Ralph Benko for Forbes.com:
Keynes expressed wariness of the risk of currency depreciation (better known as inflation). Sure enough, eventually the Federal Reserve indeed became “overwhelmed by the impetuosity of a cheap money campaign.” The Fed cheapened its product — Federal Reserve Notes — by 85% since 1971 (and by about 95% since the Fed’s inception).
A dollar today is worth a 1913 nickel and a 1971 nickel and dime. This gives a whole new meaning to the phrase “nickeled and dimed to death.”
Cheapening of money is very bad for business. It is really, really, terrible for labor. Ron Paul, call your office: Keynes proved quite right to be dubious about the Fed.
Why do so few of the economists who exalt Keynes share his tough-mindedness toward the Fed? Why do so few grasp the irony of their mesmerized adulation of an institution with such a mediocre (and sometimes catastrophic) track record? Many acorns have fallen far from the tree.
One of the factors in play involves one of the standard tropes of mercantilism, to which Kudlow and Moore allude: the intentional depreciation of a national currency to gain unfair trade advantage. This is what classically was called a “beggar-thy-neighbor” policy. The neighbor, in this instance, is America. Forbes Media chairman, and Editor-in-Chief, Steve Forbes, and Forbes.com columnist Nathan Lewis, both gold standard advocates, are zealous critics of mercantilism (as is this columnist).
– – –
Also, in the world of the delusional, The Krug was given his box of crayons again today and the NYT is running an op-ed today where Krugmanomics are on full display.
Message to The Krug: please show us the evidence that “most Americans” want any of the things you suggest. We’ll wait right here and we’ll put on another pot of coffee.
Under the gold standard, the value of the dollar would be fixed to a certain amount of gold
NEW BRUNSWICK, N.J. (AP) — Republican Jeff Bell spent three decades in Washington working on policy and wrote a book promoting all aspects of social conservatism. But so far his campaign for the U.S. Senate has centered on just one issue: returning the United States to the gold standard.
“We are in a situation of stagnation,” Bell said earlier this month in a speech to a real estate conference in New Brunswick. “Why don’t they let market interest rates return to our economy?”
Like other supporters of the gold standard, Bell is an acolyte of Ronald Reagan and Jack Kemp, the late congressman, secretary of housing and urban development and vice presidential nominee who made the call for cutting taxes to stimulate the economy part of a national debate in the late 1970s. Bell, now 70, won the Republican nomination for a New Jersey U.S. Senate seat in 1978 largely by advocating the kind of Reagan-era tax cuts some credit with spurring the economy.
From the Daily Caller:
Also, at Forbes Steve Moore writes about the differing tax policies of Kansas vs. Illinois:
Ralph Benko: End the Fed’s War on Paychecks
Brian Domitrovic: The Obama-Reagan Comparison Does O. No Favors
Ryan Ellis: Reform Conservatism and a Smarter Supply Side Tax Agenda
To sum up, here’s the winning agenda for a 21st century supply side renaissance:
1. Cut the top tax rate on business income to no higher than 25 percent. Leave wage taxes alone, and let the Left have their 39.6 percent “scalp the rich” talking point.
2. Allow all business investment to be deducted in the year of purchase
3. End the double taxation of savings
4. End the double taxation of international income
5. Cut taxes for the middle class, either by embracing an increase in the child tax credit, or cutting the payroll tax, or by some other means.
Larry Kudlow and Stephen Moore: Return Of King Dollar Is A Great Sign For America
We love seeing this in IBD!