Thursday round up: Woodhill on tax increases; Mundell calls for China tax cuts; Luskin on trickle down economics.

From Forbes, Louis Woodhill explains why tax increases are destructive to GDP, the private sector, and government revenues.

On China Daily, Robert Mundell advocates tax cuts in China.

At Parcbench, Ralph Benko urges the GOP to have fun as the party of getting rich.

From TGSN, Kelly Hanlon reports from the recent Atlas Foundation conference on sound money.

On The Kudlow Report, US Rep. Ron Paul (TX) discusses his attack on Newt Gingrich:

 

From Cato, Kevin Dowd advocates a path back to a gold-linked dollar.

At The NY Sun, Seth Lipsky gives a favorable review to the new Thatcher movie.

TGSN reprints a NYT editorial from 1896 on the gold standard.

The WSJ suggests easier dollar borrowing for Europe won’t improve the situation much.

On Kudlow, Don Luskin discusses the stocks market:

 

On International Liberty, Dan Mitchell defends “trickle down” economics.

In The WSJ, Michael Auslin argues Japan is strong fundamentally but needs reform.

All this suggests that Japan needs more structural reform, particularly in three areas: reducing regulation, opening up to foreign direct investment, and expanding free-trade networks. Prime Minister Yoshihiko Noda's recent decision to join negotiations over the free-trade Trans-Pacific Partnership is a good start, but he needs to overcome opposition in his own party to assure full participation.

In The WSJ, former SEIU president Andy Stern argues the US should imitate China’s centrally planned economy.

Weekend update: Reynolds says QE2 hurt the recovery; Lewis congratulates Republicans for stopping tax hikes; Mundell sees the euro surviving.

From The WSJ, Alan Reynolds argues QE2 damaged the US economy.

On Forbes, Nathan Lewis congratulates Republicans for holding firm against tax hikes during the budget debate.

The Globe and Mail (Canada) reports on Robert Mundell’s recent public appearance.

Reuters notes Nobel laureates, including Mundell, see the euro continuing.

At Fox Business News, Lew Lehrman suggests the yuan is undervalued and that China is a dangerous, mercantilist threat (h/t: TGSN):




In The WSJ, Stephen Moore contrasts the Reagan recovery with Obama’s.

At Forbes, Bill Flax argues that WW II did not end the Great Depression.

In National Affairs, Seth Lipsky answers the question, what is a dollar?

From Forbes, Peter Ferrara challenges inequality claims.

At The Daily Caller, Jamie Weinstein notes a supply-side slip by progressive Jacob Weisberg.

In The WSJ, Carl Kelm reports Gov. Rick Perry’s (TX) surge in the polls.

At COAL, Paul Krugman explains the Keynesian theory of Japan’s liquidity trap.

Also on COAL, Krugman notes the CBO’s estimate of lost revenue due to the recession/malaise.

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.

Weekend update: Lewis on the gold standard; Moore on red/blue state taxes; Coburn on budget talks.

From Forbes, Nathan Lewis explains why, if the gold standard is so effective, the world left it.

At The WSJ, Stephen Moore notes that taxes are rising in blue states and falling in red states.

The NY Sun advocates that Robert Zoellick be considered to lead the IMF.

On The Kudlow Report, Sen. Tom Coburn (OK) discusses his withdrawal from Gang of Six budget talks due to insufficient Medicare cuts:




At Forbes, Reuven Brenner likens the U.S. economy today to 1970s Canada.

In The WSJ, Seth Lipsky opposes selling the U.S. gold supply.

James Grant, editor of Grant's Interest Rate Observer, believes that "a resumption of gold convertibility is not politically impossible. . . . Is it not a historical fact that gold-convertible currencies did yeoman's service for 100 years and more?" He is with Mr. Lehrman, who stressed on National Public Radio this week that the gold standard is ripe for American leadership: "We have all the grounding and the basis for the United States taking the lead in establishing the convertibility of the dollar today."

Surely Mr. Lehrman is right that if we are to return to an era of sound money, America would be the logical leader. That was my takeaway from the interview with Mr. Poehl in 1986. The point on which he was most clear was that if there was to be monetary reform, "the U.S. would certainly have to take the lead. That just goes without saying, because the U.S. is the strongest country."

From the Independent Institute, Jeffrey Rogers Hummel suggests the Federal Reserve has become the economy’s central planner.

The Mellman Group releases poll data on the economy, indicating substantial room for an upbeat, pro-growth message.

USA Today reports continued weak job creation.

In The WSJ, Dick Armey and Matt Kibbe suggest entitlement reform is the key to national leadership.

At The NYT, Paul Krugman argues the weaker dollar has helped U.S. manufacturing.

Also in the Times, Christina Romer endorses the lower dollar.

The AP features James Grant saying it’s best to be in cash.

Thursday round up: The WSJ, NY Sun, Lipsky and Goldman critique Bernanke; Kudlow sees stagflation; Henninger on the President's tax rhetoric.

The WSJ reviews Fed Chairman Bernanke’s press conference:

By our lights Mr. Bernanke's least credible moment came on the dollar. The Chairman repeated the bromide that preserving the purchasing power of the greenback is a core central bank goal, which he said it will accomplish by keeping inflation low and reviving growth to attract capital from abroad.

Mr. Bernanke had clearly worked out his dollar remarks with Treasury Secretary Tim Geithner, whom he saluted for saying a day earlier that "our policy has been and will always be, as long at least as I'm in this job, that a strong dollar is in our interests as a country."

The only trouble is that no one believes this. Capital has been fleeing dollar-denominated assets for months because investors believe that the Fed and Treasury are at best agnostic about dollar devaluation, at worst playing beggar-thy-neighbor to boost U.S. exports and force China to revalue its currency.

At Forbes, Seth Lipsky poses additional questions for Fed Chairman Bernanke.

The NY Sun laments Bernanke’s failure to mention gold.

On The Kudlow Report, David Goldman discusses Bernanke’s performance:




The OC Register cites Jude Wanniski on the 15:1 relationship between gold and oil prices.

On NRO, Larry Kudlow argues that stagflation is back.

In The WSJ, Dan Henninger scolds the President for his tax-the-rich rhetoric.

From The American Spectator, Peter Ferrara suggests the President doesn’t understand economics.

On Kudlow, Stephen Moore discusses the economy’s impact on the President’s re-election:




On Forbes, Louis Woodhill reports Greece is likely to default on its debt but can get back on track with pro-growth measures and sticking with the euro.

The Economist applauds China for its appreciating currency.

At Economic Policy Journal, Robert Wenzel notes per capita gold reserves (h/t: Free Banking):




Cato offers Lew Lehrman and Ron Paul’s book, The Case for Gold.

Wednesday update: Lipsky suggests questions for Bernanke; Kudlow and Lehrman on Bernanke; Kristol on the need for a pro-growth candidate.

Bloomberg reports Federal Reserve Chairman Ben Bernanke will maintain QE2 through June but is unlikely to enact QE3.

In The WSJ, Seth Lipsky offers questions for Fed Chairman Bernanke.

At NRO, Larry Kudlow suggests gold rose today due to Fed chairman Bernanke’s statement.

On The Kudlow Report, Lew Lehrman discusses Bernanke’s statement:




At The Weekly Standard, Bill Kristol quotes Lew Lehrman and pines for a GOP candidate with a deep understanding of the conservative economic model.

From Cato, Alan Reynolds corrects the President on wages and tax rates.

The NY Sun chides Treasury Sec. Geithner for his strong dollar claim.

Despite negative stories today in The NYT and on NPR, on NRO Ryan Stiles argues Republicans are in good shape on the budget debate.

On Fox News, Stephen Moore discusses energy prices:




At NRO, Kudlow rebuts attacks on the energy industry.

On The Daily Caller, John Mueller explains the flaw in Bernanke’s view of the Great Depression.

Thursday round up: Reynolds refutes tax hike rhetoric; Kudlow on the President's plan; the Laffer Center opens its doors.

In The WSJ, Cato’s Alan Reynolds refutes the President’s tax-the-rich rhetoric:

It is not as though we have never tried high tax rates before. From 1951 to 1963, the lowest tax rate was 20% to 22% and the highest was 91% to 92%. The top capital gains tax rate approached 40% in 1976-77. Aside from cyclical swings, however, the ratio of individual income tax receipts to GDP has always remained about 8% of GDP.

The individual income tax brought in 7.8% of GDP from 1952 to 1979 when the top tax rate ranged from 70% to 92%, 8% of GDP from 1993 to 1996 when the top tax rate was 39.6%, and 8.1% from 1988 to 1990 when the highest individual income tax rate was 28%. Mr. Obama's hope that raising only the highest tax rates could keep individual tax receipts well above 9% of GDP has been repeatedly tested for more than six decades. It has always failed.

At NRO, Larry Kudlow wonders why the President has decided to move left on taxes.

The WSJ explains that raising taxes on the top two percent – even with a static analysis – wouldn’t fix the deficit.

On The Kudlow Report, U.S. Rep. Aaron Schock (IL) debates Robert Reich on the President’s tax hike proposal:



The new Laffer Center for Supply-Side Economics opens its doors with a report that finds tax code complexity costs 30% of the total income taxes collected.

From Forbes, Seth Lipsky wonders why Republicans aren’t talking about the falling dollar.

At MarketWatch, David Stockman lambasts the Federal Reserve.

In The Washington Post, George Will profiles Fed inflation hawk Tom Hoenig.

Also on Kudlow, David Goldman discusses inflation:



On Forbes, Louis Woodhill suggests Republicans should quit trying to create Social Security private accounts and focus on saving the existing program with stronger growth.

In an article printed in numerous alternative weeklies, former NYT reporter David Cay Johnston launches a lengthy assault on supply-side economics.

Thursday round up: Reuters on the ECB; Bowyer says don't panic on the dollar; Grant discusses Fed policy.

In The WSJ, Seth Lipsky reports the story of a man convicted of minting his own coins.

Reuters reports the European Central Bank may raise interest rates ahead of the Fed.

At Forbes, Jerry Bowyer counsels worry, not panic, about the dollar.

On The Kudlow Report, James Grant discusses the dollar's decline:



On RCM, Michael Pento argues the Fed is imperiling the entire economy by trying to inflate the housing market.

From RCM, John Tamny advises Japan not to focus on the faulty concept of GDP.

At Forbes, Bill Flax salutes America’s entrepreneurs.

The WSJ excerpts the tax cut portion of Robert Mundell’s speech at last week’s supply-side conference:


At NRO, Larry Kudlow advocates increased oil drilling.

From The American Spectator, Peter Ferrara suggests Keynesian spending doesn’t create wealth.

NPR’s Diane Rehm Show puzzles over rising food prices and smaller food packages.

The NYT reports the smaller package trend too.

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.

Wednesday items.

From Forbes, Brian Domitrovic recalls Robert Lucas’s role in challenging 1970s Keynesianism.

The Hill reprints a Judy Shelton memo to members of Congress on potential questions for Federal Reserve Chairman Ben Bernanke.

On The Kudlow Report, U.S. Rep. Ron Paul (TX) explains why he asked Bernanke to define a dollar:



At The Atlantic, Daniel Indiviglio comments on the Paul/Bernanke exchange.

Cato’s Dan Mitchell notes Bernanke’s embrace of Keynesian spending analysis.

From The WSJ, Mary Anastasia O’Grady notes Fed Chairman Bernanke is “out on a limb” with his inflation prediction:



At RCM, John Tamny defends insider trading.

In The WSJ, Seth Lipsky suggests Sarah Palin’s outreach to labor is similar to Reagan’s.

From the archive, the late-Robert Bartley and Amity Schlaes explain the supply-side revolution.

Weekend items.

On DNA India, Robert Mundell offers a must-read overview on the dollar, euro, yuan and gold.

Another must-read comes from Asia Times, where Hossein Askari and Noureddine Krichene provide a fascinating explanation of the global currency situation. (Hat tip: Ralph Benko.)

At RCM, Larry Kudlow wonders whether the administration’s new jobs czar, GE CEO Jeffrey Immelt, can convince the president to cut corporate taxes.

On The Kudlow Report, Don Luskin discusses roadblocks facing the economy:



Echoing Mundell, at Forbes Reuven Brenner argues for reform of corporate taxes.

Business Week reports conservative Keynesian John Taylor is the House GOP’s leading advisor on Federal Reserve policy.

Mediaite posts video of this weekend’s Real Time with Bill Maher where Stephen Moore, Rachel Maddow and David Stockman debate Reaganomics:



On Bloomberg, Caroline Baum notes the U.S. is exporting inflation to China.

At The WSJ, Stephen Green analyzes the numerous challenges facing China’s economy.

In The NY Sun, Seth Lipsky calls Sen. Joe Lieberman (CT) a Kennedy liberal, though he notes Lieberman’s lack of focus on sound money.

AEI reports on historical budget consolidations that the U.S. can emulate.

Dshort breaks down the consumer price index.

Tuesday summary.

On NRO, Larry Kudlow explains that continued volatility between the dollar and euro is damaging the world economy.

At Forbes, Brian Domitrovic recounts how Sen. George Mitchell derailed George H.W. Bush’s drive for a capital gains tax cut in favor of higher taxes, dooming Bush’s presidency.

On The Kudlow Report, Heritage’s Curtis Dubay debates tax rates:




In The WSJ, Seth Lipsky reviews Nixon Fed chairman Arthur Burns’ diary.

At Alhambra Investments, Joseph Calhoun expresses cautious optimism on the economy.

Also on Kudlow, Brian Wesbury discusses the stock market’s weakness:




In Forbes, Wesbury and Robert Stein see the economy improving.

On NRO, Reihan Salam explains the negative budget impact of raising upper income tax rates.

NRO’s editors cite Art Laffer in opposing Sen. McCaskill’s (MO) millionaire tax rate increase.

The economic facts are a good deal more complicated. As the always-sensible Reihan Salam reports in the current edition of National Review, economists expect that raising taxes at the top end would reduce economic growth significantly. Democrats will call that a Republican talking point, but it is consistent with the findings of the nonpartisan Congressional Budget Office, currently under the management of Douglas Elmendorf, a Democratic appointee. The CBO numbers suggest that a partial preservation of the Bush tax rates — meaning a compromise that raises taxes on “the rich,” in this instance defined as those earning $250,000 or more — would reduce real GNP by 1.2 percent, as lower revenue necessitates more government borrowing, slowing down long-term economic growth. But an across-the-board extension would reduce real GNP by only 0.6 percent, cutting the economic losses in half. Another way of saying that is that the growth effects of extending the tax cuts at the affluent end of the scale would make up half of the forgone real GNP associated with the tax cuts. That isn’t Arthur Laffer’s analysis, it’s the Democratic-led CBO’s.

From the Mises Institute, Frank Shostak rebuts Nouriel Roubini on the gold standard. (Hat tip: Ralph Benko.)

At Capital Gains and Games, Bruce Bartlett continues to drift from classical economics by endorsing floating currencies.

Wednesday update.

At Forbes, Lawrence A. Hunter provides a terrific supply-side history and strategy for stabilizing the euro/dollar exchange rate.

The WSJ editorializes that China’s financial system is increasingly strained by its peg to the dollar:

But on its central bank bills and repos, it [China] is borrowing at short-term rates of about 1.5% to 2%. On the asset side of its balance sheet it is earning less than 1.5% on five-year U.S. Treasurys. If the Fed succeeds in pushing down U.S. borrowing costs further, and inflation in China forces more interest rate increases, the spread on $2 trillion of foreign reserves is going to become costly. Not to mention that the yuan is appreciating against the dollar….

In the near term, tightening credit could also expose the weaknesses in China's corporations and put the banks under strain. As long as the lending spree keeps going, companies appear healthy, banks' margins are fat and nonperforming loan ratios are low. The PBoC recently raised borrowing rates by 25 basis points, and the markets expect another rise before the end of the year. Lending quotas, China's main tool for controlling credit growth, could also be cut. For many companies, this could come as a rude shock.

For a long time, the question put to China bears has been what would spark a crisis. Capital controls mean that there is little possibility of capital flight, and the government stands behind the state-run banks so there seems to be no systemic risk. While we wouldn't be so bold as to predict a crash, inflation is one way in which China's goldilocks economy could come to an end and the bears be proven right.

Bloomberg reports the weak dollar is, as predicted, sending investment funds out of the U.S.

On The Kudlow Report, Sen. Judd Gregg (NH) discusses the Fed’s actions:




Caroline Baum points out the illogic of devaluing the dollar to improve the trade deficit.

Also in The Journal, an editorial warns against forcing an EU bailout of Ireland:

Ireland, at least, is taking the overspending problem seriously. It would be in much better shape if not for that open-ended guarantee to bank creditors. Repeating Ireland's mistake on a continental scale won't save the euro, and could harm it. This week, German Chancellor Angela Merkel said that "if the euro fails, then Europe fails." But the euro is a currency union, not a debt union—at least it wasn't until last May.

Mrs. Merkel has it backwards. If the euro zone, in violation of the treaty that created it, effectively assumes the debts of all its members, it would do more damage to the credibility of the currency bloc than a haircut for its lenders. If Ireland, like Greece, cannot pay its debts, it needs to restructure them, and the sooner the better.

The Atlas Foundation Sound Money Project releases Judy Shelton’s Guide to Sound Money.

In The WSJ, Seth Lipsky anticipates Ron Paul’s ascendency to chairman of the House subcommittee that oversees the Fed:

Most exciting is the prospect that Dr. Paul will be able to bring into the national conversation such figures as, say, Edwin Vieira Jr., the visionary lawyer who has become the sage of the idea of constitutional money. That's a reference to the unit of account to which the Founders were referring when they twice used the word "dollars" in the Constitution, and which they codified in the Coinage Act of 1792 as 371¼ grains of pure silver, the same as in a then-ubiquitous coin known as the Spanish Milled Dollar, or its free-market equivalent in gold.

If Dr. Paul does accede to the chairmanship of the monetary subcommittee, he will, in but a few months, gavel it to order on the 40th anniversary of the summer in which President Nixon closed the gold window and brought an end to Bretton Woods. Yet a few weeks ago, former Fed Chairman Alan Greenspan himself, speaking at the Council on Foreign Relations, warned that "fiat money has no place to go but gold." Even the president of the World Bank, Robert Zoellick, has just called for restoring a role for gold in the monetary system.

The great debate is finally starting up again. Who better to host it in Congress than the diminutive doctor who, more faithfully than anyone else on the Hill, has for more than a generation stood for the idea of sound money?

The NY Sun echoes Lipsky’s op-ed.

Also on Kudlow, Stephen Moore worries that tax rate extensions may fall through:

Monday update.

Two remarkable mainstream media hits:

First, in The NYT, James Grant advocates return to the gold standard.

Second, on National Public Radio, Reaganite and American Principles Project director Jeffrey Bell supports a gold-backed dollar.

And, in a notable act of public dissent, economists oppose Ben Bernanke's quantitative easing. On CNBC, David Malpass discusses the letter:




On his blog, Bret Swanson praises the rise of the sound money coalition.

In The WSJ, Mary Anastasia O’Grady explains that dollar volatility is undermining Brazil’s market reforms.

Bloomberg reports Australia’s measures to raise its currency’s exchange rate against the dollar to stem inflation.

Also in The Journal, Victor Shih of Northwestern University explains that China’s dollar link is causing painful inflation:

China is seeing the highest price increases in over two years, and this has officials worried. While the official consumer inflation rate was 4.4% for October, a 10% rise in food prices is having a huge impact on poorer households. The domestic media is filled with stories of hoarding by both producers and consumers.

The government has responded with a small interest-rate increase and some hikes of the reserve requirement, though rates on demand deposits have not budged at all. More action is needed. A resolute drive to slow growth of the money supply will stop the hemorrhaging of household savings due to inflation. As an added bonus, it may also wean China off of its heavy dependence on investment-driven growth.

The recent bout of inflation may seem mild in comparison to the double-digit price rises in the 1980s and '90s. But the social impact may be almost as severe. According to research by a Chinese government think tank, poorer households now face inflation that is twice the overall rate because their consumption basket is dominated by food items, which have seen the most rapid price increases. So even though wage gains seem robust, many households are seeing flat or negative increases in purchasing power.

In Forbes, Reuven Brenner advocates fixed exchange rates and tax reform to reenergize the economy.

At Asia Times, David Goldman foresees a serious crisis from the falling dollar.

On The Kudlow Report, Bob McTeer discusses global currency tensions:




On NRO, Larry Kudlow sees good economic news in the short run.

At The NY Sun, Seth Lipsky recounts Henry Hazlitt’s sound money advocacy.

Also on Kudlow, Dan Mitchell debates Robert Reich on Congress’s next steps:




On Forbes, John Tamny raves about Bill Flax’s book on markets, The Courage To Do Nothing.

At Hugh Hewitt, Clark Judge summarizes a recent Art Laffer speech.

From the archives, Jude Wanniski recounts dollar reform efforts in 1987:

Having demonstrated the Mundellian process by which tax cuts and a stable dollar-gold price at an optimum level was a far superior policy framework than the monetarist formula, I believed it would be only a matter of a year or two before we would re-establish a dollar link to gold. The monetarists were indeed no longer a powerful force in policy circles, but the neo-Keynesians stepped up to argue against a price rule, on the grounds that they could do even better in the management of the economy with the flexibility of a managed currency. The closest we got to a dollar-gold link was in September 1987, when then-Treasury Secretary James Baker III proposed an international monetary reform that would link the major currencies together, with central banks using “a commodity basket, including gold” as a “reference point,” a term I gave Baker and his aide, Bob Zoellick, at the time.

Weekend round up.

In The WSJ, Art Laffer proposes an agenda for stronger growth but minimizes the centrality of monetary reform.

On Forbes, Econoclasts author Brian Domitrovic exposes the flawed analysis of gold's critics.

Also at The Journal, Stephen Moore discusses the politics of extending the Bush tax cuts:




On Forbes, Paul Hoffmeister suggests the President’s support for quantitative easing may cost him reelection.

At the Economic History Association, Brian Domitrovic reviews a biography of French gold standard advocate Jacques Rueff.

At Cato, Dan Mitchell critiques the deficit commission’s recommendations.

On The Kudlow Report, Don Luskin is bullish after last week’s market selloff:




At New World Economics, Nathan Lewis considers political and economic developments from an international perspective.

On The NY Sun, Seth Lipsky supports Sarah Palin’s sound money advocacy.

At the Atlas Sound Money Project, Tom Duncan reports on a recent panel on the dollar.

Wednesday round up.

The President’s deficit commission recommends spending cuts along with lower tax rates and elimination of deductions.

From August, Louis Woodhill exposes the commission’s low growth assumptions.

On The Kudlow Report, Don Luskin comments on how to play loose money and fiscal austerity:




At Forbes, Brian Wesbury and Robert Stein argue against quantitative easing.

In The FT, Alan Greenspan doubts the wisdom of a weaker dollar.

The WSJ editorializes in favor of trade liberalization to improve global imbalances.

A country's trade balance is simply an accounting identity that by definition matches the flow of goods and capital. Some countries export goods (a trade surplus) and also export capital to help other countries pay for those goods (a capital deficit). Others import goods (a trade deficit) while importing the capital with which to buy them (a capital surplus). Japan and Germany fall in the first category, the U.S. and India in the second. Either is perfectly normal.

The real problem is that for several decades many economies, especially in East Asia, have attempted to thwart these natural flows by running both trade and capital surpluses, and thus accumulating extraordinary levels of foreign currency reserves. Japan has done this for so many years that it is running a capital account deficit even as it sits on an enormous pile of U.S. Treasurys. China and South Korea do the same today.

This is where freer trade becomes so important. Trade barriers have long been a central policy tool for governments trying to keep their economies oriented toward exports. Trade barriers raise domestic prices by depriving consumers of the benefits of competition, while also artificially limiting their consumption options. Meanwhile, consumers and businesses aren't sending as much capital overseas to pay for imported goods.

On The NY Sun, Seth Lipsky defends Robert Zoellick from critics.

Cato’s Dan Mitchell worries the Fed is turning the dollar into a joke.

At NRO, Larry Kudlow links to Dan Mitchell’s latest video opposing tax increases:




In The Washington Examiner, Ralph Benko suggests ways to help the economy.

Monday update.

At The NY Sun, Seth Lipsky applauds World Bank President Zoellick’s op-ed advocating a gold-based monetary system.

Also in The Sun, Lipsky notes Sarah Palin’s opposition to a weaker dollar.

On The Kudlow Report, Stephen Moore discusses President Obama’s willingness to extend all the Bush tax cuts:




At Forbes, David Malpass advocates spending cuts.

In The WSJ, Fed Governor Kevin Warsh promotes a long-term growth agenda:

Policy makers should take notice of the critical importance of the supply side of the economy. The supply side establishes the economy's productive capacity. Recovery after a recession demands that capital and labor be reallocated. But the reallocation of these resources to new sectors and companies has been painfully slow and unnecessarily interrupted. We are feeling the ill effects.

Fiscal authorities should resist the temptation to increase government expenditures continually in order to compensate for shortfalls of private consumption and investment. A strict economic diet of fiscal austerity has greater appeal, a kind of penance owed for the excesses of the past. But root-canal economics also does not constitute optimal economic policy.

The U.S. would be better off with a third way: pro-growth economic policy. The U.S. and world economies urgently need stronger growth, and the adoption of pro-growth economic policies would strengthen incentives to invest in capital and labor over the horizon, paving the way for robust job-creation and higher living standards.

In City Journal, economist Douglas Holtz-Eakin promotes tax reform as key to restoring economic growth.

The WSJ editorial page supports Washington state’s resounding rejection of higher taxes on the rich:

So what's the matter with Washington? Clearly, its middle-class residents understand an economic reality that eludes Mr. Gates and many other already-rich advocates of higher taxes: The absence of an income tax has been Washington's greatest comparative advantage over its high-income tax neighbors in California and Oregon. Texas Governor Rick Perry even sent a letter to Washington state's biggest employers, inviting them to move to no-income-tax Texas.

The larger message, which also eludes the nation's leading proponent of soak-the-rich tax ideas—the fellow in the Oval Office—is that the average person simply doesn't believe that the taxers will stop with the wealthy. To protect both themselves and the greater economy outside their windows, voters prefer a tax system whose rates aren't rising—on anyone.

Also on Kudlow, Art Laffer sounds optimistic in response to the President’s tax cut move:

Business Week reports emerging economies may be flooded with hot money due to Fed easing.

At NRO, Nobel laureate Gary Becker analyzes the roots of the financial crisis.

On Forbes, John Tamny critiques the NFL’s economic policies.