A committee led by Gerald Corrigan, former vice chairman of the Federal Reserve Bank of New York, produced a report this week that promises to revolutionize finance. It proposes to place severe limits on derivatives, bringing them under the ambit of regulators and protecting retail investors from their more egregious products. His report met with […]

The Gross Domestic Product and employment figures released Thursday and Friday appeared at first sight to show a US economy that had returned to a measure of stability. However when examined more closely they painted a much darker picture, of an economy in which a sharp decline in retail spending is likely to cause substantial […]

Global inflation is back, and it is shuffling the kaleidoscope of world economic development. Some countries that had appeared to be thriving are coping poorly with inflation while others, including at least one chronic inflation recidivist, are showing a level of monetary maturity worthy of the Fed’s 1980s Chairman Paul Volcker and far ahead of […]

The Producer and Consumer Price Indexes announced last week were significant in that they sounded the death-knell of Bernankeism. No longer will it be possible to inflate the money supply by pretending that inflation in the real economy is not a problem; other means will have to be found to perpetuate the shell-game.

The financial crisis in the United States and worldwide entered a new phase this week, as Fannie Mae and Freddie Mac, the two huge US home loan institutions, began what appears to be a similar “death spiral” to what which claimed Bear Stearns four months ago. Fannie and Freddie are unique institutions, and will almost […]

British observers have in the last year indulged in a considerable amount of schadenfreude about the US subprime crisis, the excessively expansionary monetary policy of Fed Chairman Ben Bernanke and the substantial recession that appears impending. They should be less eager to gloat; the recession into which Britain is heading is likely to be considerably […]

Both the Economist and the Washington Post have recently denounced the poor state of US infrastructure; it is obviously becoming fashionable to do so. However, much of their criticism is ill-founded. Infrastructure failures are inevitable because infrastructure decisions have become politicized and suffer from the results of that politicization. Infrastructure investment has thus become a […]

Ever since the late 1990s, bears like myself have been forecasting a major economic downturn in the United States, but wavering in doubt as to whether it would be more like the 1930s, with price deflation and really deep economic decline, or the 1970s, with unpleasant inflation but shallower economic decline. The urge to forecast […]

GE’s announcement a week ago that it would accept offers for its appliances business marked the death-knell of yet another US manufacturing business, one among so many in US manufacturing’s long and seemingly unstoppable downtrend since 1980. That decline may seem an inevitable historical trend, and Wall Street’s analysts would claim that the US economy […]

We now know who the two major candidates for President will be in November and one thing has become abundantly clear: we are in a new policy era. The free-market economic policy consensus that appeared so firmly established in the 1990s has broken down, and participants in both the US and global economies will have […]