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

The Bear’s Lair: Will Britain 2019 follow Czechoslovakia 1948?

It appears increasingly likely that the British people will be forced into a “People’s Vote” re-running the Brexit referendum of 2016. For those of us around during the Cold War the term “People’s Vote” has a familiar ring, similar to the “People’s Republics” and People’s Democracies” of Communist tyranny. This therefore begs the question: is Britain in 2019 to suffer the same fate as Czechoslovakia in 1948? Continue reading

The Bear’s Lair: The decline of good economics

William Hogarth - Gin Lane

There are many reasons why the Industrial Revolution happened in Britain in 1775-1850, but among the most important is the quality of economic thought among British policymakers of that period. Adam Smith, Thomas Malthus and David Ricardo gave them an excellent grounding in free market economics, and few statesmen of that period opposed their doctrines. Alas, over the last two centuries the quality of economic discourse has steadily declined. Spurious economic theories have appeared, and statesmen seem determined to avoid the correct ones. Continue reading

The Bear’s Lair: The decay of property rights

New York Mayor Bill de Blasio claimed last week that there was plenty of money for his pet projects, but it was “in the wrong hands.” In response, the Wall Street Journal, supposedly the voice of capitalism, gave a turgid list of rich New Yorkers’ charitable donations while blasting the inefficiencies of de Blasio’s administration. Both sides are wrong; in a well-run system, property rights should be inviolable regardless of what owners do with their property. That’s tough to defend when funny money has unfairly rewarded speculators – yet another reason to return to sound policies. Continue reading