Larry Kudlow, writing at The National Review, spoke with Robert Mundell recently. Mundell, one of the architects of Reagan's supply-side revolution and a designer of the Euro, has a few suggestions for his friend Paul Volcker.
First, he’d like to see a complete corporate tax holiday for one year. He then favors corporate tax reform that would drop the current top rate from 35 percent to 15 or 20 percent. He believes this would generate badly needed business investment and job-creation to fight recession.
...Business needs help. Without healthy business, there will be no significant new job creation or consumer spending power.
On money, Mundell had two interesting thoughts: First, the U.S. dollar and the Chinese yuan should basically be re-linked at roughly today’s exchange rate (about 6.8 yuan to the dollar). There should be no more Chinese currency appreciation. Incidentally, Mundell thinks the Chinese economy is actually in some trouble...
Rather than slathering around hundreds of billions of dollars in an ill-fated central planning exercise, has anyone considered a massive personal tax cut that would let consumers decide how best to spend their money?
Eh, I didn't think so.