The Bear’s Lair: How to Define Conservatism

The well-respected political journalist Matthew Continetti has just published a book “The Right: The Hundred Year War for American Conservatism,” one of many such, which takes the meaning of “Conservatism” as varying from decade to decade, according to the winds of events and popular culture. This seems to me a silly way to go about defining the term “Conservatism,” as is the concurrent attempt to write lengthy philosophical tomes attempting to do so from first principles. Instead, I suggest would-be “Conservatives” should identify a regime which in their view ran its country well, and then measure ideological deviations from that regime. Trust me: it’s much simpler and more coherent! Continue reading

The Bear’s Lair: Extraordinary popular delusions and the madness of media

There are many factors that make rational economic decision-making difficult. One of them is that the media and educated opinion, mostly wholly ignorant of the laws of economics (or preferring to ignore them) often has violently misguided views on a subject, which it uses its intellectual power and marketplace megaphone to impose. William F. Buckley declared in 1963 that he would rather be governed by the first 2,000 names in the Boston telephone book than by the Harvard faculty; the problem with that solution is that even without appointing the faculty to govern, it still has an excessive influence on the views of the telephone book’s “Aardvark to Adamson” contingent. Continue reading

The Bear’s Lair: What if Trump had won?

The United States and the world as a whole have fallen into a difficult period in the last year, with war in Ukraine, rising inflation and almost certainly a coming recession as interest rates soar. Many blame President Joe Biden for this, but I thought it worth carrying out a thought experiment: what if Donald Trump had won the 2020 election that he narrowly lost? To what extent would today’s outcomes be different? Continue reading

The Bear’s Lair: Death spirals

The U.S. Consumer Price Index ticked up again this week, to 1.2% in the latest month (15.4% annualized) or 8.5% in the last 12 months, making the 10-year Treasury bond rate at 2.7% even more inadequate to restrain it. As the negative real rate of interest gets more severe, it pushes inflation up further, causing a death spiral that is eventually solved by a sharp surge in bond rates and an economic crash. However, that is not the only death spiral visible today; their prevalence makes this column even more pessimistic than usual. Continue reading

The Bear’s Lair: The search for a well-run country

When I moved from Britain to the United States in 1995, a significant motivator was my search for good government. The British government’s quality had sharply declined after the departure of Margaret Thatcher and seemed likely to get still worse after Tony Blair’s inevitable arrival. Conversely, the Bill Clinton/Newt Gingrich tandem was distinctly hopeful for the U.S. The picture today is globally grim for those seeking a replica of the capable, intelligent government of Lord Liverpool. If one were similarly seeking a new home today, one would need to search globally to find the brighter spots amid the general gloom. Continue reading

The Bear’s Lair: The Weimarization of Japan

The Bank of Japan has indicated that it will buy Japan Government bonds in an indefinite amount at a yield of 0.25% — thus refusing to share in the belated tightening policies of other central banks. That is a policy worthy of Rudolf von Havenstein, President of the Reichsbank in the years leading up to the Weimar Republic hyperinflation of 1923. Beyond monetary policy, there are other Weimar signs about Japan also – trouble appears to be ahead. Continue reading

The Bear’s Lair: Apocalypse now?

With 35% of the world’s grain supply subject to the disruption of the Russia-Ukraine war, it seems likely that the next six months will see a disruption in global food supplies, in some areas causing famine. If so, that will complete the set of evils supposedly unleashed upon the world by the Four Horsemen of the Apocalypse from the Revelation of St. John the Divine (War, Famine, Pestilence and Death.) As post-Enlightenment thinkers, we are not used to expecting the Biblical Apocalypse. Were we wrong? Continue reading

The Bear’s Lair: Ban the bonds!

Standard investment textbooks and advisors mandate that you should have a percentage of bonds in your portfolio, the percentage rising with age (my Vanguard page advises me to have fully 70% of my money in them). Yet bonds offer no upside, they do not protect against inflation, and lawyers working for borrowers have ensured there are all kinds of downside traps. The standard advice is wrong — in an era without a Gold Standard, investors should avoid bonds altogether. Continue reading

The Bear’s Lair: Companies are better off without management

Peabody Energy (NYSE:BTU) share price fell 17% last Monday on news it had made $534 million in margin payments, hedging against the price of its main product: coal. Investors may justifiably feel aggrieved; they successfully called a revival of the coal market, only to be thwarted by an amateurish management that thwarted them. Not to dunk on Peabody in particular, but it raises the question: would today’s corporations be better off if they operated without any top management at all? Continue reading

The Bear’s Lair: Good riddance to globalization

President Vladimir Putin’s catastrophic blunder in invading Ukraine has upset the applecart of the post-1991 international order. The outcome of that conflict is currently unknown – there are a wide range of possibilities. However, most of the better outcomes will result in an end to the globalization dream – in reality, nightmare – and a return to an atomized world, with higher costs, to be sure, and maybe the occasional war but with far greater freedoms. Only the unlikely triumph of globalizers would condemn us to a truly unfree world, and perpetual and increasing impoverishment. Continue reading