RealClearMarkets Articles

The fundamental flaw of socialism is a profound category error regarding human nature. It is an economic blueprint designed for a completely restored, flawless humanity—which means socialism can only exist in Heaven. In a realm completely purged of envy, ego, and deceit, a system of pure collective unity could function perfectly. There, you don’t need competitive markets or strict guardrails, because the impulse to exploit simply does not exist. But trying to run that blueprint on Earth ignores the reality of human nature as it is. When an economic system is built on the fantasy...

Affordability is a key issue in Washington, and taxes are a major factor.  Americans pay more in taxes than they do for food, clothing, and shelter combined.  But taxes keep going up, and pressure is growing to increase taxes even more. According to a recent Treasury report, individual income taxes increased $136 billion in the first nine months of the fiscal year, a 7% increase.  Total federal taxes were $4.2 trillion in the first nine months, on track for a record high $5.6 trillion in taxes for the full year.  Even with the Republican tax cuts in 2017 and 2025,...

When prices rise, the search for someone to blame usually begins immediately. During the pandemic, many politicians pointed to "corporate greed" as the culprit, arguing that businesses simply took advantage of consumers by charging more. But higher prices, by themselves, tell us remarkably little. Before assigning blame, we should first ask a more fundamental economic question: What changed? Imagine a hurricane destroys half of Florida's orange crop. Orange juice prices double almost overnight. Most people wouldn't conclude that orange growers suddenly became twice as greedy. They would...

AI will do more to elevate capitalism in the eyes of the young than any other advance. See Elon Musk to understand why. It turns out his teachers in South Africa thought he was touched. What to take from such a foolish analysis of Musk? It speaks to arguably the biggest problem in education. It’s not bad teachers, or not enough home schooling, or insufficient vouchers to free kids from “government schools.” The biggest problem with education today is the popular notion of what a “good education” is. The experts believe it’s rooted in learning math,...

When they were young, I used to give my daughters little bags of chips.  Turns out, my oldest would take some of her sisters’ stash.  This coincided with chip-makers putting fewer in each bag.  Shrinkflation. When I cut the number of bags I handed out, she would actually demand more from the other girls. If this sounds too unfair to be true, that’s because it is.  I made it up.  The scenario is analogous however, to those playing out in cities across the country this municipal budgeting season.  Faced with deficits in the hundreds of millions of...

A day at the ballpark is a classic American story – a story of community, tradition, and pure joy. It’s a story written not just on the field, but by a vast, unseen network of infrastructure, commerce, and ingenuity that makes such a day possible. Take a day at Yankee Stadium – from buying tickets and booking flights to grabbing coffee, riding the subway, lighting the stadium, and even buying a hot dog, life insurers' investments fuel that diverse network and help make gameday possible. And what's true at the stadium is true across the country: life insurers' capital quietly...

Everyone sucks at something. In a baseball sense, that’s why “five tool” players are paid so well. They can not only hit for average, but they can also hit for power, run the bases with great speed, they can field with great skill, and throw long distances accurately. The five tool players are rare, and then when someone like Shohei Ohtani comes along of the six-tool variety (yes, he can pitch), we watch in awe. Baseball is one way to look at the AI future that Mark Zuckerberg described this week in an excellent Wall Street Journal opinion piece. Zuckerberg crucially wrote...

Our Founders did something that the Kings and Queens of Europe never did, something that made America the country it is today—they gave us a patent system that anyone could benefit from. In England, writs of ownership were given to the friends of the King, but in America anyone could receive a patent. That lit a fire under our economy that helped America grow into the greatest nation on Earth. However, our government has grown and grown, as has its regulatory bureaucracy, and today our engine of innovation is seemingly coming to a halt under the slow stranglehold of bureaucratic...

What a thrilling time for soccer fans everywhere. For the past six weeks, the World Cup saw people from Buenos Aires to Barcelona, to Brisbane and beyond, gather around televisions and tablets, cheer on their heroes, live and die with each corner kick and set play, and wonder who would emerge as champions of the beautiful game.   Yet far from the pitch, another team has waged a different kind of battle, situated not on the field of play but in dark corners of the internet: a fight to prevent criminal pirates from stealing live game broadcasts, illegally distributing them online, and...

President Trump has opened a new front in the U.S.-Canada trade war. By invoking Section 338 of the Tariff Act of 1930 for the first time in its history, his administration has imposed a 50 percent tariff on roughly $20bn of Canadian imports, arguing that Canada discriminates against American commerce. Hockey sticks, furniture, apparel and alcoholic beverages are all in the crosshairs. But not softwood lumber. Like other goods already subject to Section 232 tariffs, softwood got a pass. That exemption is more revealing than the tariffs themselves — and it points toward a deal that has...

Have you ever thought you did something special? Have you felt the opposite? Have you ever expressed petty jealousies, vanities, insecurities, or simply embarrassing thoughts in the quiet of your mind?  The questions come up as Anthony Fauci has his diaries read. That he’s loathsome is settled science. We knew that from the early days of the virus when he went on the Sunday talk shows to say that the economy and jobs would have to take a backseat to safety. Yes, abject poverty as virus mitigation from someone who would never miss a meal. That Fauci was incredibly vain was similarly...

If Gavin Newsom wants to sell himself as a national leader, he should first explain why the country should import the very policies that have made California a cautionary tale.  After years of presiding over one of the highest-taxed and most heavily regulated states in America, Newsom is now calling for a federal wealth tax while promising every American a stake in the wealth created by artificial intelligence.  That is not a bold new vision. It is an economic contradiction dressed up as fairness.  Artificial intelligence is not just another industry. It is the central economic...

Since the passage of Dodd–Frank, which—among other things—capped the interchange fees that large debit-card issuers could charge, merchants and activists have advocated measures to reduce credit-card interchange fees, including the Credit Card Competition Act’s routing mandate. A common rationale is that the increasing prevalence of credit cards offering rewards—such as airline miles, hotel points, or cash back—has made credit cards regressive, with a disproportionate share of the rewards going to the wealthy. An interchange-fee restriction, advocates...

The Federal Reserve did not raise interest rates. That is the good news.  The bad news is almost everything else.  In a 9–3 vote, the Fed held its target range steady at 3.50% to 3.75%. Yet three regional Fed presidents — Beth Hammack of Cleveland, Neel Kashkari of Minneapolis, and Lorie Logan of Dallas — dissented in favor of a quarter-point rate hike.  That is the real story. Not the hold. The dissents.  Markets initially took the hold in stride. The front end of the Treasury market rallied on relief, with the two-year yield easing. Then Chairman Kevin...

Visits to Washington, D.C., this week by Nvidia CEO Jensen Huang and OpenAI CEO Sam Altman come at an absolutely pivotal moment for AI policy. Governor Kathy Hochul’s moratorium on data centers in New York is merely the latest in a flurry of misguided regulatory ideas that could subvert America’s most dynamic economic sector.  Legislators are introducing thousands of anti-AI bills across the 50 states. The White House in June bypassed its own executive order to impose export controls on America’s leading AI model. Google DeepMind CEO Demis Hassabis just suggested a new...

When two merging railroads promise better service, tougher competition, and relief from truck traffic, skepticism is bound to arise. This week, Union Pacific and Norfolk Southern gave the Surface Transportation Board, and the public, something better to judge than promises: a supplemental filing and a signed agreement that put those commitments on paper. I argued earlier this year that combining UP's western network with NS's eastern one, end to end rather than overlapping, offers real gains for shippers, consumers, and relief for the highways every taxpayer helps maintain. Two developments...

When I was in seventh grade, we took a field trip from our small southern Maine town to Lowell, Massachusetts to learn about the working conditions of early 19th Century textile mills. It was awful. They packed us into a sweltering old factory, windows nailed shut to trap the heat. Our tour guide pulled a lever to activate just half the antique machines around us, assaulting our eardrums with a deafening racket. It lasted only a few seconds before he switched them off and, smirking, invited us to imagine working in an environment twice as ear-splitting for 12 hours straight. In the 21st...

There’s no need to focus on consumption. It’s pointless simply because our wants are unlimited. The unlimited nature of our wants raises an obvious question about why some can consume more than others? The answer is that some produce more than others. Which to most is a statement of the obvious. The exception is economists and economic analysts. Gordon Chang is one of those economic analysts mistakenly interested in consumption. He believes the alleged failure of people to buy things results in economic decline, or when it comes to China, much worse. Consider Chang’s recent...

It’s accepted wisdom in San Francisco that the path to successfully purchasing an apartment is an opening bid of 50% over asking price. It’s worth remembering as the right-leaning California Post expresses optimism about the city achieving budgetary balance. At first glance, it’s difficult to not find optimism in what so many correlate with fiscal prudence. This is San Francisco after all. But conservatives regularly make a correct case for addressing concepts beyond first glance. Given a second glance, it can be said that budgetary balance in a city that can lay claim to...