• June 24, 2022

Inflation Reaches Unicorns

“Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government—in pursuit of good intentions—tries to rearrange the economy, legislate morality, or help special interests, the cost comes in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.”

—Milton Friedman...

• April 8, 2022

Other Possibilities

An old Danish proverb, later attributed to everyone from Mark Twain to Nostradamus to Yogi Berra, says, “Predictions are difficult, especially about the future.” I would refine it a little: Predictions are actually pretty easy. Accurate predictions are very difficult.

• March 25, 2022

Things Are Getting Better

In these letters, I look at the economy and tell you what I think, for better or worse. Recent missives were mostly negative. I regret being the bearer of bad news but sometimes that’s just reality.

• March 11, 2022

Another Strange Recession

Back in the good old days, recessions were simply the unpleasant part of the business cycle. Consumer choices, exuberant businesses, and monetary policy would periodically generate growth contractions. We debated the timing, but recessions didn’t come out of the blue.

• March 4, 2022

Change Squared

“How did you go bankrupt? Two ways. Gradually, then suddenly.”

- Ernest Hemingway, The Sun Also Rises

• December 17, 2021

Inflation by the Numbers

Milton Friedman famously said inflation is “always and everywhere a monetary phenomenon.” He was right but that short statement doesn’t fully explain how inflation works. It has other causes, too. The period in which he did his most famous research showed inflation was clearly a monetary phenomenon, but I’m not sure he would make the same assertion today.

• November 26, 2021

Worth a Thousand Words

Happy Thanksgiving! I hope everyone had a good holiday. I’m writing this issue early in the week while enroute to join family in Dallas. Today will be different and I hope you like it.

• November 5, 2021

Energy Complexity

If I had to describe my last 500 letters in one word, it would be “complexity.” The older I get, the more I realize problems I once thought had reasonably straightforward solutions are, in fact, hideously complicated. That doesn’t make them unsolvable but it reduces the odds they will be. Often we start with good intentions and end up with unintended consequences, not all of which are good.

• April 2, 2021

The Exponential Ride