and his adviser, Jacques Rueff, who called for a return to gold in 1965, are perhaps chuckling in heaven!

At New World Economics, Nathan Lewis analyzes Europe’s problems.

In Investor’s Business Daily, Alan Reynolds argues against permanent extension of the Bush tax cuts in favor of larger tax reform.

At NRO, Larry Kudlow reports on his interview with President George W. Bush.

From September, Domitrovic addresses a Tea Party gathering on the history of tax cuts:

Monday update.

At The NY Sun, Seth Lipsky applauds World Bank President Zoellick’s op-ed advocating a gold-based monetary system.

Also in The Sun, Lipsky notes Sarah Palin’s opposition to a weaker dollar.

On The Kudlow Report, Stephen Moore discusses President Obama’s willingness to extend all the Bush tax cuts:




At Forbes, David Malpass advocates spending cuts.

In The WSJ, Fed Governor Kevin Warsh promotes a long-term growth agenda:

Policy makers should take notice of the critical importance of the supply side of the economy. The supply side establishes the economy's productive capacity. Recovery after a recession demands that capital and labor be reallocated. But the reallocation of these resources to new sectors and companies has been painfully slow and unnecessarily interrupted. We are feeling the ill effects.

Fiscal authorities should resist the temptation to increase government expenditures continually in order to compensate for shortfalls of private consumption and investment. A strict economic diet of fiscal austerity has greater appeal, a kind of penance owed for the excesses of the past. But root-canal economics also does not constitute optimal economic policy.

The U.S. would be better off with a third way: pro-growth economic policy. The U.S. and world economies urgently need stronger growth, and the adoption of pro-growth economic policies would strengthen incentives to invest in capital and labor over the horizon, paving the way for robust job-creation and higher living standards.

In City Journal, economist Douglas Holtz-Eakin promotes tax reform as key to restoring economic growth.

The WSJ editorial page supports Washington state’s resounding rejection of higher taxes on the rich:

So what's the matter with Washington? Clearly, its middle-class residents understand an economic reality that eludes Mr. Gates and many other already-rich advocates of higher taxes: The absence of an income tax has been Washington's greatest comparative advantage over its high-income tax neighbors in California and Oregon. Texas Governor Rick Perry even sent a letter to Washington state's biggest employers, inviting them to move to no-income-tax Texas.

The larger message, which also eludes the nation's leading proponent of soak-the-rich tax ideas—the fellow in the Oval Office—is that the average person simply doesn't believe that the taxers will stop with the wealthy. To protect both themselves and the greater economy outside their windows, voters prefer a tax system whose rates aren't rising—on anyone.

Also on Kudlow, Art Laffer sounds optimistic in response to the President’s tax cut move:

Business Week reports emerging economies may be flooded with hot money due to Fed easing.

At NRO, Nobel laureate Gary Becker analyzes the roots of the financial crisis.

On Forbes, John Tamny critiques the NFL’s economic policies.

Friday round up.

On The Kudlow Report, John Rutledge debates China currency policy.



The WSJ editorializes that U.S. CPI and interest rates have been kept down, and the trade deficit elevated, by China's yuan sterilization policy, not its dollar peg.

At cnn.com, Paul R. LaMonica observes rising commodity prices and suggests stagflation.

Australia's Catallaxy Files comments on Brian Domitrovic's Econoclasts and Jude Wanniski.

At The WSJ, Kimberly Strassel suggests the President's stance on tax rates will hurt Democrats up in November.

The WSJ argues the best response to rising poverty is economic growth, and that focus on inequality is counterproductive.

On Fiscal Times, Bruce Bartlett suggests the Bush tax cuts did no economic good.

The Adam Smith Institute offers a primer by Dr. Eamonn Butler on Austrian economics.

Thursday items.

The WSJ editorial page rebuts Paul Krugman's attack on U.S. Rep. Paul Ryan's policy road map.

At Asia Times, David Goldman considers the Treasury market.

At businessinsider.com, Joe Weisenthal comments on David Goldman's latest Kudlow Report appearance.

At NRO, Kevin Williamson analyzes money supply's impact on capital flows.

In The WSJ, monetarist Allan Meltzer suggests Europe's economy has improved because of spending cuts. As a reminder, Robert Mundell predicted Europe would recover due to the euro's drop against the dollar to below $1.30.

From 2000, Mundell discusses the euro, the dollar and gold (starting on page 23).

At The American, Austrian Arnold Kling examines Keynesianism and bailouts.

In The Washington Post, Keynesian Ezra Klein compares the Bush and Obama tax cuts.

Monday update.

Larry Kudlow discusses the economy on C-SPAN’s Morning Journal.

John Tamny is bullish on America despite poor recent leadership.

At Investors Business Daily, Art Laffer warns of cap and trade's economic impact.

A commodity analyst considers Rober Mundell's euro and gold predictions.

Kevin Hassett worries about the death tax.

Bruce Bartlett lists policy mistakes made by President George W. Bush, but omits the weak and unstable dollar.

In The WSJ, Keynesian Alan Blinder supports higher taxes and increased unemployment spending.

At NRO, Veronique de Rugy refutes Blinder.

White House economics chief Larry Summers defends current policy.

At NRO, Kevin Williamson argues Republicans aren't serious enough about spending cuts.

J.D. Fosters explains why Alan Greenspan is wrong to support increased taxes.