RealClearMarkets Articles

The Congressional Budget Office has released its annual report on the accuracy of its budget projections for fiscal 2025. It is a useful yearly reminder to policymakers that CBO forecasts are almost always wrong.For fiscal 2025, CBO underestimated total federal revenue by $331 billion, a 6% miss, and   underestimated corporate tax receipts by 9%. The previous year, CBO underestimated the budget deficit by $306 billion, and underestimated corporate tax receipts by 10%. In fiscal 2022, they underestimated corporate tax receipts by 25%.Member of Congress should be very skeptical of CBO...

In the recently launched California Post, gubernatorial candidate Steve Hilton wrote that Californians suffer the worst results despite paying the highest taxes. Without disagreeing with the Republican in Hilton, this shouldn’t be news. It's government spending after all.  Say it repeatedly that central, politicized planning of precious resources always and everywhere fails. Only for it to get worse. California’s high rates of taxation don’t realistically tell the story. To see why, contemplate if California workers paid a low rate of taxation. For fun, let’s say...

The repeated claim that climate science is “settled” overlooks myriad uncertainties, competing mechanisms and computer models that miss the mark when tested against reality. Declaring finality in such a field reflects political confidence – even arrogance – not scientific maturity.The model-reality divergence Computer models – based on faulty premises – are the bible for the modern climate movement. This despite the United Nations Intergovernmental Panel on Climate Change (IPCC) describing climate as a "coupled, non-linear, chaotic system" where long-term...

For decades, business leaders have repeated a familiar truth: every business is a people business. That statement remains true. People create value, build culture, and fuel innovation. Yet the reality of the 21st century adds another layer of responsibility that leaders can no longer afford to treat as secondary. Every business today is also a technology business, and every business is a “data” business, regardless of industry and product category. That reality once felt limited to financial institutions and software companies. Today, it reaches far beyond...

Progressive advocacy group Public Citizen has exposed an ongoing campaign of the Trump Administration on behalf of “big tech” against the European Union (EU). This nefarious campaign aims to make the EU respect free speech. The Administration has banned former EU Commissioner Thierry Breton and four other officials with European nongovernmental organizations (NGOs) from traveling to the US due to U.S. objections to the EU’s censorship of American tech companies via the Digital Services Act (DSA). The DSA imposes strict regulations on very large online...

As Nvidia’s Jensen Huang routinely points out, Artificial Intelligence (AI) is work. That’s why it will be the most powerful, growth boosting, job creator the world has ever known. It can’t be said enough that what does work for humans creates exponentially more work opportunities for those same humans. Those predicting the opposite - that AI will drive mass unemployment – are revealing a profound misunderstanding not just of what progress is, but also what credit is. In thinking about credit, it’s useful to point out that when entrepreneurs and businesses raise...

When Dwight Eisenhower took office, he did not try to modernize America’s outdated road network. He scrapped it and built something new. Kevin Warsh, the nominee for Fed chair, will face a similar decision at the Federal Reserve. As incoming chair, Warsh will inherit an institutional structure that once made sense: twelve regional Reserve Banks and roughly two dozen branch offices designed for a fragmented, paper-based financial system. That structure worked when finance was local, slow, and analog. It does not fit a centralized, digital, real-time financial system. Yet the architecture...

President Trump dislikes an overly strong dollar because it hurts U.S. exporters and manufacturers, and he wants lower interest rates. His Fed nominee, Kevin Warsh, is associated with a strong dollar and is a reputed “inflation hawk” who may be reluctant to cut rates—seemingly just like Fed Chair Jay Powell.  Financial markets are struggling to square that circle. Gold volatility has surged, with the Cboe Gold Volatility Index closing above 44, an unusually elevated reading. Equity volatility has edged higher, and the Treasury yield curve has steepened, signaling...

“Every society gets the kind of criminal it deserves. What is equally true is that every community gets the kind of law enforcement it insists on.” — Robert F. Kennedy “Buzzards gotta eat, same as worms.” — The Outlaw Josey Wales If you are one of those Critical Race Theory, Michel Foucault, Herbert Marcuse, DEI, intersectionality, social-justice, big–blue-city mayor types, you love crime. It is the fuel that feeds your ideology, which proselytizes that crime rates are a byproduct of capitalism, which oppresses people and forces punks and thugs to be...

“This saga was never about TikTok’s utility or popularity but its Chinese ownership and apparent links to the Chinese Communist Party.” That’s from a recent editorial in the Washington Post, and it’s an unwitting reminder that attacks on TikTok were never about fears of China or the CCP, but were instead about protectionism for sore-loser American companies getting beat at their own game by an expert competitor.  Contemplate first the Post’s quip about TikTok’s “Chinese ownership.” It’s at odds with the simple economic reality...

February 8 will mark the 30th anniversary of the Telecommunications Act of 1996, which updated the Communications Act of 1934 in certain important respects. The only way for Congress to properly celebrate this anniversary would be to initiate a serious legislative review that leads to a deregulatory overhaul of the Communications Act. By 1996, the communications markets subject to the Federal Communications Commission's regulatory jurisdiction already had undergone significant change. For example, AT&T's telephone monopoly had been dismembered, creating separate "Baby Bells" offering...

Overlooked amid the Greenland uproar in Davos came an extraordinary statement from Canadian Prime Minister Mark Carney. Not only did the leader of America’s northern neighbor cozy up to Communist China by suggesting a “new order,” but he had the audacity to invoke the moral authority of Václav Havel, the first president of the Czech Republic and fierce anti-Communist crusader. In portraying life in an oppressive regime, Havel used a parable of a grocer hanging a sign on his window reading “workers of the world, unite." In Havel’s telling,...

Money in no way alters reality. This truth seemingly eludes Harvard economist Jason Furman. Consider his assertion in the New York Times that the dollar at “multiyear lows” ultimately “could be good for the U.S. economy.” Really? How? Furman is making an argument equivalent to one suggesting a six-inch-foot would magically make us tall. Money is a measure. Nothing else. The measure is meant to report reality. Cutting the measure in half doesn’t alter the length, weight, speed or cost of anything, it just means that perception of length, weight, speed, and cost...

America’s credit card industry is the most competitive in the world and delivers enormous value for consumers and merchants ranging from mom and pops to Goliaths like Walmart and Amazon. There are four national general purpose credit networks Visa, Mastercard, American Express, and Discover. Roughly 3,700 financial institutions issue credit cards. Consumers enjoy a surfeit of choice. More than 300 banks and nonbanks provide payment acceptance to merchants. In spite of that, the credit card industry is in Washington’s cross hairs and value consumers and merchant take for...

Washington is currently gripped by a fervor to lower the cost of credit. From the President’s proposal to cap credit card interest rates at 10% to the recent legislation introduced in the Senate to cap late fees, the legislative intent is clear: protect consumers from high costs. On the surface, these measures sound like the ultimate act of consumer protection. For millions of Americans staring down double-digit APRs and penalty fees, they feel like a long-overdue lifeline. But in the world of consumer finance, the distance between a good intention and a disastrous outcome is often...

This past week, the CEOs of some of the largest U.S. banks attended Davos, and used the opportunity to attack Coinbase CEO, Brian Armstrong, for having the temerity to attempt to compete with them by offering stablecoin holders a much higher rate of interest than the pittance they pay on deposits. At a time when affordability and the struggling finances of low- and middle-income Americans is at center stage politically, the debate over whether to rein in Coinbase’s ability to pay American consumers a high return on their savings is a golden opportunity for the Trump Administration to...

The GENIUS act does not adequately address the discrepancy between highly regulated regular lenders such as banks and crypto vendors aiming to mimic credit markets without adequate safety regulations. I recently argued for closing the stablecoin loophole in the GENIUS Act to protect Main Street communities that may switch from safer community banks with strict safety regulations to crypto stable coins where it is not. Credit competition should occur with an equal level playing field, not where incumbents are regulated while new competition is not.  As expected, crypto...

Government spending is excessively harmful precisely because it’s the central planning of precious goods, services and labor by the federal government. Conservatives and libertarians at one time nodded along to the latter, while progressives and liberals rolled their eyes. Not so much today. As this write-up’s title indicates, they’ve become one. See Patricia Cohen at the New York Times. In a recent front-page article at the newspaper, Cohen lamented soaring national debt in rich nations since “it means countries must make interest payments with money that otherwise...

Investor confidence gained by 9.7% in February, while overall optimism improved 3.4%. Consumer sentiment brightened in February as the RealClearMarkets/TIPP Economic Optimism Index, the first monthly read on U.S. consumer confidence, rose from 47.2 in January to 48.8, a 1.6-point or 3.4 percent gain. The index stayed below the neutral 50 level for the sixth straight month, keeping the nation in what we classify as a pessimistic zone. February’s reading of 48.8 is 0.66% below the 301-month historical average of 49.1, indicating that optimism remains slightly below the long-term...