Month: October 2022

The Bear’s Lair: Teach Finance Through its Origins

The British pension funds’ sudden vulnerability to an interest rate blip two weeks ago due to their misguided derivatives games showed that financiers make the same mistakes, decade after decade. While a few financial techniques are new, the errors are not; indeed they can be traced back to the era when modern finance was being […]

The Bear’s Lair: Chairman Xi’s Austrian Economics

China’s President Xi Jinping is a devotee of Austrian economics. Unfortunately, he does not follow the enlightened and intelligent economics of the “Austrian School” — Eugen von Böhm-Bawerk, Ludwig von Mises and Friedrich Hayek. Instead, China’s attempts to dominate the economies of its neighbors through “Belt and Road” investments, its use of slave labor, its […]

The Bear’s Lair: Nobel prize for GOSPLAN

The Nobel prize in economics this year went to Ben Bernanke, Douglas Diamond and Philip Dybvig for “work adding to understanding of the relationship between banking crises and the broader economy.” Like other Nobels, the prize has a mixed reputation, having been given to outright Marxists like Gunnar Myrdal in the past. Looked at that […]

The Bear’s Lair: Institutional stupidity threatens us all again

The Bank of England re-instituted “quantitative easing” last week because British pension funds were threatened with insolvency, having hedged their bond portfolios with unstable derivatives. We have seen this movie before, in 2007-08. Dopey behavior by financial institutions, central banks and regulators causes a massive unnecessary financial crash that blights the lives of billions of […]

The Bear’s Lair: How steam engines entered the economy

Conventional wisdom has it that James Watt invented the steam engine, which became economically important in the 1780s, setting off the Industrial Revolution. All three of those beliefs are wrong. This column will lay out the true process, which was a 3-stage one over a century in duration, intensifying the Industrial Revolution but not directly […]