From Forbes, Brian Domitrovic challenges Christina Romer’s claim that floating currencies represent free markets.
In The Washington Times, Lew Lehrman and Frank Cannon suggest the loss of Jack Kemp’s NY congressional district shows Republicans should refocus on jobs and prosperity.
At The Weekly Standard, Daniel Halper reports rising pro-growth emphasis among conservatives.
On Fox News, Steve Forbes advocates deep spending cuts to government:
On The Fiscal Times, Louis Peck explains that federal regulations cost business $1.75 trillion per year.
At NRO, Robert Costa profiles U.S. Sen. Rob Portman (OH) and his jobs agenda.
On Fox Business, John Stossel mediates a budget debate between conservative think tanks Heritage Foundation and AEI:
On Market Watch, Paul B. Farrell argues Reaganomics caused recent economic bubbles and is therefore discredited.
At The NYT, reformed supply sider Bruce Bartlett opposes Republican arguments on taxes.
Note: I’ve added several pieces under Classic Articles: -A Guide to Sound Money (Shelton) -David Stockman: Man & Myth (Reynolds) -Hello Supply Side (Reynolds) -How Reaganomics Made the World Work (Bartley) -One World, One Money? (Mundell, Friedman) -The Laffer Curve: Past, Present and Future (Laffer) -The Onslaught From the Left, Part I: Fact vs. Fiction (Laffer) -The Real Reagan Record: Upstarts and Downstarts (Reynolds) -Uses and Abuses of Gresham's Law in the History of Money (Mundell) -The Lehrman Records (Lehrman) --------------
The WSJpoints out that with the (mild) recovery, government revenue is beginning to come back.
The Congressional Budget Office reported last week that federal tax receipts climbed in December by $18 billion, following somewhat smaller gains in the previous two months. For the first quarter of fiscal 2011, revenues have climbed by $44 billion, or nearly 9%, to $531 billion. Especially encouraging is that these revenue gains came predominantly from individual income taxes, which rose 23% in the first three months to $256 billion. Individual tax receipts continued to fall in 2010 even as corporate receipts rose, so the current increase is a sign that wages and bonuses are rising again for workers who have a job.
On Forbes, Brian Domitrovic suggests the EU needs its own Texas.
At The Kudlow Report, David Goldman debates whether China’s currency must rise:
The Heritage Foundation and The Wall Street Journalrelease their annual index of economic freedom, showing the U.S. slipped one place.
On Cafe Hayek, Don Boudreaux explains that Germany is growing rapidly despite restraining its spending.
At the BBC’s "Show Me The Money," Steve Forbes discusses the world economy:
The Sound Money Project reports U.S. Rep. Paul Ryan (WI) discussed sound money on Hugh Hewitt’s radio show.
The WSJeditorializes in favor of Hong Kong cutting its corporate tax rate.
On Kudlow, Stephen Moore laments the big Illinois tax hike:
At LewRockwell.com, Thomas E. Woods, Jr. announces his new book which includes a chapter by Domitrovic.
On RCM, John Tamny argues lower housing prices are good for the economy.
Also on RCM, Larry Kudlow advocates pro-growth tactics to improve the employment picture.
From The Heritage Foundation, Steve Forbes makes the moral case for capitalism:
The NY Sunadvocates an audit of Federal Reserve bail outs.
In The WSJ, John Fund reports the Americans prefer spending cuts to tax increases by 59% to 30%.
The Huffington Post reports just how grim the unemployment data really is:
At The San Francisco Chronicle, Lisa Smith summarizes the Laffer Curve.
From AEI’s The American, Donald Losman rejects deflation predictions, citing rising gold.
Also in The Journal, Holman Jenkins notes weakening support for the euro among former supporters.
Even faced with maximal turmoil, Europeans are still trying to have it both ways. The bailout to-ing and fro-ing by European authorities is conditioned largely on their unwillingness to choose between conflicting goals—on one hand, a continent of competitive and open economies; on the other hand, a "social model" that cushions established interest groups and voting blocs from the stress of competition.
A very different approach to managing the current crisis is imaginable. Put the European Central Bank in charge of printing liquidity to prop up the continent's banks. (Right now it's printing liquidity to prop up governments, which are propping up the banks.) Let badly indebted governments go into default and negotiate more manageable terms with their creditors (mostly banks). Let politicians in these countries invest their limited political capital in promoting growth rather than austerity. Let them cut taxes and deregulate their labor markets.
This would certainly sound preferable to voters than job-killing tax hikes and spending cuts to appease far-off German taxpayers who are being dragooned into refinancing their insupportable debts. The most encompassing description of Europe's problem, after all, is the one not mentioned enough: a shortage of growth.
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.
In advance of Wednesday’s congressional vote on China, Nobel Laureate and supply-side economics creator Robert Mundellsaysforcing the yuan significantly higher would be disastrous for China and the U.S.
In The Financial Times, Mundell student Komal Sri-Kumararguesfor expanded access to Chinese markets, rather than yuan manipulation.
In pioneering work on exchange rates done during the 1960s, my Columbia University doctoral dissertation adviser, Robert Mundell, showed that if exchange rates are fixed, adjustment by the trading economies occurs in terms of changes in domestic costs and prices. The inflationary pressures evident in China validate Professor Mundell’s theories. There is, therefore, nothing “manipulative” about simply maintaining fixed exchange rates. Keep in mind that under the Bretton Woods system of exchange rates from the end of the Second World War until the early 1970s, keeping the rates fixed with respect to the dollar was a sign of good economic housekeeping!
The conservative Heritage Foundationreleasesits own detailed policy agenda. Sound money is not included:
At Bloomberg, Steve Forbes predicts weak growth but doubts a double dip recession.
On Forbes, John Tamny suggests emulating rather than bashing the rich.
At NRO, Kevin Williamson makes the vital distinction that production, not consumption, is the heart of economic progress.
The problem of economic policy is not getting people to consume. It is getting them to produce. You can train a monkey to consume. (In fact, he requires no training, especially once you get him coked up on the taxpayers’ dime.) Americans are extraordinarily productive people, but our economy has taken a hit because we have a couple of trillion dollars’ worth of capital locked up in dead real estate, dead securities, and the swelling sovereign debt upon which our pet Leviathan battens. If you have a trillion dollars locked up in residential real estate that still is over-valued — its inflated price being sustained by hook and by crook by the geniuses in Washington — that capital can’t be put to real productive uses. (Also, people who could otherwise buy or rent cheap real estate will be paying too much for housing, taking yet more potentially productive capital out of the markets.)
At Econ Log, Arnold Kling discusses Paul Volcker’s early-1980s tenure as Fed chairman.
The WSJreports on policy differences among European policy makers on how to save the euro.
Also in the Journal, former GW Bush economic advisor Edward Lazear suggests limiting federal spending to inflation minus one percent will balance the budget in less than a decade.
Cato’s Dan Mitchell promotes spending cuts, not faster economic growth, as the key to balancing the budget.
At NRO’s Corner, Alan Reynolds points out that even with a static analysis, raising taxes on the wealthy would pay for nine days of the federal deficit.
At Forbes, John Tamny explains that the estate tax encourages the rich to consume rather than save.
From the weekend, Larry Kudlow sees the Tea-Party as good for markets.
The Heritage Foundation forecasts the negative impact of the President’s proposed tax increases.
On Forbes, Steve Forbes interviews Burton Malkiel (part two).
At AEI’s The American, Raghuram Rajan responds to Paul Krugman’s recent critique.
On Forbes, Rich Karlgaard covers a union boss accusing businesses of treason for not hiring or investing.
At Reason, Tim Cavanaugh cites Brian Domitrovic’s Econoclasts in comparing the current malaise to the 1970s.
In The NYT, GMU’s Tyler Cowen advocates inflation, despite rising gold and commodity prices.
On Daily Markets, Cam Hui blames the international gold standard for the Great Depression.
In his 1999 Nobel Prize lecture, Robert Mundell suggested it was mismanagement of the gold standard that caused the crisis.
World War I made gold unstable. The instability began when deficit spending pushed the European belligerents off the gold standard, and gold came to the United States, where the newly-created Federal Reserve System monetized it, doubling the dollar price level and halving the real value of gold. The instability continued when, after the war, the Federal Reserve engineered a dramatic deflation in the recession of 1920-21, bringing the dollar (and gold) price level 60 percent of the way back toward the prewar equilibrium, a level at which the Federal Reserve kept it until 1929.
It was in this milieu that the rest of the world, led by Germany, Britain and France, returned to the gold standard. The problem was that, with world (dollar) prices still 40 percent above their prewar equilibrium, the real value of gold reserves and supplies was proportionately smaller. At the same time monetary gold was badly distributed, with half of it in the United States. In addition, uncertainty over exchange rates and reparations (which were fixed in gold) increased the demand for reserves. In the face of this situation would not the increased demand for gold brought about by a return to the gold standard bring on a deflation? A few economists, like Charles Rist of France, Ludwig von Mises of Austria and Gustav Cassel of Sweden, thought it would.
On The Kudlow Report, Stephen Moore discusses the economy:
At Canada's National Post, Tim Mak explains Art Laffer's support for a carbon tax.
In The WSJ, Robert C. Pozen suggests yuan appreciation will not raise U.S. exports.
From last December, Reuven Brenner and David Goldman argue that the best way to increase China's consumption is through a formal yuan/dollar link.
The United States should establish a fixed parity for the dollar with the currencies of its largest trading partners, starting with China. By stabilizing the dollar against the yuan and, eventually, other currencies, the United States can create a shield behind which the capital markets of developing countries can flourish and capital can continue to flow to the United States. Developed nations can protect themselves against sudden shifts in the flow of capital, but poor nations with nascent capital markets cannot. Currency stability is the first precondition for the creation of capital markets in the developing world.
The WSJeditorializes in support of Beijing's latest step towards yuan convertability.
David Goldman sees disinflation impacting stocks and bonds.
At Reuters, James Pethokoukis exposes the deficit's true size.
NRO rebuts claims that the Reagan and Obama economies are similar.
From 1998, Jude Wanniski recounts the Paul Volcker deflation of 1981-82.
The Heritage Foundation's 2010 policy guide omits sound money.
At RCM, Louis Woodhill makes the essential point that strong growth can overcome the national debt.
On CNBC, David Malpass suggests fiscal, not monetary, policy is needed to restore growth.
At the Peter Peterson-funded Fiscal Times, Bruce Bartlett does a great public service with a list of classic supply-side articles.
Larry Kudlow explains that printing money doesn't create jobs or investment.
On The Kudlow Report, John Tamny discusses the unstable dollar's role in the current malaise.
The WSJ editorial page opposes quantitative easing from the Fed, but cites fiscal policy as the primary obstacle to growth.
Curiously, The Journal also says, "The danger to this fragile recovery isn't that the Fed will repeat its overtightening mistake of 1937-38. With Mr. Bernanke at the helm, there was never even a remote chance of that." Of course, supply-side guru and Nobel Laureate Robert Mundell thinks it was precisely Bernanke's "overtightening mistake" that caused the financial crisis and the Great Recession.
At businessinsider.com, Ben Engebreth finds that tax revenue as a percentage of GDP has been fairly stable for 50 years, and that the rate of growth determines revenue.
Nathan Lewis made a similar point, here. As did David Ranson.
Brian Wesbury argues stimulus spending is ineffective.
At The Heritage Foundation’s Foundry blog, Kathryn Nix cites Art Laffer in defending lower tax rates.
On The Kudlow Report, David Goldman analyzes Ben Bernanke's testimony.
The WSJ editorial page comments on the three Democrats favoring low tax rates.
Bruce Bartlett recommends the Federal Reserve stop paying interest on reserves.
Paul Godek argues unemployment is worse than the statistics indicate.
ECB President Jean-Claude Trichet advocates fiscal tightening.
Jim Lubak sees a real estate bubble in China. Related, perhaps, to it importing American monetary policy?
The Heritage Foundation doubts China’s economic data.
Paul Krugman believes Republicans are reverting to George W. Bush's policies.
Mort Kondrake thinks the President should cut taxes.
The National Center for Policy Analysis suggests higher taxes and slower growth – not inflation or a debt crisis – is the most likely result of the high fiscal deficit.
