RealClearMarkets Articles

For more than a century, startups have been critical to U.S. technological advancement. They could not exist today without venture-capital funding, which enables them to form and grow. So it's alarming that venture fundraising is now at a nine-year low.  What is causing investors to stop putting money into venture capital? While supply-chain problems, inflation fears, and similar headwinds are doubtless part of the answer, these general economic conditions don't tell the whole story. A large part of the blame goes to political and legal developments that discourage venture-capital...

The price of a barrel of oil was around $25 when the 21st century began, and had been as low as $10 in 1998. In the 1980s, oil more than once dipped to $8/barrel. Stop and think about those prices for a second, and ask yourself what happened. And in asking yourself what happened, consider that in the 1980s and 1990s there for the most part wasn’t any domestic drilling in the United States. What’s the riddle here? Oh well, before we get to the riddle it’s useful return to the present and a recent column by David Ignatius of the Washington Post. Writing about Saudi...

U.S. News & World Report retirement columnist Rodney Brooks recently penned a piece about what raising the retirement age might mean “for you.” No doubt the subject matters a lot to those near retirement age, but the speculation here is that it likely won’t meant much to the 60 and 70-year olds of tomorrow. Brooks’s column came to mind while reading a Wall Street Journal profile of ChatGPT creator Sam Altman. In the profile Altman professed his support for guaranteed income in the U.S. given his belief that remarkable advances like the one he’s brought to...

April 5, 2023 Mr. Kevin Hallock President of the University of Richmond 410 Westhampton Way Richmond, VA 23173 Dear Mr. Hallock: The chief advantage of the written word over other forms of communication is its longevity.  For instance, this letter will live on for generations long after you and I are on this earth.  What this letter might do is illustrate to the world the weak-kneed cowardice of those running the University of Richmond. It might implicate you and the Board of Trustees for your culpability in ruining the lives, if not helping to end the lives of many...

It’s hardly news that Gary Gensler’s Securities & Exchange Commission (SEC) is partisan and corrupt in ways that resemble other Biden-era agencies, such as Lina Khan’s Federal Trade Commission (FTC) and the blackshirted FBI goon squad led by the execrable Merrick Garland, but that are otherwise rarities of egregiousness in American history. Today, with your forbearance, I’ll shed a little light on the little part of the SEC I know best, to let you see its partisan corruption, aided and abetted by opaque and lawless processes and absolute insouciance about fidelity...

There’s a saying about banking that the key to success is to never, ever lend money to those who need it. Translated, the loans banks make must perform. That’s the business model. Bank profits are made in the interest paid on the loans they originate. Which is why the loans must perform. One bad loan can erase the profits from 99 good ones. All of the above is a good jumping off point on the matter of the Federal Deposit Insurance Corporation (FDIC). Some think the ceiling for FDIC-insured deposits should expand beyond $250,000 per account. That would be a mistake. For one,...

As a free market-oriented conservative, I tend to cast a wary eye at government subsidy programs. With the U. S. national debt at $31 trillion, Congress should too.  Simply labeling government expenditures "investments" – as is all too often the case – shouldn't excuse taking a hard look at the effectiveness and efficiency of particular spending programs. This is true as well for "safety net" programs aimed at providing subsidies to low-income persons, such as programs providing food stamps, school lunches, or public housing.  But as Congress moves forward with the...

President Biden is flying around the country telling the American people his economic plan is working, but most Americans do not agree. Recession warnings are flashing in financial markets, and an overwhelming share of the American people are deeply pessimistic about the economy and their future. A recent survey found that Americans have a “pervasive economic pessimism about the future and a record low unhappiness.” Four in five Americans say the economy is poor or not good, and nearly half expect it will be worse in the next year. Only 1% think the economy is excellent.The...

In a rare moment of agreement in the ideologically fractured Supreme Court, Justices Elena Kagan and Brett Kavanaugh concurred in late February that it was the job of Congress – not SCOTUS – to decide on any changes to a landmark 1996 federal law that has shaped the modern internet.   While hearing arguments in the case of Gonzalez vs. Google, the justices expressed not only wariness of the company’s claim that Section 230 affords tech companies immunity from lawsuits over content posted on their sites, but also a hesitancy to weigh in on the...

“I will build a car for the great multitude.” Those were the words of Henry Ford. He didn’t invent the automobile, but he did make ownership of the automobile common. Which leads us to what made the creation of transportation abundance a possibility. Ford’s answer was as old as the profit motive: work divided. In Ford’s words, inexpensive cars would spring from each of his employees “performing a minuscule task.” Yes. It’s that simple. People working alone can produce very little of extremely primitive quality, while people working together in...

A wave of pessimism has crashed over the technology industry recently. Layoffs, budget cuts, and declining public market technology stocks have led some to conclude that the current environment is inhospitable to new ventures. But this is the wrong outlook.  As an entrepreneur and venture capitalist, my main gripe with this conclusion is that it may persuade budding entrepreneurs to forgo starting their new company or developing their new product. If this viewpoint is widely internalized and adopted, American innovation will be stifled. We need obsessive dreamers to change the world and...

Well into the 2000s American Airlines was compensating customers to the tune of 500 airline miles per ticket booked on the airline’s website. How things change. And in a big way. Indeed, it’s so easy to forget how behaviorally different consumers were not too long ago. American wasn’t paying its passengers with miles because the airline wanted to create liabilities, rather the miles were a reward meant to break a deeply ingrained, and expensive-for-the-airlines consumer habit. As recently as the late 1990s, the U.S. Postal Service was the “last mile” as it were...

Structural changes in workforce composition and how we work have dominated the headlines since the COVID pandemic and received much research attention.   Most of the analysis has focused on remote working, the gig economy, hybrid models, and the astounding growth of the contingent workforce which today is over 50% larger than pre-pandemic and represents about 36% of total US employment. What has received less attention are high-end professionals working in teams, often intermediated by giant corporations like Accenture, TCS, Deloitte, and the like, delivering...

It is one thing for government to regulate business. But it is the height of chutzpah for career politicians and bureaucrats to lecture America’s dynamic, innovative, risk-taking private sector on what business competition is, as the Biden Administration’s Competition Council is doing. The Council was launched on July 9, 2021 by an Executive Order to “establish a whole-of-government effort to promote competition in the American economy.” It touts an array of mandates and proposals for numerous industries: transportation, agriculture, banking,...

It’s such an amazing scene from a true cult classic that it hasn’t just become an internet meme, the very image of the Bobs grilling sweaty, fear-ridden Tom Smykowski trying desperately to justify his employment at Initech has become its own hieroglyph. Expertly written, exquisitely acted by all three participants, the display in the movie Office Space is the very modern symbol of how the lazy and derelict would act when finally, brutally confronted with the truth of their sham. The absurdity builds toward its close with that famous query, what would you say you do...

Washington Post columnist Fareed Zakaria writes that the dollar “gives Washington unrivaled economic and political muscle.” But that's like saying that rising usage of the meter as a measure of length would strengthen the French. Meaning it wouldn’t. A meter is a measure, as is a currency a measure. Zakaria adds that “when Washington spends freely, it can be certain that its debt, usually in the form of T-bills, will be bought up by the rest of the world.” It may seem that way, but Zakaria would likely agree there's more to the story. In the 1970s, soaring yields...

When the National Taxpayers Union Foundation released its study on states’ tax policies affecting remote and mobile workers, the 2023 Remote Obligations and Mobility (ROAM) Index, one of the more notable results was the lack of clear divide between red and blue states. While the usual suspects like New York and California scored poorly and Texas and Florida scored high (by virtue of having no individual income tax), other states were not easily grouped by political ideology. One example of this phenomenon was the poor score received by Alabama, which ranked 43rd out of 50 states....

Here we are, in another round of de facto bank bailouts. This time investors seem to be (rightly) losing their investments, but depositors are to be covered fully – as long as they bank at “systemically significant” banks. And investors at the too-big-to-fail banks have implicitly been reassured that, whatever the supposed purposes of the post-2008 reforms, they need never worry about their investments. This ratifies an obvious fact: banks that are offered “systemically significant” protections against failure and loss must not be permitted to...

If the FDIC had treated Signature Bank as a routine bank failure, it would have been resolved without a penny of cost for the FDIC deposit insurance fund.  Under normal rules, all losses would have been borne by the uninsured depositors as required by the FDIC Improvement Act of 1991 which generally requires the FDIC to carry out resolutions in a manner that imposes the least cost on the deposit insurance fund. Instead of large depositors taking a loss, the U.S. Treasury, the Federal Reserve and the FDIC choose to declare Signature Bank a “systemic risk” to the financial...