RealClearMarkets Articles

A group of Democrats have decided to copy the Heritage Foundation and put together a series of recommendations for the next Democratic President, which they have dubbed Project 2029. The Project 2029 team just unveiled their first proposal: “Kids Over Clicks.” As the title suggests, this consists of policies that supposedly protect children from the hazards of social media. What it really does is increase government control of the internet, violate all our rights, and undermine parental authority while doing little or nothing to keep children safe. Kids Over Clicks calls for...

Last week, the Federal Reserve ran a facility that lent foreign central banks exactly nothing -- and has done so for eight weeks running. So it was a strange moment for the Treasury Secretary to go on television and suggest that the cap on that idle window be raised. Whatever was worrying him, it was not a shortage of dollars. The facility, a repo line for foreign central banks, lends dollars against their U.S. Treasuries. And the timing was not random. Washington and Tokyo had just moved to prop up a sliding yen, and the Secretary was urging the Fed to enlarge the window Japan could reach...

Just missing the 10 best days over a multi-decade investing horizon can erode your portfolio’s potential value by over half.   Yet people tend to miss the best days because they often follow the worst ones — and most people are ill-prepared to jump right back into investing after suffering financial loss.  That’s part of why the “buy-and-hold” theory works so well. Few investors can successfully channel their risk-mitigating instinct into good long-term investment decisions when the markets are behaving erratically. Staying the course takes our...

The case for market-based capitalism is not that it is perfect. It is that nothing else comes close. When China loosened its grip in the late twentieth century and let markets operate more freely, roughly 800 million people rose out of extreme poverty—the largest and fastest escape from poverty in human history. And consider where people choose to move when they can: overwhelmingly, toward market economies—and almost never toward centrally planned ones, which have sometimes had to wall their people in. These facts are not much in dispute. What is worth understanding is...

Two months ago, federal regulators erased the phrase “reputational risk” from the rulebook they use to supervise banks. Last Friday, Capital One told a federal judge it didn’t need that phrase to defend itself. Its account contract, the bank argued, already lets it close any account “at any time, for any or no reason and without notice.” That sentence, buried in a motion to dismiss the Trump Organization’s debanking lawsuit, is the most candid thing anyone in this fight has said all year. Washington changed its own supervisory manual. The...

Washington doesn't hand out many easy wins. So when one shows up with 100-plus co-sponsors and genuine bipartisan support, it’s a moment for members to act.  The GROWTH Act, short for Generate Retirement Ownership Through Long-Term Holding, fixes a problem in the tax code that has been shortchanging Main Street investors for years. Millions of Americans who hold mutual funds in ordinary brokerage accounts get hit with a capital gains tax bill every year on distributions they never actually received. A fund automatically reinvests the money. The investor never touches it. And yet...

“Please, Mr. Tim. I have a huge favour to ask. My son, my four-year-old, has no future here…Please will you take him with you to South Africa and give him a new life.” That was Oggi, a Congolese guide, to Tim Butcher, a Daily Telegraph reporter based in South Africa, and who was coming to the end of his journey down the Congo River. What you’ve read is from Butcher’s remarkable (my review here) 2008 book, Blood River. Sadly, moving Oggi’s son was an impossibility rooted in an inability to smuggle him onto the UN boat taking him back to the relative...

I. Introduction For decades, politicians of both parties have treated America's trade deficit as a national scoreboard—as though a smaller deficit automatically means a stronger economy. It does not. The real question is not whether America imports more than it exports, but whether the foreign capital accompanying those imports is invested in activities that expand America's future productive capacity. By focusing exclusively on shrinking the trade deficit through tariffs and other trade barriers, policymakers risk creating two costly distortions. They undermine America's comparative...

On July 22, the European Union fined Google 890 million euro (over 1 billion dollars!) for violating the Digital Markets Act (“DMA”). This law was passed by the European Union in May of 2023, giving the European antitrust authorities the right to regulate certain on-line platforms as “Gatekeepers.” Being labeled a Gatekeeper subjects a company to a new kind of antitrust analysis, one that abandons the careful analysis of the economic effect of on-line business practices on consumers and competitors.  Instead, the DMA conclusively presumes a Gatekeeper has violated...

In June, U.S. Customs paid importers more in tariff refunds than it collected in new tariff revenue. Roughly $49 billion went back out the door; about $24 billion came in. Six weeks later, on August 3, twenty-five states walked into the Court of International Trade and asked a judge to strike down the tariff that had replaced the tariff the Supreme Court struck down in February. One policy sits behind both facts. Neither is a quarrel with a foreign capital. This is American state officials, American importers and American courts fighting over a charge that American households have paid at the...

My parents’ Christmas-tree decorator predicted the so-called “housing bubble.” Or so some might think. While he moonlighted as a tree and lighting expert at Christmas each year, his day job was as a mortgage broker for a major bank. One night while decorating my parents’ house ahead of Christmas 2007, he expressed worry to my dad about the pressure he was under to issue mortgages. They wanted the money out the door, and fast. This had him worried about the quality of the mortgages… The bet here is that more than a few reading this either had misgivings like...

The work of writing an op-ed on regulatory matters usually proceeds thus: officials decide on a policy; the analyst reads the policy (one hopes), weighs its merits and demerits, and formulates an argument; finally, that argument appears in a newspaper or digital publication to inform the public.   The Trump administration’s new framework to inspect advanced artificial intelligence (AI) models before they are released to the public has rendered several of these steps impossible. The White House, it seems, has declined to make the...

I was just a young pup—cocky and ambitious. I had graduated from law school, passed the bar, and thought I was bulletproof. So I jumped headfirst into the real estate development business. The man who owned the firm was Alexander Hamilton. No, not the first secretary of the Treasury. This was Alexander Hamilton IV, known to everyone as Alec—one of the most lovable and colorful men one could hope to meet. Big Al was fun and easygoing, twenty-five years older than I and, like me, a St. Anthony Hall fraternity brother at the University of Virginia. My God, did we have fun. We worked...

Here is the headline story of the below-expectations July jobs report — and the one the usual naysayers in the financial commentariat are seizing on.  Nonfarm payrolls fell by 23,000. May and June were revised down by a combined 103,000 jobs. Average hourly earnings rose just 0.1 percent, below expectations. The labor-force participation rate slipped to 61.4 percent.  Now look behind the headline.  Initial unemployment claims remain near record lows when measured against the size of the payroll base. Layoffs are not flashing recession. And the unemployment rate fell to...

Imagine a judicial system that announces a verdict in February, files charges in March, convicts all sixty defendants in June, and then acts surprised when one of them challenges the proceeding. This is almost exactly what has happened in international trade just this year.  On February 20, the Supreme Court famously struck down President Trump’s IEEPA tariffs. That same day, the President announced that he was imposing a temporary 10 percent global tariff under Section 122 and directed the US Trade Representative to begin investigations under Section 301 of the Trade Act of 1974....

In speeches, Nvidia CEO Jensen Huang tells rapt audiences that Artificial Intelligence (AI) is “work.” Yes, precisely. Jensen’s pithy explanation of what AI truly is speaks to the towering potential of data centers. As the headline to this piece indicates, and contrary to what you’re told, energy consumption by data centers is their most appealing feature. While they don’t require a lot of employees once they’re in operation, data centers produce staggering amounts of work. A much more prosperous future relative to the already abundant present can be found...

The moment a company starts prioritizing its stock price over its product quality, it’s headed in the wrong direction. It’s the beginning of the end.  We learned that over thirty-four years building Papa John's – from a broom closet in the back of my father’s tavern in Jeffersonville, Indiana, into a global brand. And in those years we came to understand something Wall Street tends to overlook: customers know before shareholders do. So do the employees and franchisees who see the business up close every day. Long before a stock falls, customers notice. They...

Peggy Noonan remains unwilling to acknowledge the truth about the political tragedy that was the coronavirus. See her recent commentary about Anthony Fauci. While critical of him, she described him as the man appointed “to lead a nation through a disaster.” Ok, stop right there. Fauci became a known quantity to a very small number of Americans in February of 2020, and then an enormous number the following month. Except that no “disaster” revealed itself in February. By February a virus with Chinese origins was known to be spreading in China, but even then it was...

There is rarely a day that passes without a news headline—such as recent reports of President Donald Trump walking back commitments to assist Ukraine’s defense with Patriot missile systems to save the lives of innocent civilians—that prompts an instinctive reaction: this is evil. Yet for an applied microeconomist, invoking the word "evil" initially feels out of place. Historically, evil is considered the domain of moral philosophy or theology, not empirical social science. Economists prefer critical judgments like inefficiency or adverse distributional impacts that can be...