Year: 2015

The Bear’s Lair: What would a cashless economy look like?

Bank of England Chief Economist Andy Haldane wants to abolish cash, so central banks can run policies of seriously negative interest rates, abolishing the “Zero Lower Bound” rate constraint on central bank activity. Technology will soon allow this goal to be achieved; we all make far more electronic payments and far fewer cash ones than […]

The Bear’s Lair: Will Brexit break up the EU?

In 2017, British voters will have the opportunity to express their opinion in a referendum on leaving the EU. Currently the vote looks tight, although the decision of Labour leader Jeremy Corbyn to abandon the convictions of a lifetime and support EU membership is a blow for the anti- camp. Yet if Britain votes to […]

The Bear’s Lair: Playthings of the regulators

Volkswagen’s attempt to “game” the U.S. emissions control system and its abject failure to do so have put another industry, automobiles, to join banking, energy, education and healthcare in the hands of the world’s regulators. Massive fines will be imposed, shareholders will be robbed, and companies’ business strategies will be directed by the whims of […]

The Bear’s Lair: Back to smoke-filled rooms!

  The appalling interaction of opinion polls and TV debates is yet again pushing the Republican party to produce a poor-quality Presidential nominee, the eighth in succession (well, to be fair, Mitt Romney by a magnificent, sustained effort rose all the way to mediocre.) Likewise the Labour party’s prolonged election of the eccentric leftist Jeremy […]

The Bear’s Lair: Congress needs to outlaw QE

Goldman Sachs is now calling for the U.S. Federal Reserve to instigate a new round of “quantitative easing” bond purchases. Jeremy Corbyn, the newly elected nut-left leader of a Labour party that has always deep down been nut-left itself, wants the Bank of England to print money for state-directed boondoggles.  The gigantic Japanese quantitative easing […]

The Bear’s Lair: In defense of agriculture

  Modern commentators, including Yuval Noah Harari in his interesting book “Sapiens – a brief history of humankind” (Harper, 2015) believe that the coming of agriculture around 10,000 years ago was a disaster for humanity, forcing people to work much harder than the previous hunter-gatherers for a less stable and reliable subsistence. Yet when you […]

The Bear’s Lair: The West’s huge cost disadvantages

Modern telecommunications shrank the cost differential between rich and poor country product sources, making global supply chains easily feasible. Ever since the middle 1990s, therefore, the rich world has been getting poorer, as living standards across the planet began to converge. In the last decade, however, government actions have hugely increased costs in rich countries, […]

The Bear’s Lair: The meaning of Jeremy Corbyn

Jeremy Corbyn, the far-left MP for Islington North, appears set to become the next leader of Britain’s Labour party. Various commentators have predicted economic and political doom for Britain, citing his radical ideas as evidence. Yet in reality the British electoral system, the openness of the economy and the lack of support for Corbyn himself […]

The Bear’s Lair: The madness of crowds

Conventional wisdom celebrates cities. It sees the mighty agglomerations of capital and human capital in London, New York, Shanghai and San Francisco/Silicon Valley and celebrates the wealth-producing capabilities of those agglomerations. Yet with today’s low interest rates and high asset prices, the biggest cities also have remarkably high real estate prices, which inflict massive costs […]

The Bear’s Lair: The helplessness of politicians

George W. Bush and Barack Obama have proved themselves helpless since 2001 to reverse an inexorable relative decline in U.S. power and U.S. living standards. Similarly, prime ministers from Clem Attlee through Jim Callaghan, including Winston Churchill, failed to reverse a similar period of decline in Britain. Neville Chamberlain, good-willed, capable and experienced as he […]