What Is The Bond Marketi Telling Us?

Interest rates in the US are at a 227 year low.  There are negative interest rates in parts of Europe.  What is that telling us?  Ordinarily, interest rates are sensitive to a worry about price inflation.  We get price inflation when the demand for products and services is greater than the supply.  The bond market is telling us that investors are not worried about price inflation.  The implication is that we should not expect excessive demand to drive up prices.  In other words,  investors are not worried about rapid economic growth.  There are other factors that affect interest rates and some of those considerations are discussed in this article.  Its fairly clear, however, that the bond market is not signalling concerns about excessive demand

Why Did George Bush Decide To Invade Iraq?

We have learned that US intelligence did not tell Bush that Iraq had weapons of mass destruction and that there was no link between Hussein and a terrorist group that was responsible for 9/11.  We also learned that Bush was warned that the invasion might increase the risk of terrorism.  If we assume that Bush and his advisors acted in the public interest there must be some reason why we were told lies in order to justify the invasion.  That is the real question about the decision to invade Iraq.  What was the public interest that motivated Bush and his team to lie to the public and take the known risks that might follow from their decision?  Some believe that Bush had a personal grudge against Hussein because he planned to assassinate his father.  That would not have motivated his top advisors to take the known risks of an invasion that would lead to the loss of American lives and large numbers of innocent civilian lives.  We still don't have a full understanding of the considerations that motivated Bush and his team of advisors.

Why Do Shareholders Condone "Excessive" CEO Compensation?

One would expect the owner of a firm to discourage excessive CEO compensation. We would also expect an owner to base executive compensation on performance relative to industry competitors. However, mutual funds and other large owners of corporate stock seldom complain about executive compensation.   This article offers a simple explanation.  Money managers usually own shares in many of the firms in the same industry.  They are more concerned about industry performance than they are about the performance of individual firms.  The last thing that they want to see is price competition between the firms that they own in a particular industry.  That would drive down industry profits.  In pursuit of shareholder value mutual funds, and other large investment firms, encourage oligopolistic competition.  They have no economic interest in basing executive compensation on performance relative to other firms in a particular industry.  Executive compensation in an industry is more closely related to firm size than it is to firm performance relative to its peers.

How Blair Sold The War And How It Led To ISIS

This article, by a British diplomat who was involved in the Iraq crisis, describes the misinformation that was used to sell the war to Parliament and to the British public.  Hundreds of thousands of citizens were killed in the war and its aftermath.  The decision by Bush to pursue regime change in Iraq was sold as a response to 9/11 and as critical element in his war on terror.  Instead of reducing terror, the decision to invade Iraq helped to produce ISIS and many years of terror in the Mid-East and elsewhere.  This was not an unanticipated result.  Many who were involved in the process argued that the invasion would inspire terrorists.  They were ignored.

Britain Releases Report On Blair's Decision To Join US Invasion Of Iraq

After seven years of study Britain released its report on its decision to join the US invasion of Iraq.  The report is highly critical of Tony Blair's role in the decision.  In particular, it states that no evidence was offered to show that Iraq was producing weapons of mass destruction.  It is very clear that Blair placed its relationship with the US government above all other considerations.  The report focuses on Blair's involvement in the decision but it also provides details about the Bush Administration's decision to pursue regime change in Iraq while ignoring many of the identified problems that might arise in the aftermath of regime change.  Many of the identified problems have come home to roost in Mid-East and elsewhere.  Bush praised Blair's decision to join the US invasion as an act of leadership.  Implicitly, he viewed his decision also as an act of leadership.    

Donald Trump's New Campaign Manager And Chief Stratagist

This is a link to Wikipedia's description of the replacement for the campaign manager Trump recently fired.  The strategy is to  portray Trump as a man of the people and to describe Hillary Clinton as the voice of the establishment for 25 years whose campaign is funded by Wall Street.  Paul Manafort has a long history of advising Republican politicians and corrupt foreign leaders who need to curry favor with US politicians.  He is very good at his craft.  He may be able to convince the public that Trump represents their interests in government.  Trump will not focus on policy issues that have been widely criticized as lacking in substance and designed to reward elites.  His campaign will focus on personal issues that he hopes to use against Hillary much like he did against his Republican primary opponents. 

Donald Trump's Anti-Republican Policy Proposals And The Future Of National Populism.

Donald Trump has been endorsed by Paul Ryan who is the Republican Party's highest ranked public official.  Ryan has also supported every international trade agreement that has been proposed in recent years. Those trade agreements have also been supported by the US Chamber Of Commerce which is the largest business lobby in the US and a traditional advocate for Republican political candidates.  Donald Trump has stepped up his attacks on free trade agreements and he has accused the US Chamber Of Commerce of being controlled by special interests (most of whom are Republicans).  In other words, Donald Trump has divorced himself from the Republican Party on critical campaign issues in order to increase his chances of the winning the national election in November.  He is actually running as a nationalistic populist.  His populism is closer to Bernie Sanders than it is to Hillary Clinton's.  He hopes to expand his populist base in the Republican Party by attracting disaffected Democrats to his campaign in swing states such as Ohio and Pennsylvania which have suffered from deindustrialization.  He claims that he will "Make America Great Again" by bringing jobs back to America that have been lost by the use of "unfair currency manipulation" and broad based trade agreements provide easy access to the US market.  He claims that he will use his skills as the "great negotiator" by negotiating with each of our trading partners as a single entity. 

Trumps nationalistic populism is similar similar trends that we see in Europe.  The recent referendum in the UK provides a good example of national populism at work and it should provide a warning to Republicans.  The UKIP Party in the UK opposed Britain's membership in the EU.  It attracted disaffected conservatives, who were concerned about a loss of national sovereignty, and it appealed to many traditional Labour voters who blamed immigration for their economic problems and for a loss of national identity.  The leader of the conservative party attempted to stem the tide of UKIP by proposing a referendum on membership in the EU.  He did not expect the vote to turn out the way it did and he was forced to resign after the referendum.  The campaign against the EU was led by the conservative  Mayor of London who believed that he could enhance his political career within the Conservative Party.  He resigned after the referendum and several conservative candidates are vying for leadership in the Party.  Who knows what will become of the Conservative Party.

Donald Trump won the GOP primary by appealing to disaffected Republicans who viewed Washington in many ways like voters in the UK who did believe that they benefited from membership in the EU.  Trump supporters also believed that immigration was bad for them economically and that immigrants were dangerous threats to their safety.  They were also forced to pay taxes to the federal government which were used to provide welfare benefits immigrants and others who did share their values.  The Republican Party cannot win elections without the UKIP like members of their party who have been captured by Donald Trump.  On the other hand, a Republican Party led by Donald Trump bears little resemblance to the party that has traditionally defined conservatism for most Republicans.  It has become the Anti-Obama, Anti-Hillary party rather than a party united by a set of ideals.  If Donald Trump captures the Fox News and talk radio hosts, who have typically supported conventional Republicans, the Party will have lost its propaganda machine as will as its ideology.  It will become the Anti-Liberal Party.  The Tabloids in the UK promoted the Brexit campaign by spreading lies and misinformation that supporters of membership were unable to effectively counter.  A little bit of knowledge is a dangerous thing.  Voters everywhere are concerned about the future but there are no easy answers for many of the problems that worry them.  Trump's campaign is not based upon workable ideas that will be good for the nation.  He is all about winning the presidency by appealing to many of the fears that are common in many western nations.  Things are changing in the global economy and in the popular culture that are moving faster that the ability of national governments to manage them.