Weekend edition: Danker links the debt downgrade to fiat money; Pawlenty withdraws; Ferrara sees a crash coming.

From The Des Moines Register, Rich Danker suggests the S&P debt downgrade is the inevitable result of leaving the gold standard 40 years ago.

The LA Times reports growth advocate Tim Pawlenty’s withdrawal from the Republican presidential race.

At NRO, Larry Kudlow interviews Sen. Pat Toomey (PA) about a grand bargain on the debt and taxes.

On The Kudlow Report, James Pethokoukis analyzes the GOP debate:




At RCP, US Rep. Ron Paul (TX) advocates a gold standard at last week’s GOP debate.

On The Washington Monthly, Steve Benen expresses astonishment that the gold standard is being discussed by Republican candidates.

From Forbes, Peter Ferrara predicts the end of loose monetary policy, combined with new Obamacare taxes and the Bush tax rates’ expiration, will cause an economic collapse in 2013.

On Fox Business News, Steve Forbes suggests bond yields will rise due to higher borrowing and the low dollar:




In The WSJ, Glenn Hubbard advocates tax reform to get the economy moving.

On The American Spectator, John Berlau chides Europe for suspending short sales.

At New World Economics, Nathan Lewis ties tax and monetary error to the rise and fall of great nations.

On CNN, Paul Krugman wishes for an alien invasion that would justify increased government spending and expansionary monetary policy.




The Washington Post reports that after months of deficit obsession, the House Republican majority looks vulnerable.

At Forbes, Reuven Brenner suggests educational reform to get the US growing again.

Reason asks various experts how to fix the economy. Only Amity Schlaes zeroes in on monetary reform as the top priority. Notably, former supply-sider Bruce Bartlett argues the US is in a Keynesian liquidity trap requiring inflation and increased government spending.

Monday update: Benko chides Frank on the gold standard; Kudlow sees a possible debt deal; Salsman blames Bernanke for the Great Recession.

From Forbes, Ralph Benko chides progressive writer Thomas Frank for dismissing the gold standard.

On NRO, Larry Kudlow sees a grand debt bargain including tax cuts as possible.

At Forbes, Richard Salsman argues Fed Chairman Bernanke caused the Great Recession by allowing the yield curve to invert in 2007.

On The Kudlow Report, John Harwood profiles Republican presidential candidate Tim Pawlenty:



The NY Sun notes the irony that Bernard von NotHaus will go to jail for minting silver coins that are worth more today than when he made them, while the Federal Reserve prints dollars that continue to lose value.

In The WSJ, Stephen Moore reports that after a two-week government shutdown, Minnesota’s Democratic governor has agreed to deep spending cuts without tax increases.

In the goofball analysis of the week, Newsweek’s Daniel Altman suggests today’s American “narcissism” stems from supply-side economics.

This rhetoric—that Americans can have everything without having to pay for it—dates back to the Reagan era, when an economist named Arthur Laffer suggested that lowering tax rates would result in more revenue by spurring spending among businesses and consumers. He was wrong, but it’s clear from the budget debate in Washington that people still believe him.

In The WSJ, Michael Boskin finds that without spending cuts, taxes will need to rise substantially on all tax payers.

Monday items: Benko on growth vs. deficits; Forbes on the IMF; Continetti on Sam's Clubs Republicans.

From Forbes, Ralph Benko makes a strong case against Kevin Williamson’s growth agnosticism.

On Forbes, Steve Forbes criticizes the IMF and praises Brian Domitrovic’s Econoclasts.

In The Washington Post, Matthew Continetti cites Jude Wanniski’s “Mundell-Laffer Hypothesis” and suggests Sam’s Club Republicans aren’t being served by supply-siders like Tim Pawlenty.

On The Kudlow Report, Larry Kudlow links negative economic data to QE2:




At USA Today, former Sen. Bill Bradley (NJ) makes a good case for growth vs. deficits, arguing for employment subsidies.

On Forbes, Lawrence Hunter proposes questions to ask about any budget deal.

The NY Sun promotes its anthology of gold standard editorials.

At Econlog, Arnold Kling calls Sen. Richard Shelby (AL) a New Keynesian for endorsing inflation targeting.

Bloomberg reports George Soros predicting an exit from the euro for the weaker economies.

At Forbes, John Tamny likes sports recruiting to business and investing.

Weekend edition: Mundell on a stronger dollar; Lewis, Jenkins, Forbes on the euro; Toomey on fast growth.

From Korea’s JoongAng Daily, Robert Mundell expresses concern about a stronger dollar and calls for a stable euro/dollar exchange rate.

On Forbes, Nathan Lewis argues the Eurozone’s economic problems shouldn’t undermine the euro.

In The WSJ, Holman W. Jenkins, Jr. suggests the euro is working as it should:

Those who say if only Greece still had its own currency, so much pain would have been avoidable, exaggerate. Under no possible currency regime would Greece have been able to go on forever borrowing money from foreigners to live beyond its means or its willingness to work. The same is true to lesser degree of other troubled European economies, including Portugal and Spain.

All along, the challenge of the euro was the challenge that undid the gold standard—to make "the law of one price" prevail across multiple countries in the age of interest group democracy. "One price" in one country works—Americans will pick up and move 3,000 miles for a job, but even in America, not without pain.

Yet the nostalgia for a Europe of independent currencies is mostly nostalgia for an illusory shortcut—even more so as services, rather than tradable goods, become the overwhelming source of employment in modern economies. Greece, with its sun and history, has every potential to make a happy, privileged existence inside the euro zone. Today's growth gap between Europe's north and south, which some say proves the unwisdom of a common monetary policy, is hardly organic—it's the product of their common mistake in loading too much debt on unreformed southern economies in giddy expectation of euro-based prosperity.

At RCM, Joe Calhoun says Paul Krugman is right that defaulting on debt can be healthy.

On Yahoo Finance, Steve Forbes addresses Greece’s debt problems:



The WSJ editorial board argues the dollar’s decline has been good for wealthier, heavily invested Americans but terrible for blue collar workers and the middle class.

The WSJ reports Sen. Richard Shelby (AL) will urge Fed Chairman Bernanke to adopt and explicit inflation target.

From IBTimes (UK), Gabriel Mueller compares the dollar and gold price of the 1970s to the present (h/t: Ralph Benko).

At RCP, U.S. Sen. Pat Toomey (PA) supports Tim Pawlenty’s economic growth proposal.

RCP: Tim Pawlenty has come out with what many consider to be a very pro-growth economic plan. Would you support Pawlenty's plan?

Toomey: I haven't had a chance to break down and study every element of his plan, but I am very enthusiastic about the fact that he has made economic growth -- encouraging that growth through tax reform, lowering the top marginal rates, and the abolition of the tax on capital gains -- that he has made it the centerpiece of his campaign is very constructive and very good news. A very important part of our message needs to be our ability to restore economic growth and job creation. Now, [Pawlenty] has established a very ambitious goal of 5 percent economic growth.

RCP: Do you think that's a reasonable goal?

Toomey: If we had really dramatic tax reform, if we got our fiscal house in order, if we reform the big entitlement programs, if we rein in the regulators, and if we expand trade, I think it is entirely possible. You could average that. We could have a wave of innovation and investment that could very well produce something like that and it's a good goal to have.

From The WSJ, Stephen Moore analyzes the weak recovery.

On Bloomberg, Caroline Baum suggests unstable tax policy is damaging the economy.

At Slate, Annie Lowrey acknowledges that some tax cuts do pay for themselves.

On The Kudlow Report, Stephen Moore and James Pethokoukis debate the economy and debt:




In The American Spectator, G. Tracy Mehan, III, wonders why we would raise taxes now.

At Forbes, Peter Ferrara recommends health care reforms that would achieve much of Obamacare’s aims without job-killing mandates.

On TNR, Jonathan Chait cites Bruce Bartlett arguing Republican claims about tax hikes’ negative impact is overstated.

At American Thinker, Henry Oliner defends supply-side economics.

Lewis on growth and reform; Brenner on a lost decade; Kudlow on malaise.

From Forbes, Nathan Lewis suggests ideas for spurring economic growth and reforming government.

On Forbes, Reuven Brenner explains how to avoid a lost decade.

Cato’s Dan Mitchell warns Republicans not to cave on tax rates.

On The Kudlow Report, Larry Kudlow discusses the ongoing slow-growth malaise:




At Wall Street Pit, William Anderson quotes Paul Krugman saying, in 2004, that 70 percent tax rates were insane.

On Fiscal Times, Bruce Bartlett challenges Tim Pawlenty’s claim that tax cuts pay for themselves.

At Seeking Alpha, Tom Lindmark says Bartlett’s article is a mishmash which conflates numbers to prove a point.

On his website, Robert Reich responds to Republican tax cuts claims.

At a progressive conclave, the White House communications director gets lambasted over unemployment:




At Caffeinated Thoughts, Ralph Benko expands his discussion of money quality versus quantity.

From last week at Lew Rockwell, Bob Murphy defends the gold standard.

At IBTimes (UK), Gabriel Mueller suggests the world may be returning to a gold standard.

On COAL, Krugman criticizes the Obama Administration for giving up on Keynesian stimulus.

In The Washington Post, Chris Cillizza notes Tim Pawlenty getting tougher on Mitt Romney after last week’s low key debate performance.

Thursday items: Reynolds on tax rates; Woodhill on Keynesian claims; Tamny on Zandi.

In a must-read from The WSJ, Alan Reynolds demolishes tax increase arguments.

At Forbes, Louis Woodhill responds to Keynesian claims.

On The Kudlow Report, Dan Mitchell debates high tax rates:



At RCM, John Tamny challenges Mark Zandi’s weak dollar/tax rebate strategy for growth.

On Money News, Steve Forbes promotes the gold standard.

The WSJ Asia suggests that China raise the yuan’s exchange rate.

There are hints that a debate is ongoing in Beijing about how to alter course before these distortions grow bigger. The reformers have been hamstrung by the export lobby's desire to keep the yuan's value low. But the costs of intervening to do so are rising. Sustaining China's growth will require banks to make market-oriented lending decisions, which won't happen as long as its central bank can't use interest rates as a tool of financial management. The sooner Beijing decides to stop sterilizing, the easier will be the transition to a better financial system.

Freedomist continues to critique NRO’s Kevin Williamson (more here).

At Bloomberg, progressive Ezra Klein calls Tim Pawlenty’s growth strategy fantasyland but acknowledges it is smart politics.

From earlier this week in The WSJ, Bill McGurn rebuts The NYT’s Thomas Friedman for Friedman’s view that the world is full. Like Friedman, McGurn overlooks the unstable and declining dollar:

All around us we see its manifestation in the revival of floppy hats, platform shoes and maxi dresses. We can, however, also detect this same retro fashion sense on the op-ed page of the New York Times. There last week Tom Friedman's column carried one of the sentiments most in vogue in the 1970s: "The Earth Is Full."

Mr. Friedman invokes the usual grim specters so beloved of a certain kind of intellectual: natural disasters (tornadoes, floods and droughts); rising prices (food and energy); the threat to stability; and of course the kicker—that there are just too many darn people around these days.

It's a familiar meme, and it comes bearing the familiar scientific credentials. In this case the authority is, Mr. Friedman tells us, "an alliance of scientists" called the Global Footprint Network, "which calculates how many 'planet Earths' we need to sustain our growth rates." Right now they say it is 1.5. Which can mean only one thing unless we cut way, way back: We're doomed.

At Forbes, Jerry Bowyer continues to examine the psyche of John Maynard Keynes.

On TNR, Jonathan Chait challenges The WSJ’s critique of the President's economic policy.

From this week’s Republican candidate debate, Newt Gingrich had a terrific answer on tax rates:

KING: Mr. Speaker, if you look at a poll in the Boston Globe just the other day, 54 percent of Republican voters in this state say they're willing to have higher taxes on the wealthy to help bring down the deficit. Are they wrong?

GINGRICH: Well, the question is, would it, in fact, increase jobs or kill jobs? The Reagan recovery, which I participated in passing, in seven years created for this current economy the equivalent of 25 million new jobs, raised federal revenue by $800 billion a year in terms of the current economy, and clearly it worked. It's a historic fact.

The Obama administration is an anti-jobs, anti-business, anti- American energy destructive force. And we shouldn't talk about what we do in 2013. The Congress this year, this next week ought to repeal the Dodd-Frank bill, they ought to repeal the Sarbanes-Oxley bill, they ought to start creating jobs right now, because for those 14 million Americans, this is a depression now.

The Club for Growth lists its key priorities but doesn’t mention the dollar.

Tuesday update: Domitrovic on past gold standard errors; Benko on the euro and gold; Asness on bad policy.

On Forbes, Brian Domitrovic outlines ten mistakes to avoid under a gold standard.

At Forbes, Ralph Benko proposes a fusion of Robert Mundell and John Tamny to save the euro with a link to gold.

In The WSJ, Clifford Asness argues bad policy, not uncertainty, is the root of the economy’s trouble.

From the Gold Money Foundation, American Principles Project Chairman Sean Feiler discusses the group’s gold standard project:



On Forbes, Charles Kadlec chides NRO’s Kevin Williamson for his growth skepticism but applauds House Republicans and Tim Pawlenty.

At The Freedomist, William Collier, Jr. bashes Williamson for prioritizing deficits over growth.

On NRO, Williamson makes a positive contribution on inflation.

From Bloomberg, National Review’s Ramesh Ponnuru proposes middle class tax reform featuring a big increase in the child tax credit while reducing deductions and lowering the floor on the top tax bracket.

On Dick Morris TV, Morris provides an interesting assessment of the GOP debate. Most disappointing, Pawlenty was seen widely to have been timid and uncertain:




At Business Insider, Joe Weisenthal doubts Bill Gross’s warnings on Treasuries.

On CNBC, John Carney cites a Federal Reserve analysis that uses the Taylor Rule to indicate that for peripheral European nations, the euro’s interest rates are too high.

Monday update: Woodhill, The NY Sun, and Taylor on Pawlenty; Tamny sees the euro continuing; Goldman on zombinomics.

From RCM, Louis Woodhill explains why Tim Pawlenty is right about five percent annual growth.

The NY Sun congratulates Pawlenty for his pro-growth message but stresses a deeper emphasis on the dollar.

Conservative Keynesian John Taylor supports Pawlenty’s call for growth.

You can see how the types of pro-growth policies in the Pawlenty plan would work toward the goal by reducing spending growth enough to balance the budget without tax increases and thereby remove threats of a debt crisis; by lowering marginal tax rates to spur hiring and job growth; by scaling back unnecessary new regulations which impede private investment and higher productivity, and by restoring sound monetary policy to remove uncertainty about inflation or another financial crisis.

On Forbes, John Tamny suggests the euro will remain in place.

At Asia Times, David Goldman assesses the “zombie” economy.

On NRO, Don Luskin reports Paul Krugman’s poor record predicting the economy.

From Forbes, David Malpass discusses the debt ceiling, the dollar and the economy.

On International Liberty, Dan Mitchell advocates cutting government to boost growth.

From The Daily Progress, James Philbin suggests a gold standard is key to recovery.

In The Washington Post, Larry Summers opposes reducing demand-side stimulus from the economy.

On Forbes, Richard Salsman blames demand-side economics for the current malaise.

At COAL, Paul Krugman cites Laffer to make the Keynesian case for growth economics.

Thursday update: Lehrman on the gold standard; Goldman says don't panic; Jacoby on immigration.

In The American Spectator, Lew Lehrman suggests the choice of monetary policy is between Robert Mundell’s idea for an exchange rate peg between the dollar and euro versus the gold standard.

From Asia Times, David Goldman predicts slow growth but sees no reason to panic.

At The American Spectator, Peter Ferrara sees the US falling into depression if the Bush tax rates lapse after 2012.

On The Kudlow Report, Tamar Jacoby debates the economics of immigration:




In The WSJ, Dan Henninger notes the President’s political weakness on the economy and the strength of Tim Pawlenty’s pro-growth message.

At The NYT, Matt Bai suggests the President’s reelection message, don’t change horses in midstream, is a loser.

On Future of Capitalism, Ira Stoll reports McCain economist Doug Holtz-Eakin saying 5% annual growth rates are impossible.

On Kudlow, guests discuss possible deflationary pressures in China:




At the liberal Mother Jones, Kevin Drum suggests the Left could like supply-side economics if it raised revenues as fast as advertised.

On Think Progress, Matt Yglesias takes up Drum’s point but argues the Left won’t support tax cuts due to inequality concerns.

In The NYT, Jackie Calmes reports the flagging economy is leading Democrats to push for additional spending stimulus despite high deficits.

At TNR, Jonathan Chait notes the President’s consideration of a payroll tax cut.

IBD argues Keynesian spending is ineffective.

On TGSN, Ralph Benko notes Daniel Webster’s support for gold and silver as money.

The Des Moines Register reports Herman Cain having second thoughts on the gold standard. (Hat tip: Ralph Benko).

From Project Syndicate, Raghuram Rajan argues loose money is bad for the economy.

Wednesday round up: Woodhill notes the weak recovery; Feldstein cites obstacles to recovery; The WSJ applauds Pawlenty.

From Forbes, Louis Woodhill contrasts the current recovery with the Reagan Boom and notes the weak dollar as a factor.

In The WSJ, Martin Feldstein argues the President’s proposed tax cuts and incoherent dollar policy, along with deficit, is holding back the economy. For the record, Feldstein has long supported a lower dollar.

The WSJ applauds Tim Pawlenty’s call for higher growth via flatter tax rates and a stable dollar, but is concerned by his support for a balanced budget.

On The Kudlow Report, John Carney discusses J.P. Morgan CEO Jamie Dimon’s critique of federal policy towards the financial industry:




At Forbes, Brink Lindsey notes the difficulty of measuring economic growth.

On Commentary, John Podhoretz rebuts claims that the stimulus spending package was too small.

In The WSJ, Seth Lipsky suggests a constitutional scholar would be a positive addition to the Federal Reserve board.

Back in March, when Chairman Bernanke testified before the House Financial Services Committee, Congressman Ron Paul asked him for his definition of the dollar. Mr. Bernanke made no mention of the Constitution or any law passed by Congress. Instead he replied that his definition of a dollar was what it will buy.

That isn't how the Founders thought about the dollar. They thought about it as a measure of value. They gave Congress the coinage power in the same sentence in which they also gave it the power to fix the standard of weights and measures. When they twice used the word "dollars" in the Constitution, they had something specific in mind—371¼ grains of silver. They made reference not only to silver but to gold.

My guess is that the Founders would agree with Mr. Diamond when he writes that "[w]e need to preserve the independence of the Fed from efforts to politicize monetary policy." This is why they defined money in terms of silver and gold, the latter in particular being the measure of value that is hardest to politicize. Wouldn't it be nice to have among the governors of the Fed someone who thinks about money not in terms of theories but in the constitutional terms in which the Founders thought?

The Washington Times notes that QE2’s end may mean higher interest rates.

At Fox News, Charles Krauthammer explains the economy’s weakness and confirms the 2012 election will center on economic stewardship:




Pew Research reports more Americans blame the deficit on war than on tax cuts or domestic spending.

The NY Sun notes the debt limit debate puts Republicans in an unwinnable political position.

Reuters reports a Chinese official speculating about further dollar weakening.

Tuesday summary: Domitrovic contextualizes the recovery; Tamny on the weak dollar; Rutledge sees China inflation as a warning for the U.S.

From Forbes, Brian Domitrovic contextualizes the current recovery's extraordinarily slow growth.

On RCM, John Tamny argues the weak dollar is responsible for the economy’s weakness.

At Forbes, John Rutledge sees China’s inflation as a warning for the U.S.

On The Kudlow Report, Republican candidate Tim Pawlenty highlights his pro-growth message:




The Washington Post notes the President’s softening poll numbers and Mitt Romney’s rise.

From NRO, Kevin Williamson responds to critiques of his focus on austerity versus growth by arguing we need both.

On RCM, Steve Forbes discusses the dollar and gold:




From Bloomberg, Amity Schlaes challenges Paul Krugman’s view of 1937’s recession within the depression.

At The NYT’s Economix blog, Bruce Bartlett suggests U.S. taxes are similar to Western European nations when healthcare costs are included.

In The Washington Post, Glenn Kessler challenges the President on the auto bailouts’ success.

Monday items: Benko on last week's SSE conference; Lipsky on gold; Kudlow on oil prices.

On Forbes, Ralph Benko recounts the sound money consensus at last week’s supply-side conference in New York.

From Hillsdale, Seth Lipsky explains why the dollar should be defined in gold.

At NRO, Larry Kudlow sees the weak-dollar caused oil price spike as a tax hike.

On The Kudlow Report, Larry Kudlow hammers presidential candidate Tim Pawlenty on his lack of a growth message:



At The Motley Fool, Warren Buffett predicts the dollar will continue to decline.

From Think Markets, Andreas Hoffman recounts Robert Mundell’s theory of optimum currency areas.

On Asia Times, David Goldman doubts a Treasury market implosion.

From last week in The NYT, former Fed official Laurence H. Meyer argues inflation is not a worry.

On Forbes, Steve Forbes advocates increased oil drilling.

In The NYT, Greg Mankiw predicts a U.S. debt crisis.