Year: 2020

The Bear’s Lair: Treason of the billionaires

This summer has seen a rush of billionaires and their companies donating to left-wing causes, or even giving extraordinary amounts of money to the Joe Biden campaign to defeat President Donald Trump. That is their right, of course. But I find it extraordinary that a majority of the world’s ultra-rich are supporting people whose policies […]

The Bear’s Lair: Springtime for Artificial Hitler

A Harvard Business School presentation on artificial intelligence by Professors Karim Lakhani and Marco Iansiti this week was fascinating but creepy. While the technology is empowering numerous new businesses, most of those businesses seem to be in China. Gradually, as the capabilities of artificial intelligence combined with Big Data sank in, I came to a […]

The Bear’s Lair: The rapid dynamism of free markets

In August 2020, under President Donald Trump, the U.S. unemployment rate fell in one month from 10.2% to 8.4%. Under President Barack Obama, the U.S. unemployment rate peaked at 10.0% in October 2009; it then took 27 months, until January 2012, to fall to 8.4%. That is not a commentary on the relative competence of […]

The Bear’s Lair: The Windmill Effect

 Between 1600 and 1795, the Netherlands did most things right to industrialize, yet the country’s industrialization occurred only after 1850. In the 17th century, the Netherlands made a massive investment in windmills, a technology clearly superior to water and animal power, but not readily adaptable for railroads or most industrial purposes. Then later, with […]

The Bear’s Lair: Are we in 1720?

Pessimists about the current state of the markets question whether we are in a stock market bubble, like 2000 or 1929. They are not thinking broadly enough. It is clear that when this nonsense bursts, the consequences of that bursting will be longer lasting and more fundamental than those of the burstings of 2000 or […]

The Bear’s Lair: California, China and Belarus

The world economy has come a very long way from the small-government, unregulated free-market model so celebrated by Adam Smith and other classical economists. Today, even in countries that claim to be committed to capitalism, taxes, monetary policy, regulations and state spending have produced huge distortions. To illustrate how huge, I thought I would compare […]

The Bear’s Lair: Lessons from W. Edwards Deming

W. Edwards Deming (1900-93) was the statisticians and management consultant, famous for visiting Japan after World War II and introducing them to many elements of the superb Japanese management and production system. Nearly thirty years after his death, with Japan deeply unfashionable, he may appear to have little to teach us. However, when I examined […]

The Bear’s Lair: Triumph of the Naff

Lord & Taylor’s bankruptcy this week closely followed on that of Brooks Brothers. That suggests a common trend, a Götterdämmerung of the preppie WASP. Certainly, other factors, the COVID-19 lockdowns and the ineptitude of private equity, played a role also. But there is an overall zeitgeist at work, social as well as economic, and it […]

The Bear’s Lair: Back to the Gold Standard!

As gold finally broke through its 2011 all-time high the mainstream media played the story down as much as possible. No surprise there. However, gold’s surge in 2020, which shows no sign of ending, strongly suggests that the era of dozy Keynesians monetary policies is finally reaching its inevitable Götterdämmerung. The Fed having proved over […]

The Bear’s Lair: Keynesian beauty contests are long-term losers

One of John Maynard Keynes’ favorite conceits, expressed in Chapter 12 of his 1936 “General Theory” was that selecting stocks was like a beauty contest in which you selected the six most attractive faces from a panel of 100 photographs – the person who agreed most exactly with the consensus winning a prize. For once, […]