Tuesday summary.

On C-SPAN, a panel including Judy Shelton, U.S. Rep. Mike Pence (IN), Jack Kemp Jr., and U.S. Rep. Paul Ryan (WI) discusses the need for sound money.

At Forbes, historian and Econoclasts author Brian Domitrovic explains the Great Inflation’s role in Reagan’s fiscal deficits and Clinton’s surpluses.

On The Kudlow Report, Art Laffer and Brian Wesbury are optimistic about the President’s change of economic policy direction, while David Goldman is more skeptical:




At Alhambra Investments, Joseph Calhoun doubts the tax cut deal will be a major boost to markets.

Also from Alhambra Investments, Calhoun assesses the economy in light of quantitative easing, Europe’s troubles, and the budget commission’s proposal.

In The Washington Times, Richard Rahn critiques the Federal Reserve.

If you are skeptical about abolishing the Fed, just consider the following question: "Would those who voted for the Fed in 1913 have done so if they had known that:

1. After having a 125-year period of relatively stable money when the dollar was still close to its value in 1790, the dollar would be worth less than 5 cents at the end of the century?

2. The longest and severest depression the country had ever experienced would occur a mere 20 years after the creation of the Fed and that the Fed had a major responsibility for the disaster?

3. And the number of bank failures would increase and not decrease?"

The answer clearly would have been "no." Why are we keeping a failed institution?

On RCM, John Tamny sees the fiscal commission moving the debate in a positive direction.

At Forbes, Charles Kadlec bemoans excessive government spending.

On NPR, Alan Reynolds responds to the Fed's QE2 plan.

The DBS Research Group explains that Singapore’s currency management risks violating Robert Mundell’s impossible trinity.

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.

Tuesday round up.

What Would Kemp Do?

An important factoid: The President’s fiscal commission based its recent deficit report (p. 10) – and its alarming diagnosis of “fiscal cancer” – on CBO's budget analysis (p. 28), which, according to Louis Woodhill, assumes annual GDP growth of 2.16% for the next 75 years.

Yet, as Woodhill notes, average growth over the past 75 years was 3.73% per annum. If the U.S. grew at that rate going forward, CBO's more pessimistic budget scenario balances in 2052 with no spending cuts or tax increases.

This isn't to say we shouldn’t cut government waste and bloat. We should.

But, in the middle of painfully high unemployment, shouldn’t conservatives be ringing alarm bells mainly over slow long-run growth? Restoring rapid growth through the proven formula (sound money + lower tax rates) would help the jobless and improve the budget – a win/win – and would move the right beyond the zero-sum austerity debate.


Update: This item has been reworked for clarity.
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At RCM, Joseph Calhoun argues the malaise is rooted in bad economic policy.

In The WSJ, likely presidential candidate U.S. Rep. Mike Pence (IN) proposes to repeal the Fed’s full employment mandate.

On The Kudlow Report, Pence explains his plan:




IBD notes that after tax rates were cut in 2003, the wealthy paid a higher percentage of taxes.

At The Washington Times, Richard Rahn suggests government caused the financial crisis, though he omits the falling dollar.

On Kudlow, David Goldman assesses the market’s decline:




On Charlie Rose, U.S. Rep. Paul Ryan (WI) repeatedly mentions sound money.

At the Peterson Institute, lead currency warrior C. Fred Bergsten insists China must revalue the yuan.

From YouTube, a viral video mocks the Fed’s QE2:

Thursday items.

On RCM, Louis Woodhill posits the novel theory that the Fed’s Interest on Reserves program caused the 2008 financial crisis.

At Forbes, Econoclasts author Brian Domitrovic explains that the world is desperate for the U.S. to stabilize the dollar.

On The Kudlow Report, U.S. Rep. Paul Ryan (WI) discounts demand side economics and underscores sound money:




On Forbes, Charles Kadlec advocates a gold-based international currency system.

At NRO, Larry Kudlow expresses cautious optimism about the deficit commission report.

Reuters reports the commission’s tax reform options.

Also on Kudlow, James Pethokoukis debates how to pay for the Bush tax rate extension:




The NYT hosts a debate on the gold standard but can’t find a single pro-gold economist.

At IBD, Walter Williams debunks trade deficit paranoia.

From Vlad Signorelli at Bretton Woods Research:

Reports this morning that Obama may have 'conceded' on extending Bush-era tax cuts for upper incomes may have been premature. The National Journal reports that [presidential advisor David] Axelrod clarified his stance around 9am, signaling the White House is still opposed to the idea.

Nonetheless, Obama's rhetoric is slowly evolving for the better as he is now conceding that economic growth is at least just as good as tax increases in reducing the deficit. Today, Obama made the point in Seoul that if economic growth increased by "1 percentage point over time that could have as much impact as completely eliminating the Bush tax cuts." And he added, "The single most important thing we can do to reduce our debt and deficits is to grow." Therefore, despite Axelrod's inept comments this morning, Obama seems to be gravitating toward growth solutions, which may spare expiration of Bush-era tax cuts on all.

On Forbes, Rich Karlgaard sees the worst of the recession as past.

From 2007, Art Laffer clarifies the claim that tax rates pay for themselves.

Wednesday update.

In Forbes, Paul Hoffmeister urges Sen. Kyl (R-AZ) to embrace sound money as part of his pro-growth agenda.

On Asia Times, David Goldman mocks Treasury Secretary Tim Geithner’s claim that the U.S. will not devalue the dollar.

At The Kudlow Report, Dick Armey suggests big Tea Party wins will mean less corporate welfare and a sound dollar:



On Gordon Liddy’s radio show, John Tamny discusses gold, oil and the weak dollar.

At Smart Money, Don Luskin predicts higher stock prices.

Bloomberg reports inflation fears are raising Treasury bond yields.

At The Heritage Foundation’s Foundry blog, David Weinberger makes the historical case against raising tax rates in a recession, featuring this amusing clip from “Ferris Bueller’s Day Off”:



Cato’s Dan Mitchell argues against conservative acquiescence to a VAT tax.

In The Washington Examiner, AEI President Arthur Brooks analyzes the top 10 factors contributing to unemployment. Sound money doesn’t rate a mention.

In The WSJ, John Chambers and Safra Catz argue U.S. taxes on foreign income are keeping capital from being repatriated.

On CNBC, David Malpass explains how Fed policy is damaging the economy:



In the UK, Prime Minister Cameron tests Jude Wanniski's Two Santas Theory with budget austerity and tax increases.

From earlier this year in The Washington Examiner, Ralph Benko pays homage to supply-side guru Robert Mundell.

Wednesday items.

Housekeeping notes:

The American Principles Project has initiated the Gold Standard 2012 project, now added under Links.

Thanks to Bob Landry for suggesting Lewis Lehrman’s 1980 paper, “Monetary Policy, the Federal Reserve System, and Gold,” now in the Classic Articles section.
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In The WSJ, Sen. Jon Kyl (R-AZ) outlines a growth agenda focused on tax reform, lighter regulation, and spending cuts. Sound money doesn’t rate a mention.

On Smart Money, Don Luskin explains the impact of recent jobs numbers on markets.
At NRO, Larry Kudlow suggests the President is off message on the economy.

On Kudlow, National Review’s Stephen Spruiell debates government's role in the current malaise:



At Forbes, Brian Wesbury advocates patience rather than short term fiscal and monetary stimuli.

On The American Spectator, Peter Ferrara critiques the President’s economic policy.

At Café Hayek, Don Boudreaux challenges Paul Krugman’s claim that the recent Keynesian spending surge didn’t happen.

On The Kudlow Report, Stephen Moore debates free trade’s impact on jobs:



Investor’s Business Daily applauds Fed Vice Chairman Yellen for her skepticism on quantitative easing.

The Atlas Sound Money Project reposts Reuven Brenner’s 2003 article, “Alan Goldspan.”

The Washington Post’s Ruth Marcus hopes Republicans will follow Britain’s Tories with deep spending cuts and tax rate increases.