Greg Manikiw's seven guidelines for policy makers for the coming year. Nothing unexpected, but I would not have included the elimination of the penny as one of our top seven priorities:
Repeat After Me, by N. Gregory Mankiw, Commentary, Wall Street Journal: ...Since ... economic policy makers inside the Beltway are often too busy for such introspection, my gift to them is a list of seven New Year's resolutions. Any senator, congressman or presidential wannabe is free to adopt them as his or her own. Just repeat after me:
• #1: This year I will be straight about the budget mess. I know that the federal budget is on an unsustainable path. I know that when the baby-boom generation retires and becomes eligible for Social Security and Medicare, all hell is going to break loose. I know that the choices aren't pretty -- either large cuts in promised benefits or taxes vastly higher than anything ever experienced in U.S. history. I am going to admit these facts to the American people, and I am going to say which choice I favor.
• #2: This year I will be unequivocal in my support of free trade. I am going to stop bashing the Chinese for offering bargains to American consumers. I am going to ask the Bush administration to revoke the textile quotas ... I am going to vote to repeal the antidumping laws... I am going to admit that unilateral disarmament in the trade wars would make the U.S. a richer nation.
• #3: This year I will ask farmers to accept the free market. While I believe the government should provide a safety net for the truly needy, taxpayers shouldn't have to finance handouts to farmers... Farmers should meet the market test as much as anyone else. I will vote to repeal all federal subsidies ...
• #4: This year I will admit that there are some good taxes. Everyone hates taxes, but the government needs to fund its operations, and some taxes can actually do some good in the process. I will tell the American people that a higher tax on gasoline is better at encouraging conservation than are heavy-handed CAFE regulations. ... I will tell people that tolls are a good way to reduce traffic congestion ... I will advocate a carbon tax as the best way to control global warming. Because we may well need to raise more revenue (see resolution no. 1), I'll always be on the lookout for these good taxes.
• #5: This year I will not be tempted to bash the Fed. Ben Bernanke, soon to be the new chairman of the Federal Reserve, will not inherit Alan Greenspan's halo, and so may be a tempting target. But I will resist temptation. ... Difficult as it is, I will hold my tongue.
• #6: This year I will vote to eliminate the penny. The purpose of the monetary system is to facilitate exchange, but I have to acknowledge that the penny no longer serves that purpose. ...
• #7: This year I will be modest about what government can do. I know that economic prosperity comes not from government programs but from entrepreneurial inspiration. Adam Smith was right when he said, "Little else is required to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice." As a government official, I am not going to promise more than I can deliver. I am going to focus my attention on these three goals -- peace, easy taxes, and a tolerable administration of justice -- and I am going to trust the creativity of the American people to do the rest.
It would have been nice to hear some of these things voiced when he was Chair of the Council of Economic Advisers.