Weekend edition: Laffer and Moore on state taxes; Forbes on Romney; Spitznagel on the Fed.

From The WSJ, Art Laffer and Stephen Moore argue states without income taxes are economically healthier.

At Forbes, Steve Forbes urges Mitt Romney to defend free markets vigorously.

In The WSJ, Mark Spitznagel explains how the Fed enriches the top 1%.

On The Kudlow Report, David Malpass analyzes the slow recovery:



At Forbes, Peter Ferrara analyzes progressive economic fallacies.

In The WSJ, Stephen Moore reports a Florida Tea Party dust up.

From The Manhattan Institute, Diana Furchtgott-Roth explains that raising investment taxes will result in less investment and push capital overseas.

At NRO, Larry Kudlow highlights the slow 2.5% growth rate.

The NY Sun applauds the Shadow Open Market Committee.

At The Mises Institute, Frank Shostak doubts that Ben Bernanke saved the economy from another depression.

From The Peterson Institute, C. Fred Bergsten argues for a lower dollar, tax increases (though not on businesses or incomes), and trade barriers on China unless it raises the yuan. Around 1:06, he suggests President Nixon’s 1971 import surcharge to “rebalance” world exchange rates was a success:



The Examiner reports US Rep. Eric Cantor (VA) citing supply-side economics in support of his small business tax cut bill.

At The American, Steve Hayward doubts the instability of the oil-to-gold ratio.

Wednesday round up: Moore and Kudlow applaud the Ryan plan; Bernanke opposes the gold standard; Domitrovic rebuts Romer on supply-side economics.

US Rep. Paul Ryan (WI) advocates his budget and tax plan:



In The WSJ, Stephen Moore applauds Ryan’s proposal.

On NRO, Larry Kudlow emphasizes the Ryan plan’s supply-side tax cuts.

Reuters reports Federal Reserve Chairman Ben Bernanke criticizing the gold standard.

The NY Sun responds to Bernanke.

On CNBC, Larry Kudlow discusses Mitt Romney and Bernanke’s remarks:



In Forbes, Brian Domitrovic rebuts Christina Romer’s critique of supply-side economics.

On Bloomberg, Robert Mundell advocates greater US fiscal discipline.

At Fitsnews, Ralph Benko reports South Carolina’s consideration of gold and silver as legal tender.

From First Trust, Brian Wesbury highlights the Fed’s move away from QE3.

At a press conference, US Rep. Eric Cantor (VA) announces the House Small Business Tax Cut Act to provide a tax deduction equal to 20% of their active business income.



Rush Limbaugh applauds Mitt Romney’s more pugnacious economic message but wonders if he means it (h/t: Jerry Bowyer).

From Business Insider, Joe Weisenthal argues the eurozone’s problems stem from the euro’s similarity to the gold standard. He fails to consider that under an international gold standard, the euro would not be pushed so high by the low dollar.

On Forbes, John Tamny suggests the blockbuster Hunger Games book and film is an anti-government parable.

Tuesday items: Benko chides Santorum on gold; Kadlec on the dollar and oil; Cantor rolls out the GOP jobs plan.

In Forbes, Ralph Benko chides Rick Santorum for opposing the gold standard.

From Bloomberg, Ramesh Ponnuru explains small business opposition to the President’s corporate tax reform plan.

At Forbes, Charles Kadlec links the falling dollar to the rising oil price.

On The Kudlow Report, House Majority Leader Eric Cantor (VA) discusses the Republican jobs act:



In The CSM, Stefan Karlsson warns against a Greek devaluation.

From First Trust, Brian Wesbury doubts a stock market correction.

In The Washington Times, Richard Rahn argues for Federal Reserve reform but stops short of supporting gold.

At CNBC, John Carney suggests Reagan and Thatcher’s economic programs worked.

USA Today reports the President will create a trade enforcement bureau.

From Reason, James Pethokoukis discusses anti-growth government policies.



At The American, Pethokoukis quotes Bruce Bartlett on the mainstreaming of supply-side economics.

In The NYT, Bartlett analyzes corporate tax reform.

At Modeled Behavior, Karl Smith suggests work incentives are altered until tax rates hit 70%.

Weekend edition: The NYT quotes Bell and Lehrman on gold; Forbes on two important dates; Lewis says gold is not deflationary.

In The NYT, Jeff Sommer quotes Jeff Bell and Lew Lehrman on rising interest in the gold standard, but commits the error of discounting gold’s price for inflation:

The last apex of the back-to-gold movement was perhaps in 1980. It may have been a signal that the price of gold was about to peak. Could we be approaching a turning point now? “You could make that argument,” Mr. Bell says. “The big question is whether the government and the Federal Reserve will be able to get the economy under control without a return to gold.”

In Forbes, Steve Forbes advises the President to heed two important dates.

Also at Forbes, Nathan Lewis explains that gold is stable, not deflationary.

On The Kudlow Report, US Rep. Eric Cantor recounts that debt-ceiling negotiations broke down because the President insisted on tax increases:




At Forbes, Peter Ferrara notes the expected tax increases in 2013 and elimination of the Fed’s duel mandate.

On Forbes, Reuven Brenner suggests the Federal Reserve is mispricing credit.

This week’s winner of the Kevin Williamson Shooting-Inside-the-Foxhole Award goes to fractional reserve banking opponent Gary North at lewrockwell.com, for his harsh attack on sound money advocates Robert Mundell and Ralph Benko.

Speaking of Williamson, last week the National Review author once again muddied the waters by rebuking pro-growth advocates including fellow NR columnist Larry Kudlow.

On Kudlow, my old roommate Tim Carney debates the debt ceiling:




In The WSJ, author Margaret Hoover suggests a “jobs, jobs, jobs” agenda will win the GOP young voters.

Reagan brought an entire generation to the Republican Party in 1980, and in 1984 he won the youth vote by 20%. The GOP needs this kind of revolution again if it hopes to recapture the White House and create a sustained majority.

The Washington Post continues the media’s fascination with anti-tax advocate Grover Norquist.

In Business Week, David J. Lynch reports that Republicans embrace Art Laffer’s tax ideas.

The WSJ notes GOP candidate Michelle Bachmann suggesting lower income workers should pay higher taxes.

Monday items: Benko rebuts growth skeptics; Goldman sees continued malaise; The WSJ emphasizes growth.

From Forbes, Ralph Benko rebuts high-growth skeptics.

At Asia Times, David Goldman offers evidence that the economy is on a long-term slow growth trajectory.

From last week on The Kudlow Report, Stephen Moore discusses proposed tax rate hikes:




In The Weekly Standard, conservative Keynesian Irwin Stelzer suggests the dollar’s reserve status is declining.

From last week, The WSJ emphasizes growth in its analysis of the New York congressional seat loss.

The biggest failing of House and Senate Republicans this year has been their emphasis on budget accounting more than growth economics. This is understandable given the tea party's 2010 electoral influence, the magnitude of the deficits, and Mr. Obama's fiscal abdication. But it has too often made the GOP come across as bookkeepers.

Assuming they get some spending cuts and budget reform as part of the debt-limit talks, Republicans would be wise to focus most of their legislative attention on raising growth to 4% or 5% of GDP. This is the least the U.S. should be growing after the deep recession of 2007-2009, and the failure to do so is Mr. Obama's biggest political vulnerability.

In the GOP Weekly Address, House Republican leader Eric Cantor (VA) emphasizes jobs and growth.

At The NYT, Paul Krugman advocates solving unemployment through a return to the Works Progress Administration.

Weekend round up: Lewis on gold linked currency; Mundell says gold could play a role in monetary reform; Lowry admonishes the GOP to focus on growth.

The new book to buy – ‘It Shines for All’: The Gold Standard Editorials of The NY Sun.

On Forbes, Nathan Lewis distinguishes between currencies linked to gold vs. backed by gold.

At a leading website in primary state Iowa, Ralph Benko argues the gold standard advantages main street rather than wall street.

On Bloomberg, Robert Mundell suggests monetary reform featuring fixed exchange rates among major currencies, with gold as an intermediary:

FOX: Now, you've written about the role of gold in the world economy, Professor Mundell. Do you think that we're going to see any kind of return to the gold standard?

MUNDELL: I - nothing like the gold standard that existed before 1914. But there could be a kind of Bretton Woods type of gold standard where the price of gold was fixed for central banks and they could use gold as an asset to trade central banks. The great advantage of that was that gold is it’s nobody's liability and it can't be printed. So it has a strength and confidence that people trust. So if you had not just the United States, but the United States and the euro tied together to each other and to gold, gold might be the intermediary, and then with the other important currencies, like the yen and the Chinese yuan and the British pound, all tied together as a kind of new SDR, I think that would be one way the world could move forward toward a better monetary system.

At NRO, Larry Kudlow recounts House Republican leader Eric Cantor’s (VA) focus on jobs and growth.

From Forbes, Bret Swanson explains the budget ramifications of 2, 2.5, 3 and 4 percent annual growth:



In a bellwether column, National Review editor Rich Lowry admonishes the GOP to focus on economic growth:

The unemployment rate is still at 9 percent. According to Gallup, 35 percent of people say the economy is their top concern, and 22 percent say jobs. Just 12 percent cite the federal deficit and debt. Republicans have taken the top concern of roughly one-eighth of the public and made it their existential cause. On top of that, they have taken a subset of the debt issue, the long-term fiscal sustainability of Medicare, and made it their calling card.

On The Kudlow Report, Art Laffer outlines a tax reform agenda to supercharge economic growth:




From Bloomberg, Stephen L. Carter suggests small and medium size businesses are paralyzed by regulatory uncertainty.

At New World Economics, Nathan Lewis continues his explanation of gold’s great long-term stability.

From last year, Chris Mahoney of Granite Springs Asset Management speculates that China could use its dollar assets to peg the euro to the dollar, and by extension to the yuan.

IBD notes gains from international trade.

Thursday items: Woodhill rebuts inequality claims; Moore sees higher tax rates; Cantor on the GOP's growth agenda.

From Forbes, Louis Woodhill rebuts income inequality rhetoric.

At The WSJ, Stephen Moore sees top tax rates combining state and federal taxes climbing to 62 percent.

On The Kudlow Report, House Republican Leader Eric Cantor (VA) discusses the GOP’s jobs and growth agenda, including good ideas on tax rates, but he doesn’t mention stabilizing the dollar:




Bloomberg reports new Sen. Rob Portman (OH) is the leading Republican on economic issues, stressing growth and jobs over spending cuts.

At COAL, Paul Krugman counsels calm on the deficit.

The Washington Post reports the President’s plan to reduce or streamline regulations.

On Kudlow, businessman and tax reform advocate Herman Cain discusses his rise to second place in the Republican presidential primary:




ABC News features U.S. Rep. Paul Ryan (WI) standing by his Medicare plan.

On Bloomberg, supply-side guru Robert Mundell suggests Europe will benefit from a lower euro and speaks highly of IMF front-runner Christine Lagarde.

At The Freeman, Gerald O’Driscoll examines the falling dollar’s impact.

The Onion mocks private currency advocates. (Warning: coarse language.)

Wednesday round up: Stoll on a split among supply-siders; Kudlow on Cantor's growth agenda; Ferrara on inflation.

At Future of Capitalism, Ira Stoll reports supply-siders are split on whether to emphasize fiscal or monetary policy.

From NRO, Larry Kudlow applauds Republican House leader Eric Cantor (VA) for rolling out a pro-growth agenda, but notes Cantor omitted the dollar from his proposal.

The Kudlow Report covers Portugal’s rejection of additional budget austerity:



At The American Spectator, Peter Ferrara worries about inflation.

On Gordon Liddy’s radio show, John Tamny discusses the dollar.

From TGSN, Ralph Benko recounts the dollar standard's three economic disorders (here, here and here).

In The WSJ, Stephen Moore reports on labor’s electoral maneuvers in Wisconsin.

On NRO radio, Douglas Irwin discusses his book on Smoot-Hawley but seems to miss Jude Wanniski’s point that the market meltdown began in 1929 due to expectation the legislation would pass.

At Minyanville, David Stockman rails against the Federal Reserve.

From 2009, Gabriel Fagan, James R. Lothian, and Paul D. McNelis find the gold standard era’s prosperity hard to beat.

Weekend update.

In The Financial Times, World Bank President Robert Zoelick advocates a Bretton Woods-style international currency arrangement based on gold.

On The Jim Bohannon Show, Brian Domitrovic provides a terrific discussion of supply-side economics.

On Fox News Sunday, U.S. Rep. Paul Ryan (WI) firmly opposes the Federal Reserve’s planned quantitative easing, but doesn’t say what the Republican House will do about it.




On the same show, U.S. Rep. Eric Cantor (VA) repeatedly insists Republicans want to maintain the status quo on tax rates, not cut them. My question is, why not push the debate -- and go for real growth -- by proposing significant new cuts to the corporate tax and capital gains tax, to help investors and businesses recapitalize? Surely the electorate will reward pro-growth proposals.

At Classic Capital, Wayne Jett decries the Fed’s QE plan.

At New World Economics, Nathan Lewis diagnoses Japan’s economic weakness.

On Friday’s Kudlow Report, Stephen Moore debates tax rates:




In The WSJ, Robert Frank reports on why the Washington state initiative to raise taxes on the rich failed.

On Café Hayek, Don Boudreaux worries about the President’s mercantilist perspective.

Supply-side foe Peter Peterson’s foundation will launch a new ad campaign on the deficit.

Weekend round up.

In a must-read WSJ piece, Judy Shelton interviews supply-side founder Robert Mundell. The Atlas Sound Money Project features the full text:

“Are you thinking,” I venture, “that maybe it’s time to start figuring out the design for a new international monetary order? Should the U.S. offer new proposals regarding exchange rates and monetary policy?”

Mr. Mundell, who is Canadian, looks troubled. “I don’t think the U.S. has any ideas, they don’t have strong leadership on the international economic side,” he replies. “There hasn’t been anyone in the administration for a long time who really knows much about the international monetary system.”…

“The U.S. berates China for its exchange rate policy, which Washington doesn’t like,” Mr. Mundell says, noting that discriminatory tariffs against China might not be legal under the treaty provisions of the World Trade Organization. “But one-sided pressure on China to change its exchange rate is misplaced.”

Shaking his head, Mr. Mundell asserts: “The issue should not be treated as a bilateral dispute between the U.S. and China. It’s a multilateral issue because the U.S. deficit itself is a multilateral issue that is connected with the international role of the dollar.”

He goes on to explain that the dollar bloc includes China and other Asian countries—except Japan—but that the euro now constitutes the rest of the world.

“The euro today is the counter-dollar,” he says. “The most important initiative you could take to improve the world economy would be to stabilize the dollar-euro rate.”

The WSJ editorializes on Fed Chairman Bernanke’s lack of attention to the falling dollar.

We were more struck by what Mr. Bernanke didn't say. In a nearly 4,000-word speech about inflation, the Fed chief never once mentioned the value of the dollar. He never mentioned exchange rates, despite the turmoil in world currency markets as the dollar has fallen in anticipation of further Fed easing. He never mentioned rising commodity prices or soaring gold, and his only reference to the recent increase in the price of oil was by way of dismissing it in the context of overall low inflation.

On Fox, Steve Forbes suggests the mortgage market has been nationalized:



At Bloomberg TV, David Malpass calls the U.S. a currency manipulator and says the current administration is following GW Bush’s weak dollar policy. Interestingly, he suggests the weak dollar since 2004 has driven investment capital overseas, contributing to a rising trade deficit, the opposite of the mainstream view. He also predicts the Bush tax cuts will not be extended.

Seeking Alpha summarizes a recent presentation on the economy by Dr. Victor Canto.

On CNN, Stephen Moore debates economic policy:



Foreign Policy analyzes the power struggle among China’s rulers.

Cato’s Dan Mitchell suggests Calvin Coolidge was the best President of the last 100 years.

Tuesday round up.

In a speech, Federal Reserve Vice Chairman Janet Yellen suggests additional quantitative easing may create new investment bubbles.

On Forbes, John Tamny argues the economy would do fine without the Federal Reserve.

At Zero Hedge, Tyler Durden scolds a former Fed member (currently at the Peterson Institute for International Economics) for recommending the U.S. government sell its gold.

On The Kudlow Report, Larry analyzes the market’s support for looser money:



Investor’s Business Daily reports 56 percent of poll respondents favor keeping all tax cuts in place.

On Jon Stewart (third segment), House GOP Deputy Leader Eric Cantor says Washington has ignored jobs and the economy. Stewart describes the agenda as “freedom and liberty, blah blah blah blah blah.” Cantor suggests Republicans got fired in 2006 because government got too big. No mention of sound money.

At Asia Times, David Goldman doubts Republican electoral gains will help the economy much.

On Forbes, Steve Forbes analyzes Albania’s economic success.

In The Washington Times, Richard Rahn dissects Australia’s winning economic formula.

At CNBC, Keynesian Stephen Roach makes a good point on the dangers of destabilizing China’s financial sector via “a sharp, ridiculously irresponsible increase in the renminbi.” He suggests a more constructive approach is to increase Chinese consumption while increasing U.S. savings and exports:



Last year, Reuven Brenner and David Goldman made a similar argument, built on a formal dollar/yuan link:

Currency policy is the key to opening the world to American exports. What seem like minor errors in Western monetary policy have devastating effects on developing economies. The large industrial economies are like oceangoing vessels designed to withstand typhoons; ten-meter waves may roll them but will not sink them. Not so for the fragile craft in their wake. As former Federal Reserve chairman Paul Volcker once observed, the industrial nations' deep financial markets allow participants to hedge against large shifts in currency parities. Not so for the shallow, inefficient financial markets of developing nations, in which the vast majority of firms do not qualify as derivative counterparties, and the yield curve is not liquid past the two-year mark….

China, in particular, is the natural fulcrum for America's proper economic policy. China's requirements for infrastructure and capital equipment are enormous: Two-thirds of its 1.3 billion people still live in conditions of extreme backwardness. But rather than invest in its own interior, China has diverted its savings to securities in Western currencies as a rainy-day hedge against potential political and economic disruption. America should help China stabilize its currency by a solemn and formal agreement to link the renminbi to the dollar; China in turn should make its currency convertible and open its capital market to American institutions. Other countries may wish to participate in this arrangement; with the world's two largest and most dynamic economies as an anchor, a Sino-American currency agreement would quickly become the point of orientation for the rest of Asia and eventually for other countries.

China's demand for savings, to be sure, stems in part from the one-child policy, which requires Chinese to provide for their retirement with financial assets rather than offspring. But a good deal of Chinese savings is precautionary. With a nonconvertible currency and limited outlets for investment, Chinese are apt to exaggerate their rainy-day savings.

In effect, China needs to reduce its saving rate drastically while America increases hers. Why wouldn't just letting China's currency be convertible on its own, without coordinating with the United States, be part of the solution, as some propose?

The simple answer is that China's capital markets--and, by extension, its political system--are still too fragile to withstand the tsunami-sized capital flows caused by the dollar's instability. Dollar devaluation sends capital rushing into China, distorting asset prices. By contrast, a repetition of the global liquidity crisis that followed last year's failure of Lehman Brothers could provoke massive capital flows out of China, in a repeat of the 1997 Asian crisis. As long as the United States subjects its currency to extreme volatility, China cannot take the risk of making its own currency convertible.

The WSJ editorializes in support of immigration visas for entrepreneurs.

Hawaiian Libertarian offers a good list of historical quotations on the evil of fiat currency.

Weekend update.

In The WSJ, Steve Moore interviews House GOP chief Eric Cantor on the party's election message. No mention of sound money.

Another concern is that Republicans lack a coherent growth agenda beyond simply cutting spending. To this, Mr. Cantor objects: "We will start by unraveling the economic damage that has been done by their agenda, whether it's health care, or whether it's the financial reg reform or regulations from EPA that are strangling businesses."

On The Kudlow Report, Don Luskin is optimistic about the economy:



At RCM, Larry Kudlow sees few improvements coming from the President’s staff shakeup.

Also in The Journal, Charles Schwab suggests the Federal Reserve’s low interest rate policy is damaging savers and reducing the availability of credit.

The negative impact of current policy is clear. The near-zero interest rate experiment is weighing on consumer and investor confidence, and the Fed signals its lack of confidence with each "extended period" proclamation. It is providing banks with low-interest financing that can be used to create modest returns through a carry-trade in U.S. Treasurys but is adding nothing to the velocity of money, which is what actually generates economic growth.

The Fed's super-loose policy has driven down the security and spending power of savers, particularly those in retirement who played by the rules during their working years and now depend on the earnings from their savings for a decent quality of life. As a result, savers and investors are being forced to take more risk with their money as they hunt for higher yields.

The extreme monetary policy is also having no positive impact on the availability of consumer or business credit, job growth or consumer and business spending.

At Market Oracle (UK), Barry Grey summarizes the emerging global currency war.

The Las Vegas Review Journal reports on a Steve Forbes speech.

On Kudlow, Larry debates Sec. Geithner’s call for more stimulus spending:



Robert Reich likens today’s Republicans to Herbert Hoover. He omits that the Great Depression’s main causes – an unstable dollar, a large tariff, and tax rate increases – are items on his party's current agenda.