RealClearMarkets Articles

After three short weeks, the Department of Homeland Security recently “paused” the operations of its “Disinformation Governance Board.”  Its head, Nina Jankowicz, resigned virtually simultaneously from DHS, all but sealing the Board’s fate.  Good riddance. The federal government routinely establishes boards and advisory groups of all kinds.  Few people pay attention to them.  But DHS’s Disinformation Governance Board was different.  Over its short lifespan, the Board was the focus of significant public discourse,...

An unsolved problem in American corporate governance is that a few big asset management firms have through their index funds grabbed dominating voting power in hundreds of corporations by voting shares which represent not a penny of their own money at risk. They have in effect said to the real investors whose own money is at risk, “I’ll just vote your shares.  I’ll vote them according to my agenda.  I don’t want to bother with what you think.” This obviously opens the door for the exercise of hubris, as has perhaps notably been the case with BlackRock,...

The White House’s continued efforts to deflect blame for historic levels of inflation after pumping money into an overheated economy are becoming harder to swallow. So it’s no surprise Jeff Bezos became the latest public figure to let loose in a series of tweets castigating the White House for continuing to push massive spending packages amid rising inflation. Yet, this high-profile clash online is not all flash: new research backs up the fact that the American Rescue Plan Act (ARPA) bears a great deal of responsibility for Americans’ inflation woes. In early 2021, all the...

A headline at Forbes.com last week indicated rising layoffs at Silicon Valley start-ups that are said to foretell a "quiet summer" for venture capitalists. On the same day, an A1 story in the Wall Street Journal reported that “Highflying startups have been grounded, swiftly, by the new climate: layoffs, skeptical investors, an exodus of funds and the prospects of a valuation haircut.” Such is life in relentlessly capitalistic northern California. Though California’s business climate is said to be going “socialist” by partisans who really should know better, the...

For 35 years I’ve written of the capital markets as TGH—The Great Humiliator. It wants to humiliate me, you and as many people as possible for as much money as possible, for as long as possible. It always does, has and never gives up. Your goal is to engage The Great Humiliator while not letting it humiliate you, or not humiliate you too badly.  Today its best tactic is scaring you away from the coming rebound. Don’t let it. This stock market downturn is flirting with the -20% threshold commonly separating corrections from bear markets. More declines could...

The market speculation that is Bitcoin has risen to prominence for a variety of reasons, but it’s not unreasonable to say that the dollar, euro, yen, pound, yuan (or name your county’s currency) have served as the cryptocurrency’s greatest publicists. Owing to rising skepticism about government-issued “fiat” money, Bitcoin has had much more than its day in the sun. On the supposition that government monetary authorities can no longer be trusted to credibly oversee their currencies, Bitcoin has been viewed as a replacement. Since total supply of the cryptocurrency...

More than a few executives appear to be glimpsing the high costs of politicized corporate management. A chief driver of these revelations is surely the rolling market correction that has characterized 2022. At one point last week, the Nasdaq was down 29 percent from its December 31st close. Adam Smith once noted that “there’s a lot of ruin in a nation,” by which he meant that a country can screw up very many things while still trudging along. In good financial times there can be a lot of ruin in a company, too. When profits are high (or speculative backing is fulsome)...

These are the words never to be uttered. Not if you know what is good for you. They have nothing to do with national security. No secret formulas locked tightly away from prying eyes. A taboo imposed by strict observance with the codes of positive messaging. Keeping up the pretense for as long as it may last, lest the whole house of cards fold. The press did have its fun with the devastating news. Why wouldn’t the media? The company’s name forever keeps open the door to punning. Calling yourself Target, the inevitable wordplay follows whenever you, ahem, miss. Once the phrase was...

Upon return from a family vacation three summers ago, economist Ike Brannon remarked at a subsequent lunch about an individual at the resort who was almost literally covered in tattoos. This was an expensive resort, and Brannon wondered how he and his family were sharing the same pool. To be clear, Brannon’s wonderment about the inked up vacationer wasn’t of the nose-upturned variety; rather he wanted to know what profession afforded so much individuality and disposable income. It turns out his poolmate was a chef. To younger readers, the mention of chef likely elicits a “so...

While he was president the dollar fell 27 percent against the euro, and 25 percent against the British pound. Who was this president? It has to be Joe Biden, right? Figure that inflation has soared on his watch, or something like that. Back to Biden in a bit. There’s much to criticize. For now, and since members of the Right loathe zones without spin, it’s important to address the presidency of George W. Bush. Time seems to heal all wounds, and monumental errors it seems. In Bush’s case, the dollar didn’t just fall during his presidency, it fell substantially. That was...

Just over two years ago, as the world was confronting the COVID-19 pandemic, the United States hit a record unemployment rate of 14.7 percent. Since then, the U.S. labor market rebounded as everyday life has mostly returned to normal. But digging into the latest unemployment data reveals a thought-provoking trend that should have sweeping implications for U.S. immigration policy. In short, many high-tech, high-skilled industries rebounded from historic unemployment so quickly that they now face labor shortages.        According to the Bureau of Labor...

Good for Tom Brady. He signed a new deal with Fox Sports, and he’s set for life. Actually, he was already set for life but now he’s set for the Mac-Daddy of all lives! The New York Post reported Brady's deal with Fox Sports is worth $375 million over 10 years. It’s believed to be the largest in sportscasting history and more than his combined earnings as an NFL player, not including endorsements.  The Tampa Bay Buccaneers quarterback will join Fox Sports as the lead NFL analyst after he retires from football. That news came directly from Fox...

Last week Federal Reserve Chairman Jerome Powell warned of looming "pain" from the Fed's fight against inflation. Such an assertion, or observation, or excuse is foolish (and wrongheaded) on too many levels to count. What makes it sad is the consensus from Left and Right about the alleged truth of Powell’s comments. The Paul Volcker myth just won’t die. Powell’s inflation solution, one embraced by both sides, is to raise interest rates. It raises an innocent question: what about the Fed raising the short rate for credit would shrink inflation? If your answer is that the rate...

Individuals and tech giants alike are racing to stake their claims in the new frontier of The Metaverse. But how will The Metaverse differ from the Internet? As Supreme Court justice Potter Stewart said while admitting his inability to define obscenity in a landmark 1964 case, “I know it when I see it.” Imagine a future cyberspace where VR video games are interconnected with cryptocurrency enabling users to profit and spend in the real-world from their virtual creations and adventures. Or a concert across the planet where you can join your old friend virtually as a hologram at the...

In recent years, progressives have been pushing harder for taxation of unrealized gains, either through wealth taxes or “mark-to-market” taxation. Though there are numerous economic reasons why proposals to tax unrealized gains are wrongheaded, one should merely need to imagine how chaotic administration of such taxes would end up being to know they are an idea best left on the cutting room floor. As I’ve noted in the past, a major issue that any proposal to tax unrealized gains would need to address is what happens when those unrealized gains disappear after they’ve...

Dear Mr. Musk:  It is heartening to witness your commitment to protecting freedom of speech in our world. Despite backlash from the far left, you’ve gone ahead and bought Twitter. Like millions, I too greatly admire the pace at which SpaceX has developed and the advanced AI technology that your Tesla runs on.  But this letter is about an issue that is close to my heart, one of life and death for millions in developing parts of the world. It is about energy poverty.  The antithesis to energy poverty is energy security and freedom. You know this. It is precisely why you...

The dollar is the most important price in the world. Former Fed Vice Chairman Manuel Johnson asserts the latter in his book on monetary policy, though one gets the feeling he wasn’t the first to say something so blindingly true. The dollar is the world’s most important price precisely because it factors into just about every global transaction in the world. Put another way, when Argentinians transact with Egyptians, the official currency of each country (the peso and the pound respectively) is almost certainly not the currency in which any exchange is denominated in. What’s...

America’s extraordinary economic machine would simply not be possible without some of the strongest intellectual property (IP) protections in the world. Many of the healthcare breakthroughs to prevent and treat COVID-19 would never have happened without robust IP protections. Quite frankly, inventors of all sizes simply wouldn’t have the incentive to invest countless amounts of time and money into products that could easily be ripped off by copycats if the U.S. didn’t protect IP. Despite the success and necessity of robust IP rights, it is all-too tempting for policymakers...

Many corporate executives have claimed that embracing “equity” theory at their companies (and, in the case of investment-house CEOs, trying to force equity on companies whether they like it or not) is in the objective, demonstrable best interest of shareholders. Ok. Let’s analyze that claim. What equity means is current discrimination now to make up for other discrimination against other people by other people in the past. And it also means dividing national wealth and power by a racial spoils system, with each racial and other identity-based group getting a...