The Bear’s Lair: Government should give up its ESG activities

The Business Roundtable last year made a stir by claiming that business should no longer maximize shareholder value, but instead respond to ESG (environmental, social and governance) concerns. Skeptics, including this column, pointed out that capitalism was not designed to run on that basis, and would fail if it was adopted. However, the coronavirus response has highlighted that government as well as business needs to be run in the interest of its “shareholders” the voting public, and that the fewer ESG policies it adopts, the better. Continue reading

The Bear’s Lair: Tech and Covid-19 free us from squalid cities

The Covid-19 crisis has brought an outbreak of despair from the world’s commentators. They forecast a huge economic downturn (hoping it will rid them of President Donald Trump) and moan about the limitations the disease has brought. But the same commentators celebrated the obviously flawed globalist economy, as it dragged us into ever more loathsome global cities. Now tech and the disease have liberated us – to live in villages, where humanity is most comfortable. Continue reading

The Bear’s Lair: Will the U.S. adopt Argie-nomics?

The U.S. is currently projected to run a budget deficit of $3.8 trillion, about 19% of GDP, in the year to September 2020, according to the Congressional Budget Office. Meanwhile interest rates are held flat at zero, and the Fed is beginning to purchase junk bonds to provide “stimulus.” We are in uncharted waters – or are we? There is a country that has intermittently pursued policies like this ever since 1944 – Argentina. That country’s past may well be our future. Continue reading

The Bear’s Lair: Back to the Middle Ages!

2019 may have marked the all-time peak in real U.S. and global GDP per capita, although statisticians will doubtless fudge the figures to disguise the fact. We can be sure that 2020’s pandemic will cause a sharp GDP downturn and that the bigger government inefficiencies introduced this year will add to previous such burdens on productivity. With worldwide economic policies getting worse not better, the astounding revolution in global living standards brought by industrialization is going into reverse. Continue reading

The Bear’s Lair: The world needs another Geddes Axe

The Geddes Axe, imposed in 1921-22 was a relatively successful attempt by Sir Eric Geddes to cut British public spending – it reduced military spending by 20%, for example. Shortly after World War I, the public’s urge to government economy was still strong enough to inspire an “Anti-Waste Campaign” to which Sir Eric’s efforts were a response – a similar even more successful effort was made in the U.S. in the Harding and Coolidge administrations. Sir Eric, where are you now that we need you? Continue reading

The Bear’s Lair: The De-Industrial Revolution

Britain got the Industrial Revolution largely because of good policy (deo volente, there is a book in my future about this.) Now those good policies have been reversed. Savings are discouraged, the short-term and financial juggling are benefited over the long-term, industrial enterprise is hampered while sloth is subsidized and surplus capital is seized randomly by governments. Guess what – this is leading to a De-Industrial Revolution, a tendency that will be intensified in the West by our not-very-friendly competitor China. Continue reading

The Bear’s Lair: Ahriman’s big win will include inflation

The Forces of Evil, human and supernatural, look like doing very well out of the coronavirus epidemic. From the supernatural side, deaths from the disease and the misery from the economic disruption look likely to provide triumphs. From the human side, government budgets are yet more unbalanced, bringing global bankruptcy several years closer and increasing state control of the economy. However, the greatest triumph for the forces of evil, devastating noble rentiers yet again, will be a resurgence in inflation. Continue reading

The Bear’s Lair: Time to ban stock repurchases

Boeing (NYSE:BA) and the airlines are currently in negotiations with the Trump administration for a bailout, with taxpayers expected to replace capital that those companies had previously eliminated through stock buybacks. If they get money without being forced through bankruptcy, this will become a pattern in each business cycle because it is so beneficial to incumbent management with stock options. It is now clear that stock buybacks are a rip-off of taxpayers; we already knew they were a rip-off of ordinary non-management shareholders. They must be outlawed, as they were before 1982. Continue reading

The Bear’s Lair: Götter-Boomer-rung

At the end of the 1983 movie “Trading Places,” the Duke brothers’ solid, long-established commodities business has been bankrupted in the orange juice pits by the insider-trading young sleazebags Winthorpe and Valentine, and the Dukes realize to their horror that trading has closed and the screens are dead. “Turn them back on” they cry feebly as they are led off the trading floor. The Baby Boomers are now in this position. Continue reading