Observers have been puzzled by the continued strength of the U.S. stock market, asset prices generally and the U.S. economy in the face of sharp rises in interest rates since early 2022. Artificial stimulus from record U.S. budget deficits seems to be part of the cause, but an even more significant indicator is the velocity of M2 money supply, still one third below its pre-2008 historical level. With too much money in the system, asset bubbles and inflation are inevitable. Correction of this will produce a major slump, probably after the inauguration of the next President in January 2025. If that President is Donald Trump, the slump will not be his fault. Continue reading →

The democratic system of government has many advantages, but it is bedeviled by the electorate’s tendency to fall for snake-oil salesmen peddling economically devastating nostrums. In recent years, the climate change “net zero” nonsense is the most obvious of these follies, but they stretch back through democratic history to the repeal of the Corn Laws and beyond. Finding a way to quell these outrageous scams is essential if the human race is not to revert to barbarism and poverty. Continue reading →

The United Auto Workers’ success in unionizing a Volkswagen plant in Tennessee suggests that the reported death of private sector unions is not imminent. Fifty years ago, even in cyclical industries unionized workers were close to Japan-style lifetime employment, with any layoffs in business downturns allocated by inverse seniority, so that after a few years a worker’s position was guaranteed. In white-collar activities, long careers were predominant and layoffs were scarce. Yet in today’s knowledge industries and elsewhere, the social contract between large corporations and their employees has become one-sided, with layoffs commonplace and lifetime employment a distant dream. This places excessive costs on employees. As the recent history of GE, Boeing and other faltering behemoths shows, it also eliminates the workforce’s knowledge and skills and destroys shareholder value. Continue reading →

The European Court of Human Rights’ decision sanctioning Switzerland for having not done enough to combat global warming is typical of all international bodies. It flouted the original restrictions imposed on the court’s activity, the decision did direct economic harm to ordinary Swiss citizens, and the Court exhibited utter contempt for Swiss democracy. International bodies have become a mechanism for leftist ideologues to impose their will on the rest of us, entirely free of control by democracy or by the tenets of rationality. These bodies need to be eliminated. Given that they were set up to be eternal and impervious to elimination, this will be difficult. Continue reading →

Britain and the United States are together the progenitors of modern democracy and it has since spread worldwide, albeit suffering a retreat in the last decade. Nevertheless, the current governments under which we are groaning suggest that the U.S., Britain and Western Europe are not very good at operating a democratic system. Can it be that some of democracy’s later adopters in South and East Asia can show us old hands a thing or two? Continue reading →

I was shocked this week to discover that the Pan American Highway, much admired in my youth as a potential connector for the entire American continent, is still incomplete, with a 66-mile Darien Gap between Panama and Colombia that has been held up by environmentalists since 1972. Given the hyperbolic multiplier from completing first-move infrastructure, that is total economic insanity – I cannot offhand think of a stronger word, but if there were one, I would use it. It is just one of the appalling costs and blights that the environmental movement has imposed upon humanity since its 1960s genesis. The time has come to declare freedom from this scourge. Continue reading →

It has long been a nostrum among economists that central banks should be independent of their countries’ governments. The 1998 decision granting “independence” to the Bank of England was specifically motivated by that thesis. Yet in practice, central banks have not stood staunchly against the free-spending proclivities of their governments; instead, they have indulged them, forcing down interest rates to unprecedented levels in a way that enhanced government profligacy. If indeed central banks are not independent of their governments, what use are they? Continue reading →

President Biden’s denunciation of the takeover of the modest remnants of U.S. Steel by Nippon Steel, the premier steel company of the United States’ most important ally, leads to only one conclusion: protectionism and autarky are reaching 1930s levels. There are other parallels; for example, wars are breaking out all over the world, as they did in the 1930s. Are we indeed bound to slide down the same slippery slope as did the 1930s, ending in the toxic drain of global war (which would be infinitely more destructive this time round)? There are disquieting indications, though we can hope to take measures that will avoid disaster. Continue reading →

President Biden recently produced his Budget for the next fiscal year, with projections for the next ten years; even with swingeing tax rises on the “wealthy” and sharp cuts over the decade in real defense budgets it proposes a series of trillion-dollar deficits, beginning with $1.78 trillion in the year to September 2025. When you look around, nearly all rich countries are running similarly unprecedented deficits and running up their debts rapidly as a percentage of GDP. Without a dramatic worldwide reversal in policy, the entire planet will go bankrupt by around 2040. Continue reading →

At a lunch in 2002, British political commentator Iain Dale horrified me by proposing a “modernization” of the Conservative party. My view was that it had gone badly left under John Major and needed a “re-Thatcherization” or even better a “re-Liverpoolization” rather than a further trek in the wrong direction. However, under David Cameron and his successors “modernization” won, although Dale himself never entered Parliament. As we look back on nearly 14 years of Conservative government, we can assess the true value of the “modernization” project – and conclude that in terms of Britain’s real needs or the electorate’s long-term support, it was an utter failure. Continue reading →