The Bear’s Lair: The reforms billionaires won’t bring you

Ray Dalio, self-made CEO of the Bridgewater hedge fund group, the largest such operation in the country, says capitalism is broken. His solution, unsurprisingly, is a mix of higher taxes and more public spending – just the mix that will pull up the drawbridge up behind him and prevent younger people replicating his success. From Warren Buffett through Mark Zuckerberg down, there is a sameness to all the billionaires’ prescriptions. This column will explain why and suggest a few reforms billionaires won’t tell you about. Continue reading

The Bear’s Lair: The dark side of Tech

We are accustomed to thinking of the tech sector as a beacon of hope, leading us to a bright gadget-filled future, in which everybody’s lives will be richer. Yet evidence is mounting that the reverse is in many cases happening. Fueled by immense amounts of private equity money, tech companies are reinventing established businesses – to turn them into exploitative sweatshops that circumvent regulations, degrade quality and oppress their employees. Continue reading

The Bear’s Lair: The Ocasio-Cortez Presidency

Rep. Alexandria Ocasio-Cortez (D.-NY) will turn 35 on October 13, 2024 and is therefore eligible to run for President in the election of that year. By that time, two terms of President Trump will have tired the nation of solid, sober, well-managed government and the electorate will be keen to try something new. With its long-standing reputation for bringing you the issues of tomorrow years or even decades before they become real, The Bear’s Lair this week peers into the crystal ball to examine the Ocasio-Cortez Presidency of 2025-33. Continue reading

The Bear’s Lair: Treason is rampantly prospering

“Treason doth never prosper, what’s the reason? For if it prosper, none dare call it treason,” wrote the Elizabethan poet Sir John Harington. The news that Tony Blair has been helping Emanuel Macron thwart Britain’s attempts to escape the clutches of the EU fits Harington’s epigram as never before. For if indeed Britain becomes trapped in the EU, the forces of political correctness, already far too strong, will make sure that the history of the attempt to leave is comprehensively rewritten. Continue reading

The Bear’s Lair: The John C. Calhoun immigration policy

The Trump administration and some Congressional Republicans want to expand the H1B and H2B immigration programs. Under these programs – H1B for skilled labor, H2B for unskilled — immigrants can work only for their sponsoring employers and must leave the United States if that employment ends. They cannot participate in the free U.S. labor market or apply for citizenship. Economically, we have seen before this policy of importing tied workers without full civil rights to undercut the free labor market – it was favored by Senator John C. Calhoun (D.-SC). Continue reading

The Bear’s Lair: Trump will Make Japan Great Again

Japan has had a rough 30 years of no growth with soaring public debt and zero interest rates. In the same period, China’s economy has taken off at record-breaking speed – as we now learn, with considerable cheating on intellectual property protections and the like. On closer examination, the two phenomena are closely connected, with China’s rise being a major cause of Japan’s economic lassitude. Thus, if President Trump makes China play by the rules, he could Make Japan as well as America Great Again. Continue reading

The Bear’s Lair: Time to close down the CDS market

This week, we learned that a hedge fund and the credit default swap (CDS) market had pushed a regional telecom company, Windstream Holdings Inc. (Nasdaq:WIN) into bankruptcy. The toxic CDS product caused havoc in 2008, and regulators have been their usual ineffectual selves in failing to grasp it since. There is no legal way to make CDS legally watertight, and Wall Street lacks the expertise to manage the product’s risk exposure. It’s time to close this casino down. Continue reading

The Bear’s Lair: Senator Rubio’s first good idea

Senator Marco Rubio (R.-FL.) is not a favorite of this column – he is much too fond of open-borders projects and his child tax credit was a waste of government money. But his latest idea, a tax on stock buybacks, looks well designed to remove most of this plague on U.S. corporate finance and the economy in general. If we are to avoid a very nasty recession, it should be passed as quickly as possible. Well done, Senator! Continue reading

The Bear’s Lair: Ben Bernanke killed the world economy

This column has contended for several years, based on empirical data observations from several countries, that low interest rates worldwide were killing productivity growth. A University of Chicago paper finally provides some academic back-up for this contention and suggests a mechanism through which it takes place. There are other mechanisms also, and I would suggest that the Ben Bernanke-inspired wild monetary experimentation from 2008 on has done more damage to the world economy than any other initiative in the history of mankind. Continue reading

The Bear’s Lair: Bureaucrats grinding the faces of the poor

The OECD recently published a paper on taxation and economic development that claimed that the propensity of poor countries to tax less than rich ones is a contributor to their poverty. Thus, by raising taxes to Western levels, they could develop their economies. This view is not surprising from an organization of international bureaucrats, but it is the reverse of the truth. I thus thought it worth setting out the correct picture. Continue reading