Wednesday round up: Breen critiques Romney's tax plan; China won't revalue its currency; IBD refutes Krugman on Reagan's Keynesian record.

At Supply-Side Forum, Ed Breen critiques the Romney tax plan.

The WSJ notes the Fed is weighing sterilized bond purchases (h/t: Larry Kudlow).

Reuters reports China refuses to bow to US pressure to appreciate the yuan (h/t: Bretton Woods Research).

On The Kudlow Report, former RNC Chairman Ed Gillespie suggests Obamacare should be central to the 2012 campaign:



IBD rebuts Paul Krugman's claim that President Reagan was a better Keynesian than President Obama.

From First Trust, Brian Wesbury highlights the French proposal to raise the top tax rate to 75%.

In IBD, James Carter and Jason Fichtner advocate the corporate tax becoming a major campaign issue.

At CNBC, John Carney contrasts Austrian economics with Modern Monetary Theory.

In Forbes, Richard Salsman advocates positive financial reforms.

At TGSN, Ralph Benko notes the monetary difficulties following abolition of the First National Bank.

The Federation for American Immigration Reform argues against legal immigration. H/t Bruce Bartlett: “As I have long said, those that are opposed to illegal immigration are really opposed to legal immigration as well.”



Businessweek reports cigarettes are the most stable international currency.

On Modeled Behavior, Karl Smith agrees with Paul Krugman that opponents of demand-side solutions to the 2008 financial crisis destructively undermined a helpful consensus.

Thursday update: Domitrovic on Reagan's unfinished business; Ron Paul says the Fed caused the financial crisis; Forbes, Pethokoukis on Perry's flat tax.

From Forbes, Brian Domitrovic explains that monetary reform is President Reagan’s crucial unfinished business.

In The WSJ, US Rep Ron Paul (TX) blames the Federal Reserve for the financial crisis.

The WSJ reports Rick Perry’s flat tax garners support from Steve Forbes.

The Washington Post forecasts the coming tax battle between Perry and Romney.

On The Kudlow Report, Jimmy P debates Perry’s flat tax proposal:

 

From NRO, Larry Kudlow notes somewhat improved economic data from last month.

At Forbes, Jerry Bowyer critiques Herman Cain’s 9-9-9 plan.

Dick Morris supports the 9-9-9 plan.

IBD rebuts Paul Krugman and Jared Bernstein’s Keynesian advocacy.

On NRO, Michael Barone suggests bipartisan support to allow more visas for a high-skilled immigrants.

At International Liberty, Dan Mitchell notes a recent video likening President Obama to President Carter:

 

The liberal Think Progress proves that there’s no point in trying to appease tax hikers with targeted middle class tax cuts.

Factcheck.org disputes the President’s jobs numbers (h/t: Speaker Boehner’s office).

Future of Capitalism notes a new book that praises Michael Milken.

Wednesday summary: Domitrovic on the Fed's dual mandate; Malpass on Operation Twist 2011; Forbes predicts Perry will beat Obama.

From Forbes, Brian Domitrovic notes the Federal Reserve’s dual mandate isn’t contradictory as a weak dollar coincides with higher unemployment.

In The WSJ, David Malpass critiques the Fed’s updated Operation Twist:

The modern version [of the Twist] would probably be even less effective since markets are expecting it. The Fed's idea is that the private sector will go looking for riskier and longer duration assets to make up for the bonds the Fed bought. But the evidence is clear that this isn't working: The Fed's near-zero interest rate policy and its huge overhang of bonds create uncertainty. This hurts small-business confidence and discourages job growth.

The twist from the second round of quantitative easing (QE2) contributed to the sharp economic slowdown in the first half of 2011 when the Fed was buying $70 billion in bonds per month. The more it bought, the slower the economy grew as the twist sucked capital from savers and small businesses to the government.
The Fed has conducted a controversial experiment with near-zero interest rates and massive bond purchases. These policies have hurt growth and added to unemployment by distorting financial markets.

At CNN, President Clinton argues Republican policies do not create prosperity:



The NYT reports the Republican congressional leadership opposing additional Federal Reserve stimulus.

On The Daily Ticker, Steve Forbes predicts Rick Perry will beat President Obama.

From Alhambra Partners, Joe Calhoun dissects public opinion on taxes and spending.

In The WSJ, Jonathan Anderson explains why China is still a financial midget despite its fast growth:

The bigger problem is that China can't open its capital regime, at least not fast enough to matter. For more than two decades, China's philosophy of monetary management and financial development has been based on a closed-economy system: maintaining low and stable interest rates without having to worry about external arbitrage, breezily adopting economic stimulus when needed without concern about the banking system's asset quality, propping up banks with historically high nonperforming loan ratios and fixed-cost pricing, and keeping iron-clad control over the exchange rate. All of these only work when foreign portfolio funds cannot influence asset prices, and when locals have nowhere else to go.

While China's GDP may be 10 times larger than it was in 1995, its external capital controls are still similar to what they were back then. China has opened a few windows at the margin, but it has never seriously opened the doors. If anything, the financial crises of 1997-98 and 2008-09 have taught the authorities to be as slow as possible in making adjustments.

Even if China were to remove external controls, this still leaves the lack of deep domestic markets. Put simply, there's nothing to invest in. You need a local bond market, and China doesn't have one. Relative to its size, China has a much less mature fixed-income market than most of its major emerging-market peers.

On The Street, Phil Streible notes the correlation between rising gold prices and the President’s declining poll numbers:



Bloomberg reports Robert Mundell advocates Serbia fix to the euro in preparation to entering the eurozone.

At Fox Business News, conservative Keynesian Martin Feldstein discounts the President’s economic plan.

The WSJ criticizes US Rep. Barney Frank’s (MA) proposal to reduce Fed independence.

From 1980, candidate Reagan debates President Carter on the economy and inflation.

At COAL, Paul Krugman amplifies his argument that the economy is in a liquidity trap.

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 round up.

At The WSJ, Daniel Henninger advocates a resurgence of the Republican Party’s growth wing.

The growth issue has defaulted to the Republican Party. That's the pity. Hardly anyone in the party remembers how to give economic growth the starring role it deserves.

The last Republicans able to talk about growth as a crucial, creative, essential force, a driver of American prosperity and primacy (think the China threat) were Ronald Reagan, Jack Kemp and Steve Forbes. The current crop of Republican leaders and presidential contenders, about to be handed the opportunity of a generation, are in danger of reverting to the party's austerity-only obsessions. Austerity-only policies are producing Europe's riots.

Reducing spending, controlling entitlements, reforming public pensions—all of that matters. It's important. But any population being asked to "sacrifice" needs to be able to believe something better is possible. That's the challenge of political leadership.

On Forbes, Brian Wesbury and Robert Stein argue that quantitative easing by the Fed is no longer justified.

At Barron’s, Michael Kahn explains stock prices are depressed when measured against gold.

At CNBC, Steve Forbes echoes John Tamny's recent prediction of a return to a gold-linked dollar:



On The Future of Capitalism, Ira Stoll reports on David Malpass’s recent comments on the Fed.

On Asia Times, David Goldman advocates buying guns and ammo before physical gold.

Also in The Journal, Craig Barrett and James B. Moore Jr. argue high corporate tax rates push companies offshore.

On The Kudlow Report, Jerry Bowyer opposes dollar devaluation:



In USA Today, President Carter inadvertently makes a good point: that anti-establishment revolts arise during weak dollar eras.

The Denver Post’s Mike Rosen claims calls for tax hikes are based on envy, not economics.

A brief YouTube video explains the Laffer Curve.