As the Fed raises interest rates quarter point by quarter point, the financial environment may seem to be changing little, but in reality it is becoming increasingly at risk of singularities, financial tornadoes that appear from a clear sky and produce economic devastation.

If Paul Wolfowitz survives the inevitable sniping from Europeans to emerge as President of the World Bank, he will at least represent a different approach from outgoing president James Wolfensohn. It’s about time!

Japan bans U.S. beef. The United States bans Canadian beef. The EU subsidizes aircraft production. South Korea places multiple tariff barriers against automobile imports. The United States, the EU and Japan spend billions of dollars a year on farm subsidies, mostly paid to wealthy and corporate farmers. All these market distortions reduce output and trade, […]

“Thank you, Mr. Chamberlain,” caroled the musical British after prime minister Neville Chamberlain returned from signing the 1938 Munich Agreement. This week, as Federal Reserve Chairman Alan Greenspan told Congress that Social Security and Medicare reform required cutting, not expanding, those out-of-control programs, one is tempted to echo their song. Hopefully with more long term […]