RealClearMarkets Articles

With President Trump back in the White House, tariffs and trade deficits are once again front-page news. His second-term economic agenda seems to hinge on reducing America’s trade deficit—treating it as proof that other nations are taking advantage of us. But that narrative is misleading. A trade deficit is not inherently bad; in fact, it can be a sign of economic strength and global confidence in the U.S. economy. What a Trade Deficit Really Means The term “trade deficit” simply means that Americans buy more goods and services from abroad than foreigners buy from us....

There are two compelling reasons for the U.S. Department of Justice’s (DoJ’s) Antitrust Division to end its assault on Google, both of which are accelerating in importance. First, the DoJ’s actions are at direct odds with the Trump administration’s fervent push to ensure that America remains the world’s leading AI provider. Indeed, if DoJ got what it wants from Google it would hobble, if not derail, that fundamental goal. Second, while DoJ, through litigation undertaken primarily during the Biden administration won court cases against Google pertaining to...

Consumer sentiment increased in August, as the RealClearMarkets/TIPP Economic Optimism Index rose from 48.6 in July to 50.9, a 4.7% gain. After peaking at a 40-month high of 54.0 in December, the index eased to 51.9 in January and 52.0 in February before slipping below the crucial 50.0 benchmark in March. August’s reading breaks a five-month spell in the pessimistic territory. The Economic Optimism Index’s August reading of 50.9 is 3.5% above its 295-month historical average of 49.2. Investor confidence rose by 13.2% (7.6 points) to 65.1, while non-investor confidence edged up by...

Texas Attorney General Ken Paxton and 10 other AGs recently filed a misconceived lawsuit against BlackRock, State Street, and The Vanguard Group, three of the largest investment firms in the world. This suit is wrong regarding the facts about the energy industry and coal production, and wrong regarding energy policy and politics. Their claims present a radical, unprecedented expansion of antitrust and consumer protection laws and would have significant consequences for President Trump’s energy dominance...

Government regulation of financial institutions is expensive and there is no reason to think regulation of payment stablecoins is going to be cheap. Drafting, issuing and refining financial regulations is itself a costly time-consuming process. The Basle capital and liquidity framework has taken decades to develop and implement—and it’s still unfinished.  The GENIUS Act requires federal bank regulatory agencies to produce safety and soundness rules for payment stablecoins in addition to supervising the payment stablecoins issuers that will ultimately be licensed by...

I left Richmond headed up I-95 to New England. Final destination: Newport, Rhode Island. I’m an old-school radio dial guy. No SiriusXM or podcasts for me. I’m constantly changing the station, always curious to hear what local broadcasters have to say. Leaving Richmond, a local station was reporting that ICE had arrested an illegal immigrant. A city council member from a crime-infested district was on an unhinged screed about how the man had gone missing and nobody knew where he was. Well, sweetheart—that’s what happens to everyone who gets arrested: they disappear for...

“We are living in a moment of existential dread and alienation caused by the savagery of social media, the ugliness of our politics, the AI takeover, our melting planet, a winner-take-all economy...” Those are the words of Washington Post columnist Dana Milbank. He doesn't lack for certitude. Most of us can't develop a read of the street we live on, but Milbank looks in the mirror and sees an ability to describe a nation.  About the alleged “savagery of social media,” all one can ask is why it’s so popular if it’s so awful? The question answers itself....

The Jones Act is a regulation that requires ships to be U.S.-built, U.S.-owned, U.S.-flagged, and U.S.-crewed if they move goods between American ports (cabotage).  For over 100 years, the Jones act has thus restricted competition in American shipping. The U.S. only had 92 Jones Act-compliant ships in 2024. However, there were 185 U.S.-flagged ships that year. The other 93 are foreign-built ships that have been flagged in the United States. While those ships cannot engage in cabotage, they can take advantage of other programs that protect U.S. shipping, namely,...

According to a new Tax Foundation report, permanently locking in lower individual and corporate tax cuts is the most important pro-growth feature of the recently enacted tax bill. While preventing a $4.5 trillion tax increase is important, and while other targeted tax cuts are getting all the attention, permanence is much more significant, providing increased stability to the tax code after years of uncertainty.The report details how the permanent provisions will give taxpayers the certainty needed to increase long term investments. Combining the permanent 21% corporate tax rate with the...

There is something Capraesque about progressive antitrust writing. Recently in The New York Times, Lina Khan waxed rhapsodic about Democratic mayoral candidate Zohran Mamdani as he stops by halal carts and pops into bodegas to ask small business owners about their problems. Khan’s writing – like that of former progressive FTC Commissioner Alvaro Bedoya – is poetic in evoking the plights and virtues of the small dealer. Reading Khan, one imagines the small grocer urging you to bite into one of his crisp apples while his granddaughter sweeps the floor, or the guy in the...

I was living at 537 W. Deming in the Lincoln Park section of Chicago in the summer of 1995. The address and city rate mention because that summer Chicago suffered one of those brutal and nationally notable heat waves. The kind that could claim a high death count. Where it became interesting, while also enervating, was that air conditioning even in the reasonably nice parts of Chicago wasn’t a foregone conclusion in 1995. My apartment lacked AC, and the implications of what it lacked were awful. Working from home at the time, I periodically took cold showers throughout the day just to...

Minnesota residents will soon be unable to log onto their favorite social media sites without first seeing a “mental health warning label.” The label will remain on their screen until the individual “acknowledges the potential for harm and chooses to proceed to the social media platform despite the risk.” Similar legislation was recently passed in New York which mandates that any site using popular features such as like buttons, infinite scrolling, or an autoplay feature will include a warning label created by New York’s “Commissioner of...

Americans look to the Supreme Court as an umpire in legal and constitutional disputes. There, controversies meet their resolutions, and circuit splits are closed. In some cases, though, the justice’s rulings yield more uncertainty than clarity. Such a case was Free Speech Coalition v. Paxton, in which the Court’s majority upheld the constitutionality of a Texas law requiring online platforms hosting pornography to verify the ages of their users. Before Paxton’s resolution, enforced online age verification had been deemed an unconstitutional...

A truism in regulatory analysis is that if the government fails to take steps to clarify an unduly vague regulation, litigation will inevitably ensue that will force the courts to do so. In one of the final acts of President Trump's first term, he signed legislation to codify the No Surprises Act, which ended the practice of out-of-network healthcare providers sending “surprise” bills to patients. The legislation resulted in patients receiving fewer unexpected invoices for out-of-network non-emergency services, and most healthcare policy analysts consider the legislation to have...

GDP is a worthless calculation. It goes down as imports increase, it goes up as government spending does, and it increases not due to productivity, but if production of any kind has happened. In other words, the revival of the worst of the worst businesses from the dead would be additive to GDP, and without regard to how economically crippling it is to have “zombie” businesses hogging precious capital. Which is a comment that if anything, the latest GDP number reflects slower economic growth than would otherwise be the case. To be blunt, GDP is frequently backwards due to how...

Finger-pointing over the nation’s housing woes has become an annual tradition. Both parties have blamed professional housing providers for the ongoing affordability crisis. In Congress, Rep. Adam Smith (D-Wash.) and Sen. Jeff Merkley (D-Ore.) have introduced legislation to impose tax penalties for institutional investors buying single-family homes or even to force them to sell any single-family homes they have purchased. Several states have followed suit. This rush to ban certain entities from owning homes flows from a misunderstanding of their effect on the housing market and their...

Silicon Valley VC legend Don Valentine purchased a 33% stake in Cisco decades ago for $2.5 million. Cisco is one of the many great investments made by the VCs at Sequoia Capital, and it’s worth thinking about with Cisco’s $271 billion market cap top of mind. How did Valentine and Sequoia get so much for so little? Readers know why, or they should: before Cisco became Cisco, it wasn’t expected to survive. To be clear, it’s the business model of VCs to invest in companies pursuing “impossible” ideas, and that fail quickly. On the rare occasion that one of the...

The future of the global derivatives market, a multi-trillion-dollar enterprise underpinning the smooth functioning of everything from air travel to international currency exchanges, could soon be decided in a Camden, New Jersey courtroom.    The court case in question turns on whether New Jersey’s casino regulator should be able to police Kalshi, which is a futures exchange where investors manage risk by hedging the outcomes of the Super Bowl, presidential elections, and other marquee events that generate economic activity. Why is this court case unnecessary? Because Kalshi is...

For decades, a patchwork of regional rail networks across the United States have been forced to grapple with the same headache: Interchanges, where cargo is handed from one rail line to another. Interchanges are one of the biggest friction points in freight logistics. They slow down the transport of goods that commonly travel on railroads--important products like lumber, food and fuel--while driving up shipping and supply chain costs for important industries like manufacturing, homebuilding, and retail. Ultimately, consumers foot the bill of the higher transport costs, exacerbating...