Darline Graham’s South Carolina Senate primary victory is yet more proof, as if any were needed, that MAGA is essentially an anti-intellectual, faith-based tribe. Graham is the tribe’s pick for one of the country’s most consequential jobs, purely by accident of birth and despite the fact that she knows nothing. She couldn’t answer a simple question about Taiwan at a recent debate. “National security is not my thing.”

Then what IS her thing? I’m guessing weekend bake sales. Who or what would be her guiding principle when she has to confirm a Supreme Court justice or consider a treaty concerning a country she can’t find on a map? Lemme guess: ask WWJD? (More likely, WWDD?)

As for her economics background, she’s a smart “bargain shopper.” In Trump Land this would qualify her as Fed chair if the job weren’t already taken.

All of this is par for the MAGA course, needless to say. Mango Mussolini couldn’t identify the nuclear triad in a 2015 debate, and probably still can’t.

But none of this matters. What matters is brand recognition. Any marketing professional knows that name recognition is 80% of the battle when selling a candidate or a brand of toothpaste. This is why supposedly serious political parties elevate know-nothing celebrities like Herschel Walker and Donald Trump to offices for which they are no more qualified than a New Age life consultant.

Here’s the GOP’s primary achievement since the age of Saint Reagan: Abetted by Fox news and the rest of the right-wing noise machine, it has actually made expertise a liability and ignorance an asset. That is not hyperbole. Intellectual mediocrity is the core of the brand.

Hence, GOP campaign rule No. 1: If you want to win but you’re not actually a moron, at least pretend to be. Think MASA — Make America Stupid Again.

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A slightly modified version of this article appeared on Canada’s Globe and Mail website on Aug. 20.

The chief benefit of artificial intelligence is supposed to be a vast increase in productivity. But the trade-off will be millions of lost jobs, if you believe the direst predictions. This poses a conundrum: AI may vastly increase output, but if no one is employed, who’s going to buy it?

The question is not entirely facetious. When we talk about “economic activity” in advanced economies, we are talking largely about consumer spending, often described as the engine of the economy. That’s because in industrialized societies, consumer spending can account for half or more of gross domestic product. (It’s 55 per cent in Canada, 67 per cent in the United States.) This implies a significant economic threat should the worst predictions for AI-related job losses prove accurate.

The economists I’ve consulted know of no study examining precisely the question of AI-impaired consumer spending, but they have studied the potential impact on employment and spending generally. There’s not much doubt that a significant fall in employment would reduce personal consumption and by extension overall growth, at least as a first-order effect.

As banks set the tone for AI adoption, senior executives rethink hiring

We can get a rough idea of how much by looking at the COVID-19 crisis. U.S. consumer spending fell 2.7 per cent in 2020, while real GDP shrank 3.5 per cent, a postwar record. Canada’s personal consumption contracted by 3.2 per cent (5.2 per cent without government transfer payments) and real GDP by 5.4 per cent, the latter Canada’s worst GDP performance since comparable data was first recorded in 1961. Worldwide, collective consumer spending shrank 4.5 per cent and world GDP by 2.9 per cent.

To be sure, the COVID-19 crisis involved a supply shock, not just the demand shock that AI job losses could produce. But what would be the impact on GDP if AI reduced employment by, say, 10 per cent, roughly what happened in the U.S. in early 2020?

That depends partly on two things: what economists call the “marginal propensity to consume” — how much of each discretionary dollar a consumer spends, as opposed to saving — and “multiplier effects” that amplify the total spending generated by an initial purchase as a dollar spent by one consumer moves on to the next consumer, and so forth. Multiplier effects magnify spending, but also spending contractions.

A simple textbook example suggests that, assuming consumers on average spend 60 cents of each dollar of discretionary income, a 10-per-cent reduction in employment would mean about a 25-per-cent decline in GDP in the short term, all else equal. (Variables include such factors as household consumption’s share of GDP and compensating government responses, such as unemployment insurance.)

A lot could depend on “what happens to all the money saved by AI from those job losses,” says Stanford University economist Nicholas Bloom. “Consumption could drop if the savings to companies don’t end up getting spent.”

Self-fulfilling psychology could also inhibit consumption even if AI does not carve a swath through labour forces. Knowledge workers in fields most vulnerable to AI-caused job displacement could ramp up precautionary saving in anticipation of hard times, reducing overall spending and neatly illustrating “the paradox of thrift.”

Will AI be the end of jobs? The reality looks different in Canada

That’s partly because of the “wealth effect,” which cuts in two directions: When people feel secure in their jobs and their stock portfolios are up, they’re likely to spend more. A shrinking portfolio and job insecurity, naturally, means they spend less. Multiplying this “reverse wealth effect” by millions of people is not good for GDP.

On the bright side, not everyone foresees an employment apocalypse in an AI-driven future. AI could serve merely to supplement existing work, or even increase employment. “I think there will be some job losses and some job gains, probably netting each other out,” says New York University economist Robert Seamans, who studies the economic consequences of advanced technologies.

Some argue that AI will prove no more disruptive than previous watershed technologies, and that today’s handwringing is just the latest in a long history of doomsday hysterias, from Malthusian impoverishment to the “population bomb.”

The AI job apocalypse is coming. Or is it?

But it may be prudent this time to expect the worst outcome, not an ideal one, if only because AI is a species for which history may offer little guidance. The power loom and the printing press displaced workers, but they weren’t capable of recursive self-improvement or general intelligence, and they couldn’t easily infiltrate the entire industrial landscape.

“The adoption of [AI] technologies is the fastest we’ve ever seen because the adoption cost is so much lower,” says ​​Ekkehard Ernst, chief macroeconomist for the International Labour Organization. “Anybody can open a ChatGPT account without much cost.”

A New York Moment

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It’s been said of poker players that if you can’t identify the stupidest person at the table, then it’s you. After Canadian Premier Mark Carney’s rejection of Donald Trump’s extortionate trade demands on Friday, it’s becoming clear who is the stooge at the trade-dispute table.

It would appear that Mr. Carney meant what he said in his widely lauded Davos speech in January: Given Trump’s “rupture” of the rules-based international order, the world’s middle powers should cooperate to foil U.S. coercion. Needless to say, Trump has doubled down, threatening today to impose 50% tariffs on Canadian cars, car parts and steel starting next year.

Nonetheless, Mr. Carney has achieved a couple of important things here. First, he has placed Canada on the moral high ground, simply by having continued to negotiate in the face of substantial, and justifiable, Canadian doubts about Trump’s good faith. If Mr. Carney had refused to talk all along, Canada would have appeared obstructionist. No one can blame him now for rejecting demands that, among other things, Canada effectively forfeit its sovereignty to set trade terms with other countries, an idea only slightly less daft than Trump’s threat to annex Canada.

Second, Mr. Carney has shown that someone other than China is willing to defy the professional shakedown artist who runs the U.S. government like it’s a personal fief. That can only embolden other countries and trade blocs to defy the U.S. bully. What’s at stake here is something much bigger than whatever economic pain Canadians will feel as a result of Mr. Carney’s line-drawing.

Trump likes to regard himself as the consummate dealmaker and strategist, always the smartest person at any table. But it turns out Mr. Carney is the far more astute judge of character.

What he sees in Trump is less a cunning statesman playing three-dimensional chess than the oafish schoolyard bully in the old Calvin and Hobbes cartoons: Dimwitted and beetle-browed, he nonetheless manages to intimidate all the smarter kids on the playground. You cannot negotiate with such people; you either submit or defy them. That’s why you can be sure many Americans took pleasure in the diplomatic bitch-slap Mr. Carney delivered Friday night.

That’s also why an argument made in the Globe and Mail on Saturday — America is really being a bad friend — doesn’t sit quite right. Which America? There are at least two, and always have been. The 77 million people who voted for Trump because he’s a cathartic middle finger to urban elites are one culture. People-who-know-stuff is the other.

It’s a gaping flaw of the U.S. political system that it imposes no test of intellectual qualification for the most important job on earth — something unthinkable in any other profession of significant consequence. But it’s not the “American people” who have weaponized trade policy. Most Americans oppose Trump’s tariff tantrums, which are the product of a primitive mercantilism enabled by sycophants who know better — looking at you, Howard Lutnick and ex-con Peter Navarro. Most Americans are, in fact, pretty fed up with Trump’s tiresome antics.

Mr. Carney surely realizes this. He must also see that Trumpism is an aberration that historians will one day treat as a regrettable and disruptive populist spasm, nothing more. Even a Republican successor to Trump, it’s reasonable to assume, will find a way to tack back toward sanity and global cooperation. Canada may simply have to wait MAGA out.

A Globe op-ed recently compared Mr. Carney’s dealing with Trump to Neville Chamberlain’s conundrum in Munich. There’s an analogy there, but not a very tight one. Front of Mr. Chamberlain’s mind was an unthinkable return to trench warfare and economic devastation on a scale that few appreciate today. That made peace-at-any-price a palatable option.

The difference is that Mr. Chamberlain was dealing with a strategically astute foe who, while unhinged, was not ignorant or guileless. Mr. Carney, by contrast, is dealing with a buffoon, and it’s a good thing for the world that he knows it.

A New York Moment

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This article was originally published in Canada’s Globe and Mail newspaper on Aug. 7, 2016.

For all his faults, let’s give Donald Trump credit for one thing: He has pulled America’s Republican Party a considerable distance from its much-cherished if largely hollow small-government “principle.” There may be no clearer example than his — and his party’s — eagerness to place government guardrails around artificial intelligence.

Not a moment too soon. Unreleased AI models have shown a disturbing inclination to escape experimental laboratories and hack into other systems independently of their creators. In April, Anthropic’s Claude Mythos escaped its “sandbox” — an isolated testing environment supposedly unconnected to the Internet — and e-mailed a company researcher.

Last month, two OpenAI models, one recently released and the other still under evaluation, hacked into the systems of Hugging Face, an AI-model hosting platform, and then a customer of cloud provider Modal Labs. More incidents followed.

The U.S. President signed an executive order on June 2, asking technology companies to voluntarily give the government a look at AI models before releasing them to the public. That action reversed the hands-off approach Mr. Trump backed just weeks earlier, when he cancelled the signing of an order that would have allowed the government to review new models. (On Tuesday, the administration exempted “open-weight” models from the June 2 order, those anyone can download.)

The first order, he said at the time, “gets in the way of, you know, we’re leading China, we’re leading everybody, and I don’t want to do anything that’s going to get in the way of that lead.”

A little ideological perspective is in order here. Isn’t it supposed to be those meddling, namby-pamby liberals who want to regulate everything, pick winners and keep a Big Government jackboot on the private sector’s neck? What happened to the scripted banalities such as “regulation will impede efficiency, cost jobs and put the economy on the slippery slope to central planning” — the sort of thing you hear when government wants to constrain, for example, systemically risky financial institutions?

Of course, lots of folks who cosplay as small-government conservatives don’t really mean it; they simply know what sort of language the donor base demands. Much free-market evangelism amounts to cheap rhetorical weaponry aimed at vilifying government and titillating the sort of people who think Ayn Rand is the last word in economic philosophy. A favourite chestnut: anti-tax zealot Grover Norquist’s demand that government be rendered small enough “to drown it in a bathtub.”

But it’s easy to cite government interventions that self-anointed libertarians would be up in arms about trying to abolish – laws that keep pornography out of the public square, illegal drugs off street corners, or any public good. (Next time you meet one of these folks, ask if they’d like to liberate the crack cocaine and child pornography markets from the oppressive hand of Big Government.)

Untethered to anything resembling principle, Mr. Trump has no qualms about indulging what Republicans used to condemn as Stalinist industrial policy. You may recall this jewel from 2019: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

Read that again: “hereby ordered.”

Since January, 2025, the U.S. government has acquired stakes worth $27.6-billion in at least 37 companies, among them Intel Corp., Westinghouse Electric Co. and Nippon Steel Corp. As the libertarian Cato Institute rightly noted, congressional Republicans “would be foaming at the mouth were this occurring under a Democratic administration.”

Read the rest (paywalled)

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This article originally appeared in Canada’s Globe and Mail on July 23.

If there’s a silver lining in the Strait of Hormuz impasse, it may be the refutation of Donald Trump’s green derangement syndrome and the delicious irony now on display: The renewable-energy sources he despises seem to be mitigating the disastrous consequences of the conflict he foolishly started.

Mr. Trump’s reckless war initially prompted predictions that the benchmark Brent crude price would spike from around US$72 a barrel on the eve of the war to perhaps US$200. Instead, it peaked at about US$120 in April, and has fallen sharply amid an on-off ceasefire. (While high, adjusted for inflation that figure is more than 40 per cent below the record price set in 2008, according to the Energy Institute, a research group affiliated with the University of California, Berkeley.)

Part of the explanation is drawdowns from reserves and substitution with fossil-fuel alternatives, the International Monetary Fund reports. Among those alternatives are the renewable sources that Mr. Trump ridicules.

Opinion: The world is moving off fossil fuels as Canada continues to live in the past

But economies more reliant on renewables seem to have suffered less than those more dependent on fossil fuels. Installed renewables helped the world avoid US$480-billion in fossil-fuel costs last year, the International Renewable Energy Agency says. The European Environment Agency reported last month that gas-price volatility in early 2026 cost the European Union €13-billion ($20.9-billion) by mid-April, while renewables saved €29-billion, “confirming renewables’ role as the system’s most effective shock absorber.”

There’s a simple reason: Energy from renewables is generally insulated from price shocks. Green technologies have huge installation costs but trivial production costs. Moreover, renewable energy is produced domestically, free from the caprices of foreign markets.

Indeed, a 2022 IMF report found that wholesale electricity prices in Europe fall by an average of 0.6 per cent for each percentage-point increase in the share of renewables in electricity production.

An Oxford Economics report this year suggests how much buffer renewables can provide. In a scenario using South Korea as an example, a higher share of renewables under a given commodity-price shock produces a smaller impact on electricity prices as well as a smaller contraction in GDP. The report concedes that scale matters: Renewable capacity must be high (the Korean scenario posits 50 per cent of national power production, compared with 10 per cent in 2025), and must be accompanied by high electrification rates for transport and household consumption.

Mr. Trump, who has famously proclaimed his love of “beautiful clean coal,” may be tempted to gloat that South Korea and other countries have relaxed restrictions on coal generation. He probably wouldn’t notice or care that they feel forced to do so because of an energy crisis he instigated.

Read the rest (paywalled).

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Lindsey Graham sold his soul to Donald Trump years ago, so expect to hear the Orange Sultan demanding compensation. But from God or from Satan? (If we know anything about Trump, he’ll shake down both.)

One shrinks from using harsh language like “hypocrite” and “opportunist” about the recently departed, so let’s just say Graham was “protean,” which the dictionary defines as “tending or able to change frequently or easily.”

Recall that it was Rep. Graham who during the Clinton blowjob impeachment asserted that “this is a country based on character, this is a country based on having to set a standard that others will follow willingly.” When he took his last breaths yesterday, he was fully enthralled to a serial felon and adjudicated rapist whom he had initially and correctly identified as “race-baiting, xenophobic, religious bigot.”

Let’s just call it situational ethics.

Graham was, to put it politely, something of a disappointment. When elected South Carolina’s senator in 2002, he seemed a refreshing replacement for century-old Strom Thurmond, an ossified anachronism who had run for president in 1948 — not a typo — as nominee of the segregationist, states’-rights Dixiecrat Party. He could just as well have run in 1848.

The new fellow was smart, articulate and reasonable-seeming, suggesting that South Carolina — the first state to secede in 1860 — had updated the software of its sometimes reactionary politics. But, as the New York Times notes today:

As chairman of the Judiciary Committee, he oversaw the confirmation of Amy Coney Barrett to the Supreme Court after the death of Justice Ruth Bader Ginsburg in 2020. Before he was chair, he played a key role on the committee during the 2016 fight over President Barack Obama’s nomination of Merrick Garland to the court, aiding in Republicans’ success in blocking the pick. In 2018, he vehemently defended Brett Kavanaugh, one of Mr. Trump’s Supreme Court nominees, when sexual assault allegations threatened to derail Judge Kavanaugh’s confirmation.

Graham spent his last decade effusively defending Trump at every turn. He must have surprised even himself when, after winning his primary race last month, he heard himself saying “Mr. President, you’re not far behind God.”

The justification for this shameless, irony-free 180, Graham explained, is that he needed to remain “relevant.” But to what end? Is relevance an end in itself? Couldn’t people who defended Joe McCarthy or George Wallace have made the same argument? Graham, like every other Trump-adjacent careerist and acolyte, raises a perennial question: Are you seeking high office to do something or to be something?

The eminent economist Paul Samuelson held that “science progresses funeral by funeral” as proponents of obsolete theories die in their turn. Lindsey Graham’s untimely departure suggests that this is how American political culture will put MAGA in the rearview mirror, where one day it will appear as irrelevant as the Know Nothings, just one more ugly scar on the body politic.

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There’s plenty about America to denigrate on its Semiquincentennial, but this is a moment to recall what celebrates America. It’s hard to think of a better exemplar than Aaron Copland’s “Appalachian Spring,” originally the score for a 1944 Martha Graham ballet but known today as an orchestral expression of the pathos and triumph of this perennial social experiment.

I think it was Plato who said something to the effect that if you can hear a society’s music, you’ll know the society. In an era marked by irate rappers dropping F-bombs and N-words in public earshot, that’s not a ringing endorsement of American culture. For every thousand monotonous rappers, though, there is an occasional Copland or a Gershwin — not a great exchange rate, but you take what you can get.

Copland, known earlier for scoring films such as Sam Wood’s 1940 adaptation of Thornton Wilder’s “Our Town,” created what we can only call an American voice. You know him when you hear him — soaring strings that would border on saccharine if not leavened with the vinegar dissonance that is Copland’s signature.

America is an extract of Europe, so we call things “uniquely American” with caution. But I like to think that only Aaron Copland — born in Brooklyn to an immigrant Jewish family — could have produced the magnificence that is Appalachian Spring, and that only American culture could have produced Aaron Copland.

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This article originally appeared on Canada’s Globe and Mail website today.

Of the many things Alan Greenspan is remembered for, surely one of them should be as a sterling example of someone who rediscovered the wheel — or, more accurately, who learned the hard way why wheels are necessary.

Mr. Greenspan, who died Monday at 100, was the Federal Reserve chairman who reigned from August, 1987, to January, 2006, and was reverently called “the maestro” and “the wizard” for his oversight of a generally booming economy. For such an astute observer of financial markets, though, he sure got them wrong on one notorious occasion.

A little history: Thirty years ago, Mr. Greenspan, an Ayn Rand libertarian and deregulation evangelist, fought a fierce ideological battle — ably recounted in the 2009 documentary “The Warning” — against people who wanted to tighten regulation of over-the-counter derivatives, a market that had emerged largely unregulated in the 1980s and 90s. By the late 90s it was big enough, many feared, to pose considerable systemic risk should its various exotic — and to many incomprehensible — products turn south.

The key advocate for increased regulation was Brooksley Born, head of the Commodity Futures Trading Commission, the U.S. agency overseeing futures markets, from 1996 to 1999. She and others were particularly concerned with the swaps market, opaque instruments traded by financial institutions with little regulatory oversight.

The problem with swaps is that they tended to entail enormous leverage. Warren Buffett, who was Berkshire Hathaway’s CEO at the time, called them “very dangerous stuff” that “accentuated enormously, in my view, the leverage in the system.”

In the opposite corner during this fight were free-market exponents like Mr. Greenspan, Robert Rubin, Treasury secretary from 1995 to 1999, and his deputy Larry Summers — “The Committee to Save the World,” according to a now-ironic TIME Magazine cover. Their argument was that regulation would raise costs, stifle financial innovation and send capital fleeing abroad. They asserted this even as what amounted to a laboratory experiment in overleveraged finance unfolded before their eyes in the 1998 collapse of the heavily leveraged hedge fund Long-Term Capital Management.

Mr. Greenspan in particular argued that OTC markets would self-regulate, obviating any need for oversight. “Regulation, by its nature, inhibits freedom of market action, and that freedom to act expeditiously is what rebalances markets,” he wrote in his 2007 memoir. “Undermine this freedom and the whole market-balancing process is put at risk.”

Congress sided with Mr. Greenspan, passing something called the Commodity Futures Modernization Act, which prohibited regulation of OTC derivatives. Centrist president and Democrat Bill Clinton signed it into law just before leaving office in January, 2001.

Read the rest at Globe and Mail (paywalled).

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Now that the SpaceX initial public offering has made Elon Musk all but officially the world’s first trillionaire, is it okay to despise him just for being one? To broaden the question, are the billionaires associated with widening inequality a bad look for capitalism?

There are competing schools of thought about the accumulation of wealth, among them the anarchist claim that “property is theft” and the Gordon Gekko theory of greed as a star-spangled virtue.

It’s a lot easier to subscribe to Gekkonomics when you view capitalism as a poker game where there’s no guarantee that one player won’t end up with all the chips. That’s an unequal outcome, but it’s not an unfair one as long as everyone plays by the rules. Indeed, an equal distribution of the chips would be unfair if one talented player deserves to win them all.

The weakness in attacks on extreme wealth is their focus on the normative — what’s fair, how things should be — rather than the consequential. Jeff Bezos’s US$500-million yacht and its US$75-million support vessel are “obscene”? Well, they’re not obscene to Mr. Bezos or to lots of other people. And where is it written that Mr. Bezos has no right to be obscene?

Equal vs. fair
It’s “unfair” that the richest 1 per cent of the United States holds 32 per cent of the wealth and the bottom half holds 2.5 per cent? Unequal, to be sure. But strictly speaking, equality of outcome has nothing to do with the fairness of the game. A Gini co-efficient of 1 is just as fair as a Gini co-efficient of zero as long as billionaires play fair. (The number measures income equality, where 1.0 equals perfect inequality and 0.0 perfect equality. The U.S. number in 2023 was 0.418; Canada’s in 2020 was 0.299.)

Moreover, the plutocratic class can claim that most of the wealth it creates accrues to other people through the disbursed social benefits of capitalist innovation and philanthropy.

The more compelling argument against billionaires has to do not with the ethical implications of the extreme inequality that they arguably promote, but with the adverse real-world consequences, which you don’t have to be a fire-breathing Marxist to acknowledge. There is plenty of evidence that extreme inequality produces inferior and even perverse social outcomes.

Most importantly, concentrated wealth means concentrated political power that tends, in a self-reinforcing cycle, to exacerbate economic inequality. James Madison warned 240 years ago against the “indefinite accumulation of property” and the implied imbalance of political influence. The eminent jurist Louis Brandeis once warned, “We may have democracy, or we may have wealth concentrated in the hands of a few, but we cannot have both.”

Enter Elon. It was his wealth, not his political acumen or the strength of his ideas, that put him at the centre of government. No voter gave him political power; he simply bought it.

Bought and Paid
By donating at least US$250-million to the Trump campaign in 2024, this private citizen positioned himself to kill a congressional budget deal more or less single-handedly, and then to create a bogus federal agency: the “Department” of Government Efficiency. He staffed it with college-age technobrats who among other things effectively dismantled the U.S. Agency for International Development, which millions of people depended upon for life-critical assistance. According to one study, this reckless exercise in government-by-frat-boy cost at least 762,000 lives by November, 2025, and could cost millions more by 2030.

Then there’s Elon’s hypocrisy, which feeds popular resentment of capitalists who pretend to be pro-market but are in fact pro-business. Elon disparages big government while gorging on “at least [US]$38-billion in government contracts, loans, subsidies and tax credits, often at critical moments … helping seed the growth that has made him the world’s richest person,” The Washington Post reported last year. Meanwhile, the Trump regime that Elon partly paid for has shut down numerous investigations that threatened his business interests.

(One could also mention his needlessly harsh treatment of employees, as documented in Walter Isaacson’s 2023 biography, and his gratuitous political provocations.)

Whatever Elon’s considerable accomplishments, it’s hard to construct a price-of-genius argument that justifies his often-malignant influence. But if he’s a stain on capitalism, it’s not because of his wealth. It’s because he exemplifies the idea of government as the plaything of plutocrats who shamelessly bend public policy toward private advantage. It may be difficult to excite class warfare in a culture that worships wealth, but people like Elon make it a whole lot easier.

This article was originally published in Canada’s Globe and Mail newspaper today.

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This column appeared in Canada’s Globe and Mail newspaper today.

What with all the hand-wringing about a politicized U.S. Federal Reserve under new chair and Trump designee Kevin Warsh, maybe there’s a bit of solace to be had in artificial intelligence. AI is about to revolutionalize everything else in the universe, so why not monetary policy?

Much of what the central banks do is aggregate and analyze data from myriad sources for purposes of forecasting and “nowcasting,” which would seem to be an ideal use case for large language models. (AI already assists in some ways — the Fed and the Bank of Canada, for example, use it for some operational purposes and forecasting.)

But data collection is one thing. Knowing how to use it in setting policy is another. There have long been two schools of thought about how to run monetary policy: One favours human discretion (the dominant approach), and the other a rules-based approach.

The latter is not an entirely new idea. Economist Milton Friedman, who died long before AI became the Leviathan it now threatens to be, said that he’d prefer to replace the Fed with a computer that would have one job: To increase the money supply at a constant rate, year after year, forever.

Mr. Friedman was the world’s most prominent monetarist, preaching that changes in the money supply are the most important determinants of economic output and inflation. Persistent, long-term inflation, he famously said, “is always and everywhere a monetary phenomenon.” Automating policy would leave little need for central bankers; all you’d need to guarantee price stability is a few IT folks.

The best-known monetary guideline is the Taylor rule, after American economist John Taylor. It attempts to optimize short-term interest rates by a calculation that incorporates factors such as the federal funds rate (the one you see in headlines) and changes in real (inflation-adjusted) income. The rule, which has various incarnations, is supposed to tell the Fed how much to ease or tighten, given prevailing economic conditions, to keep growth and prices at targeted levels.

The details of Taylor rule are less important than the fact that it is a rule, as opposed to discretionary, subjective decision-making by fallible humans interpreting data presumed to represent real economic conditions. Rules-based policy-making, say its exponents, implies an apolitical consistency that is critical to the Fed’s credibility.

Read the rest (paywalled).

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Abraham Lincoln’s 1864 letter of condolence to Lydia Bixby needs updating for the MAGA Time.

Madam:

I have been shown in the files of our proudly renamed Department of War a statement by my great War Secretary Pete Hegseth — the greatest war secretary in history, many people are saying. Great on Fox, great ratings, great tattoos, have you seen his tattoos? — that you are the mother of five sons who have died gloriously on the field of battle. So glorious. Totally glorious. Like the movie “Glory.” Have you seen it?

OK, first, I like people who weren’t killed, OK? Why were your sons in the military anyway when they could have gone into real estate? Whoever heard of that? I told my sons don’t ever do the military stuff. Don’t be a sucker. Get a letter from a podiatrist. You can use mine. Only losers die, OK?

I feel how weak and fruitless must be any words of mine which should attempt to beguile you from the grief of a loss so overwhelming. OK, so my people wrote that line. Whatever. But I don’t do weak and fruitless. That’s the radical-left Democrats and the fake media. But OK, let’s call it overwhelming. Whatever. But people die in war, OK? Stuff happens.

But I cannot refrain from tendering to you the consolation that may be found in the thanks of the Republic they died to save. Total consolation. So thankful. Don Jr. and Eric said thanks. And our beautiful first lady. Doesn’t she look great? I always tell her she looks great. And Barron and Jared. Anyway, too bad your sons won’t be around to see the new victory monument I’m building. People are calling it the Arch of Trump. The communist woke Democrats complain it’ll block the view of Arlington Cemetery from the Lincoln thing, the one with the statue, which really could use a paint job. But there’s nothing to see anyway but an old house, which really should be done over. It would make a fabulous tennis club. Can you imagine? We’re talking all-exclusive. Like no one’s ever seen. Your sons would be impressed. So impressed. They’d go “like wow.” They’d be tired of winning. So tired.

Thank you for your attention to this matter.

PRESIDENT DONALD J. TRUMP

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This article originally appeared in Canada’s Globe and Mail newspaper on May 14, 2026.

U.S. meddler-in-chief Donald Trump has hijacked authority over everything from Kennedy Center programming to White House renovations. Markets are about to find out whether he’ll do something similar, and unprecedented, at the world’s most important monetary authority via Kevin Warsh, whom the Senate confirmed on Wednesday as Federal Reserve chair.

The problem here is Mr. Trump’s well-known penchant for installing loyalists in high places, which doesn’t quite square with Mr. Warsh’s declared intention to insulate Fed policy-making from political intrusion. Given Mr. Trump’s preference for hiring sycophants, his open desire for lower interest rates and Mr. Warsh’s eagerness for the job, Fed independence could take a hit. If Mr. Trump knows anything, it’s how to leverage careerist ambitions into slavish loyalty.

He’s already gone to work on Mr. Warsh, confirming a December Wall Street Journal report that he’d “pressed Warsh on whether he could trust him to support interest-rate cuts if he were chosen to lead the central bank.” Mr. Trump told the Journal that the next Fed chair should consult with the President when setting rates, and that Mr. Warsh “thinks you have to lower” them.

Mr. Warsh told the Senate Banking Committee in April that Mr. Trump “never once asked me to commit to any particular interest-rate decision, period, and nor would I ever agree to do so if he had, but he never did.”

He didn’t sound very independent, though, when he refused to concede at the hearing that Mr. Trump lost the 2020 election, and when he declined to criticize Mr. Trump’s contested attempt to fire Fed board member Lisa Cook on spurious charges of mortgage fraud. Outgoing Fed chair Jerome Powell has criticized the case as an attempt to compromise Fed independence. In fact, he will remain a board member — the first time an outgoing chairman has done so since 1948 — indicating his own fears for Fed autonomy.

Read the rest (paywalled).

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So Ted Turner has died, prompting effusions of admiration of the sort folks seem to feel for a certain kind of star-spangled risk taker. From the NYT today:

“An Atlanta-based entrepreneur, Mr. Turner took astounding risks in business, often teetering on the edge of bankruptcy and then roaring back to multiply his fortune.”

But as Malcolm Gladwell explained in the New Yorker 16 years ago, Turner sometimes succeeded not by taking risk but by minimizing it. His legendary 1976 acquisition of the Atlanta Braves, for instance, for $10 million:

First, he didn’t pay ten million dollars. He talked the Braves into taking a million down, and the rest over eight or so years. Second, he didn’t end up paying the million down. Somewhat mysteriously, Turner reports that he found a million dollars on the team’s books—money the previous owners somehow didn’t realize they had—and so, he says, “I bought it using its own money, which was quite a trick.” He now owed nine million dollars. But Turner had already been paying the Braves six hundred thousand dollars a year for the rights to broadcast sixty of the team’s games. What the deal consisted of, then, was his paying an additional six hundred thousand dollars or so a year, for eight years: in return, he would get the rights to all a hundred and sixty-two of the team’s games, plus the team itself.

You and I might not have made that deal. But that’s not because Turner is a risk-taker and we are cowards. It’s because Turner is a cold-blooded bargainer who could find a million dollars in someone’s back pocket that the person didn’t know he had. Once you get past the more flamboyant aspects of Turner’s personal and sporting life, in fact, there is little evidence that he had any real appetite for risk at all.

Reality often trumps image, but image is always more fun.

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In case you still harbor doubts about what sort of mobster hit-job Donald Trump favors, two news items today should help clarify matters. The first involves former FBI Director and Trump bête noire James B. Comey, indicted today on charges of threatening the Dear Leader’s life. See for yourself:

The incontrovertible smoking gun:

But of course. Who wouldn’t read that as a lethal threat?

Just for the record, it’s not clear Comey understood the symbolism here, assuming there is any, or how posting the image threatens the Bronzed Sultan-Child. Even if Comey meant the post as a provocation, it’s not clear how it’s anything more than protected political speech. To say you wish Trump were dead is not the same as trying to kill him. There is a critical distinction between speech and conduct.

And if a threatening social-media post is grounds for prosecution, why don’t we start with the unhinged lunatic who threatened an entire country that it had better “Open the Fuckin’ Strait, you crazy bastards, or you’ll be living in Hell.”

Hit-job No. 2 was aimed at Disney, whose ABC broadcast licenses Trump’s attack-dog Federal Communications Commission has decided to review for improprieties related to its hiring policies. Specifically, reads the formal complaint:

The FCC has been investigating The Walt Disney Company, its American Broadcasting Company, and its subsidiaries … for possible violations of the Communications Act of 1934 and the FCC’s rules, including the agency’s prohibition on unlawful discrimination.

By an astounding coincidence, the complaint comes just as Trump and trophy wife No. 3 are demanding that ABC fire late-night thorn-in-the-side Jimmy Kimmel, who joked last week that she had the “glow” of an “expectant widow.” Saturday’s assassination attempt was conveniently timed to color the comment with an element of radical-liberal menace.

As with any other Trump-ordered prosecution, this one should not be taken at face value. It’s a ploy familiar to anyone who’s read the Trump lawfare playbook: File a frivolous suit that you know you’re bound to lose, because what counts is the implied warning to other Enemies of the People. Not incidentally, as the Times put it today, “the move all but guarantees months if not years of legal wrangling that would lock the network in an expensive, running war with the federal government.”

The FCC “has never before ordered such a sweeping review of a major television network’s licenses,” says the Times. It’s almost certainly overreaching. The threshold for license removal is high, requiring the government to show a persistent pattern of regulatory infractions. ABC would have ample leeway to challenge any penalty in the courts.

Anyone who thinks today’s attacks on Comey or ABC are good-faith efforts to enforce the law hasn’t been paying attention these past 10 years. This is not a normal government, to state the obvious. This is a gangster junta abetted by opportunistic hyenas — like FCC Chairman and culture-war pit-bull Brendan Carr — who’ll sacrifice any scruple and every principle on the alter of career advancement.

I can’t wait for the first Kimmel monologue after the courts send Carr packing. The jokes are already writing themselves.

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This article originally appeared in Canada’s Globe and Mail newspaper on April 23, 2026.

Bad actors have sought to manipulate markets since markets first emerged. We all know the tricks of the trade: insider trading, pump-and-dump schemes, front-running. For centuries, these were the chicaneries of mortal actors limited by the constraints of human ingenuity. Now they are the province of seemingly omniscient robots that may be impossible to restrain.

Does that spell the end of trust in equity markets?

It’s worth noting that malefactors abetted by technology smarter and faster than mere mortals have been manipulating markets for years. Rogue high-speed trading was blamed for the notorious “flash crash” of 2010. (The rogue was prosecuted and convicted.)

Among the fraudster’s favourite techniques are “pinging” and “spoofing.” The former is a type of front-running that involves submitting large volumes of small orders for a security, then cancelling them within nanoseconds, inducing other machines to react and reveal their trading intentions. That provides the pinger valuable counterparty information at scant risk, since the orders go unexecuted.

Spoofing uses artificial intelligence to place fraudulent orders that bait other AI systems to move prices to the benefit of the spoofer. Spoofing and pinging, though illegal in the United States and other countries, continue nonetheless.

While these techniques are old, combined with the relentless advance of AI, they and other illicit tactics pose a whole new level of risk. Think of AI as a cybercrime force multiplier.

Read the rest at the Globe and Mail (paywalled).

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This article was originally published on Canada’s Globe and Mail website today.

Has Donald Trump just revived the “TACO trade”? That’s one way to read the market’s response to the U.S. president’s latest reversal in Iran.

Astute investors have known for a year about the TACO trade, the phrase referencing the acronym for “Trump always chickens out.” The strategy involves buying securities that fall on an impulsive Trump initiative and profiting when he reverses course and prices rebound. Last year it was on-off tariffs; this year, shifting positions on Iran. (U.S. News and World Report has even suggested ways to profit if Mr. Trump retreats on tariffs.)

Mr. Trump’s Tuesday night decision not to wipe Iran off the face of the earth might prove the mother of all TACOs. Mr. Trump had vowed to terminate Iranian “civilization” by 8 p.m. ET if Tehran did not open the Strait of Hormuz. Two hours before the deadline he announced a two-week ceasefire.

Mr. Trump presented it as a win, saying Tehran had agreed to reopen the strait. But if you parse the words of Iran’s Foreign Minister, it seems that the waterway would be open only under the good graces of its military – Tehran could still choke the strait if it wanted.

All the same, oil prices plunged 15 per cent and stock futures soared more than 2 per cent on the news.

Analysis: The U.S.-Iran ceasefire, full of uncertainty, brings relief to both sides

That suggests the TACO trade is still viable, even though arguably it shouldn’t be. University of Massachusetts economics professor Arindrajit Dube wrote on X in January, “TACO undermines itself” as markets begin to anticipate reversals. Moves that once rattled investors may now provoke a muted response.

Mr. Dube argues that this creates a cycle: Markets price in reversals, reducing reactions to new announcements, which in turn may encourage more aggressive policy signals until markets begin to doubt a reversal and react more sharply. Over time, he suggests, this dynamic could contribute to larger market disruptions.

Mr. Dube’s observations about the self-negating quality of the TACO trade reflect something called the Lucas critique, after the late University of Chicago economist Robert Lucas, who posited that market actors change their behaviour as their expectations adapt to shifts in policy.

Read the rest at the Globe and Mail (paywalled).

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Headlines like this on the New York Times homepage make one ask oneself, like this guy, whether you’re stoned or hallucinating:

Thankfully, the absurdity of the Trump Time is less surreal when leavened with irony. Rolling Stone:

When Alex Jones and Tucker Carlson sound like voices of reason, you know something is way off the rails. From the Atlantic’s David Graham today on Trump’s threat to hit Ctrl + Alt + Delete on Iranian civilization if it doesn’t open the Strait of Hormuz by 8pm eastern time tonight:

Trump’s threats today were quickly denounced, not only by Democrats and progressives but also by some on the anti-war right. The conspiracy theorist Alex Jones declared that “Trump literally sounds like an unhinged super villain from a Marvel comic movie. This IS NOT WHAT WE VOTED FOR!!!” Tucker Carlson, another conspiracist voice who is one of the most influential MAGA media figures, said that officials should refuse to grant Trump access to nuclear weapons: “It’s time to say no, absolutely not, and say it directly to the president, no.”

I’ve written before about the hazards of putting amateurs and ignoramuses in charge of foreign policy, so will just reprise myself here:

U.S. foreign policy is increasingly hostage to a mind that is, as NPR’s Car Talk guys used to say, “unencumbered by the thought process.” That’s embarrassing, but it could also be lethal. If we’re not going to use nuclear weapons, Trump once argued, “then why are we making them?”

There’s a reason society requires the credentialing of people who make highly consequential decisions — lawyers through bar exams, doctors through board certifications and state licensing procedures. It’s the same reason airlines don’t put untrained pilots in the cockpit and pray that they’re quick learners; pilots pass rigorous tests of competence long before they start moving passengers. And yet the most critical job on earth has no test for measuring what other professions call “job knowledge.”

Presidents have made apocalyptic threats before, but with greater justification and less-juvenile language. Harry Truman to Japan just after Hiroshima:

We are now prepared to obliterate more rapidly and completely every productive enterprise the Japanese have above ground in any city. We shall destroy their docks, their factories, and their communications. Let there be no mistake; we shall completely destroy Japan’s power to make war…. If they do not now accept our terms they may expect a rain of ruin from the air, the like of which has never been seen on this earth.

John F. Kennedy to the Soviets during the 1962 Cuban missile crisis:

It shall be the policy of this Nation to regard any nuclear missile launched from Cuba against any nation in the Western Hemisphere as an attack by the Soviet Union on the United States, requiring a full retaliatory response upon the Soviet Union.

But these were informed, intelligent adults acting under circumstances they did not initiate out of mood and impulse, or to dog-wag their way out of a sex scandal, and they were informed by the best intelligence available. They were not ignorant narcissists surrounded by court flatterers who wouldn’t dare suggest to the Dear Leader that he doesn’t know what he’s doing, even when what he’s doing points in a straight line toward genocide.

With five hours remaining on Trump’s deadline, it’s hard to believe he won’t TACO once again. He is, at bottom, a coward and a clown, though a clown with WMD still has WMD. If he doesn’t cave, the military authorities who would erase Iran from the map have an obligation to refuse him. If that creates some sort of some Seven Days in May impasse, fine. It’s long past time to bring matters to a head, remove this gargoyle, send him and his craven enablers to some sort of tribunal, and put the whole sorry junta wherever you house international psychopaths.

It will be beyond criminal if the price of extirpating this orange pathogen from public life is an Iranian genocide or anything close, but this is what happens when populism-run-amok puts a know-nothing criminal in charge because he’s cathartic middle finger to elite libtards. As the clock counts down, let’s remember to give a malignant, star-spangled thank you to MAGA morons everywhere.

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The Trump junta doesn’t spend a lot of time examining its own hypocrisies and inconsistencies, which helps explain this one: Performative Pete Hegseth’s Department of Kill ‘Em All, Let God Sort ‘Em Out wants to criminalize reporters’ questions, while decriminalizing illegal acts committed by U.S. military personnel.

From the Guardian, March 20:

Pentagon Wants It to Be Illegal for Reporters to Ask “Unauthorized” Questions
The Trump admin wants to criminalize a key part of journalists doing their jobs — a broadside attack on a free press.

A federal judge has blocked key portions of the Pentagon’s press access policy, siding with the New York Times and ruling that the Trump administration’s controversial policy was unconstitutional.

The policy, which was introduced in October, prohibited journalists from soliciting information that the defense department didn’t directly provide, and revoked the credentials of any outlet that didn’t sign on.

From the Intercept, March 26:

In response, the Pentagon on Monday added some meaningless window dressing and essentially reissued the same restrictions. The administration pledged to “immediately” appeal the decision on the original policy, and on Tuesday, the Times filed a motion to compel the administration to comply with the judge’s order.

Most discussion of the Pentagon’s restrictions has focused on their conditions for reporters to receive press credentials, which the Pentagon says can be revoked if reporters publish “unauthorized” information. That policy is wildly unconstitutional on its own, and every mainstream outlet gave up their press passes rather than sign on, leaving war coverage inside the Pentagon to the likes of Turning Point USA’s Frontlines and MyPillow CEO Mike Lindell’s LindellTV streaming service.

But the Pentagon’s legal filings imply that reporters who don’t follow the rules risk more than their press passes. On March 12, the DOJ filed a brief to clarify its lawyers’ earlier comments in a discussion with [federal district Judge Paul Friedman] at a hearing of “whether asking a question was a criminal act.” The government argued that although journalists may lawfully ask questions of “authorized” Pentagon personnel, “a journalist does solicit the commission of a criminal act, and that solicitation is not protected by the First Amendment, when he or she solicits … non-public information from individuals who are legally obligated not to disclose that information.”

Recall that this is the same Heat-Packin’ Pete who wanted to prosecute Arizona Sen. and former Navy officer Mark Kelly — already guilty of being a Democrat — for seditious conspiracy after Kelly urged service members to refuse illegal orders. This should be a moot point. The Uniform Code of Military Justice not only allows but obligates service members to disobey illegal orders.

Kelly sued Hegseth in January, arguing that Hegseth had illegally tried to demote him in retaliation for criticizing the Trump junta. Demotion could slash Kelly’s retirement pay. U.S. District Judge Richard Leon agreed with Kelly and blocked Hegseth, who vowed to appeal. In February, a grand jury declined to return an indictment against Kelly and others facing the same spurious accusation.

What we’re seeing here is yet another MAGA mobster attempt to intimidate people and show that Hegseth, though actually Trump’s ventriloquist doll, runs the show and brooks no dissent. This is an old Trump tactic, learned at the feet of McCarthyite reptile Roy Cohn: If you want to scare your enemies or anyone who refuses to genuflect sufficiently, just throw a meritless lawsuit at them. It will fail, but your message will have gotten through, and that’s all that matters. You can always howl about radical-liberal judges afterward.

If anyone should be considered for criminal prosecution here, it’s Hegseth, as lawmakers of both parties suggested in November after he allegedly ordered a follow-up assault in September that killed survivors of a boat strike — itself of questionable legality — in international waters. His frat-bro gangsta threat to allow “no quarter, no mercy for our enemies” in Iran hints at future war crimes.

Trump would no doubt pardon the former Fox attack-dog for violations of U.S. law, but his pardon powers do not extend to international war crimes. Maybe this has something to do with Trump’s demand that the International Criminal Court effectively exempt himself and his servile consiglieri from prosecution.

Hegseth is expected to testify before the House Armed Services Committee on April 29. He better be studying that burn book.

A New York Moment

There’s something quintessentially Manhattan, and a little Hopper-esque, about the city’s traditional diners. (Photo by author.)

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This article originally appeared in Canada’s Globe and Mail newspaper on March 26, 2026.

Canada’s banks should pay close attention to what its counterparts are doing south of the border, where U.S. regulators are loosening the rules dictating how much capital banks must maintain as a cushion against shocks. It’s a move some see as a slippery slope to the next financial crisis, and one that could encourage Canada to take similar measures, in a kind of regulatory race-to-the-bottom.

The U.S. Federal Reserve provisionally approved a measure on March 19 that would ease capital-adequacy regulations tightened after the 2008 financial crisis in an effort to make Wall Street safe for capitalism. The proposed rules — put out for a standard 90-day comment period — would lower capital requirements for the biggest banks, for instance, by up to 4.8 per cent on average in dollar terms, freeing up about $40-billion in core capital for lending, dividends and share buybacks. The changes would be among the most significant liberalizations since the crisis.

But the specifics are less important than the change in direction. Recall that stricter capital rules were imposed after undercapitalized American financial institutions collapsed into the arms of taxpayers in 2007-09 when their reckless bets went south. Congress responded with the Dodd-Frank Act, which among other things raised mandated capital-to-asset ratios as a buffer against future shocks.

Some see the move toward lower ratios as a first step in the time-honoured American process of manufacturing financial crises, which goes something like: 1) easy credit, lax regulation and overpriced assets, 2) market crash and recession, 3) government bailouts, 4) a new round of prudential regulations. Closing the circle, once steps 2 to 4 are well down the memory hole, Wall Street has an easier time securing deregulations that loop back around to step 1.

Read the rest at the Globe and Mail (paywalled).

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Researchers recently discovered the minutes of a March 1945 press conference held by Reich Pressesprecherin Karoline Leavitt. An edited transcript:

Frau Leavitt, foreign and domestic news media report that Allied forces are closing in fast on Berlin from both east and west. Does the Führer have a plan for repelling them?
The Führer doesn’t need a plan, OK? Your momma is more of a threat than the so-called Allies.

Then how do you explain the bombs falling on Berlin?
Those are fake bombs, which you’d know if you’d get your head out of that failing shithole of a newspaper you work for.

I work for Der Stürmer
Yeah, I’m guessing the food section? Lose thirty pounds and move out of your mother’s basement.

There are reliable reports that the Reich is holding millions of political prisoners in Poland and elsewhere in what some are calling death camps. Is this true?
Did your woke editor tell you to ask that question? These camps have created thousands of jobs for our valued Jewish and Romani communities. Put that in your paper and smoke it.

Does the Führer regret his decision to invade Soviet Russia given the disastrous German defeat at Stalingrad?
I’ve never heard of Stalingrad.

Does the Führer have a plan of action should the Allies actually enter Berlin?
From which orifice did you pull that question?

There have been rumors that top Nazi officials are trying to negotiate peace with the Allies. Can you comment?
I can comment on that cheap-ass tie you’re wearing. Did you take it off a dead circus clown?

Has the Führer been in touch with Mussolini since his ouster from power?
I’ve never heard of Mussolini.

There are rumors that the Reich is developing an atomic bomb. What can you tell us about that?
Here’s what I can tell you: It looks like Helen Keller chose that outfit you’re wearing. Yeah, bitch, I said it.

There are reports that after the war some top German leaders could be charged with war crimes. Any thoughts?
I asked the Führer about that. His response was, and I quote, “Yeah, I got your war crime hangin’.” Would you like me to repeat that?

Propaganda Minister Goebbels has called Jews vermin who are destroying German culture. How is that not racist?
You say racist, I say Völkisch. Please stop the fake outrage and report on something that actually matters to the master race.

Have you thought about what you’ll do after the war?
Finally, a smart question. If you must know, I’m starting a PR firm with Dr. Goebbels.

Thank you all. If you have any further questions, there’s a waste basket by the restrooms.

A New York Moment
A public-service reminder that the orange gargoyle hasn’t ruined everything.

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