The Austrian economist Joseph Schumpeter in his 1942 masterpiece “Capitalism, Socialism and Democracy” described the process of capitalist wealth creation as being one of “creative destruction.” It’s a lesson that policymakers have not taken sufficiently to heart, largely because they have to answer to sentimental democratic electorates. Creation sells well to an electorate whose instincts, […]

Mass protest movements should be deeply distrusted, but taken seriously. They almost never represent the populace as a whole, but they sometimes represent the future – many of the unpleasant novelties of 1968 have been inflicted on us ever since. Also, like the Bonus Marchers of 1932, their demands may make more sense than the […]

We are now within three months of the climacteric year of 2012 around which the 1997 Kyoto Protocol was built, and therefore within fifteen months of a period in which the Kyoto restrictions will no longer have effect. No fewer than sixteen conferences have been held in an attempt to find a successor to Kyoto, […]

The resignation a week ago of Jurgen Stark, Germany’s representative on the European Central Bank’s executive board, was due to a failure by the ECB to follow the German concept of Ordnungspolitik. In the German view, Ordnungspolitik – which may roughly be translated as the politics of order – demanded that Greece be treated harshly […]

The Census Bureau’s study of American incomes, poverty and health coverage issued last week was most interesting when considered, not as a metric of this recession, but as a long-term picture of where American living standards are going. If median incomes are back to 1996 levels in real terms, then the stagnation which followed the […]

As the Great Recession drags on, politicians assure us that “Prosperity is just around the corner” in Herbert Hoover’s unfortunate words, if we only follow their favored nostrums, usually involving spending more public money. However experience of the 1930s combines with the wisdom of Carmen Reinhart and Kenneth Rogoff’s “This time it’s different” to suggest […]

President Obama delivered to House Speaker John Boehner this week a list of just seven regulations Federal agencies proposed to impose, each of which would cost over $1 billion and the total cost of which would be $109 billion. If you contemplate the latter number, you will come to realize why U.S. economic growth is […]

The last 30 years have been notable for the rise of hedge funds, organizations that compete with the top Wall Street investment banks in remuneration, while charging their investors fees far above those traditional for investment management services. Hedge funds had a mixed record in 2007-08; there were several large failures but also some notable […]

New York Times columnist Paul Krugman, in a talk show August 14, remarked that the fiscal stimulus caused by a fake Alien invasion of the United States would best rescue the U.S. economy, providing the inflation and growth that according to him it needs (a real Alien invasion would be equally efficacious, but might cause […]

The decision by Standard and Poor’s to downgrade the U.S. credit rating to AA plus caused a stock market slump and an extraordinary rally in U.S. Treasuries, the latter further proof if you needed one that markets are often irrational. In spite of Ben Bernanke’s Flying Dutchmen-like attempt Tuesday to nail interest rates to zero […]