2019 may have marked the all-time peak in real U.S. and global GDP per capita, although statisticians will doubtless fudge the figures to disguise the fact. We can be sure that 2020’s pandemic will cause a sharp GDP downturn and that the bigger government inefficiencies introduced this year will add to previous such burdens on productivity. With worldwide economic policies getting worse not better, the astounding revolution in global living standards brought by industrialization is going into reverse. Continue reading →

The Geddes Axe, imposed in 1921-22 was a relatively successful attempt by Sir Eric Geddes to cut British public spending – it reduced military spending by 20%, for example. Shortly after World War I, the public’s urge to government economy was still strong enough to inspire an “Anti-Waste Campaign” to which Sir Eric’s efforts were a response – a similar even more successful effort was made in the U.S. in the Harding and Coolidge administrations. Sir Eric, where are you now that we need you? Continue reading →

This column has been predicting de-globalization for almost a decade – the June 2010 piece “Back to the Kaiser’s World” was its first example of this theme. Now that the coronavirus has caused everybody else to leap onto this bandwagon, it is worth examining what the new de-globalized world might look like. While it has its downsides, it is overall not an unattractive prospect. Continue reading →

Britain got the Industrial Revolution largely because of good policy (deo volente, there is a book in my future about this.) Now those good policies have been reversed. Savings are discouraged, the short-term and financial juggling are benefited over the long-term, industrial enterprise is hampered while sloth is subsidized and surplus capital is seized randomly by governments. Guess what – this is leading to a De-Industrial Revolution, a tendency that will be intensified in the West by our not-very-friendly competitor China. Continue reading →

The Forces of Evil, human and supernatural, look like doing very well out of the coronavirus epidemic. From the supernatural side, deaths from the disease and the misery from the economic disruption look likely to provide triumphs. From the human side, government budgets are yet more unbalanced, bringing global bankruptcy several years closer and increasing state control of the economy. However, the greatest triumph for the forces of evil, devastating noble rentiers yet again, will be a resurgence in inflation. Continue reading →

Boeing (NYSE:BA) and the airlines are currently in negotiations with the Trump administration for a bailout, with taxpayers expected to replace capital that those companies had previously eliminated through stock buybacks. If they get money without being forced through bankruptcy, this will become a pattern in each business cycle because it is so beneficial to incumbent management with stock options. It is now clear that stock buybacks are a rip-off of taxpayers; we already knew they were a rip-off of ordinary non-management shareholders. They must be outlawed, as they were before 1982. Continue reading →

At the end of the 1983 movie “Trading Places,” the Duke brothers’ solid, long-established commodities business has been bankrupted in the orange juice pits by the insider-trading young sleazebags Winthorpe and Valentine, and the Dukes realize to their horror that trading has closed and the screens are dead. “Turn them back on” they cry feebly as they are led off the trading floor. The Baby Boomers are now in this position. Continue reading →

Maynard Keynes, as a good left-liberal, was a political admirer of an earlier Cambridge alumnus Oliver Cromwell, and certainly regarded himself as part of the “Roundhead” tradition. Yet it is becoming increasingly apparent that, just as Cromwell’s virtues and policies pointed Britain on the road to the Industrial Revolution, so the vices and profligacies inspired by Keynes and his followers are bringing the great human advance brought by that Revolution to an end. Let me explain. Continue reading →

Jack Welch, former GE Chairman (1981-2000) who died last week, was named “Manager of the Century” by Fortune magazine in 1999. Twenty years later, we can see clearly that the Manager of the 20th century was not Welch but Alfred P. Sloan, CEO and then Chairman of General Motors (1920-1963). Welch’s main achievement was destroying the management model that Sloan had built, causing GE’s subsequent near-collapse. Continue reading →

President Donald Trump last week pardoned Mike Milken, the effective originator of the junk bond market, who had been sentenced to 10 years in jail in 1990 for mysterious securities infractions. While I have considerable sympathy for Milken himself (not that he needs it, being worth $3.8 billion) I thought it worth performing the thought-experiment: would we indeed be worse off if he had never existed and the junk bond market had never appeared? Continue reading →