Thursday items: Woodhill proposes Greek reforms; Domitrovic on 19th century panics; Laffer on Italy.

From Forbes, Louis Woodhill offers Greece a compelling alternative to austerity.

At Forbes, Brian Domitrovic analyzes the economic panics during the classical gold standard.

On The Kudlow Report, Art Laffer sounds optimistic about Italy’s new leader:

 
From Alhambra Investments, John Chapman explains the US is far more guilty of currency manipulation than China.

In Canada's Financial Post, Peter Foster reports from a Keynesian debate on the parallels between Japan’s deflationary recession and the current US situation. Unmentioned is the yen’s sharp appreciation versus gold and the dollar since the mid-1980s, and the dollar’s sharp appreciation versus the euro and gold in summer 2008.

At NRO, Larry Kudlow highlights positive economic news.

Caffeinated Thoughts notes the gold standard’s popularity with Iowa Republicans.

In The WSJ, Walter Russell Mead sees France and Germany in a struggle over the eurozone’s economic culture:

France is basically a Club Med country with some northern features (historically often found among the Huguenots and Jews, out of which communities many of its most successful business leaders have come). It wants a "political" economic system for Europe, one in which political pressures can ensure the kind of steady devaluation of the euro that Italy, Spain, France, Greece and Portugal used to enjoy with their national currencies in the good old pre-euro days. The only problem with this old system was that it gave too many advantages to the Germans, Dutch and others (in the form of lower interest rates). France wants to stick the Germans with a Latin currency and Latin rules for running it.

Germany, on the other hand, wants the Latin countries to live by northern rules: Keep the currency sound, the budgets balanced and let the chips fall where they may. There is zero, repeat, zero consensus in Germany to go Latin and give the euro into the hands of slick French and Italian politicians. Technocrats bound by rules, the Germans can accept: That is why an Italian technocrat is following a Frenchman at the head of the ECB. But that is also why the Germans are being such sticklers about ECB rules against bailouts and unlimited ECB purchases of sovereign bonds.

At RCM, Alan Viard and Chad Hill propose an interesting tax reform idea.

The WSJ pans the GOP balanced budget plan:

Instead, House Speaker John Boehner plans to offer a vanilla amendment that merely calls for a balanced budget, with no spending limitation or supermajority tax requirements. The Speaker seems to believe, or at least hope, that this might attract enough Democratic votes to pass the amendment (which requires a two-thirds vote in both houses of Congress, plus approval in 38 state legislatures).

On Bloomberg, James Grant predicts the European Central Bank will continue to loosen (h/t: TGSN):

 

In The WSJ, Jason Riley notes Sen. Marco Rubio’s (FL) pro-immigration rhetoric.

Monday round up.

On NRO, Larry Kudlow counters Charles Krauthammer on the tax cut deal.

Rush Limbaugh notes the attacks on supply-side economics.

At The Kudlow Report, Larry discusses Fed policy:




On Forbes, John Tamny profiles the producer of the forthcoming Atlas Shrugged film.

At New World Economics, Nathan Lewis analyzes government spending.

In i view magazine, Ermira Kamberi examines Robert Mundell’s call for a global currency.

On MSNBC, Joe Scarborough sees the tax agreement as a victory for “Jack Kemp style supply-side economics,” but bemoans the deficit.

At The WSJ, Stephen Moore reports some conservatives may oppose the tax deal over higher estate tax rates.

On RCM, Benn Steil explains how floating currencies create bubbles and break down the global economy.

Consider first how the United States and China would interact under a classical gold standard. If the United States sent a dollar to China, China would have to redeem that dollar for American gold. A fall in the U.S. gold stock would necessitate a rise in U.S. interest rates, which would reduce credit growth, reduce prices, and reduce the trade deficit. This is the mechanism by which the gold standard automatically corrected global imbalances.

Compare this with today's actual monetary structure. When the United States sends a dollar to China, China immediately returns it in the form of a low-interest-rate loan. That dollar is then recycled through the U.S. financial system, causing further credit growth and, critically, no countervailing Federal Reserve action.

The bubbles and imbalances that have marked the past decade-as they did the 1920s-are features of a monetary regime which operates in precisely the opposite fashion as the one which operated during the great globalization of the late nineteenth century. America is not, as Fed chairman Ben Bernanke would have it, a passive victim of "a global savings glut." It should not, therefore, be surprising that bubbles will continue to emerge in one asset market after another, and will continue to burst with damaging consequences.

From Cato, Greg Mills suggests that Africa is poor because its economies are illiberal.

On Bloomberg, Kevin Hassett argues Ireland should be allowed to default.

AEI’s resident floating currency advocate says – surprise! – the euro in its present form is doomed, because it restricts nations from devaluing their currencies and therefore defaulting on their debt.

In The Washington Times, Patrice Hill reports on economists who say the US-China current account deficit costs America jobs.

From earlier this year, on the Freeman, David Henderson explains trade deficits are irrelevant.