Bolivian President Evo Morales last weekend won re-election by a smashing margin. His eight-year rule has weakened Bolivian property rights, indulged in frequent nationalizations and demonized capitalism. Yet it has also produced Bolivia’s best growth rates in several decades, far better than the orthodox and admirable policies pursued in 1985-2003. Thus Morales’ policy of making […]

The IMF’s latest World Economic Outlook, in an unholy alliance with Larry Summers, claimed this week that a surge in publicly funded infrastructure spending would provide an increase in economic output with no downside risk. The truth is almost precisely the opposite: by indulging in ill-thought-out and boondoggle-filled public infrastructure spending, governments in rich countries […]

The latest estimate by the Congressional Budget Office of the federal deficit in the year to last Tuesday was $506 billion. The deficit is expected to improve marginally this year, then jump back above $500 billion next year and worsen steadily for the next decade and thereafter. Given that we are five years into an […]

Last week’s inflation figures showed that the Fed’s over-expansionary monetary policy wasn’t showing itself in inflation. But that doesn’t mean it’s doing no damage. Instead of in inflation numbers, the multiple years of ultra-low Fed interest rates are manifest in savings figures for both individuals and companies, with individual savings at half the long-term average […]

The Fed last Wednesday did not even remove the “considerable period” from its language about when it might start raising interest rates, thus delaying the likely start of rate rises even further than expected. This repeats its mistake of 2004-06, when it raised the federal funds rate at only ¼% per meeting, undertaking 17 such […]

The bicentenary of the Congress of Vienna, organized to settle the questions outstanding from the 22-year Napoleonic Wars, is a slightly uncertain date. The Congress itself opened officially on October 1, 1814 and the Final Act was signed on June 9, 1815, but on the other hand the British Foreign Secretary Robert, Lord Castlereagh arrived […]

No less than six sovereign borrowers are now paying negative nominal interest rates on their two-year borrowing in euros – in other words they are making money by going into debt. In real terms, medium-term US TIPS and British index linked gilts have had negative interest rates for several years. Contrary to the views of […]

“We wanted flying cars, and they gave us 140 characters” said venture capitalist Peter Thiel in 2011. He put his finger on a central dilemma of the New Economy: its innovations can make money (usually through redirecting advertising sales) but they add little or nothing to the overall stock of human knowledge or long-term happiness. […]

The NASDAQ Composite Stock Index this week broke out to 14-year highs, reaching levels not seen since March 2000, within 10% of its all-time closing peak of 5,048.62 on March 10 of that year (by the end of that month it was already below current levels.) At that time I thought, along with many commentators, […]

Ever since the fall of Communism and the rise of the Internet, future growth has appeared to lie in emerging markets. Modern communications have made it much easier for multinationals to run international supply chains that take advantage of their abundant resources and cheap labor, while emerging markets people have become far more connected to […]