Radio gold this morning as Larry Kudlow not only got Steve Forbes and Art Laffer to appear on his show at the same time, Larry had them on for about 45 minutes, over three segments. It was a very good discussion.
This link will take you to the mp3 of the entire interview, you can listen right in your browser or download the file to your computer or device.
☕ Sean Rushton appears in the Asia Times today, talking currency:
Speaking in 2010, Dr. Robert Mundell, the Nobel Laureate and iconoclastic dean of international monetary economics, made an intriguing observation.
The global economy was like a solar system, he said. And for many decades, due to the overwhelming size of American GDP, the US dollar had been like the sun, the behemoth at the center whose gravity dominated and defined the system.
The dollar’s centrality was a fact, despite the supposed monetary independence nations attained in the early 1970s, when the Bretton Woods system of pegged exchange rates broke apart and currencies were allowed to float relative to one another.
☕ Steve Forbes makes some great points about why we tolerate the “atrocity” of the tax code.
But try to get an American politician to make it a front-burner cause! Most are too scared to attempt it. They’ll mumble about the need for a tax code that is “simpler and fairer,” but that’s it. They fear getting in the lobbyists’ crosshairs. They tremble at being accused of benefitting the rich, while shafting the poor and gutting health care and the tax breaks of home ownership and charitable giving.
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Ultimately, this is a moral issue. Just think back over 20 years and add up the, literally, tens of billions of hours, the trillions of dollars and the immense brainpower that have been wasted on this utterly unnecessary activity. Then think of all the new products and services, the new medical devices and cures for diseases that could have been created with these resources that went down the drain of the current and ever more complex and corrupt tax code.
☕ Do not miss this chance to hear from George Gilder.
Don’t forget to pay your taxes today!
☕ Steve Forbes drops the hammer on the Border Adjusted Tax (BAT):
Here’s how, in essence, this sneaky, anti-consumer tax works. Importers will no longer be allowed to deduct an item as a business expense. To simplify things, let’s say a store imports a pair of sneakers for $40 and then sells them for $50, making a $10 profit on which it would owe taxes. Under the Republican plan, however, the retailer wouldn’t be able to deduct the $40 it paid for the sneakers. In fact, it would owe taxes on the entire $50! And who, ultimately, pays this tax? You, the consumer, in the form of higher prices or fewer choices of where you can shop. Retailers and their customers will be hit.
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But enacting a big, brand-new tax to finance cuts in old taxes is a dangerous business, especially in the way the Republicans are going about it. Democrats will gleefully remind voters why prices are going up, conveniently ignoring the tax cuts. Moreover, the GOP border adjustment tax is a but a small step away from a full-blown value added tax, which has financed the bloating of governments around the world. Democrats will someday be back in power, and they won’t hesitate to either ramp up this GOP-created tax or go for the VAT. This would be hypocritical–rip apart the Republicans over this tax, and then go on to compound their felony. A VAT would crush future U.S. economic growth rates, just as it has in Europe and elsewhere.
Consider this astonishing fact: In the mid-1960s government spending in Europe as a proportion of their economies wasn’t much different from our own. Growth rates matched or exceeded ours. Then Europe discovered the VAT. Spending ballooned and growth slowed to a crawl, consistently clocking in at significantly lower levels than Uncle Sam’s.
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The GOP should drop this tax scheme. Why create unnecessary conflict and damage our new President? Republicans shouldn’t be constrained by the Congressional Budget Office’s antiquated way of measuring the economic impact of changes in taxes. Drop the green eye shades, and go for big cuts that would turbo-charge the economy.
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).
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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.
African American Conservatives (AACONS) has posted a podcast at Blog Talk Radio, and this one features two interviews, one with Congressman Paul Ryan and one with Steve Forbes. Listen to the interviews here in one file.