The U.S. Treasury reopened the 30 year Treasury bond market Thursday, with the first 30 year bond issue since such issues were suspended in 2001. The issue of $14 billion 4.5 percent bonds due February 2036 was twice covered on a yield of 4.530 percent, with an indirect bid from domestic institutions and foreign central […]

About the only bipartisan cheers in President George W. Bush’s State of the Union address Tuesday came with his claim that the United States was “addicted to oil” and the inevitable proposals thereafter for various state subsidies to new energy research. Yet neither the diagnosis nor the proposed cure make sense, since they bear little […]

Sir John Tenniel’s famous cartoon of 29th March 1890 shows the young Kaiser Wilhelm II “dropping the pilot” — the veteran Chancellor (1862-1890) Otto von Bismarck – and heading Germany into new and dangerous waters. Like Bismarck a towering figure, retiring Fed Chairman (1987-2006) Alan Greenspan, to be “dropped” Tuesday, has run U.S. monetary policy […]

President Jacques Chirac announced Thursday that France might respond with nuclear weapons to any terrorist attack, while Western concern intensified over Iranian President Mahmoud Ahmadinejad’s apparent determination to develop nuclear weapons and wipe out Israel. The threat of a nuclear attack on a Western city is becoming more real by the day; it’s worth thinking […]

The fashionable cliché about the Federal Reserve’s current monetary policy is that it has created a “Goldilocks economy” in the United States, in which the economic porridge is neither too hot nor too cold, and moderate non-inflationary growth can continue ad infinitum. However, what if the “path of steady growth” onto which the Fed has […]

Russia’s cutoff of gas supplies to Ukraine Tuesday caused alarm in Western Europe, much of which is dependent on Russia for gas, but was quickly resolved. However a Russian state that controls important natural resources and that operates by nationalist whim rather than by market demands potentially imposes huge costs on Western economies. The “peace […]

The Bear’s Lair’s examination last week of Latin American economies, which concluded that excessive inequality has combined with democracy to leave them trapped in a morass of poor economic policy and minimal growth no doubt left domestically-oriented U.S. readers unmoved. They should start worrying – there’s considerable evidence the United States is heading in the […]

In the late 1990s, Latin America was believed to have adopted a “Washington Consensus” of democratic politics and moderately free market economics. At the end of 2005, it is becoming only too clear that the two parts of the Washington Consensus are in conflict in the region, with the democratic politics leading to increasingly anti-market […]

In 4th Century BC Syracuse, Damocles was the court sycophant who wished to change places with the wealthy tyrant Dionysius, and discovered that to do so involved having a sword suspended over his head by the finest of horsehairs, since Dionysius was in permanent danger of assassination. Likewise those who designed today’s U.S. economy sought […]

Europe has managed over the last half century to combine a higher level of government spending than the United States with a rate of economic growth that is still respectable and living standards that many “blue state” Americans envy. Regrettably, this party may be coming to an end.