Nobel Prize winning (1992) economist Gary Becker, who died last weekend, extended economic theory into areas such as racism, crime, and family formation in which it hadn’t been thought relevant. Critics, whether of religious or other persuasions, complained that Becker’s analysis dehumanized us by leaving out many other factors that were of equal or greater […]

It is becoming increasingly clear that size, in government and business, was a fetish of the early and middle 20th century, caused by the peculiar technological capabilities of that period. Humanity had gained access to enormous power sources, so production could be aggregated into enormous units, but we did not yet have the informational capabilities […]

For the last couple of decades, U.S. budgets have been prepared on a 10-year basis, with the Congressional Budget Office scoring the 10-year deficit, while the sustainability of social security and other entitlement programs is calculated on the basis of their deficit projected 75 years ahead. Politicians have learned to game this system, inventing new […]

Monetary economists around 2009-10 were sure of one thing: the Fed’s unprecedented creation of “narrow money” in the form of bank reserves would show up fairly quickly in a burst of inflation. Clearly, they were wrong; the Fed has created $2.7 trillion of bank reserves, increasing the monetary base by $3 trillion or 319% since […]

The American Enterprise Institute has now joined much of the Fed, Christine Lagarde of the IMF and the commentariat in warning of the imminence of deflation, and the dire consequences that would ensue from even a mild decline in prices. I frankly don’t believe a word of it. We are in uncharted waters of monetary […]

The Financial Times revealed this week that trades in index credit default swap options had managed to avoid being listed on exchanges, with all the transparency requirements that brings, instead being allowed to continue trading on an over-the-counter basis. The amount outstanding is relatively small in relation to the $25 trillion of CDS outstanding, but […]

Thomas Piketty’s “Capital in the Twenty First Century” has received rave reviews among the sort of commentators who are looking always for reasons to dump capitalism in the dustbin of history and resuscitate the Marxism they enjoyed in college (there are a LOT of these people). His central thesis is that if the return on […]

The Global Financial Center Index, released last week, showed that New York had supplanted London as the world’s premier financial center, albeit by a tiny margin of 2 points out of 1,000. With British financial capability hollowed out, and nearly all the major London investment banking operations foreign-owned, it’s a change that has been coming […]

Since November 2012, the world has been watching for the outcome of Japan’s experiment in “Abenomics,” a bold policy experiment that attempted to put the country on a faster growth track. The results are now coming in, and on balance the experiment appears to be failing. That’s not very surprising – one of its central […]

In a piece “Dinosaur tail risks” published on January 27, I discussed the various unlikely things that could go wrong with the world economy, mentioning well into the second page the faint possibility of a global war, since the global geopolitical system appeared as fragile as that governing before 1914. . Well, that didn’t take […]