Today’s Brew 11-13-17

Ralph Benko has a timely piece today at Forbes.com:

Jack Kemp, Tax Reform, And The Way The World Works

According to the report of one Kemp insider, Reagan, on the verge of his presidential campaign, came to seek Kemp’s endorsement. The Reagan campaign’s purpose was to prevent Kemp from entering the race too, splitting the conservative base. Jack Kemp offered his endorsement in return for Reagan’s endorsement of the Kemp-Roth 30% across-the-board tax rate cut.

That policy was controversial among both Republicans and Democrats. It was famously attacked by Reagan’s chief rival for the 1980 presidential nomination, George H.W. Bush, as “voodoo economic policy.” Reagan, on the advice of his then-top advisors, reportedly intended to check Kemp’s box, pocket Kemp’s endorsement, and never mention the tax rate cut again.

Until, that is, President Carter attacked Reagan’s endorsement of Kemp-Roth as irresponsible. Reagan rose to its defense. Carter doubled down. So did Reagan.


And Dan Mitchell for the win!


The Cats Roundtable

Our friend, Senator Pat Toomey of Pennsylvania discussed tax reform, including SALT deducations, with John Catsimatidis on The Cats Roundtable. Listen to the discussion here (less than 10 minutes long).

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Today’s Brew ☕ 4-17-17

Forbes

☕ Ralph Benko’s latest for Forbes.com addresses the chaos in the West Wing and how that relates to (or not) economic growth:

President Trump: End The West Wing War By Focusing The White House on Economic Growth

Excerpts:

But only Trump has the power to really work this out, by directing his advisors — all of them — to start focusing on the right question. How to engineer a 3% – 4% economic growth rate? Getting there is not a mulligan.

– – – – –
The clashing of White House camps is an inevitable artifact of sluggish growth. All President Trump needs to do to bring about a just and lasting West Wing peace is to focus his team better. The way of producing harmony in the West Wing — and popularity in the polls — is for the President to issue a sticky note to each of his economic and political advisors that says, simply “How do we get real economic growth up from 2% to 3% or 4%, and fast?” Trump, alone, has the power to do this.

– – – – –
Getting growth is an empirical, not an ideological, thing.

Worked for JFK.  Worked for Reagan. Worked for Clinton.

Would work for Trump.

– – – – –
Reagan supported Chairman Volcker’s wringing inflation from the economy. When that was accomplished, and Reagan’s across-the board tax rate cut was fully phased in, America enjoyed a cumulative 3.5+% economic growth rate with a spectacular 7% year. Mr. President? That was huge.


Dan Mitchell also has a new post that while not strictly economic, does matter in the economic realm. As we know, money taxed away from the people is money taken out of the consumer economy.

The Shadow Bureaucracy and the Burden of Federal Spending


☕ If you can get to Dallas on May 9th…

Today’s Brew 3-21-17

Real Clear Markets

☕ John Tamny discusses David Malpass in this Real Clear Markets column:

The U.S. Treasury, and the Exciting Arrival of David Malpass

Excerpt:

With Janet Yellen expected to depart after her first term, interviewers frequently ask me whom I would choose as her replacement as Chairman of the Federal Reserve.  My answer is always the same: David Malpass.

While the Federal Reserve presently serves no useful purpose such that its shuttering would affect a tiny percentage of the U.S. whole, the reality is that it still exists.  And it’s going to exist for a long time.


The National Pulse

☕ Ralph Benko writes about Alan Greenspan in the news for The National Pulse:

Greenspan’s Big Reveal: The Secret Recipe for Economic Growth

Excerpt:

Most striking of all of his comments is Dr. Greenspan’s open declaration that under his chairmanship, during the high-growth, low-inflation period known as “the Great Moderation,” “US monetary policy tried to follow signals that a gold standard would have created. That is sound monetary policy even with a fiat currency.”

That the Greenspan Fed then was targeting the price of gold has long been a matter of inference and speculation. Tracking the vibrant economic growth period of monetary policy known as “the Great Moderation” demonstrates a great consistency with stability for the market price of gold.

That consistency drew an inference in some circles that the Greenspan Fed, during the Great Moderation, used the price of gold as a primary target in deciding whether to ease or tighten.

Greenspan’s recent interview provides, however, the first explicit declaration I have seen by the former Fed Chairman that this was intentional rather than coincidental. Had Greenspan stuck to that “sound monetary policy even with a fiat currency,” we would never have experienced the Panic of 2008 and the ensuing Great Recession.

Today’s Brew 1-19-15

Ralph Benko hits some high notes at Forbes.com in describing a possible turning point in recognizing the Fed as the biggest money player in politics.

Monetary Politics: The Biggest Money Player In Politics Is The Fed

Washington finally shows signs of coming to grips with the importance of money to politics. This is not about mere campaign finance. Last week there was a breakthrough in bringing the money policy issue out of the shadows and to center stage … where it belongs.

The real issue of money in politics is about the Fed, not the Kochs. The Fed’s political impact is orders of magnitude greater than all the billionaires’ money, bright and dark, left and right, combined.

– – – – –

Monetary policy has been relegated to the Fed and largely excluded from the formal electoral process for almost two generations. This is, at it happens, and as O’Brien states forthrightly, a historical anomaly.

Monetary policy was a white hot topic at the Constitutional Convention of 1787. Thereafter, it was crucial to the success of George Washington’s administration, one of the few matters in which cabinet members Thomas Jefferson and Alexander Hamilton concurred.

Today’s Brew 12-15-14

Ralph Benko is great reading  this morning with his Forbes.com column:

The Yellen Tug Of War

For the rest of us, getting it right — as did Chairman Volcker and (during his first two terms), Greenspan is crucial to the creation of a climate of equitable prosperity in which jobs are created in abundance.  39 million jobs were created during the “Great Moderation.” We haven’t seen anything remotely like that since.

Getting it right is crucial to economic mobility — raises, bonuses, and promotions — to let us workers climb the ladder to decent affluence. Thus, just when to raise rates is much less important than the bedrock issue.

For over a decade now job creation has been poor. Poor, too, has been economic mobility.  The left is very much on record as calling for extended ease — keeping interest rates down.  The right has been critical over the Fed’s “zero interest rate policy.” Yet the real tug of war is over whether the Fed should follow a monetary rule or exercise discretion; and, if a rule is preferable, what rule?

– – – – –

It is my guess that Janet Yellen reaches out to the social-democratic left because it represents her native intellectual milieu. They speak her language.  Many progressives simply find the right foreign, our language alien. (Memo to Yellen: If all I knew about my team was what I read from Paul Krugman I, too, would disdain me. The mainstream media portrayal of the right is a grotesque caricature.  We’re not the way we are portrayed.  We are, however, skeptical of the efficacy of central planning.  For good reason. And, Dr. Yellen? America is a center right nation.)

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In a way, it’s “Yellen vs. Volcker.” Contrast a statement by Madam Yellen with one made by former (and iconic author of the Great Moderation) Fed Chairman Paul Volcker, reprised in an earlier column:

Madame Yellen [at hearing of the House Financial Services Committee chaired by Chairman Jeb Hensarling earlier this year] stated that “It would be a grave mistake for the Fed to commit to conduct monetary policy according to a mathematical rule.” Contrast Madame Yellen’s protest with a recent speech by Paul Volcker in which he forthrightly stated: “By now I think we can agree that the absence of an official, rules-based cooperatively managed, monetary system has not been a great success. In fact, international financial crises seem at least as frequent and more destructive in impeding economic stability and growth. … Not a pretty picture.”

Also, from Twitter:

Today’s Brew 11-17-14

Ralph Benko looks at national politics, and specifically, the threat by the President to use Executive Action. Check out his Forbes.com piece:

What Saul Alinsky Could Teach Obama About Totally Ignoring Congress

Actually we the people are a lot smarter than you might think, Mr. President. If your policies were good, really, we’d be rallying around you — and re-electing, rather than de-electing, your political allies. It isn’t, as you say, that your administration has done a poor sales job. It’s a mixture of your promoting a product that the majority of us do not want, or a poor quality version of a product (like universal health care) that we do.

It is not, Mr. President, a failure of politics. The recent election is a triumph of politics over a failure of policy.

And this bespeaks more than a utilitarian deficiency. It betrays a philosophical, even a spiritual, deficiency. Alinsky:

One hundred and thirty-five years ago Tocqueville gravely warned that unless individual citizens were regularly involved in the action of governing themselves, self-government would pass from the scene. Citizen participation is the animating spirit and force in a society predicated on voluntarism.

There can be no darker or more devastating tragedy than the death of man’s faith in himself and in his power to direct his future.

Today’s Brew 11-10-14

Ralph Benko weighs in on the election results last week in his Forbes.com post:

The November 4 Elections: American Voters Punish Political Fanatics

Voters have shown, yet again, that we do not like political fanatics. “Fanatic” is defined by my resident dictionary as “a person filled with excessive and single-minded zeal, esp. for an extreme … political cause.” The Republican Party, in the nuanced language of Sen. Mitch McConnell (R-Ky), “crushed,” everywhere, its fanatical wing during the past election cycle.

This implies no animus toward the Tea Party, of which I am a self-identified member. But there were factions within the Tea Party, and a few rump hotheads, who are, in fact, fanatics willing to go to such counterproductive extremes as shutting down the government. The fanatics have been marginalized.  The GOP then marginalized fanatical Democrats.

Conservative grownups now are in charge of the GOP in both House and Senate. The GOP has yet to crystallize a vision on how to bring about a solid climate of equitable prosperity and job creation (by reining in a rogue Fed, perhaps), civil liberties (such as the free exercise of religion), and the pursuit of happiness (through traditional values). These can be threshed out in the upcoming presidential cycle.

The GOP could, of course, stumble. As of now, though, it looks like the 114th Congress is more likely to do right by, rather than wrong to, America.