RealClearMarkets Articles

Ronald Coase once remarked, “If you torture the data enough, nature will always confess.” Governments increasingly rely on sophisticated statistical models to justify policies. Before accepting a model-generated number as a basis for public policy, we should ask two questions: How much comes from actual observations and how much from assumptions? And what incentives surround the institutions producing the research? Consider employment data. The Bureau of Labor Statistics publishes its Employment Situation monthly. Even a century gives us only about 1,200 monthly...

Twelve state Attorneys General have just settled their lawsuit that tried to block Paramount from acquiring Warner Brothers.  The case was brought under federal antitrust law. The settlement, however, goes far afield from antitrust. A state Attorney General is a political office-holder. It is neither surprising nor inappropriate that each would bring political considerations into the decision to sue, and now to settle a suit, against a merger of the prominence of Paramount-Warner Brothers.  What is inappropriate, however, is to extract promises that have nothing to do with...

The US debt load crossed $40 trillion in August 2026. The Treasury publishes the number and updates it every business day. $32.4 trillion of it is borrowed from investors, pension funds, and foreign governments. Another $7.7 trillion is owed to the government's trust funds, including the funds that pay Social Security and Medicare. I spent two terms chairing the House Financial Institutions Committee, reading numbers like these, page after page. The pace worried me more than the total ever did. Everyone quotes the Congressional Budget Office’s baseline when they talk about where the...

Congress is acting rationally, and in sober fashion. As the wealth pie grows so does federal tax revenue, along with the ability of Treasury to borrow in growing amounts for a Congress that is still nursing its first drink. Debt doesn’t just happen. Instead, debt rises as market expectations about the capacity for the borrower to pay monies borrowed back grows. The national debt isn’t an effect of Congress overspending, nor will it be fixed by reform of how Congress spends. Both notions ignore a tax situation that showers Congress with enormous amounts of tax revenue now and the...

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the...

Headline Index Rises to 46.8 as All Three Components Advance; Investors Pull 25.1 Points Ahead of Non-Investors, the Widest Gap Since the Index Began in 2001 Consumer sentiment improved for a second straight month in October as the RealClearMarkets/TIPP Economic Optimism Index, the first monthly reading of U.S. consumer confidence, rose to 46.8 from 45.6 in September, a 1.2-point (2.6%) gain. The index reached its highest level since March, and all three of its components advanced. But the improvement was again concentrated among investors and higher-income households, while non-investors...

This week marks another milestone for socialist Mayor Zohran Mamdani’s goal of remaking New York’s economy. By definition, it also means taking America’s largest metropolitan economy backward. Biden-era FTC Chair Lina Khan, Mamdani’s choice to lead the city's Economic Development Corporation (EDC) board of directors, officially started her job on Wednesday. In appointing Khan as chair, the Mayor has ceded the reins to the agency responsible for attracting jobs and investment to someone who has spent her career treating American business as the enemy. Khan’s...

Never doubt the creativity of state and federal politicians when it comes to rescuing Americans from problems that do not exist or are vastly overblown, while working the public into a tizzy. A case in point: fears being stoked about surveillance pricing, the concept that vast amounts of data integrated with AI will allow merchants and marketing platforms to gouge customers. As Walmart said in strongly disavowing the practice, it involves “different prices on the same products based on their (customers) personal data such as age, gender, race, and income, or raising prices when...

On May 10, 1869, workers drove a golden spike at Promontory Summit, Utah, and the Union Pacific met the Central Pacific. For the first time, freight could cross the country by rail. More than 150 years later, shockingly it still can't do so on a single railroad. Freight moving between the East and the West today has to change hands, usually in Chicago or another interchange point in the middle of the country. Those handoffs can add 24 to 48 hours, according to the companies. A railcar waiting in a yard earns nothing. The shipper pays for the inventory sitting inside it, and eventually so do...

August’s ugly $105.6 billion trade deficit tells two very different stories. One begins with the Supreme Court’s February decision knocking down President Trump’s broad reciprocal tariffs and forcing the administration onto narrower trade authorities. The other is much more encouraging: America is importing extraordinary amounts of capital equipment because companies are building factories and supply chains here at home.  Start with the headline. The goods-and-services deficit jumped 13.7 percent from July, above the $102 billion Wall Street consensus. Imports rose...

President Trump recently boasted that all 50 state Medicaid programs, along with the DC and Puerto Rico programs, are now using Most Favored Drug (MFN) pricing. MFN pricing requires pharmaceutical companies to charge American consumers a price equal to or below the lowest price they charge one of 19 reference countries. MFN is a response to the longstanding complaint that Americans pay more for pharmaceuticals made by American companies than consumers in other countries. One of the reasons foreigners often pay less for prescription drugs is because their governments impose price controls. MFN...

"The next task for education reform isn't merely helping parents identify good schools but understanding what makes schools good." That's Robert Pondiscio of the American Enterprise Institute, in a letter-to-the-editor response to a recent Wall Street Journal opinion piece about education by Harvard's Roland Fryer.  Pondiscio might agree that he overstated things. Just consider real estate listings. It's routine that realtors list the school district in which the house or apartment is in. With good reason.  School districts sell apartments and houses. They’re a market signal....

Whether advanced AI poses an existential threat is a real debate even among the people building it, and it's a debate the public should understand and participate in. That's a real role for ordinary people at this moment. But it isn't a personal survival plan. If the threat is an AI system that exceeds humanity's ability to control it, the choices that might protect us are ones society makes collectively, through oversight, safeguards and regulation, not household preparation. What individuals and communities can and should prepare for directly are the AI risks already here: intensified...

In a recent Wall Street Journal “Investing” column, Heather Gillers and Sam Goldfarb (GG) report a seeming paradox: Interest rates (on Treasury bonds) are rising sharply “despite a decline in oil prices, a key driver of bond yields since the start of the war in Iran.”             That premise is problematic: Standard economic analysis predicts that an increase in interest rates should engender a decline in crude oil prices, other factors held constant. Notice that the simple long run (1987-2025) correlation between...

This month, the Federal Reserve raised interest rates for the first time in three years, pointing to elevated inflation as the reason for this decision. The quarter percent increase moved the target range from 3.75% to 4%. For small business owners, the higher borrowing costs are adding yet another challenging variable to an already complicated economic landscape.  Small business owners have been contending with the rising costs of energy needed to power their operations. Inflation continues to drive up the price of materials throughout the supply chain, and global turmoil is inflating...

Without insider trading, the stock markets are blinded. Which means we need more insider trading.  What's hard to fathom is why "insider trading" ever became a pejorative in the first place. Exactly because we want market prices to reflect reality, we should logically champion more trading by insiders. By their very description, they know best what's going on inside any corporation, what is poised to affect a corporation, or both.  Of course, in the description of insiders we can see the origins of the mindless disdain for "insider trading": it's a left-wing notion that we all must...

CNBC and Yahoo Finance called the jobs report a miss. Fox said it was lower than expected. More bad analysis from a Keynesian financial press that has shown extraordinary supply-side ignorance throughout the Trump 47 term.  The deeper story is indeed more complicated — and considerably more reassuring.  Start with the unemployment rate. It rose a tenth not because people lost jobs but because people came looking for them. The labor force participation rate jumped two tenths to 61.8 percent, well above expectations.  Behind the curtain, the share of prime-age Americans...

Social Security’s rising costs restrain the growth of the federal government. Yes, you read that right. That’s why it would be a major blunder if deficit hawks and self-proclaimed limited government proponents get their wish to reform it. Don’t let them. To see why reform would be a big mistake, consider the meaning of the projected 2032 insolvency date for Social Security. This is bullish. Yes, you read that right too. Precisely because Congress will never shrink Social Security benefits to avoid insolvency, the funds required to avoid benefit cuts will have to come out of...