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More Wackoism

October 24, 2014

Central banks win the day and week.

The Bear's Lair: When Socialism can appear to work

October 20, 2014

Bolivian President Evo Morales last weekend won re-election by a smashing margin. His eight-year rule has weakened Bolivian property rights, indulged in frequent nationalizations and demonized capitalism. Yet it has also produced Bolivia's best growth rates in several decades, far better than the orthodox and admirable policies pursued in 1985-2003. Thus Morales' policy of making Bolivian clocks run backwards seems reflected by the apparent successful defiance of theory in his economics. In reality, however, there is a fairly simple explanation, and it is an important lesson for other poor countries.

The Downside of Do Whatever it Takes

October 17, 2014

"Anyone who isn't really *concerned* doesn't understand the situation."

The Bear's Lair: Infrastructure is generally a bad investment

October 13, 2014

The International Monetary Fund's latest World Economic Outlook, in an unholy alliance with Larry Summers, claimed this week that a surge in publicly funded infrastructure spending would provide an increase in economic output with no downside risk. The truth is almost precisely the opposite: by indulging in ill-thought-out and boondoggle-filled public infrastructure spending, governments in rich countries leave their long-suffering taxpayers gasping for their next dinner.

Derivatives Story 2014

October 10, 2014

Increasingly, it looks like "risk off" and big trouble.

The Bear's Lair: Half a trillion is still a lot of money

October 6, 2014

The latest estimate by the Congressional Budget Office of the federal deficit in the year to last Tuesday was $506 billion. The deficit is expected to improve marginally this year, then jump back above $500 billion next year and worsen steadily for the next decade and thereafter. Given that we are five years into an economic "recovery," this won't do. Fourteen years of sloppy fiscal policies have left the U.S. fiscal position in a parlous state, only partly disguised by two decades of cheap money. Drastic action needs to be taken.


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