The Bear’s Lair: How can we de-corporatize?

The 25-year asset bubble has caused a crescendo of corporatism, as large corporations, their values swollen by asset price inflation, have sought to impose themselves on our lives. Their interaction with the left of politics has been especially poisonous, with “corporate-woke” schemes generated by top management threatening to eliminate the interests of the shareholders who are nominally their masters. Is this our future, or will we find a way to defeat it? Continue reading

The Bear’s Lair: After Globalization

As predicted in these columns a decade ago, globalization did not work, and has now gone the way of the dinosaur. It is not however clear what will replace it. The international institutions are still there, exerting their influence like stegosauri who missed the memo about the end of the Jurassic. Western “woke” governments are planning ever more elaborate schemes to combat climate change. That suggests that, to succeed, a country needs to be both well-run and isolated from international advice. Continue reading

The Bear’s Lair: Dogecoin beats the digital dollar

The Fed, the People’s Bank of China and the Bank of England are planning digital currencies linked to their currencies. Their real objective is to stop people using cash so they can create even more distorted interest rate structures. Their new constructions will thus combine the insecurities of digital currencies with the Gosplan approach to monetary management that is now so popular. Dogecoin, started as a joke and with money creation controlled by an algorithm, will be a much better store of value than these central bank constructs and will protect the public against the tyranny of bureaucrats. Continue reading

The Bear’s Lair: Liquidate, liquidate, liquidate

The above was the supposed advice of Treasury Secretary Andrew Mellon to President Herbert Hoover after the Wall Street Crash of 1929. It was good advice, which Hoover did not follow, thus landing the country in a decade of Great Depression. However, if Mellon’s advice was good after the crash, how much more intelligent would it be to follow it before the bubble has burst, as today? Continue reading

The Bear’s Lair: A re-focus on dividends

U.S. corporate earnings and the stock market in general have become divorced from reality, with corporations increasingly ignoring stockholders in favor of a politically correct “woke” agenda. This is dangerous for society and it is not capitalism. The solution is for stockholders, investment analysts and designers of tax codes to focus laser-like on dividends. Actual cash payments to shareholders, generated through earnings, are the best way to keep the system honest and functional. Continue reading

The Bear’s Lair: Brexit may re-kindle global innovation

1938 Lagonda V12

Peter Thiel is not alone in wondering where all the major technological innovations went. From the other end of the political spectrum Chicago professor Robert Gordon wrote a best-seller “The Rise and Fall of American Growth” speculating that U.S. productivity growth is slowing to zero. Yet if you look back, from the Industrial Revolution until at least the 1950s, Britain was the “skunk works” or prototype producer of a high proportion of major technological innovations. Then in 1973, Britain joined the European Union, which appears to have had the same deadening effect on British innovation as the Whig Supremacy of 1714-60. With Brexit, will we see a renewed innovation take-off? Continue reading

The Bear’s Lair: Economic ineptitude reaching 1690s levels

There is no question the quality of economic policymaking peaked under Robert Banks Jenkinson, 2nd Earl of Liverpool (1812-27) and has gone into sad decline ever since. But hills have two sides. So, the question is: how far back must you go to find economic policy as bad as that in today’s United States, to pick an example? I think the answer is: about 330 years, to the chaos of the doubtfully legitimate and suddenly war-torn Whig regime of the 1690s. Continue reading

The Bear’s Lair: Is Cold War optimal on a crowded planet?

Back in the days of sailing ships, when it took months to get to India, there was no question of a global government – communications were not good enough. Thus, countries preserved their freedom independently, worrying little about the ideology and governance of any but their near neighbors. The world is now much smaller, and co-existence more difficult. Since large wars are unimaginably horrible, and a single global government almost equally so, the optimal outcome may be a bipolar Cold War, as we enjoyed in 1945-91. Continue reading

The Bear’s Lair: Return of the Whig Economy

The Industrial Revolution was a Tory Story! It began with the scientific exuberance of the Tory-dominated Restoration period, then slowed as the Whigs diverted the country into war and financial excess from 1689 to 1720. Even though the key inventions of the steam engine and coke-fired ironworks came during that period, they were not developed further. Forty years of Whig financial capitalism and social repression followed, before a Patriot King and a series of Tory governments unleashed the greatest boost in living standards the world has ever seen. Alas, since 1991 we have returned to Whiggery and worse. Continue reading

The Bear’s Lair: Kleptocracy beats Communism

Recent reports suggest that the Venezuelan economy has enjoyed a modest uptick after its collapse due to its following Presidents Hugo Chavez and Nicolas Maduro’s Communist economic policies from 1998-2018. Russia and China also have benefited, not from a move to democracy, but from a move from Communism to Kleptocracy. The lesson is clear: a regime that allows some elements of the free market to operate and then steals the result is preferable to even an honest Communism. Continue reading