EconAir

September 16, 2026:     A Day in the Life of a Retired Finance Professor The Fed raises the Fed funds rate for the first time since 2023. This will raise most short-term interest rates, in response to a rising inflation rate. President Trump is not pleased. European countries are pulling central bank gold out of the Fed’s gold vault in New York. Gold is slowly replacing the dollar as a central bank reserve asset. (Personal note:  Many years ago I was in a small group given a tour of the NY Fed that included going into the Fed's gold vault. As we entered, the guide said "Don't even think about it.") Many countries are exploring and implementing ways not to use the dollar in international transactions. One method is to use central bank digital currencies to settle international trade payments instead of the dollar. Scott Bessent, the U.S. Secretary of the Treasury, announces a government buy-back of a small amount of U.S. 10-year Treasuries ($4-$6 billion) to lower long...

  Assumptions Economic theory starts with a set of assumptions about behavior.  The most basic is the assumption of rationality in the limited sense that individuals can calculate and compare the marginal costs and marginal benefits of decisions.  They then pick that decision that maximizes net benefit. Economists and psychologists have attacked this assumption.  Some have won Nobel Prizes in Economics. It is refuted by virtually everything that has been learned in cognitive psychology and neuroscience. Yet it remains the foundation of economic theory. This assumption is not even supported by one of economists’ favorite tool, game theory.  One famous experiment, the “ultimatum game,” demonstrates that moral considerations can overcome maximizing income. This outcome seems to hold for many different social groups and many different cultures. Profit Maximization Maybe the most defensible assumption is profit maximization.  While it is...

FROM:  The American Analysis Group of the Public Security Subcommittee of the Central Committee TO:  General Secretary Xi Jinping RE:  The Decline of the United States Thank you for the opportunity to continue our important work on behalf of the Central Committee. We are honored that you allow us to contribute to the defense of China against the arrogant pretensions of the United States. America is degenerating and weakening. It is ruled by a typical imperialist bully. He is the usual combination of ignorance, arrogance and a belief that military might is the only basis of power and influence. He insults and extorts allies. He forgets that global power is based on industrial might; he is doing everything to undermine America’s industrial predominance. We are in a battle of innovation, a battle for the world’s economic future. The example of England is relevant here – they stopped innovating and declining power followed. America is overextended. An expensive...

OVERVIEW: In the future, what will be the relationship between central governments of nation-states and large private companies including multinational corporations (MNCs)? Private companies mean privately-owned, including companies with widespread ownership and secondary markets for the company stock. Like with the English East India Company (EIC) in the past, there are new questions about the relationships between the multinational company and the home country, and between the multinational company and foreign countries. T o what extent do economic organizations and political institutions overlap or are mutually dependent? To what extent are corporations, especially multinational corporations (MNCs), assuming political functions because of the failures of nation-states? INTRODUCTION The following comments are speculative. This is a possible scenario, not a forecast. It depends on assumptions about the future political organization of the world and the future possible power of multina...