RealClearMarkets Articles

An article by Stephanie Kelton of MMT fame titled, “Biden Can Go Bigger and Not ‘Pay for It’ the Old Way,” appeared in the New York Times recently. She cautions against increasing taxes to fund elevated Federal Government spending demanded by Biden and his Democrat cronies, and urges alternatives to avoid impinging upon the economy’s resource constraints in labour, material and equipment.  In her words, “Just as my son’s Lego projects are limited by the amount of bricks …we can’t squeeze more goods and services out of our economy...

Imagine an upside-down university that gives its best students Ds and Fs, while the worst get the As. The best students will, of course, quickly notice and will seek to outdo the worst, by getting every question wrong, sitting slack-jawed in class, or skiving completely, in order to displace the worst students and capture the As. Realistically, no one would learn.  A system that aggressively rewards the inept, while penalizing the most competent, reaches a sorry endpoint defined by broad indolence. Our hypothetical upside-down university, courtesy of Art Laffer, comes to mind as we watch...

In recent years, it has become fashionable to profess outrage at reports of businesses with book profits that nevertheless owe zero taxes. Popularized by left-wing advocacy groups such as the Institute for Taxation and Economic Policy, these reports are intended to drum up public anger against a tax system supposedly “rigged” in favor of corporations. Ironically, recent attempts to solve this “problem” demonstrate how bogus this narrative is better than any op-ed ever could. Since his time on the campaign trail, President Biden has...

As public markets continue to be roiled by the pandemic, political instability in Washington, and so-called meme investing orchestrated on social media platforms, private equity is emerging as a more reliable alternative, especially for institutional investors like insurers and pension funds. The strengths that private equity brings to investors are many, including access to obscure but promising companies as well as rare deals and profits that often eclipse those seen on the public market. It’s no surprise, then, that private equity showed remarkable resilience in...

The announced goal of the Biden’s administration newly released plan to spend over $2.3 trillion to improve America’s aging physical infrastructure seems laudable. However, upon closer inspection, many of the assorted activities included in the proposed legislation will go to projects not defined as infrastructure. “Less than 6% of this massive proposal goes to roads and bridges," according to Senator Mitch McConnell (R-KY). Worse yet, the proposal sharply increases corporate taxes to cover the plan’s massive cost while ruling out higher fuel taxes or mileage-based...

President Biden recently proposed a massive infrastructure package, The American Jobs Plan, which will be funded by the Administration's Made in America Tax Plan. There are a lot of policy goals outlined in this proposal that will create jobs in certain sectors and move the country toward an economy the President has repeatedly stated he supports over the current one we have now. An economy and tax code that chooses specific jobs over others. A claim that, with respect to energy policy, he has made multiple times on the campaign trail, and an economy that provides tax...

Always, always the interest rate fallacy. Like last week my examination of Economics tardily discovering interesting and key facts on collateral in the world’s primary monetary arrangements, there’s some (very slight) movement in the direction of solving the related “puzzle” over persistently low rates. These are textbook stimulus yet the world hasn’t reacted to them at all in the way predicted. This has been a long-sought problem, an unforced error in the forced transition from money-based understanding to expectations-based manipulation central banks had begun...

What’s the most common "people" sight in any public place, anywhere? At this point in our evolution the answer is easy: hunched over individuals tapping away on smartphones. It doesn’t matter one bit if the locale is rich or poor. The gadgets are everywhere. The other day at the library your writer spied a homeless man, surrounded by presumably all of his worldly possessions. Those possessions included a smartphone. He had it hooked up to a power source outside the library’s main entrance. Please think about this for minute or two. A homeless American man was charging a...

Eulogies for the office were abound for months. Just a few years after massive building sprees in Silicon Valley, the coronavirus pandemic led tech giants like Twitter to offer working from home forever. Not so fast, said Google, suggesting a hybrid work model instead. Even the CEO of Zoomargued that videoconferencing won’t replace office life anytime soon. Not to mention the industries – health care, manufacturing, retail and transportation – that simply cannot work from home. As we begin to turn the corner and more employees return to workplaces, the...

Making a SEAL team used to mean cutting the mustard. It meant being one of the minority who are even accepted for training to make it through training. It will soon mean being a minority. A face. A color. A pair - or not. And what you do with what you've got in your shorts. Not whether you can run 1.5 miles in less than 10 minutes and 30 seconds. Or swim 500 yards in less than 12 minutes and 30 seconds. Do at least 50 pushups and ten pull-ups. That’s to get into the SEAL training program. Once accepted - to make it through the program - you must be able to do at...

1776 was quite a year for faith in markets. In March, Adam Smith made the case for a light touch on taxes and trade in The Wealth of Nations. His work would become the foundational text for supply side economics. In July, Thomas Jefferson’s Declaration of Independence stated the purpose for the revolution that had begun fifteen months earlier: an unrelenting belief among the colonists that a society organized by the individual wills of a free and independent people best protects the inalienable rights of all. As nations put these ideas into action over the next two centuries,...

I like my councilwoman.  In the Facebook videos I’ve seen, and firsthand in the candidate forums we’ve participated in, she seems like a genuinely nice lady. It’s what she does within city council chambers that gives me pause.  We have some fundamental, philosophical differences of opinion. First and foremost was the government’s reaction to the coronavirus pandemic.  Some would say overreaction, and I count myself amongst them. Without question, the pandemic threw everyone for a loop.  Elected officials could almost be forgiven for taking as...

Imagine if one year ago U.S. states had been left free to craft fifty different responses to the rapidly spreading coronavirus. If so, it’s not unreasonable to speculate that lockdowns, to the extent that they were imposed, would have been lifted with great rapidity.   But wait, some will say, states were already autonomous.   To make their case they’ll point to April of 2020. With fear about the virus at a high, and with then-President Donald Trump having proclaimed his power over U.S. states as “absolute,” governors acted as they saw fit. Soon enough...

MMT has emerged in recent times as a supposedly feasible alternative to modern economic conventions, some proclaiming it as the answer to our economic ills. Conceded or not, what MMTers advocate is what every Marxist, socialist, or big government adherent relishes – a further loosening of the unwieldy, insatiable government beast from its financial moorings - in effect, a Soviet style monetary system and its unproductive, squandering sham of an economy. The mystical tenets of MMT are partially plausible and partially absurd. MMT is essentially Keynesian economics with a frightening...

Believe it or not, “Infrastructure Week” appears to finally be here. Unfortunately, it carries with it a raft of tax hikes that put the lie to the campaign-trail branding of Joe Biden as a moderate, at least on taxes. Fresh off the passage of a $1.9 trillion spending bill (which, in truth, will probably end up costing taxpayers well over $3 trillion), President Biden is now proposing a $2 trillion infrastructure package. It may not even take six months for Biden to put American taxpayers on the hook for $5 trillion in spending. And with this bill, the cost is no...

In George Orwell’s 1984, Big Brother government held monopolies on truth and morality.  Bureaucrats at a literal Ministry of Truth systematically altered and destroyed historical documents in order to make them comport with the government’s current agenda.  Disapproved ideas—particularly ideas that posed a threat to government orthodoxy—were incinerated in “memory holes.”  All that remained were accounts of history pre-approved by the government.   Recently, the threat of a new Ministry of Truth...

Tax hikes are coming! Tax hikes are coming! Yikes, Yikes, Yikes! Pundits tizzy it up over President Biden’s rumored plan, fearing multi-faceted new, huge hikes will whack stocks. They warn budget reconciliation means Biden can slam-dunk it all with Democrats only. Take a deep breath: Internal Democratic divisions will dilute any tax legislation that passes. But, even if I’m wrong on that, it still won’t whack stocks. Let me explain.  Pundits say rising stocks, at new all-time highs, “ignore” looming tax overhauls, teeing up future market shocks. That’s...

“While my advisers tell me that the response to this new virus will be different in all fifty states because of something about “states’ rights” in the Constitution, my billions of supporters in the U.S. and around the world can be sure that I won’t abandon them. I will not sit back and watch liberal governors destroy this beautiful economy my policies have created. No great nation remains great by destroying businesses and jobs. So mark my words that if any governors in any of our 50 states locks down, those Governors will soon have a regular visitor with a big,...

Industry must account for its contribution to flooding, drought, deforestation, stripmining, and other unsustainable practices. Though governments must create regulations and laws to reshape economies long-term, we need a more immediate and invariable solution capable of change at a global scale. Socially conscious businesses must turn to the capabilities of blockchain, which is uniquely capable of upsetting “trust intermediaries” and delivering transparency for the full lifecycle of a transaction or product. The ramifications of increased transparency, particularly to the supply...