Economic Analysis

A Big Swirling Italian Mess

Thoughts from the Frontline

December 2, 2016

“Move to Italy. They know about living in debt: They don’t care.”

– John Lydon

“Italians were eating with a knife and fork when the French were still eating each other.”

– Mario Batali

Do Larger Federal Budget Deficits Stimulate Spending? Depends on Where the Funding Comes From

Outside the Box

November 30, 2016

In the true spirit of stepping outside the box, today’s OTB is a counterintuitive argument against the concept that fiscal deficits and/or infrastructure spending constitute effective economic stimulus. It comes from Paul Kasriel, who was one of my favorite reads when he was at Northern Trust, and I am glad he continues to write in “retirement.” He always has a way of looking at things from different angles than everybody else does.

Paul is a self-confessed reformed Keynesian. He likens his...

What Should Trump Do?—Your Questions Answered

Thoughts from the Frontline

November 27, 2016

This will be a shorter letter, in keeping with the need for holiday fun and relaxation. However, last week’s letter with my thoughts on what Trump should do generated more responses than any other letter had in the last 17 years. As you might suspect, with a topic so controversial, not everyone agreed with me. But there were many good questions and comments and some thoughtful disagreements, so I want to address a few of those. And I will specifically go into why I seemingly deviate from core...

Federal Reserve Meeting Minutes: Stronger than Oak

Outside the Box

November 23, 2016

Today, for your pre-Thanksgiving delectation, I have for you an Outside the Box with deep roots in my West Texas homeland. It comes from fellow Texan Danielle DiMartino Booth, who has graced these pages more than once this year. You’ll recall that she was a key advisor on monetary policy to Dallas Fed President Richard Fisher until his retirement last year, whereupon Danielle struck out on her own (and landed here). She has a book coming out early next year, called Fed Up: An Insider’s Take on...

What Should Trump Do?

Thoughts from the Frontline

November 20, 2016

“The problems of victory are more agreeable than those of defeat, but they are no less difficult.”
– Winston Churchill

“Crying is all right in its way while it lasts. But you have to stop sooner or later, and then you still have to decide what to do.”
–  C.S. Lewis, The Silver Chair

“I must have a prodigious amount of mind; it takes me as much as a week, sometimes, to make it up!”
– Mark Twain

Reversal Rates Are the Next Big Challenge for Central Banks


November 18, 2016

Hoisington Interim Update and Comment

Outside the Box

November 16, 2016

Time flies. It seems like only hours ago that I was sending you the Jeffrey Tucker “This Could Be Our 1989” article on Sunday. Now it’s Wednesday and I’m still plugging away on the detailed post-election analysis I promised you. Many of you are eager to read it, too, and said so in comments you sent. I’m finding that the story is full of nuances that I must explain in depth, lest someone misunderstand me.

I want my thoughts to be very clear, so I’m going to take another day to wrap up....

This Could Be Our 1989

Thoughts from the Frontline

November 13, 2016

I think many of my readers are in the same boat I’m in: we are still sorting out the implications of last Tuesday’s election. My style is generally not to shoot from the hip but to think about things before I start to write. When I have adopted the “ready–fire–aim” style of writing, I have usually found myself going back and asking, “What was I thinking?” And the answer is that I wasn’t doing enough thinking.

The Day After

Outside the Box

November 9, 2016

We had a very late night in the Mauldin household, as I’m sure many of you did. I truly was unsure what to expect from this election, and I was as surprised as anyone when the Trump victory started taking shape. At our election party there were many of my neighbors who were ardent Hillary supporters, and they were shocked, as was much of the national media.

The real losers? Polling companies and those who create models built around them. It turns out that when you really need a poll to work,...

The Election: Making Difficult Choices

Thoughts from the Frontline

November 6, 2016

I have a letter halfway done on economic/investment themes, but I’m putting it aside. For over 16 years I have written each week about what has interested me and what I have thought important. And frankly, what is really on my mind is the same thing that is likely on your mind, and that is Tuesday’s election results. So I am going to write a shorter letter on my thoughts on the election, trying to put an economic spin on the political process (since economics is the beat of this letter, not...