As Israel starts a war with Iran, and the U.S. considers how deeply involved it wants to get, one lesson from history is abundantly clear. Wars cost hugely in direct physical devastation, yes, but they also have a huge hidden economic cost, in distorting the market and encouraging policymakers to seize further power and narrow […]

When you look at the arc of global industrial progress and the emergence of new technology, one decade stands out: the 1880s. That decade saw the arrival of electric light and power, which revolutionized everyone’s lives. It also saw the automobile, the safety bicycle, the first process for large-scale aluminum production, the Hollerith tabulating machine, […]

President Trump has proposed to privatize the two housing finance agencies Fannie Mae and Freddie Mac, now in public ownership after their collapse in 2008. While the fisc might benefit in the short term from such a deal, the risk to taxpayers of a second collapse and bailout is high, for risk correlation reasons I […]

President Trump’s threat to remove Harvard’s ability to take international students is appropriate. The university has admitted far too many dozy offspring of the Chinese Politburo and has allowed intellectual standards to collapse into a morass of woke incoherence. The first sign of sharp decline, as far back as 2006, was the university’s firing of […]

In research for my forthcoming book on global industrialization, I have been examining recently the career of the Japanese business titan Eiichi Shibusawa (1840-1931). Shibusawa, still something of a national hero in Japan, was effective head of the Dai-Ichi Bank from its founding in 1873 until 1917. More important, having while working for the Ministry […]

President Trump this week described the EU as “in many ways nastier than China.” The media responded with the usual shrieks of outrage, but he had a point. The EU bureaucracy has imposed a structure on Europe that is perpetually Socialist, deeply anti-democratic and utterly intolerant of dissent. Traditionally, the EU benefited from being democratic […]

President Trump recently threatened to remove Harvard University’s non-profit charitable status. That is an excellent idea. However, it should not be limited to Harvard, but extended to all charities, eliminating all their tax preferences. The Charity Industrial Complex, representing about 5.5% of GDP in nominal value, subtracts far more than that from our wealth for […]

In our 2010 book “Alchemists of Loss” Kevin Dowd and I examined the record of Wall Street risk management leading up to the 2007-08 financial crisis and concluded that it was seriously lacking. The universal assumption of “Gaussianity” caused participants to lose sight of the possibilities of “fat tails” where the probability of bad outcomes […]

The investment management business has suffered from investors moving their money to index funds, which have much lower fees and are purely mechanical in their investments. Also, much investor money has been diverted to private equity and hedge funds in the belief that those investments offer higher returns. The Efficient Market Hypothesis suggests that it […]

The U.S. Congress is currently debating the Budget for the year to September 30, 2026, where past mostly Biden-era profligacy has left a $2 trillion deficit. I want therefore to discuss what the final Budget should contain, focusing mainly on the tax provisions rather than the expenditure cuts, which should clearly be as Draconian as […]