The Bear’s Lair: Robots don’t threaten weirdos and misfits

The fancy-college-educated left take great satisfaction in proclaiming that robots will soon threaten blue-collar jobs, while skills requiring higher education will be immune from competition driven by artificial intelligence (AI). This is surely incorrect. Robots/AI can in principle reproduce any predictable process, whether mechanical or intellectual. They cannot reproduce unexpected movement, leaps of imagination or eccentricity. Blue-collar workers with good mechanical skills and weirdos who get fired for offensive tweets are tomorrow’s survivors, while the politically correct are robot roadkill. Continue reading

The Bear’s Lair: Half-inflated bubbles are a Buy

If you had bought South Sea Company shares 300 years ago today, on February 17, 1720, you would have paid the inflated price of about £175 per share. If you had sold those shares at any time before the end of September 1720, you would have made a fine profit, more than five times your money if you had sold at the top of £1,000 in July. Today as then, it remains true: half-inflated bubbles are a thoroughly unsound investment, but potentially a very lucrative one. Continue reading

The Bear’s Lair: The Dead Hand of Jacques Delors

On July 6, 1988 European Commission President Jacques Delors propounded the hope that “Ten years hence, 80% of our economic legislation, and perhaps even our fiscal and social legislation as well, will be of Community origin.” The EU has not lost this ambition; this week Michel Barnier, the EU’s chief Brexit negotiator, attempted to prevent Britain from signing a trade deal with the EU unless it conformed to EU regulations. It is therefore worth looking at the damage those regulations have done to what was once an economically thriving collection of countries. Continue reading

The Bear’s Lair: Beyond reason and behaviorism

Classical economics holds that economic decisions are made by rational decision makers, using solid information and reason. Behavioral economics holds that many economic decisions are based on “cognitive biases” such as an aversion to losses that is stronger than the desire for profits. Richard Robb’s new book “Willful” holds that many decisions are made without rational justification or behavioral motivation, but simply “for-themselves” based on whims or deep-seated irrational beliefs. It’s an interesting, plausible thesis that has implications well beyond investing. Continue reading

The Bear’s Lair: Debt Jubilee would set us back to Sumer

With U.S. debt at record levels, enthusiasm is mounting for a debt jubilee, in which part of or all the mountain of debt would be written off, to the great relief of debtors and the despair and probable bankruptcy of creditors. The jubilee’s proponents point out that debt jubilees have Biblical sanction, being a standard feature of the ancient world originating in Sumer. However, while a full jubilee would very likely restore us to the joys of Sumerian living standards, there is another way we could take advantage of current crazed interest rates. Continue reading

The Bear’s Lair: The Coming Fall of the Meritocracy

The last five years have been marked in most Western societies by a populist revolt against the values of a leftist university-educated elite. That elite had appeared invulnerable, and increasingly separated from the rest of us, as Charles Murray described in his 2012 study “Coming Apart.” There are thus two questions to be answered: how did the elite become so cut-off and misguided, and will its rule survive the populist revolt? Continue reading

The Bear’s Lair: Back to the economics of 1792

When William Pitt the younger made his great and optimistic Budget speech of 1792, he attributed Britain’s increased prosperity not to technological improvement but to the wealth-enhancing effect of the compounding increase in the country’s capital stock. Only a generation later, in the administration of Robert, Earl of Liverpool, was technological change given credit for the country’s growth and prosperity. Today, as productivity growth slows or even halts, we may be returning to the economics of 1792, in which only capital increase brings greater wealth. This has uncomfortable implications. Continue reading

The Bear’s Lair: Trump’s iconoclasm is a feature, not a bug

Three years into his administration, President Donald Trump is subject to a level of obloquy surprising given the U.S. economy’s benign performance. Not only his political opponents, but even some nominal “conservatives” want to impeach him. The reason is clear: rigid thinkers committed to the “icons” of past consensus policy loathe President Trump with unparalleled venom for breaking those icons. But for more dispassionate thinkers, Trump’s iconoclasm clears the way to a better future. Continue reading

The Bear’s Lair: 2020s look like a Bear bonanza

Ten years ago this week, this column asked: “Will the Tens be another Bear decade?” predicting that the stock market in late 2019 would be lower than in late 2009. Alas, that prediction was complete rubbish. Yet the column’s economic forecast – that the early years of the Tens would be grim, but improvement would come late in the decade – was quite close. The stock market however let the Bears down, making everybody else richer in the process. So, let us repeat the process for the 2020s, perhaps learning from previous mistakes (you never know)! Continue reading

The Bear’s Lair: Towards a working-class Tory Britain

Boris Johnson’s Conservative “Tory” party’s big victory in the British election December 12 was achieved by winning seats that had been Labour since 1987, 1935 and even 1922. His majority thus represents far more working-class voters from the North of England – and far fewer rich Londoners – than any previous Tory government. To survive the next election in 2024, he must pursue a working-class Toryism quite different from the party’s policies of the Cameron/May era, or those of Margaret Thatcher. Continue reading