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

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 […]

The Bear’s Lair: Back the bros against the hedgies

“Bros” connecting through the social media forum “WallStreetBets” last week staged a massive rally in the shares of GameStop (NYSE:GME) causing huge losses to a hedge fund that had shorted the stock. Most commentary suggested this should be a rare occurrence, as the hedge fund was a professional investor performing a valuable market function, while […]

The Bear’s Lair: Will the Bear’s Lair see Bearmageddon?

The twentieth anniversary of this “Bear’s Lair” column passed in late October. During that period, the stock market has risen, but pretty much every other indicator of U.S. economic health has declined. Actuarially at age 70, I can expect to be writing this column for another 14 years and 3 months (though the column’s coherence […]

The Bear’s Lair: Keynesian beauty contests are long-term losers

One of John Maynard Keynes’ favorite conceits, expressed in Chapter 12 of his 1936 “General Theory” was that selecting stocks was like a beauty contest in which you selected the six most attractive faces from a panel of 100 photographs – the person who agreed most exactly with the consensus winning a prize. For once, […]

The Bear’s Lair: To cure inequality, run the economy better

We have heard a great deal about excessive inequality in the United States, which has among other things been used to justify the recent rioting. Historical comparisons however show that inequality is not especially high by the standards of the past, though it has certainly risen over the last thirty years. Yet the solution to […]

The Bear’s Lair: The decline of good economics

There are many reasons why the Industrial Revolution happened in Britain in 1775-1850, but among the most important is the quality of economic thought among British policymakers of that period. Adam Smith, Thomas Malthus and David Ricardo gave them an excellent grounding in free market economics, and few statesmen of that period opposed their doctrines. […]

The Bear’s Lair: Time for Mexico to bring back Diaz

Porfirio Diaz, who had ruled Mexico with multiple re-elections almost continuously since 1876, was ousted from power in 1911. In 107 years, you would think Mexico would have found another equally competent ruler, but it hasn’t, and Andres Manuel Lopez Obrador seems very unlikely to break that track record of failure. Maybe it is time […]

The Bear’s Lair: Germany must stop beggaring its neighbors

German Chancellor Angela Merkel’s staff published a photo taken at the recent G7 summit that showed Merkel glowering at a defiant President Donald Trump, suggesting that Trump was isolated and alienating America’s allies. Yet when we examine actual behavior, it is Germany that is beggaring its neighbors and failing to live up to international obligations. […]

The Bear’s Lair: Konrad Adenauer would despise Merkel

Angela Merkel won most votes on September 24, but her certainty of leading the next government with only 33% of the vote, a fall of 8.6%, is a sad commentary on proportional representation voting systems. Calls last year for her to be appointed “the savior of Europe” or “the leader of the free world” now […]

The Bear’s Lair: Funny money makes us unproductive

  Two weeks ago, this column denounced central banks’ post-2008 policies because of their effect on savers and savings. This week I will demonstrate an entirely different result of their feckless policies: a deep decline in productivity growth, in all markets where their foolishness has manifested itself. There is not enough criticism of this insanity, […]