The Bear’s Lair

The Bear’s Lair: Mississippi Company Economics

We have seen today’s economics in action before. Not in the 1720 South Sea Bubble – that was a simple stock market frenzy, similar to that of 1999, with a debt conversion scheme buried in it, but no excessive leverage. However, the almost exactly contemporary Mississippi Company/ Banque Royale scheme, devised in Paris by the […]

The Bear’s Lair: Better invest in a horse

Britain intends to ban the purchase of internal combustion and diesel engine cars in 2040, hoping to make everyone switch to electric.cars. California, China and France all have similar schemes in place. These government decisions naturally provide yet another implicit subsidy to Tesla Motors (Nasdaq:TSLA) whose first quarter’s production of its latest “mass market” model […]

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: Too much entrepreneurship?

I have been away this week, as my dear mother passed away and I have been in Britain for her funeral. Here, therefore is a classic column, from April 24, 2006, that has survived the test of time quite well, I think. Entrepreneurship is popularly held to be the principal reason for the success of […]

The Bear’s Lair: China’s size may not make it dominant

For sheer Silicon Valley silliness, the FT article “China is leaving Donald Trump’s America behind” by Sequoia Capital boss Michael Moritz will take some beating. It is inaccurate and politically unbalanced about the United States, but even more so about China. It also misjudges China’s present position, its actual policies and its future prospects. China’s […]

The Bear’s Lair: Cryptos are sounder than today’s currencies

Crypto-currencies are an entirely imaginary form of money, dreamed up by pimply nerds in basements. Or so it seemed. Yet examine the algorithms behind some of the better crypto-currencies, and look in contrast at the monetary policies that have devastated the last decade. You will recognize two things. First, fiat money is fiat money, whether […]

The Bear’s Lair: Jackson Hole 2017 was a barmy ideas factory

The Federal Reserve Bank of Kansas City is a relatively solid, well-run institution and its President Esther George is among the most sensible members of the Federal Open Market Committee when she is permitted to attend it (her next triennial year of service is 2019). It is thus surprising and regrettable that its annual Jackson […]

The Bear’s Lair: The politicization of Big Business

The collapse of President Trump’s business advisory councils had little to do with Trump’s policies, or even his presentation. After all the business leaders had joined the councils after he became President, so knew what they were getting into. Traditionally, businesses have been careful to maintain a political neutrality, so their opposition to President Trump […]

The Bear’s Lair: Productive economies require participation

Many of Maynard Keynes’ dreams were destructive to civilization. The euthanasia of the rentier, which central bankers worldwide are still trying to achieve, has hopelessly corrupted the capital allocation process and brought productivity growth to a halt. But perhaps his most destructive vision was that of a universally leisured society, in which only a few […]

The Bear’s Lair: Finally, an immigration proposal that makes sense

Ever since Senator Edward Kennedy’s 1965 immigration legislation, both Republican and Democrat efforts to reform immigration policy have been marked by sentimentality and bad faith with American workers. This column pointed this out in January 2004, when President George W. Bush’s proposed reform promised to immiserate further workers who had already gained nothing from the […]