The shocking onslaught of the Russian military into the Ukraine, and Kiev (or Kyiv) in particular, prompts thoughts of what relationship has obtained, over the long run of history, between Russia and Ukraine. Some of the topics associated with this historical matter can be difficult if not controversial to relate and reckon with. Events nonetheless have brought it to the fore of our attention.

Robert A. Mundell, the 1999 Nobel Prizewinner in economics and in an easy argument the greatest economist of the last several generations, died April 4 in his beloved Italy at the age of 88.

It’s a fact: economists know that monetary policy caused the Great Depression. The economy of the late 1920s was overheated with a bloated stock market—caused by excessive tax cuts for the rich, unsupervised banks and overleveraged credit. The inevitable reckoning came at the hands of an ultra-conservative Federal Reserve, tight monetary policy and an inflexible gold standard.

In today’s world of political economics, the topic of international trade is only large enough to accommodate two points of view: one that believes in free trade and one that believes in protectionist policies. You’re either in one group or the other. Both pure trade and international finance are vast fields of economics incorporating the highest levels of competence, formal
theoretical skills and math. Any bimodal classification of people’s views and thoughts is grotesquely misleading. Trade theory and its practice is as nuanced as any branch of economics—full of rich, deep theory and empirical research. Treating the topic loosely or superficially is dangerous in the extreme. Let the reader beware. Enter at your own risk.

The voluble discussion over the prospective nomination of Stephen Moore to the Board of Governors of the Federal Reserve
System was undisciplined in many ways, not least in its characterization of the monetary history during the crucial decade of
the 1980s. Bloggers and reporters, especially at the Washington Post, seized upon Moore’s remarks concerning the way Paul
Volcker had conducted monetary policy during the successful latter portion of his chairmanship of the Federal Reserve from
1982 to 1987. Moore contended that Volcker had followed a commodity-price rule, while Catherine Rampell of the Post (who
led the anti-Moore charge) called this “flat-out false.

Federal Reserve Chairman Paul Volcker all but advocated a price rule for monetary policy beginning in the latter half of 1982. He despaired of the major options to a price-rule, namely quantity and interest-rate targeting, and urged that instead, the exchange value of the dollar be given priority in Fed monetary-policy deliberations. In coming to this conclusion, this reorientation of the Fed’s strategy and outlook which occasioned opposition from his board, Volcker sought to reorient monetary policy in anticipation of a major episode of non-inflationary economic growth that appeared to be in the offing as the second year of the Ronald Reagan presidency came to a close.

Currency boards have attracted increasing interest in recent years—and months—because signs of another international monetary crisis are beginning to gather. The prevailing monetary system does not comport with the actual monetary order of the world. Currency boards can, on all important criteria, close the currently yawning gap between the world monetary system and its order. The only risks entailed in currency boards are those associated with the great success and prosperity that they bring without fail.

The story of how the Laffer Curve got its name isn’t one of the Just So Stories by Rudyard Kipling. It began with a 1978 article published by Jude Wanniski in The Public Interest entitled, “Taxes, Revenues, and the ‘Laffer Curve.’” As recounted by Wanniski (associate editor of the Wall Street Journal at the time), in December of 1974 he had been invited to have dinner with me (then professor at the University of Chicago), Don Rumsfeld (chief of staff to President Gerald Ford) and Dick Cheney (Rumsfeld’s deputy and my former classmate at Yale) at the Two Continents Restaurant at the Washington Hotel in\ Washington, D.C. (just across the street from the Treasury). While discussing President Ford’s “WIN” (Whip Inflation Now) proposal for tax increases, I supposedly grabbed my napkin and a pen and sketched a curve on the napkin illustrating the trade off between tax rates and tax revenues. Wanniski named the trade off “The Laffer Curve.”