Weekend round up: Lewis on Bretton Woods; Glassman on growth; Pethokoukis on jobs and the election.

From Forbes, Nathan Lewis explains the trauma caused by the collapse of the Bretton Woods monetary system four decades ago.

On Forbes, James Glassman argues faster growth will lower the deficit.

At Forbes, Peter Ferrara suggests economic equality proposals lead to poverty.

On The Kudlow Report, James Pethokoukis discusses jobs and the 2012 election:




On RCM, Pat Buchanan rebuts extreme tax increase rhetoric.

In The Washington Post, Bruce Bartlett examines the debt ceiling.

At The Tax Foundation, Stephen Moore discusses the tax increases and the debt.

Canada’s National Post covers the Tea Party’s embrace of the gold standard (h/t: Ralph Benko).

On the Senate floor, Sen. Orrin Hatch (UT) argues for shared prosperity rather than shared sacrifice:




On COAL, Paul Krugman worries that gold bugs have taken over the GOP.

From Calafia Beach Pundit, Scott Grannis reports a rise in the money supply.

At NRO, Brian Bolduc explains on Utah’s Sound Money Act.

On Hot Air, Jazz Shaw critiques the Laffer Curve.

Tuesday summary: Domitrovic on oil prices; Tamny on Stiglitz; Goldman on declining credit.

From Forbes, Brian Domitrovic notes the government profits handsomely from high oil prices.

On RCM, John Tamny critiques Joseph Stiglitz for his recent claims that the top one percent have benefitted in recent years at the expense of others.

At Asia Times, David Goldman suggests declining credit is deflationary.

From Fox News, Steve Forbes discusses tax hike proposals to pay for government benefits:




On Forbes, Charles Kadlec explains the dollar fell during – and because of – Federal Reserve Chairman Bernanke’s press conference.

On Reuters, James Pethokoukis reports that all income groups have had substantial wage growth since President Reagan took office:



At NRO, James Glassman argues faster growth, not deficit reduction, is key to American prosperity.

From stevedeace.com, Ralph Benko suggests a gold standard is constitutional money.

The Laffer Center profiles Art Laffer:



From Alhambra Investments, Joe Calhoun notes rising inflation and commodity prices.

At Newsweek, Niall Ferguson says inflation is back.

The WSJ notes wealth Americans pay a higher percentage of total taxes even compared to Europeans (reprinted by House Republicans).

Thursday round up.

In a must-read from RCM, Louis Woodhill runs the numbers and finds economic growth is far more effective at balancing the budget than spending cuts.

From Bloomberg, Caroline Baum notes America’s many economic strengths.

Cato’s Steve Hanke examines the Middle East and North Africa's misery index.




On Forbes, Ralph Benko advocates a smaller warfare/welfare state.

Also from Forbes, Jerry Bowyer notes that democracy can be as tyrannical as autocracy.

In The WSJ, James K. Glassman explains why his Dow 36,000 theory didn’t come true, but omits the dollar’s volatility since 1999 from his analysis.

The first major change is that the relative economic standing of the U.S. is declining. The Congressional Budget Office estimates that U.S. growth will average a little more than 2% over the next 70 years, compared to about 3.5% during the second half of the 20th century. This is a stunning decline.

The reasons? One is a demographic imbalance, with too few workers supporting too many retirees and other non-workers. Another is a growing preference for European-style security. Still others include inefficient investment in human capital, especially K-12 education, and an enormous buildup of debt partly meant to prevent financial catastrophe in 2008-09. Meanwhile, developing nations like China, India and Brazil are growing far faster than the U.S....

But there is a second kind of risk, the kind that we can't really measure or expect—the murder of 3,000 Americans by terrorists in a single day, the Dow losing 1,000 points within minutes in a "flash crash," or home values in the U.S. suddenly plummeting. These discontinuous risks—or "uncertainties," as the famous University of Chicago economist Frank Knight called them—are multiplying in a world in which technology provides instantaneous connections among markets and allows just about anyone to do just about anything, anywhere.

The Financial Times reports on a Goldman Sachs study that says deep budget cuts will slow the U.S. recovery.

Keynesian Stephen Roach applauds China’s plan to consume more.

Tuesday round up.

At Forbes, James K. Glassman explains that stronger growth is the best way to fight the deficit.

From Alhambra Investments, Joe Calhoun sees the world's leaders as clueless.

On The Kudlow Report, Don Luskin relies on CPI to deny inflation, while Michael Pento relies on money supply to confirm it:




On RCM, John Tamny argues inflation – properly defined as a decline in the monetary standard – is here but hidden by government statistics.

At Forbes, Brian Domitrovic suggests stable money is the kindest method to help the poor and less educated.

Also on Kudlow, John Rutledge and David Goldman assess inflation’s impact on emerging markets:




At Gold Standard Now, Domitrovic responds to Paul Krugman’s gold standard claim.

From Commentary, James Pethokoukis critiques Ben Bernanke’s approach.

In The WSJ, EU official Mojmir Haml outlines post-crisis thinking on monetary policy, but omits a stable gold price from his analysis:

Back in 1978, the U.S. economic historian Charles Kindleberger, in his now classic book "Manias, Panics, and Crashes: A History of Financial Crises," pointed out that financial upheavals had almost always been preceded by credit and property price booms. The bad news for monetary policy, however, is that credit booms have not always led to crisis. In other words, we still lack a rule of thumb for the future.

The basic proposition about the importance of credit, asset prices and the extent of financial intermediation in the economy, is slowly establishing itself in central bankers' post-crisis thoughts—although so far only at the general intuitive level described above. As soon as we start to ask when exactly, and at what level, the rate of growth of credit aggregates or asset prices start to become risky, or how large a leverage ratio and how high a risk mark-up are sustainable, we have no clear answers.

Moreover, we are frequently asking fundamental questions that we thought we had already answered: What prices should we actually target? How should we define new price indexes? Hacking at the foundations like this is painful in any field of study. Try asking a monetary expert for a precise definition of money. Where does money start and end? The layman may be surprised to learn that the answer is not necessarily clear cut.

From Business Insider, U.S. Rep. Ron Paul (TX) predicts it will take a crisis to bring about monetary reform.

In a NYT interview, White House advisor Gene Sperling confirms that the deal to maintain the Bush tax rates raised growth expectations, but omits the dollar from the discussion.

In The Washington Times, David Malpass advocates a constitutional amendment to cut the deficit.

From 1982, Jude Wanniski opposes a balanced budget amendment.

The WSJ editorializes in favor of allowing college educated immigrants to stay in the U.S.

Restrictionists claim that employers hire H-1B visa holders for "cheap labor," but companies must pay the higher of the prevailing wage or actual wage paid to "all other individuals with similar experience and qualifications for the specific employment in question." A Government Accountability Office study last month found that H-1B professionals in the same fields and age groups generally earn the same or more than their U.S. counterparts. Employers hire skilled foreign nationals based on merit, not because they can pay them less. Immigrants are also some 30% more likely than non-immigrants to start businesses.

Friday round up.

On Forbes, McGill’s Reuven Brenner advocates returning to a gold-backed currency system.

The WSJ editorial page suggests the FAIR tax is politically untenable.

On The Kudlow Report, James Glassman analyzes terrorism’s impact on the market:




On Bloomberg, Art Laffer explains how the wealthy respond to higher tax rates.

At Café Hayek, Don Boudreaux rebuts The NYT’s worries about the current account deficit.

On NRO, Alan Reynolds suggests banks are supplanting consumer and small business lending with government loans.

Easing through open-market operations has always been “quantitative,” since the Fed adds to bank reserves to pay for whatever securities it buys. But bank lending has not been falling since January 2009 because of any shortage of reserves; it has fallen because of a superabundance of regulations. The problem is regulatory, not monetary.

From December 2008 to October 2010, bank purchases of securities rose by $335 billion while bank lending fell by $455 billion. All of the regulatory pressures on banks from TARP, the Treasury’s stress test, the regulatory-reform bill, and the Basel capital standards have pushed banks, quite conveniently, to buy up a big chunk of the Obama administration’s soaring debt as an alternative to making more risky loans to consumers and small businesses. Since the Fed makes sure that banks pay savers next to nothing on deposits or CDs, the banks can make money even at the low rates offered on Treasury notes. That makes the Fed and other regulators happy, so why lend?

The Heritage Foundation reports on new regulations under the current administration.

At The Washington Post, Jim Hoagland assesses the global trend toward every-nation-for-itself policy.

In The Washington Times, U.S. Rep. Randy Neugebauer (R-TX) offers a thoughtful critique of Federal Reserve policy.

One of my biggest concerns is what this policy would do to the "savers" in our economy who, during their lives, have not over-consumed and thoughtfully have put away money for their retirement. Their capital accumulation is the fuel for our economy, but under this policy, the Fed forcefully drives the real rates of return for the savers (many who are retired or approaching retirement) to zero or negative. Many of the retirees in my district are facing a new financial crisis as the income on their savings has fallen as much as 70 percent over the past few years. This is a direct result of a Fed policy that rewards debtors with increasingly lower interest rates - most recently funded by a doubling of the monetary base - while punishing those who lived within their means and planned for the future. Our nation needs more saving, not less, but the Fed appears to be rewarding behavior that is not in our economic interests.

Under mounting pressure, savers, especially retirees, are confronting the difficult choice of taking on greater amounts of risk in search of increased returns or experiencing a dramatic reduction in lifestyle. It is no accident that you see more and more seniors working at places like Wal-Mart and thus crowding out employment for the young adults looking to get a start in our economy.

There is also no doubt that this policy over a long period of time will wreak havoc on our nation's already underfunded pension system. The rate-of-return assumptions made by our nation's pension funds typically range from 6 percent to 9 percent. These assumptions are no longer valid, given the price controls the Fed has placed on the cost of money. With the cost of money so low, stewards of these pensions, like retirees, are perversely incentivized to take on more risk in order to fund the retirements of their beneficiaries. This has the potential to become disastrous. The bottom line is that there is not an accountant creative enough (even in Washington) to argue that the pension system can survive long under this policy.

Friday items.

At Globe Asia, Steve Hanke calculates President Obama’s misery rating (third after Carter and Nixon). One note is that Hanke refers to Fed rate policy as responsible for the last decade’s falling dollar; analysts including John Tamny argue Treasury jawboning was more responsible as the dollar declined in the 2000s when rates were falling and when rates were rising.

On The Kudlow Report, James Glassman debates Fed policy’s impact on markets:



In The WSJ, Stanford’s Ronald McKinnon counters the recent editorial on China’s monetary sterilization and suggests rising wages will improve trade imbalances.

At Bloomberg TV, David Malpass argues a yuan revaluation would hurt China and the U.S.

From the Heritage Foundation, Derek Scissors discounts security concerns stemming from China trade.

On Kudlow, Larry Kudlow analyzes the GOP’s Pledge to America:



At Reason, Veronique de Rugy argues spending cuts won’t hurt the economy.

From the Mercatus Center, Matthew Mitchell and Jakina Debnam suggest government deficits crowd out private sector investment.

At The Weekly Standard, Jonathan V. Last notes the low American birth rate.

Thursday items.

At NRO, Don Luskin suggests uncertain Fed policy is disrupting the economy.

At The American Spectator, James P. Gannon laments the Fed's impact on his savings account.

At Asia Times, David Goldman offers a bleak assessment of the economy.

At Classical Capital, Wayne Jett foresees a U.S. default.

On the Kudlow Report, Stephen Moore debates the super rich tax rate idea.

US News blogger Peter Roff predicts an October Surprise of a partial tax cut extension.

The WSJ reports small business owners fear tax increases.

At The Economist, Will Wilkinson rebuts the notion that inequality caused the economic crisis.

Market Watch's David Callaway says the Fed's Jackson Hole retreat will be "more goat rodeo than Bretton Woods."

At Commentary, James Glassman argues the continued malaise confirms the failure of liberal economics.

Weekend items.

On the Kudlow Report, Jim Glassman analyzes the economy.

At SmartMoney, Don Luskin examines China's economy.

In The American Spectator, Quin Hillyer outlines an agenda to restore the economy.

WSJ columnist Jeff Opdyke observes that gold mirrors the dollar's value but not necessarily the inflation rate.

Steve Forbes interviews Paul Volcker on financial regulation.

In The Weekly Standard, James Pethokoukis looks at what went wrong with Recovery Summer.

The NYT reports that small investors are leaving the stock market.

At This Week, George Will and Robert Reich spar over Herbert Hoover's balanced budget record, but omit his real mistakes: the Smoot-Hawley tariff and the Revenue Act of 1932, which raised the top tax rate from 25 to 63 percent.

Liberal Washington Post columnist Dan Balz urges Republicans to follow Britain's conservatives by raising taxes.