Sanae Takaichi’s thumping recent victory in Japan’s elections gives hope that Japan’s economy may finally be recovering. There is much recovery to do; at IMF estimates for 2026, Japan’s GDP per capita (at purchasing power parity) is $56,444, below even badly-run Britain’s at $65,215 and far below the United States at $92,883, let alone its regional neighbors Taiwan at $88,565 and Singapore at $161,546. In terms of average wage level, Japan’s position is only marginally better. Yet Takaichi’s opposition to heavy immigration and the Bank of Japan’s abandonment of Ben Bernanke’s suicidal zero-rate policies suggest the economy could recover, as does the recent sustained rise in the Nikkei stock index. However, Japan becoming as rich as Singapore, almost trebling its GDP per capita, would require truly optimal policies (or dreadful backsliding by Singapore). Continue reading →

They laughed when he demonstrated his new communication device. A distinguished academic who had discovered the medium he was using had said there were no practical applications. Another distinguished British academic had failed to make such an apparatus practicable, despite prolonged efforts. As a young unknown foreigner, with no formal education beyond high school, how could he succeed where the cream of academia had failed? Yet it was 1896, he was Guglielmo Marconi (1874-1937), the apparatus was radio and the distinguished academics were wrong. In 2026, can it be that a college education, never of much value other than in signaling to large company prestige employers, is becoming completely worthless? Continue reading →

This column went on record before President George W. Bush’s selection of Ben Bernanke as Fed Chairman and said that of all the likely candidates, he would be the worst. In the next decade, that judgement was miserably justified. Now President Trump has avoided the funny-money favorite Rick Rieder of BlackRock and instead appointed Kevin Warsh, the most monetarily conservative candidate, with a long and impeccable record of monetary policy probity. Yet Trump has not changed his views; he is even more a fan of “funny-money” Keynesian policies of negative real interest rates than were Presidents Bush and Obama. So, can Warsh’s new justification for lower rates, used to make him attractive to Trump, possibly work, or will he be dragged into the Bernankeist pit that Trump favors? Continue reading →

President Trump wants the United States to buy Greenland, and European recalcitrance against the idea led him to impose further tariffs on the EU to spur negotiations. Trump’s negotiating techniques may be rough, but the geopolitical advantages of a U.S. takeover of Greenland are clear, and EU hatred of Trump should not be allowed to block negotiations. Whether or not the interim solution reached late in the week proves real, there is a Greenland purchase deal to be done and past such transactions can be used to set an appropriate price. Continue reading →

The most Important financial market news this week was not the U.S. Justice Department’s opening an investigation into Fed Chairman Powell over the Fed’s grossly mismanaged building project, but Powell’s hysterically arrogant and entitled response to it, which was joined by other central bank chiefs. The Fed Chairman is not above the law, and the Fed has arrogated to itself an altogether excessive power over our lives. President Trump’s monetary instincts may be foolish, but his belief is correct that the Fed needs taking down a few pegs to ensure our future prosperity. Continue reading →

In major markets, there have been two occasions when stock market indices have crashed and stayed below their peak for a quarter-century. One was the U.S. in 1929, where the Dow Jones Industrial Index finally topped its 1929 peak in 1954. The other was Japan, where the December 1989 Nikkei peak of 38,915.87 was surpassed only in February 2024. Sorry, Trump-san, but the current U.S. market looks more like late 1980s Japan than any U.S. predecessor and the market downturn may last as long (in inflation-adjusted terms) as Japan’s, which would end it in 2060. Continue reading →

In a sound political system, it should be obvious that the principal task of politicians is to maximize the living standards and life quality of the people they govern. Given that truism, the politician’s principal economic aim should be to ensure that their constituents’ labor is as expensive as possible. This will ensure that new technologies are introduced rapidly, further improving constituents’ living standards. Cheap labor is a feudalist and rent-seeking shibboleth, the aim for which undermines society and sharply reduces human happiness. Continue reading →

In discussing modern American, British or global politics, I often find myself on a different planet from other commentators, because my preferred political system is not that of any modern polity, but that of Britain under Lord Liverpool’s government from 1812 to 1827. Most of the policies were better in that government’s earlier years, but the economic results were better after 1820. In the lull between Christmas and New Year, I would like to review why I believe those policies to be optimal, and what would be necessary to bring them back. Of course, as often in these columns, mere political realism is not my prime objective! Continue reading →

JP Morgan Chief Executive Jamie Dimon recently expressed a preference for Kevin Warsh over Kevin Hassett as the next Fed Chairman, on the grounds that Warsh is less likely to be influenced by President Trump’s calls for rate cuts. To one who has followed bankers for several decades (and been one in the distant past) this was surprising; big banks are net beneficiaries of easy money and low interest rates and generally wish such conditions to continue ad infinitum. Dimon is however a very prominent canary in the banking coal mine, and his remarks may suggest banks are finally coming to their senses and hoping for sound money. If so, it is long past time! Continue reading →