Thursday items: Mundell discusses exchange rates and tax cuts; Tamny defends the euro; Woodhill opposes QE3.

From Bloomberg, supply-side guru Robert Mundell argues QE3 isn’t necessary but argues for a steady expansion of the money supply and against more spending, and that commitment to a 20% corporate tax rate and making the Bush tax cuts permanent will lead to a strong US recovery.

In The Telegraph (UK), Ambrose Evans-Pritchard interviews Mundell on the euro.

At RCM, John Tamny defends the euro against criticisms from Evans-Pritchard and National Review editor Rich Lowry.

On C-SPAN, the Steve Forbes media blitz continues with an extended discussion of the economy, with the dollar as his top issue:




At Forbes, Louis Woodhill opposes QE3.

On NRO, Ramesh Ponnuru defends looser monetary policy.

From Forbes, Steve Forbes sees positive political change coming.

The WSJ counters Keynesian claims of US austerity.

From earlier this month, Stephen Moore debates liberal Thomas Hartmann on entitlements and taxes:




In The WSJ, businessman Warren Stephens suggests Sarbanes-Oxley has damaged small companies.

At Reuters, Jimmy Pethokoukis notes Gov. Mitt Romney’s (MA) updated position on global warming.

In Forbes, Jerry Bowyer outlines the religious basis for classical economics.

Tuesday items: Kadlec says gold will restore confidence; The LAT reports a possible debt and tax reform deal; Kudlow, Lowry and The WSJ oppose the Balanced Budget Amendment.

From Forbes, Charles Kadlec argues the gold standard is vital to restoring economic confidence.

The LA Times reports the Senate’s Gang of Six proposal to cut spending, eliminate tax expenditures, and reduce tax rates. One major problem: it would raise the capital gains tax from 15% to 20%.

On RCM, John Tamny reviews Peter Ferrara’s America’s Ticking Bankruptcy Bomb.

On The Kudlow Report, Larry Kudlow notes supply-siders’ objections to the Balanced Budget Amendment:




The WSJ editorializes against the Balanced Budget Amendment; NRO editor Rich Lowry also opposes it.

At The Washington Times, Richard Rahn argues regulation is stifling innovation.

IBD features Thomas Sowell’s Senate testimony on taxes.

On Hardball, Chris Matthews loses his cool over Grover Norquist’s refusal to accept tax hikes:




Canada’s Business News Network features an interesting debate with John Mueller and Professor Robert Barsky on the gold standard.

At The Washington Post, Ezra Klein defends Keynesianism.

In The New Yorker, George Packer highlights the problem of cutting social programs during high unemployment:

Representative Paul Ryan’s ten-year budget plan, which remains his party’s blueprint for the future, would impose a fifty-per-cent cut on programs like food stamps and Supplemental Security Income, which, as long as Danny Hartzell remains jobless, represent the Hartzells’ only income. By the last day of June, the Hartzells had twenty-nine dollars to their name.

Weekend round up: Lewis on Germany's recovery from hyperinflation; Reynolds rebuts Krugman; Brenner stresses incentives over debt.

From Forbes, Nathan Lewis has an astounding account of how hyperinflationary Germany relinked its currency to gold.

At IBD, Alan Reynolds counters Paul Krugman’s claim that spending austerity damaged Ireland.

In Forbes, Reuven Brenner argues the policy debate should focus on incentives for growth and investment rather than government debt.

At The WSJ, Stephen Moore profiles U.S. Rep. Michele Bachmann (MN) who says she is an Art Laffer fan and favors sound currency.

On This Week with Christiane Amanpour, George Will credits Tim Pawlenty with avoiding the austerity trap, as Ronald Reagan did:





At NRO, Larry Kudlow applauds Tim Pawlenty for focusing on 5 percent annual growth.

At Slate, David Weigel, of Journolist fame, celebrates National Review’s Kevin Williamson for ridiculing fast economic growth “magic unicorns.”

Taking a page from Williamson, Washington Post progressive columnist Ruth Marcus critiques Pawlenty’s “magical thinking” on economic growth.

On Bloomberg, National Review editor Ramesh Ponnuru doubts Republican tax cut plans will do much to help the middle-class.

On The Kudlow Report, David Malpass sees slow growth continuing:




In The Washington Post, Charles Krauthammer predicts Republicans will focus on stewardship of the economy rather than ideology in 2012.

On NRO, Rich Lowry highlights the unemployment crisis.

From Forbes, Jerry Bowyer analyzes the roots of Keynes’ thinking.

At The WSJ, Stephen Moore notes Republican efforts to ensure against default if the debt ceiling isn’t raised.

Also on This Week, Sen. Richard Shelby (AL) debates supply- vs. demand-side economics, but doesn’t mention the unstable dollar and refers to World War II spending ending the Great Depression:





From Fiscal Times, Bruce Bartlett argues cutting long-term deficits, not lowering tax rates, will increase growth.

On Slate, Annie Lowrey argues the Bush tax cuts were a failure.

From Yahoo Finance, Jeff Macke sees dollar strength causing market and commodity sell offs.

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.

Friday items.

A FreedomWorks press release says the organization will co-sponsor a panel discussion in Washington this week on sound money.

From Wednesday, Larry Kudlow reports on the stock market’s progress.

On The Kudlow Report, Stephen Moore analyzes the high jobless numbers:




At Encima Global, David Malpass assesses the jobless report.

On RCM, John Tamny takes a counter intuitive view of a US-debt default.

At Reason, Nick Gillespie downplays the role of economic growth in the current deficit:




The NY Sun notes silver's recent rise.

At National Review, Rich Lowry praises entrepreneurial innovation.

From the Mises Institute, George Selgin suggests the Fed has been a failure:




In The WSJ, John H. Cochrane suggests national debt defaults are preferable to bailouts.

On NRO, Kevin Williamson scolds Americans for Tax Reform for opposing the Simpson-Bowles tax plan.

Wednesday round up.

At IBD, Jed Graham explains how growth rates impact fiscal deficits.

Michael J. Boskin debunks the President's economic analysis.

Brian Wesbury predicts solid economic growth.

At Fox News, Greta Van Sustern interviews The WSJ's Stephen Moore.

Rebelyid.com compares Laffer and Krugman.

CEO Jim Prevor rebuts Keynesian Alan Blinder.

Calwatchdog.com analyzes tax rates and budget deficits.

Rich Karlgaard wonders why more pundits don't ask employers why they aren't hiring.

Bloomberg's Caroline Baum examines employment statistics.

At NRO, Amity Schlaes challenges Conrad Black's analysis of FDR.

Megan McArdle suggests substituting spending for tax cuts is weak stimulus.

Newt Gingrich assesses barriers to job creation.

Congress presses the Fed to provide more monetary stimulus.

To increase exports, President Obama will pursue stalled trade deals.

Coin dealers are up in arms about a new tax on gold coins.

This site has a collection of Friedrich von Hayek interviews.

Lowry review.

In last weekend's Washington Post, National Review's Rich Lowry reviewed a book on the rise of neo-conservatism in the 1970s and the subsequent triumph of conservatism. The review recounts well-known history -- the turn of some New York intellectuals against communism, President Carter's failures, etc -- in considering the Right's success after 1980.

While Lowry's article focuses on foreign policy, it's worth noting the role of supply-side economics in the conservative ascendancy. Without supply-side's appearance in the 1970s, hawkish foreign policy, which had a long pedigree, would not have led to sweeping political success.

It's important to remember that before it was refocused in the 1990s solely on foreign policy, neo-conservatism was a wider intellectual movement, a component of which was supply-side economics. In 1975, Irving Kristol, the godfather of neo-conservatism, published in The Public Interest the first popular supply-side treatise, Jude Wanniski's "The Mundell-Laffer Hypothesis," explaining the chaos unleashed by the newly-floating dollar and how to fix it.

It was this view, taught to Wanniski by Professors Robert Mundell and Art Laffer, detailed in Wanniski's book, The Way the World Works (written on a fellowship at the American Enterprise Institute arranged by Kristol), that captured U.S. Rep. Jack Kemp's interest. Kemp later conveyed supply-side's framework to presidential candidate Ronald Reagan.

Mundell's view, in contrast to the predominant Keynesian framework, was that monetary policy should focus solely on maintaining a stable currency price against gold, leaving fiscal policy to stimulate employment. Realizing spending stimulus was unproductive in an open economy with flexible exchange rates -- increased borrowing led to higher interest rates which caused the current account deficit to rise, thereby sending stimulus dollars offshore -- Mundell and Laffer focused on tax policy, specifically marginal tax rates, as the crucial lever to reduce unemployment. In sum, sound money and marginal tax rate cuts, the familiar supply-side policy mix.

This novel approach enacted by Kemp and Reagan led to an astounding reversal of the 1970s stagflation and historic expansion of employment, financial markets, and GDP.

This success, clearly, was the key to conservative electoral victories in the 1980s.

Moreover, it likely was central to the era's foreign policy successes. The tremendous U.S. military build up of the 1980s simply would not have been possible without the revenues thrown off by the economy's expansion. As I recall, after the Cold War a former Soviet official noted that the U.S. ability to finance large budget deficits even as interest rates declined was deeply demoralizing to the communist world.

One great irony of the Cold War is that it may have been floating currencies, fiercely opposed by supply-siders, that finally undid the Soviet system. Its centrally planned economy was able to cope, however poorly, when the world's prices were stable. When currency values became highly unstable after 1971, the Soviet system could no longer mimic the West's market-driven pricing system. While capitalist economies were flexible enough to adapt to floating currencies, the top-down Soviet system was hamstrung, hastening its collapse.

If conservatism is to have another ascendancy anytime soon, it will be because conservatives once again unify under supply-side economics.