RealClearMarkets Articles

In the last few years, two different billionaire investors settled tax disputes that ended in large payments to the federal government.  In 2019, Robert F. Smith, founder and CEO of the private equity firm Vista Equity Partners, paid a $140 million fine to federal authorities and agreed to forego $180 million in charitable deductions for failing to pay taxes on a portion of his firm's profits moved to an offshore account.  Two years later, an investment company founded by Jim Simons called Renaissance Technologies was fined $7 billion for its long-running efforts to shoehorn...

I’m inclined to cut Treasury Secretary Janet Yellen a tiny little slack here, pun intended. Rather miffed by all this talk of recession, appearing on ABC’s Good Morning America the Monday following the release of the gigantic January jobs report, Yellen confidently dismissed every idea the US economy might be in trouble. “You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years.” It’s the combination of the two statistics which gives her point a chance. Economists such as the Secretary absolutely love...

It was reported in the New York Times the week before last that the U.S. hedge funds at the top of the proverbial heap had reaped gains for their owners of over $22 billion in 2022. Contrast the previous number with losses in the total hedge fund space that exceeded $200 billion. That “billionaire” is so often associated with hedge funds in the popular imagination speaks to how few there are relative to the total amount of hedge fund managers. That billions can be made is a reminder that many billions more can be lost. We hear a lot about the vital few in the hedge fund space, but...

Last week, President Joe Biden announced a sizable tariff hike on Russian metals, minerals, and chemicals. Most notably, the tariff on Russian aluminum will increase to a whopping 200%. Biden’s Proclamation on Adjusting Imports of Aluminum Into the United States insists that this tariff hike will punish Russia for invading Ukraine and strengthen America’s national security. It won’t accomplish either objective. What it will do is worsen US inflation, not just with respect to what—if anything—American manufacturers buy from Russia...

This is a brief excerpt from the just published text of a Joint Statement by the Foreign Ministers of France, Germany, Italy, the United Kingdom, and the United States in response to Israel’s announcement of advancing and legalizing settlement units: “We – the Foreign Ministers of France, Germany and Italy, the Foreign Secretary of the United Kingdom, and the Secretary of State of the United States – strongly oppose these unilateral actions which will … undermine efforts to achieve a negotiated two-state solution. … We...

Since September 2022, the Federal Reserve has lost about $36 billion.  A big number!—and notably big compared to the Fed’s stated capital of $42 billion. Thus the Fed has already run through about 85% of its capital and has only $6.6 billion (0.07 % of its total assets) left as of February 22. How long will it take to burn through that?  Less than three weeks. So the Fed’s real capital will hit zero in mid-March. By April Fools’ Day, it will be proceeding into ever more negative territory. [This is shown in the attached graph--could be used or not.] What...

Conservatives have for some time taken to quoting Saul Alinsky that would-be reformers should “[m]ake the enemy live up to its own book of rules.” Often the quote is deployed in tandem with frustration at how hard it is to do that when the hard left holds so many of the levers of power and expression, and has abandoned objectivity and fair play. I suspect that Alinsky’s response to that, so long as he didn’t know that his addressee was not a leftist, would be to buck yourself us and get to work. The difficulty – and...

What is a “supply chain”? It’s not a tangible chain, and as such it’s not visible. In reality, a supply chain is a wildly sophisticated intellectual accomplishment.  Considering the “supply chains” that connected the world’s producers so brilliantly in February of 2020, they were the consequence of decades of trial and error among cooperating producers the world over. The immense global plenty that defined February of 2020 was the result of trillions of commercial relationships entered into by billions of workers. Work divided is the path to...

Several years ago I was invited to attend a Hoover Institution retreat out in Palo Alto. At the gathering, Hoover scholars presented to a variety of economics writers, Left and Right. Catherine Rampell was one of the attendees, and it was pure joy seeing her poke holes in a presentation by Niall Ferguson in which he, among other things, claimed he predicted the 2008 financial crack-up. Ferguson did not do what he claimed, to have predicted 2008 was to have predicted the incredibly inept (a redundancy?) interventions crafted by the Bush White House and the Bernanke Fed amid what was a healthy...

As with any major economic shift, some governments will see remote work as an opportunity, while others will see it as a threat. States and localities that view remote work as a threat have only two options: they can engage in a costly and ultimately futile battle to try to reverse the changes that remote work is bringing, or they can embrace remote work and adapt. Unfortunately, to this point, many appear to have a preference for the former. To some extent, it’s an understandable response. To cities that were bustling before the pandemic, remote work threatens a tangible loss in...

Every American who values free speech (and that ought to include every American) owes a debt of gratitude to Kentucky Representative James Comer. Representative Comer recently assumed the chairmanship of the House Oversight and Reform Committee. Along with Ohio Representative Jim Jordan who now chairs the House Judiciary Committee, and Washington Representative Cathy McMorris Rogers, who now chairs the House Energy and Commerce Committee, Comer has introduced the “Protecting Speech from Government Interference Act” (HR 140). As the title suggests, the bill protects free speech by...

The government is not the solution to all of our problems. In fact, relying too heavily on the government can lead to a lack of personal responsibility and a belief that someone else will take care of us. This mentality creates a cycle of dependency and limits opportunities for personal growth and success. Let’s start with breaking the bail-out beliefs. One of the biggest misconceptions is the belief that the government will bail us out of our current and future problems. This outlook is not only unrealistic, but it also takes away our inherent power. Instead of waiting for a government...

Significant new rules issued by federal agencies are routinely challenged in court, but it is far from easy to get an agency decision overturned, due to the deference given the agency’s presumptive expertise and latitude to interpret ambiguous statutory language. However, the Supreme Court put a new arrow in challengers’ quivers in June of 2022 by applying the “major questions doctrine” to overturn EPA rules in West Virginia v. EPA, the first time a majority opinion expressly relied on the doctrine by name.  Under the major questions doctrine, an agency may not...

My colleagues and I had to develop instant expertise – Ben Bernanke Arthur Burns, Chair of the Federal Reserve from 1970 to 1978, publicly regretted afterward that he had lacked the spine to do what was necessary to get the Great Inflation of the 1970s under control. When his predecessor William McChesney Martin’s term ended in 1970, he openly declared, “I’ve been a failure.” What are the regrets, if any, that weigh on Ben Bernanke’s memory when he looks back on his time as Fed Chair from 2006 until 2014? After a reading of his latest...

It was a sudden and epic flood of oil the likes of which the country hadn’t seen before. According to the government’s numbers, the Energy Information Administration, over a seven-week period domestic stocks of crude gushed by a then-record 34.4 million barrels. The last time America had experienced close to that number was March and April 1990, just prior to the start of what should have been called the S&L recession. This was again March and April, though in the year 2001. Up to the prior November, policymakers and Economists had refused to consider anything other than...

“To think I might have died without having read it.” Those were the words of the late, great William F. Buckley. He was referring to Moby Dick. Having read it after he’d turned 50, Buckley’s love of the novel had him marveling at the very real possibility that he might have never gotten around to it. Buckley’s quip comes to mind frequently with Leo Tolstoy’s War and Peace top of mind. To be clear, I’ve never read it. But I want to. Badly. What keeps me from accomplishing the feat is the novel’s length in consideration of my desire to maintain my...

Recent reports suggest that Gary Gensler, the hard-left Chairman of the Securities & Exchange Commission (SEC), has realized that his proposed carbon-disclosure rule is so sweeping and costly as to guarantee that the courts will strike it down. He is now mulling revisions that would keep some smaller companies from having to report, and would reduce some of the most absurd reporting requirements such as “lost revenues and costs not incurred because of climate-related factors” (which would be so speculative as to be meaningless, but very costly to conjure). It's...

With the resignation of Christine Wilson from the Federal Trade Commission due to Lina Khans’s unwarranted and totalitarian anti-trust policies, Robert Bork is now in the news, again. Yes, he was unfairly “Borked” by the Democratic Party for his political views, mainly on civil rights legislation. We believe in piling on. We are now going to Bork him for his irrational views on economics, sub category, anti-trust policy. What is his perspective on this matter? Bork is most famously associated with the stance that anti-trust policy should be predicated not on the basis of...

“Put on your mask, Dude.” That was said to me in an office building amid peak lockdown. “Where’s your mask?” was a question angrily posed to me by a sour-faced shopper in the parking lot of a Whole Foods in Washington, D.C. around the same time. At another Whole Foods in nearby Bethesda, a rather self-regarding customer (redundancy?) let me know that “in Bethesda, we wear masks.” Close friends lectured me on the importance of wearing masks while scoffing at my surely knuckle-dragging disdain for the cloth. For a brief time in the summer of 2020,...