RealClearMarkets Articles

I asked an artificial intelligence system to analyze Donald Trump’s use of political distraction. I gave it a constraint: keep it neutral, use fact-based sources, and stay within the scope of the question. Within two responses, it had already moved beyond what I had asked. It described Trump’s use of political distraction as evidence of “waning political power” and introduced details that were not part of the original question, building an interpretation out of information I had not asked for. The facts were accurate. But the interpretation pointed in a clear...

I served as mayor of Hoboken for eight years, and one of the clearest lessons from that job was that climate resilience is not a branding exercise or a political talking point. It is a matter of economics. When a city floods repeatedly, the damage does not stop at roads, parks or public works. It hits property values, small businesses, insurance costs, municipal budgets and investor confidence. That is why the federal government’s decision to reopen funding for the Building Resilient Infrastructure and Communities program deserves attention. For cities dealing with physical...

People seem eager to tell a story about private credit investments becoming a source of systemic risk in financial markets akin to mortgage-backed securities in 2008.  While the notion that private credit threatens the broader economy may conform to a predetermined narrative, that doesn’t make it true. In fact, the rise of private credit is a direct—and somewhat intentional—consequence of the post-financial crisis regulatory landscape, and there is no reason to think it poses a threat to financial stability.  One reason for this is that private credit actually...

Despite the negative histrionics, AI could potentially solve the developed world’s population/productivity dilemma.  Currently, the developed world is trapped between two opposing forces: Economics demands that productivity increase if living standards are to rise; however, demographics in developed nations show population growth falling below levels needed to sustain its growth, as well as the number of workers to nonworkers falling.  AI has the potential to increase productivity enough to offset developed nations’ rapidly increasing need for it to do so. Opposition to...

Of the most banal-but-sinister political efforts to enforce ideological orthodoxy in recent years, debanking must rank highly. Quietly, without warning or, often, explanation, Americans and the institutions or businesses they form have been told that their bank accounts are to be closed. A  Christian organization engaged in charity work in Uganda, the National Committee for Religious Freedom, investors in cryptocurrencies, businesses in such industries as firearms, payday loans, and credit repair—all these and more have discovered their access to financial...

Paul Ehrlich's death last month is a reminder of how careless extrapolations from one field of knowledge to another can still pass for “science” with devastating consequences. Ehrlich, an entomologist with genuine scientific expertise concerning butterflies, parasitic mites and insects around the Berin Sea and in the Canadian arctic, ventured in his 1968 The Population Bomb book into the field of human demography. He speculated that overpopulation brings disasters such as famine and high death rates.  All evidence to the contrary notwithstanding, the book...

Planet Money recently published a piece titled "The Labor Economics of Alien and Its Lessons for Inequality on Earth." It describes itself as a preview of a new book about monopsony in labor markets. It’s actually a detailed plot summary of the 1979 science fiction movie Alien, followed abruptly by the assertion that income inequality has "exploded", followed by the claim — stated rather than argued — that monopsony is the cause, followed by an admission that labor markets really aren’t monopsonies, followed by a plug for the book. The movie is distraction, offered in...

Arthur Laffer has long explained the genius of trade through the horrors of incurable forms of cancer. Considering, for instance, pancreatic cancer, Laffer asks rapt listeners if they would refuse a lifesaving cure solely because it was created in China. Tick tock, tick tock… Readers get it. Just as there are no atheists in foxholes, there similarly aren’t any protectionists in oncology wards. It’s accepted wisdom that the U.S. must “beat China” as though trade is a game with winners and losers. What a mistaken, backwards, and surely slow-growth way of looking...

Mexico was swept by a wave of violence following the recent killing of Nemesio Oseguera Cervantes, a.k.a. "El Mencho," the leader of a major drug cartel, by the nation's armed forces with intelligence support from the United States. Historically, the death of a cartel boss triggers two events: an immediate spasm of revenge against the government, followed by bloody internal struggles as factions move to fill a power vacuum. Both are already happening. This is just the latest development in an accelerating and highly visible campaign by the Trump Administration to take on narcotics and...

The latest panic over private credit says more about Washington than it does about finance. A few major funds have limited withdrawals. Some software-heavy loans are under pressure. Critics are reviving the old script about “shadow banking” and fresh bailout chatter, while others warn that private assets are creeping into retirement accounts with risks many investors may not fully understand.  Those concerns are worth taking seriously. But they still skip the real problem: government helped create this structure in the first place, and more government control would likely...

Both Congress and the Trump Administration are desperate to find ways to relieve the cost pressures currently stifling the U.S. economy, but their efforts thus far have done little to alleviate inflation, which surged this month.  For instance, both want to pretend that a raft of price fixing or corporate greed has mysteriously accelerated in recent years, creating higher prices, and that more antitrust enforcement or selectively calling out companies that raise prices will bring down inflation and solve the problem.  Yet, there is no reason to think that such political...

After a decade of explosive growth, digital assets are rightfully moving into the financial mainstream. Financial institutions from NYSE to Nasdaq are investing in plans to integrate digital assets and tokenized securities. Even U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins has claimed that much of the financial system could move on-chain within "a couple of years."  In preparation for this shift, the SEC is expected to announce an innovation exemption for tokenized securities in the coming days. Yet there’s a looming question on what level of...

The launch of Fox News remains one of the great free market stories of modern times. While conservatives had long expressed frustration with the left-wing bias that defined traditional media, Fox News met that rising frustration with reporting that incorporated a conservative view of domestic and global news that had historically been ignored by news sources.  Notable about the rise of Fox was that Democrats weren’t fans of the nascent news network. In a preview of critiques commonly heard today, they referred to Fox News as a "right-wing propaganda machine” that was engaging...

The House Energy and Commerce Committee’s Subcommittee on Health is holding a series of hearings on health care affordability, each one focusing on a different aspect of the health care system. The hearing held on March 18th of this year addressed health care providers, and included testimony from representatives of medical groups, patient advocates, and hospital administrators. Witnesses claimed that one of the biggest reasons for the increase in health care costs was consolidation. This is the result of large hospitals buying smaller hospitals, clinics, and private...

In a recent interview with former U.S. Comptroller General David M. Walker, he made something clear: Social Security is under serious pressure, and the timeline is closer than most people think. He didn’t hedge. He said the system will run out of money by 2032.  Not decades from now, but within the working lifetime of millions of Americans who are currently counting on it. And yet, despite warnings like this, most people are still building their entire retirement around a system they don’t fully understand and cannot control. I later had a conversation that brought this...

In thirty years of reviewing fixed-income allocations for single-family offices, I have seen the same mistake repeated with impressive consistency: clients reach for a familiar yield without asking whether the underlying credit has structurally changed. The tax exemption is real, the retail demand is deep, and the inertia is powerful. California municipal bonds are testing all three of those assumptions right now. The bull case is well known. California is the world’s fourth-largest economy with a GDP exceeding $4.1 trillion. The double federal-and-state tax exemption translates to a...

Tax Day marks the end of many Americans’ annual tax stress, but for high-income taxpayers with complex returns, the 2026 anxiety season may drag on for a very long time. With the IRS losing more than a quarter of its  employees during 2025 – 28,000, according to The National Taxpayer Advocate – complex tax returns are likely to face a long slog in processing. Since those complex returns are generally the province of business owners and wealthy individuals, big questions that translate into large dollar amounts could take months (or even years) to answer. That...

Economic thought with any pretense of seriousness is all about removing all barriers to production. No doubt taxes are a barrier, as are regulations, tariffs, currency devaluation, and government spending. Whatever inhibits production is paid for right now. The problem presently is that even the right-of-center economic religions, though they would nod their heads to much of what you’ve just read, don’t quite grasp the truth of it. It can be found in their commentary about tax day. A recently published piece at American Institute for Economic Research vivified this. The opinion...

For decades, April 15 has been a day of mourning for America’s blue-collar and middle-class families — the day the taxman takes his annual bite. This year, however, Tax Day feels a lot more like Christmas morning.  Why? Because millions of Americans are discovering that President Trump’s Big Beautiful Bill (BBB) is doing exactly what it was designed to do: put more money back into the pockets of the people who actually work for a living.  As I predicted, when Americans opened their Tax Day checks, this would amount to one of the biggest and most broad-based rebate...