Cannabis use has increased as more states have legalized it for adults. That should surprise no one. When a widely used substance moves from an illicit market to a legal one, some who previously abstained will try it, some occasional users will use it more often and people will be more willing to admit they use it.

Yet these recent patterns don’t tell us what cannabis use will look like going forward.

History should make us cautious about extrapolating from the early years of legalization. When Americans repealed Prohibition in 1933, alcohol consumption did not immediately settle into the pattern we recognize today. Consumption rose substantially over the following decades, eventually peaked around 1981 and then declined for more than a decade. Today, the share of Americans who report drinking alcohol is at its lowest level since Gallup began tracking it in 1939.

Along the way, Americans learned to live with legal alcohol. Knowledge, customs, and social norms evolved around its responsible use. We learned to distinguish drinking from drunkenness. We came to strongly disapprove of drinking and driving and of drinking on the job. People learned to recognize their own limits, and friends and families learned to recognize when someone’s drinking was becoming a problem.

None of those norms required us to conclude that, because alcohol can cause addiction, disease, accidents and death, we should prohibit adults from drinking it.

Cannabis may be undergoing a similar period of adjustment.

As cannabis use becomes normalized, consumers can learn more about dosing, potency, frequency, impairment and their individual responses to the drug. Social norms around responsible use can develop as people gain experience with a substance that, for most of the past century, public policy treated simply as something no one should use.

There is already some evidence supporting that possibility.

Canada legalized cannabis nationwide in 2018, providing researchers with an unusually useful natural experiment. A prospective study followed 1,428 Ontario adults from immediately before legalization through five years afterward. Overall, cannabis use frequency increased slightly, yet measures of cannabis misuse decreased slightly. Even more interesting, people who used cannabis frequently before legalization showed the largest decreases in both cannabis use and misuse.

That doesn’t prove legalization caused those reductions. The researchers themselves caution that factors such as people aging out of problematic patterns of use may partly explain the findings. But the Canadian experience should at least caution us against assuming that an initial increase in use inevitably leads to ever-increasing problematic use.

Cannabis is not harmless. Frequent use can be problematic for some people. High-potency products warrant particular attention, as do the risks to adolescents and to people predisposed to psychotic disorders. We should educate people honestly about those risks and discourage them from driving or operating dangerous machinery while impaired by cannabis.

But acknowledging those risks does not justify banning adults from using cannabis.

Prohibition carries risks of its own. It pushes consumers toward illicit markets, where products may have uncertain potency and contents. It exposes otherwise peaceful people to arrest and criminal penalties. And by reducing an enormously complicated subject to “don’t use drugs,” prohibition can impede the development of the knowledge and social norms that help people make safer choices.

We should judge legalization against the real-world alternative of prohibition, with its illicit markets, criminal penalties and unreliable product information.

The latest findings about cannabis use should inform consumers, physicians and policymakers. Researchers should continue monitoring cannabis use patterns and identify which patterns of use and which products carry the greatest risks. Public health officials can provide adults with accurate information without exaggerating risks in hopes of frightening them away from using cannabis. Laws should prohibit sales to minors and driving while impaired.

Adults routinely make choices that involve risk. Some drink alcohol, some smoke tobacco and some participate in dangerous sports. Respecting their autonomy doesn’t require pretending those choices are harmless. It requires providing them with good information and allowing them to weigh the risks and benefits for themselves.

We should treat cannabis the same way.

A free society should be capable of learning to live with potentially risky substances without the government banning them.

In recent years, self-styled socialists or ultra-progressive candidates have notched multiple high-profile election victories. Zohran Mamdani, the mayor of New York City, is of course the most prominent. He’s an official member of the Democratic Socialists of America (DSA), and since taking office, he has pushed for government-owned grocery stores, universal government-funded child care, government-funded public transit and a favorite failed policy of New York City: rent control.

Katie Wilson, now the mayor of Seattle, campaigned on government-owned housing, aggressive new taxation policies and for “much more land and wealth to be owned and stewarded by communities instead of corporations.” If she looked, I think she’d find that corporations are collections of people, just like communities.

Melat Kiros, a DSA-backed socialist, beat incumbent U.S. Rep. Diana DeGette in the Democratic primary for Colorado’s 1st Congressional District. Donavan McKinney, also DSA-supported, unseated congressional incumbent Rep. Shri Thanedar in the Democratic primary. Ultra-progressive Peggy Flanagan defeated moderate Rep. Angie Craig in Minnesota’s Democratic primary for U.S. Senate. And three New York candidates endorsed by Mamdani triumphed over establishment Democrats in New York primaries.

And so on, and so forth.

A recent poll by CNBC found that “46 percent of Americans between the ages of 18 and 34 now hold either a ‘favorable’ or a ‘very favorable’ view of Democratic Socialism.” Research by the Cato Institute (where I’m a legal fellow) produced similar findings: Gen Z is more supportive of socialism (53%) than capitalism (45%). The Washington Post reported that “three in four Democrats say they would be open to supporting a democratic socialist for president.”

But socialism’s success in Arizona is mixed.

In May, Tempe voters elected Bobby Nichols, a Democratic Socialist, to City Council, making him the first openly socialist candidate elected in Arizona. Like many socialists, Nichols has seemingly never worked for a private, for-profit employer (in fairness, he only recently graduated from Golden Gate University School of Law). But equipped with endorsements from Mamdani and U.S. Sen. Bernie Sanders, he proudly announced that he “was elected as a Democratic Socialist [and] will govern as a Democratic Socialist.”

Down in Tucson, Miranda Schubert has served on City Council since getting elected in November 2025. She’s less outspoken than Nichols about socialism, but she, like Nichols and Mamdani, is a member of the DSA. Her policy agenda mixes the sensible (“safer streets for all”) with the socialist (“housing is a human right”).

Perhaps most significantly, the state legislature is on track to welcome its first socialist member in January 2027 after 31-year-old Miranda Lopez beat incumbent state legislator Stephanie Stahl Hamilton in the July Democratic primary. Lopez has also never worked for a private, for-profit employer (she calls capitalism an “oppressive system”). But she is currently “#OpenToWork” on LinkedIn, so perhaps that will change. In the meantime, I guess it’s just other people’s taxes that will fund her socialist dreams.

So yes, socialism has had its victories in Arizona. But it’s also had its losses.

Kai Newkirk, an insurgent community organizer whose professional highlight is being “arrested over 25 times,” challenged Rep. Greg Stanton in the Democratic primary for Congressional District 4. Newkirk criticized Stanton for being a “corporate Democrat” and for supporting Israel in its war against Hamas. Newkirk also thought Stanton erred by not supporting Medicare for all and the abolition of ICE.

Stanton won, 68.1% to 31.9%.

In the state legislature, incumbent bipartisan dealmaker Alma Hernandez defeated socialism in the guise of former Tucson city councilman Roque Perez. Perez embraced a wide range of socialist-friendly policies, but he also had to run from his history of violent, sexually explicit and antisemitic social media posts.

Perhaps the best indicator of socialism’s limited foothold in Arizona is Gov. Katie Hobbs. Hobbs is a liberal, yes. She’s pro-choice; she supports the expansion of government-funded health care, and she has the endorsement of the labor unions and the teachers union (Arizona Education Association).

But she’s no socialist. Far from it. The website listing her “key accomplishments” begins with job growth, manufacturing and tax cuts. Next up is “lowering the cost of housing,” which includes “cutting red tape and lowering costs” ― hardly the language of a socialist. Third on the list is “keeping Arizona families safe and secure” by “combatting violent crime,” “cracking down on drug traffickers” and “securing the border and keeping communities safe.”

If you listen to Hobbs on the radio or local television, she usually talks about foreign direct investment in manufacturing, training for skilled jobs, tax cuts and business loans. Some of her critics complain that she can’t take full credit for these successes. But the point is that, unlike Mamdani and Wilson, Hobbs isn’t publicly fantasizing about overthrowing the proletariat and seizing the means of production. Or, more prosaically, she’s not talking about raising taxes or government-owned grocery stores.

Want further proof that Hobbs isn’t plotting the progressive revolution? She just chose former Mesa mayor John Giles as her lieutenant governor. Giles is a longtime Republican turned Independent. He’s male, white, Mormon, mild-mannered, heterosexual, married 43 years, and he has five kids and 10 grandkids ― hardly the profile of a leftist revolutionary.

While mayor of Mesa, Giles mostly crowed about the growth of Mesa’s downtown, new businesses and new restaurants in the city and expanded educational partnerships with Arizona State University and Mesa Community College. His 2024 campaign website bragged that Mesa “continually balances the budget and has no primary property tax” and “Mayor Giles has attracted new companies to Mesa and created thousands of jobs… without increasing taxes or utility rates.” This sounds a lot more like Doug Ducey than it does Karl Marx.

And despite changing his partisan affiliation, Giles insists that he largely hasn’t changed his policy preferences. He recently told KTAR radio, “I continue to identify with a lot of the principles that the Republican Party says it identifies with.” This is the person Gov. Hobbs chose as her running mate.

So is socialism on the rise in America? Yes. Definitely. But in Arizona, it has a long way to go, even within the Democratic Party. And the socialist revolution certainly isn’t going to happen in a Hobbs-Giles administration.

When we recently returned to that spot around our 10th wedding anniversary, we joked with our children that if they attended the same college, perhaps they’d meet their future spouses in that very building, too. Part of me hopes they do. It would make for a cute family story across generations.

But statistically, I know they’re far more likely to one day find love with the help of an online matchmaker. That doesn’t make me sad. I think of the couples I know who met online. They were brought together by an algorithm, yet their marriages are no less happy, and their children are no less loved because of it.

Some, however, lament this new mode of family formation. Others contend, more despairingly, that humanity is about to “scroll its way out of existence,” believing that smartphones are a drag on fertility. Are these devices replacing in-person interaction, romantic relationships and children?

Most Couples Meet Online
The available research suggests smartphones have become the most common way couples meet, which makes them one of the most powerful matchmaking technologies ever built.

According to research from Stanford University, in 2021 more than 50% of new U.S. couples met online, a category that includes meeting through digital forums, social media and dating apps.

That may actually understate the role of technology as an effective matchmaker. The Stanford data also appear to show a post-2010 rise in couples first meeting in “bars and restaurants,” but according to the researchers, that “is due entirely to couples who met online and subsequently had a first in-person meeting at a bar or restaurant.”

A 2024 survey of nearly 8,000 newly engaged couples similarly found dating apps were the single most common way they met, ahead of every offline route. That survey, from The Knot, an online wedding services platform, found couples first connected through a variety of different dating apps including Hinge, Tinder, Bumble, OkCupid, Match, Plenty of Fish and eHarmony.

Technology has long been blamed for inadvertently hindering family formation. Recent research from Northwestern University suggests the typewriter may have lowered birth rates by bringing more women into the workforce. Yet the same research also suggests the typewriter led to many “office romance” marriages — and, presumably, many children.

Today, technology continues to bring couples together. Smartphones are increasingly accused of fueling the global decline in fertility, but the evidence that smartphones reduce fertility is weaker than many think. For example, some economists point out that most of Italy’s fertility decline preceded smartphone adoption.

Studies on average marital satisfaction between couples who met online and offline show mixed results, but some research suggests slightly higher marital satisfaction among the former as well as slightly less separation and divorce. Digital introductions can lead to lasting partnerships, and divorce rates are at their lowest point in half a century. That trend is driven by highly committed married millennials, many of whom met their spouse online.

Although dating apps and other online mechanisms are the leading way couples first connect, there is still significant room for improvement. Rates of couple formation (and, consequently, fertility) declined across many countries, even though most single young adults say they are aspiring toward marriage.

Some would blame the phones. Yet, some data shows a decline in teen dating that predates smartphones, starting in the early 1990s. And research suggests the widespread adoption of online dating between 2008 and 2021 had remarkably little effect on individuals’ romantic preferences or selectivity — that is, their pickiness — to the researchers’ surprise. Nonetheless, many singles still struggle to meet the right person.

Traditional matchmakers are expensive, but AI holds the promise of dramatically lowering the cost and democratizing access to high-quality, personalized matchmaking as well as enhancing matchmaking through higher success rates.

The race is already on to harness AI to improve digital courtship. For example, the company Keeper AI bills itself as “AI-assisted matchmaking for serious, long-term relationships” and claims that with their app, “1 in 10 first dates lead to marriage.” Other new AI-powered dating platforms include Known and Overtone.

Older dating apps also aim to improve their effectiveness with AI. Earlier this year, Bumble introduced an AI-powered profile guidance feature providing users with feedback on their bios, and plans to entirely replace swiping with AI-based matchmaking later this year in select markets. Meta similarly says its AI assistant for Facebook Dating helps users optimize their profiles and highlight their best qualities to appeal to potential matches.

Smartphones and dating apps are frequently criticized for undermining traditional courtship and contributing to declining fertility. Yet if they were to suddenly disappear, couple formation would likely suffer, given that most couples now first meet online. Smartphones, perhaps paradoxically, act as vital family-formation infrastructure in the modern world.

Most prominently, India’s blocking the adoption of Investment Facilitation for Development Agreement (IFDA), a plurilateral agreement among 131 WTO members, including 94 developing countries. Now that Turkiye and South Africa have withdrawn their opposition, India stands alone in preventing the agreement from becoming part of the WTO rulebook.

Under a plurilateral agreement, some, but not all, of the member countries can agree to improvements while permitting the rest of the members to accept the new rules and obligations later when and if they choose to do so. India refuses to join other WTO members in a consensus to add new plurilateral agreements to the WTO rulebook.

What is the price the world — especially the developing world — is paying for India’s continued intransigence against IFDA? Last month, Unctad released its annual World Investment Report 2026. The good news is that, after 2 yrs of decline, FDI investment increased 6% in 2025 to $1.6 tn.

The worrying news is that while FDI flows rose by 11% to developed countries, they rose by only 2% to developing countries. Least-developed and lower-middle-income countries received only 10% of global greenfield project investments. Many of these countries in dire need of much more FDI are parties to IFDA.

Why is India blocking this agreement? So far as anyone can tell, it has no significant substantive opposition to IFDA. The agreement doesn’t include provisions on market access, investment protection or investor-dispute settlement. It is, after all, mainly about cutting red tape that impedes FDI.

On that front, India’s record is commendable. Domestically, India has eliminated a lot of investment red tape. Instead, Indian opposition to IFDA is predicated on its professed apprehension that adding more plurilateral agreements to the WTO treaty will ultimately fragment the WTO-based trading system.

But there are several plurilateral agreements in the WTO rulebook. And such fragmentation need not happen if, as usually happens, more members add their signatures over time to the existing plurilateral agreements. In other words, these agreements can be building blocks for multilateral agreements. Indeed, several plurilateral trade agreements that preceded establishment of WTO in 1995 — on dumping, subsidies, standards and more — were transformed into fully multilateral agreements in the WTO treaty.

India sees itself as a champion of the world’s poorer countries. It shouldn’t stand in the way of their economic progress by blocking adoption of a WTO agreement that would provide those countries with more FDI.

India’s insistence that new WTO rules must begin with full-blown multilateralism is not preserving the trading system. Indeed, it is having the ironic effect of making WTO less central to the global economy. Its outright refusal to endorse plurilateral approaches to dealing with new trade issues in WTO is forcing other member countries to look for trade solutions outside WTO, creating the very fragmentation in trade that India fears.

Meanwhile, FDI to developing countries is slower than it ought to be. With its long history of fighting poverty at home and elsewhere in the world, India should be helping lead the way toward encouraging more FDI in poorer countries by removing needless obstacles to it. It should not be adding to those obstacles through a misguided policy of intransigence against much-needed new global investment rules that will help reduce poverty worldwide.

While it is true that a college education generally pays off for the typical student, there are a few problems with this view. The biggest, and most obvious, problem to note is that there are many predictable cases in which college is not worth it from a financial perspective. A famous example is Harvard’s certificate program in theater, which failed an Obama-era debt-to-earnings measure because it left graduates with excessive debt ($78,000) relative to earnings ($36,000).

Perhaps more important, however, is that the value of a college education is often overstated. A recent analysis from the Institute for Higher Education Policy (IHEP), which sought to determine the economic contribution of four-year public colleges, provides a representative example of this mistake.

The IHEP formula estimates the net benefit of a college education as the higher wages of college graduates after accounting for the net cost of college paid by students. The headline value is determined by the annual earnings of college graduates ($62,300) minus the earnings of high school graduates ($35,700) and the net cost of college ($13,000). It then multiplies the resulting figure by 10.3 million college graduates.

The resulting figure is $140 billion. Therefore, the analysis concludes, the implication is that public four-year colleges provide a net benefit of $140 billion to the economy.

While IHEP’s general approach to calculating the economic benefit of college education is sound, its analysis systematically overstates benefits, understates costs, and makes several other unorthodox choices that render its estimate unreliable. There are, by my count, at least three big problems with the analysis.

First, the analysis estimates college costs as the student’s cost of attendance minus grant aid but ignores two huge categories of costs. One is the costs paid by taxpayers instead of students. Across all types of colleges, the federal government provides around $4,000 in grants, work-study, tax benefits, and loan subsidies per student. Meanwhile, state and local governments provide around $12,000 per student at public colleges. The IHEP analysis should have taken both figures and adjusted them to separate out the spending for bachelor’s degree students at four-year public colleges. Instead, it simply ignored them.

The second type of costs missing from the IHEP analysis are the student’s opportunity costs. If a student didn’t go to college, they could have been working and earning wages. These forgone wages should be counted as an (implicit) cost of college. Ignoring both these college costs means that the IHEP analysis substantially underestimates the costs of college.

Second, the benefits of college attendance are overstated. The key benefit in the analysis is the higher wages that college graduates earn relative to high school graduates. The IHEP analysis finds this value by taking the median wage of college graduates and subtracting the median wage of high school graduates. While this difference might be fine as a rough proxy for the potential financial benefits of going to college, it isn’t clear that colleges cause these benefits.

Students are not randomly assigned to college or no college, and indeed college graduates tend to be more intelligent, more diligent, and more conformist than nongraduates. All of those tendencies are valued by employers, so the typical college graduate would earn more than the typical non-graduate even if they never attended college. The part of the earnings premium due to these underlying differences in the college-educated population is often called the signaling effect. There is considerable debate over how much of the difference in wages is due to signaling: some argue that signaling’s share is small (30%) and some contend it is on the larger side (80%). The IHEP method takes the rather extreme position of assuming that signaling accounts for no part of the earnings premium.

Finally, college dropouts are ignored. The IHEP analysis splits the population into two categories: college graduates, who earn more but pay some costs to attend college, and non-college graduates, who don’t get the higher wages from attending college but also don’t pay the costs of attending college. But there is a third category, college dropouts, who don’t get the (full) benefit from attending college but do pay (some of) the costs. The costs paid by these students (and taxpayers) should be included in the cost of college tab, as should any benefits (those with some college tend to earn more than those that never attended, though again, part of this is likely due to signaling). Ignoring college dropouts understates the costs of college.

A few smaller issues compound these problems: aggregate figures should multiply average, not median values, and the methodology document indicates that college costs are added rather than subtracted. These are minor issues, but they add up. Between overstated benefits and understated costs, the $140 billion figure isn’t a real estimate of college’s benefit to the economy. But it is, unfortunately, a number that will be repeated often in the debate over higher education.

The Trump administration has definitely noticed this reversal, recently trumpeting the Institute for Supply Management’s (ISM) latest manufacturing purchasing managers index (PMI), which, in their words, showed that “U.S. manufacturing activity surged in July at the strongest rate in more than four years — driven by soaring demand, record production, and a wave of new hiring.” Now, the vice president is gloating, White House trade adviser Peter Navarro is calling it a “robust tariff- and tax cut-induced renaissance,” and prominent protectionists are snarkily citing the PMI as proof anti-tariff “think tankers, economists, and columnists” don’t know what they’re (ahem, we’re) talking about.

The new narrative from the pro-tariff crowd—which rarely differentiates correlation from causation—is that the ongoing manufacturing upswing is a clear Trump trade policy success story.

Yet there are several reasons to doubt that spin. The U.S. manufacturing sector’s recent growth is real but has been exaggerated in recent surveys. More importantly, the hard data we now have show that the nation’s industrial upswing is being driven by non-tariff forces—ones that have more than offset a clear tariff headwind. In fact, American factories would likely be doing even better without the tariffs, an inconvenient reality that brand new research confirms. Let’s dig in.

Debunking the narrative that protectionism is working.

Sentiment isn’t output, and it started in a deep hole.

The first problem with the protectionists’ spin is wonky but important: Much of the recent tariff triumphalism rests on PMI surveys that are useful for gauging short-term industry sentiment and forecasting future trends but can misrepresent what’s happening nationwide and over the long term. As economist Dave Hebert just detailed, the PMI records the share of purchasing managers in various U.S. manufacturing industries who report an increase, decrease, or no change in their orders, employment, prices, and other categories of business activity. The index documents only the direction of the change, not its magnitude. Thus, Hebert explains, a big company like Ford could lay off 1,000 workers while two other small automotive firms each hire five, and the index would read 66.7, signaling a robust “expansion” even though actual employment fell by 990.

The PMI’s reporting of rising inventories and slower deliveries (which can signal backlogs caused by high demand) can also be misleading: Both are treated as unambiguously positive developments by the ISM even though in the real world they could signal deteriorating external factors (e.g., Iran-related stockpiling and supply chain bottlenecks). Thus, part of the PMI’s recent “strength” probably reflects costly frictions created by the Iran conflict and tariffs—frictions not worth crowing about.

The other issue with the PMI surveys is that, as Bloomberg’s Shawn Donnan just explained, they track only “how purchasing managers feel about this month versus the one before,” meaning that “if this month is marginally better than a lousy one before it, the index points up.” In January, I highlighted 2025’s long string of contractionary PMI readings because they continued the “lousy” situation from previous months—persistently pessimistic manufacturing sentiment that directly countered the administration’s promises of a tariff-driven boom. That sentiment has now changed, but—as Donnan notes—“what the ISM is really showing so far this year is a short-term bounce in sentiment from low levels.” Put another way, it’s a few steps up after dozens of steps down.

Finally, the manufacturing surveys report a broadly negative view of tariffs. The ISM PMI’s latest prices paid index, for example, shows that “raw materials prices increased for the 22nd straight month” thanks to tariffs and Iran, while many tariffed materials (especially metals) are persistently in short supply. Meanwhile, the commentary accompanying the PMI reports—actual statements from people working at surveyed U.S. manufacturers—has consistently painted tariffs as a headwind, not a tailwind. As The Economist reported in March:

The most recent ISM reports continue this trend and are echoed by other surveys. As I noted in Bloomberg a few weeks ago, for example, the National Association of Manufacturers has consistently found that trade-related uncertainty was members’ top challenge since early 2025 (only edged out now by Iran). American manufacturers’ message on tariffs is clear: They’re a problem to be managed, not a solution.

The claims ignore powerful non-tariff forces driving the recent improvement.

Despite these problems, real-world data do show an uptick in the U.S. manufacturing sector, especially in 2026. According to the Federal Reserve’s industrial production index, domestic manufacturing output has been on a decent run since Trump took office, outside of that multimonth dip in the second half of last year.

That’s good news for the sector, but there’s little reason to think it’s owed to Trump’s tariffs. More likely, the growth is happening despite them.

For starters, three powerful factors coincided with the 2025–26 tariffs and are the most likely drivers of U.S. factory output. On the supply side, the One Big Beautiful Bill Act restored and made permanent provisions that allow U.S. businesses to immediately deduct spending on equipment, machinery, and research and development (R&D), and the law temporarily allowed U.S. manufacturers to do the same for spending on structures, effective January 2026. As the Tax Foundation explains at the link above, research shows that cutting the after-tax cost of these business inputs boosts investment and growth, and they estimate that the OBBBA’s permanent expensing provisions will boost long-run GDP by a significant amount (0.7 percent). As I and others have explained for years now, these neutral, free-market reforms are particularly beneficial for large, capital-intensive manufacturers, and their timing aligns with the current U.S. manufacturing acceleration. (The temporary expensing provisions might induce a sugar high but won’t affect long-run growth; they should instead be made permanent.) The White House, for what it’s worth, seems to agree: Its official press release credits business tax cuts, not tariffs, for the current manufacturing “boom.”

On the demand side, the U.S. artificial intelligence buildout—now totaling trillions of dollars in new spending that dwarfs previous U.S. infrastructure booms—has become a big and direct source of orders for American manufacturers that equip both the stuff needed to build a data center (bulldozers, trucks, structural steel, etc.) and what goes inside them (electrical equipment, server racks, semiconductors, etc.) To grok the mind-boggling scale of this demand, consider an April report that GE Vernova’s electrification unit “sold more grid equipment, including substations and transformers, to data center customers in the first quarter than all of last year.” They’re certainly not alone.

Third, the Iran war has both boosted domestic output (and prices) of energy and energy-related goods and set off a short-term stockpiling rush among companies looking to get ahead of possible supply crunches later this year. The latter trend, Bloomberg reports, was what drove a significant manufacturing expansion in the spring. Unlike tax reform and (maybe?) AI, this is a short-term sugar high—extra purchases now mean fewer purchases later—but still important to acknowledge in any honest assessment of the current state of U.S. manufacturing. Tariff champions rarely do.

Look under the hood, and the data also rebut the pro-tariff spin.

The hard data paint an even starker picture. For one thing, the recent growth has been historically modest: The Fed’s manufacturing index in July 2026 was 99.3—just a hair above where it was in February 2020 and around 2.5 percent below mid-2018, when Trump’s first tariffs really got rolling. The pace of the current expansion also isn’t stellar: Output is up roughly 1.3 points over the last 12 months, against a 2001–2019 median of 1.4. This recovery is fine and good, but it’s hardly a renaissance.

A deeper dive creates even bigger problems for the pro-tariff case. Most basically, the manufacturing sector’s rebound—and the growth of the industries driving that rebound—began months before Trump’s new tariffs took effect in March 2025:

(Several other industries not shown here are still shrinking—more on that in sec.) Given these trends and similar ones for manufacturing productivity, the 2025–26 “boom” is less a “Trump phenomenon” than it is the continuation of a rebound that began months earlier, likely owed to the AI buildout and the business cycle.

The next hit to the tariff success story comes from import volumes over the recent “boom” period. In a protectionist framework, imports and domestic production are substitutes: Restrict the former with tariffs or other measures, and the latter zooms ahead. Yet this is decidedly not the case for goods imports overall and for industries doing the heavy lifting in the Fed’s manufacturing data. Most importantly, data from the Bureau of Economic Analysis show that real imports of capital goods, excluding autos, were up 39 percent between the fourth quarter of 2024 and the second quarter of 2026—the largest sustained import increase outside the post-pandemic rebound and one that coincided with a major increase in domestic production of similar goods:

Oddly, the White House press release and Council of Economic Advisers Chair Kevin Hassett acknowledge this trend, boasting that the “historic peak” in capital goods imports is evidence of a major U.S. factory expansion. The more likely culprit, however, is the AI buildout: booming domestic production of data-center inputs alongside booming imports of the same (especially from Mexico), thanks to a generational demand shock—not tariffs knocking out foreign competition and encouraging new factories.

Indeed, the hard data show that U.S. tariffs and manufacturing performance have actually run in opposite directions since Trump took office. Using the U.S. International Trade Commission DataWeb, we can calculate the tariffs collected on goods falling into the Fed’s industry groups over the last few years and thus the actual level of protection those industries have been getting. The pattern we see is definitely not what a pro-tariff story would predict.

First, the top two U.S. industries powering most of the recent U.S. manufacturing expansion—computers/electronics and aerospace—are the ones facing the lowest (and declining!) tariff protection, while the industries enjoying the highest levels of protection are contributing little or even shrinking outright:

The trend in production capacity is even worse for the pro-tariff case, with lightly protected industries expanding and highly protected ones contracting.

Even an apparent tariff winner—the moderately protected U.S. automotive industry–is less than it seems. Yes, motor vehicles and parts output have expanded since 2024, but overall production capacity (see above) and fixed investment are basically flat, while jobs are down—trends possibly reflecting the U.S. industry’s cannibalistic business model and automakers’ cutthroat lobbying (against each other!). Even more damning, however, is the fact that domestic automakers enjoyed a huge tariff-related subsidy—the Section 232 import adjustment offset—that let companies assembling vehicles here claim a credit (3.75 percent of the cars’ MSRP) to offset duties paid on imported parts through 2030. Given that this credit’s potential size was actually larger last year than all duties assessed on imported car parts, the industry’s modest growth may be owed to the simple fact that politically powerful U.S. automakers won a tariff exemption as large as their tariff bill. (And now they get big tariff refunds too.) The charts above won’t reflect the tariff credit. Include it, and the “pro-tariff automotive story” gets even weaker.

Finally, there’s the timing of the manufacturing sector’s 2026 acceleration. The effective duty rate on all manufactured imports peaked last October at 12.1 percent, and output stagnated. Following the Supreme Court’s February ruling against Trump’s “emergency” tariffs, however, the effective rate fell below 8 percent and has hovered there ever since. And as the average tariff rate fell (and trade policy uncertainty waned), manufacturing output zoomed ahead:

Correlation isn’t causation, of course, and I’d wager that the recent surge has more to do with AI, tax reform, and Iran than with declining tariffs. But it’s still no less true that the manufacturing “boom” protectionists now celebrate arrived as the President’s signature tariffs—and, importantly, his power to chaotically impose them—waned.

The standard response to these and other figures would doubtless be that tariff-fueled investments take time to show up in the Fed’s output and capacity figures. That’s true (and one reason why I won’t yet claim total vindication), but it runs into another real-world data problem: Future manufacturing growth needs new factories, yet real private spending on manufacturing structures is down substantially since its 2024 peak. (The White House’s notes on factory construction jobs, meanwhile, are simply bogus.)

Tariffs supposedly work by changing the return on domestic investment versus importing, and new investment would show up in the construction and capacity figures. Neither is telling an optimistic tariff story so far, despite some flashy (and isolated) headlines about promised factory spending.

Summing it all up.

Unlike the politicians and pundits, I’m not declaring victory today because it’s still too early for definitive conclusions about Trump’s wild—and still ongoing—tariff experiment. But the initial evidence runs strongly against the “tariff boom” narrative and is consistent with both an AI-fueled alternative and the country’s long history of both protectionist stagnation and support for dying legacy industries instead of thriving new ones. (On the last point, consider today’s sky-high tariffs on apparel, furniture, and footwear contrasted with low ones on semiconductors, aerospace, and data-center equipment.) The burden rests on tariff advocates to demonstrate otherwise.

More rigorous research will likely make their job even harder. Just this week, for example, a new paper from four Federal Reserve economists examined the 2025 tariffs and found that—thanks mainly to broad exemptions for the capital goods fueling the data-center buildout—the AI investment boom was strong enough to keep imports and output growing, despite the tariffs that were applied (particularly on consumer goods). Their counterfactual: Absent the AI investment boom, Trump’s tariffs would’ve caused imports to fall by 10 percent, GDP to contract by 0.7 percent, and prices to rise. Apply the tariffs evenly (no carveouts), and growth shrinks even more (-1.0 percent).

Another challenge will come from a forthcoming paper in the Journal of Supply Chain Management, “Paying More and Doing Less,” by Michigan State economist Jason W. Miller and colleagues. It examines five Federal Reserve regional manufacturing surveys and finds “compelling evidence that the 2025 tariffs compressed U.S. manufacturers’ gross margins because prices paid for inputs increased more than prices received for outputs.” The authors add that “[t]he 2025 tariffs also had a negative effect on U.S. manufacturers’ new orders, employment, and capital investment,” with effects that were “significantly more negative on employment and capital investment than new orders.” The tariffs’ costs, in other words, outweighed their benefits.

Both papers arrived in my inbox after I started writing this newsletter. More will probably follow. And in each, the following story emerges: Faced with a large and unstable tariff shock and an even larger AI demand shock, American manufacturers didn’t build new factories and hire new workers en masse but instead deployed tariff mitigation strategies and boosted production at the factories they already had. Manufacturing growth was in advanced industries aided by tariff exemptions and accompanied by rising imports, while old, politically connected industries won heavy tariff protection yet still kept declining, perversely insulated from competitive pressures that might have motivated improvement. The negative correlation between tariffs and manufacturing growth isn’t concrete proof that tariffs caused industrial stagnation, but it’s a direct hit to the common protectionist claim of a tariff-fueled boom.

The best thing tariff advocates can say today is that their chaotic and costly taxes didn’t kill the AI golden goose or offset gains from last year’s corporate tax reforms (a genuine free market victory, by the way). But the AI boom’s capital expenditure wave might not last, and U.S. manufacturers facing tariff-inflated costs across their supply mix—along with U.S. laws that ensure future uncertainty—may be unwilling to invest in new factories on a wager that the AI gravy train keeps rolling (especially given other economic headwinds like an aging population and declining immigration). At that point, protectionists might not even have correlation to brag about.

Markets FTW

The beautiful website Ordinary Abundance pairs items you’d find in any modest U.S. apartment today—a stereo, lamp, refrigerator, and much more—with famous historical statements on those same goods, demonstrating how the “normal” stuff we enjoy today was considered a sci-fi miracle in the past. Scroll through it in a few minutes—and then stop taking your modern living standards for granted.
 

Chart of the Week

If only there were some kind of sign …

China’s lost 18 million manufacturing jobs—12 percent of its factory workforce—since 2013

Since 2018, US strategic doctrine has acknowledged limitations on the scope of America’s engagement in international conflict, particularly given the resource demands of deterring conflict with China in the Indo-Pacific, a US priority. However, leaders in Washington from both political parties have consistently refused to grapple with the hard choices that come with prioritisation.

The large-scale drawdown of high-value munitions from the US arsenal to arm Ukraine following Russia’s full-scale invasion in 2022 robbed the war chest to the tune of approximately $67bn. Combined with the inability to replenish stocks quickly given significant industrial base constraints, the US traded away a significant degree of optionality. Prior to this, Congress had protected US stockpiles from flowing out to foreign partners at the expense of US preparedness for its own global requirements. Yet there was no substantive debate on the trade-offs.

The US intervention in Iran has only exacerbated these unfavourable conditions by further stressing munitions stockpiles already in deficit. The numbers speak for themselves. Media reports estimate the depletion of nearly 80 per cent of the US Thaad inventory and close to half of Patriot interceptors. The supply of Tomahawks, a long-range munition critical for a potential conflict in the Indo-Pacific, is also estimated to have fallen by 50 per cent.

The Trump administration is now seeking a $1.5tn defence budget from Congress, as well as $73bn in additional supplemental funding just to address the costs of the war in Iran. Munitions funding is a significant portion of this.

But while money and higher production targets look good on paper, they cannot speed up estimated delivery timelines. Even if requested funding and significant production increases break through the budget stalemate on Capitol Hill, the replenishment of critical munitions back to pre-Iran war levels is years away.

The notion that more money, more munitions and more time will always materialise permeates policymaking in Washington to an unhealthy extent. This is evident in the very decision to start a war in the Middle East. President Donald Trump chose to do this despite inheriting a stressed and limited resource environment. Moreover, he appears to be keeping further escalation on the table. False confidence only fuels strategic error. It cannot improve the inventory balance sheet.

The pressure is mounting for the government to deliver both a defence budget and an Iran supplemental funding bill in September. But rubber-stamping eye-watering levels of defence funding will not solve the problem. The Iran war has brought the structural and strategic limitations of the US military into focus, but reducing the munitions crisis to merely a symptom of this conflict alone misses the forest for the trees.

The fundamental issue is that the US is overcommitted to the defence of other nations and cannot materially deliver in more than one theatre of conflict. More money and better production targets without accompanying safeguards to protect American stockpiles all but ensure another munitions crisis in the future.

Congress, given its sole power over the purse, is the only branch of government that can require and enforce guardrails on the nation’s critical military resources. It should not move the defence budget or an Iran emergency supplemental forward without reinstituting and expanding protections on US munitions stockpiles. It must ensure the US can meet and sustain its highest-priority requirements first — resourcing a credible deterrence by denial approach in the Indo-Pacific. Leaders on both sides of the political aisle no longer have the luxury of time to put off making difficult choices.

On paper, the munitions shortages present a maths problem. In practice, however, it is a strategic one. The defence budget and supplemental funding for Iran present a new opportunity to pivot back to a path of prioritisation. However, without acceptance of both strategic limitations and tighter guardrails around critical munitions, the US is doomed to repeat the cycle again under potentially far worse conditions.

America’s foreign policy establishmentarians have long worried about losing influence as a result. Indeed, by driving Europe away from America, Donald Trump may be inadvertently spurring creation of a serious counterweight to Washington. As CNN Fareed Zakaria warned: “As Europe’s spending increases, the continent will become less dependent on the U.S., and less deferential to it.”

American policymakers, he added, might therefore regret the disappearance of the continent as a military backwater governed by obsequious nonentities, which served as a convenient base for U.S. troops to operate around the globe.

The rise of Europe as an independent power will almost certainly transform international politics. And the process could be painful. One issue will be the difficulty of coordinating the militaries of more than a score of often dissonant perspectives within the European Union. Another is the return of Germany as a significant military power. Moreover, as European states increasingly talk about the possibility and, worse, likelihood, of war with Russia, Moscow may perceive a growing threat from the West and increase its military preparations accordingly

However, the benefits for America will still far outweigh the problems.

Europeans’ reliance on Washington has long reduced their mutual cooperation. For instance, in 2020, years after Moscow wrested Crimea from Ukraine and backed separatists in the Donbas, the Pew Research Center asked Europeans if they favored defending their neighbors. Overall, sentiment was 50% to 38% against. Only in three of 13 countries polled did more people favor fighting for their supposed allies rather than standing by in case of war. In two, pluralities opposed doing so. A majority said no in eight, reaching 66% in Greece. Yet most Europeans still believed that America would intervene on their behalf.

This fecklessness encourages irresponsibility elsewhere. Last year the European Union surrendered economically, agreeing to President Donald Trump’s trade shakedown. EU policymakers and commentators claimed they had no choice, lest they be left to their own defense devices. For instance, European Trade Commissioner Maroš Šefčovič observed: “It’s not only about … trade: It’s about security, it is about Ukraine, it is about current geopolitical volatility.”

And it’s about saving money; as Financial Times columnist Janan Ganesh asked: “How, if not through a smaller welfare state, is a better-armed continent to be funded?” Concern for such tradeoffs, until recently at least, trumped quaint concepts like sovereignty and self-respect. In this way, European subservience not only encouraged the administration’s irresponsible foreign policy, but also its modern, and destructive, mercantilist economic policy.

If the Europeans, and especially the EU, can no longer rely on Washington’s military umbrella, they will have to do more for their own security. This will place greater pressure on them to limit sclerotic rulemaking and liberalize existing controls. They will also have good reason to reject dubious and costly U.S. demands. And they will be more likely to confront American administrations directly when the next George W. Bush or Donald Trump decides to create another international disaster.

An equally important benefit would be to reduce America’s ability to meddle around the world, especially if a full U.S. military withdrawal from the continent ultimately results. Russia would no longer be viewed as a likely existential threat, at least in Washington, allowing the U.S. to follow by eliminating both its commitment to war and the force structure necessary to fulfill that obligation. Americans could then put these unlocked resources to better use elsewhere.

Thus, what some see as a likely problem would actually be an enormous advantage. True, Washington risks losing a subservient Europe willing to back its political interferences and serve as a launching pad for Washington’s military interventions. However, these policies have, more often than not, turned out disastrously. Even the globe’s nominally benign hegemon requires restraint.

The problem, as recognized by the historian John Dalberg-Acton, commonly known as Lord Acton, is that “power tends to corrupt, and absolute power corrupts absolutely.” That maxim applies even to the well-intentioned who wield overwhelming and largely unrestrained power. This includes the United States — especially when that nation is governed by a narcissist with spectacularly poor policy judgment.

Washington’s Cold War misjudgments were legendary. Vietnam was the worst but not alone. Seventy-three years on, supporting the coup that delivered absolute power to Mohammad Reza Pahlavi in Iran looks disastrous. Decisions like backing Pakistan’s Islamist government, headed by General Muhammad Zia-ul-Haq, and funneling aid to Afghanistan’s Mujahedeen through later Pakistani regimes, which empowered the most radical insurgents, look terrible in light of 9/11 and succeeding developments.

However, such errors must be understood, if not excused, by the Cold War and competition with the Soviet Union. The latter was an Evil Empire like Ronald Reagan said, even if perhaps not as militarily aggressive as feared at the time. The same cannot be said for Washington’s missteps after the USSR’s collapse. “What we say goes,” announced President George H.W. Bush, when American policymakers really believed that the U.S. was the unipower and essential nation that could do no wrong.

Alas, hubris overwhelmed judgment, yielding the Somalia, Iraq, and Afghanistan debacles. After a quarter century of the “Global War on Terrorism,” nearly 5 million people have perished, most as an indirect result of the many conflicts. Few in Washington appeared to understand that wandering the globe bombing, invading, and occupying other nations, as well as backing other nations that did the same, would create enemies prepared to strike back with often terrible consequences.

Contra George W. Bush’s comfortable triumphalism, Americans were not attacked on 9/11 because they were so free and generous. Rather, a succession of administrations operating in their name spent years making other nations’ conflicts their own. Unfortunately, if you swat the hornet’s nest, you are likely to get stung.

The usual suspects in Washington tend to share Zakaria’s error in conflating their power to intervene internationally and Americans’ national interest. The former is often negative. Blob members typically enjoy running the world, or at least attempting to do so. Unfortunately, the rest of us pay the price.

If the president inadvertently strengthens Europe, so much the better for Americans as well as Europeans. U.S. policymakers have proved that their power, like that of adversary governments, require limits. A more powerful and dynamic Europe could help provide some.

Only if you assume that fewer people receiving food stamps is inherently a bad thing. Much of SNAP’s enrollment decline reflects states unwinding pandemic-era waivers and eligibility rules that kept caseloads elevated. It can also mean that people capable of work are finding jobs, or that those who no longer qualify are leaving the program.

The more revealing question is why SNAP enrollment remained elevated after the pandemic-era emergency had passed.

The Supplemental Nutrition Assistance Program was relatively responsive to economic conditions for much of its history, expanding during recessions and shrinking during periods of economic growth. Policy choices broke that trend.

SNAP rolls surged as states gerrymandered work requirement waivers meant for areas with weak labor markets across multiple counties (and even entire states), and emergency policies let states waive verification checks, such as applicant interviews and more frequent eligibility redeterminations. Many of these policies outlasted the pandemic because states had little reason to reverse them.

States share SNAP administrative expenditures, while benefit spending is fully federally funded. Letting the rolls inflate allowed policymakers to appear generous to constituents while federal taxpayers picked up more than 90 percent of the program’s tab.

The American Enterprise Institute estimated that, by fiscal year 2023, more than eight in 10 able-bodied adults on SNAP were not meeting the program’s work requirements through employment. That same year, one in 10 SNAP dollars, or $10.7 billion, went to households that received more than they were entitled to, largely because states didn’t perform proper eligibility checks. Cutting paperwork saved states money; the cost of the resulting payment errors fell largely on federal taxpayers. When the economy recovered and unemployment fell back to 2019 levels, the program didn’t follow. Six million more Americans were on SNAP last summer than before the pandemic.

Congress worked to address SNAP’s incentive misalignments and bring the program’s spending and enrollment closer to pre-pandemic levels with OBBBA.

Besides expanding the number of able-bodied adults subject to work requirements, the law limited states’ ability to waive those rules except in areas with genuinely high unemployment. More important, it encouraged states to preserve benefits for eligible recipients by requiring states with high improper payments — benefits sent in the wrong amount or to ineligible households — to share in paying for the food stamp benefits they provide.

As Senate Agriculture Committee chairman John Boozman put it, the policy changes were meant to “preserve the integrity and sustainability” of SNAP and restore its intent as a “bridge to independence, not a long-term lifestyle.”

Thirty years ago, Congress tried to redesign welfare around making welfare a “way station, not a way of life,” as Brookings scholar Isabel Sawhill later put it. In 1996, Congress converted the federal government’s flagship cash welfare program into the Temporary Assistance for Needy Families block grant, featuring work requirements and time limits to help move families from welfare to work. In the years that followed, child poverty dropped dramatically, and employment among single mothers surged, even as caseloads fell from 5 million families in 1994 to 2.2 million in 2000.

As then-Sen. Joe Biden said, “The culture of welfare must be replaced with the culture of work.” Indeed, work is one of the most reliable paths out of poverty. It’s also tied to better mental health, stronger social ties, and greater life satisfaction.

These principles still resonate with the American public. A new Manhattan Institute poll finds that voters still believe benefits should be temporary, focused mostly on those unable to provide for themselves, and paired with an expectation that able-bodied adults work in exchange for them.

If the government is going to provide welfare benefits, Americans are clear about what it should do: Target the truly needy — the disabled, the elderly and low-income families with young children — not subsidize dependency for adults capable of supporting themselves. Judge the success of OBBBA’s SNAP reforms, and all welfare programs, by how many people move out of welfare and into self-sufficiency, not by how many are kept on it.

“Providers say HHS proposal guts preschool,” blared a Washington Post headline. Before the proposed regulations were even unveiled, the Los Angeles Times warned that the “Proposed Trump overhaul of Head Start raises anxiety for California providers and families.”

What’s causing the uproar?

HHS says the proposed rule would rescind more than 1,400 regulatory provisions and replace the five-part Head Start Program Performance Standards with a dramatically streamlined set of regulations.

For the most part, the rule simply strips out federal regulations that either duplicate the Head Start Act or dictate choices that states and local programs could make themselves.

That’s not ’gutting’ Head Start. It’s questioning the premise that federal regulators know the best way to run local programs.

Paradoxically, some parts of the proposal actually increase federal micromanagement of Head Start providers, something the administration should not do. But it’s a far cry from gutting preschool.

Much of what’s in the proposal is a welcome change. For example, current federal rules dictate staff-to-child ratios and maximum class sizes — despite a lack of evidence establishing an optimal ratio or class size. The proposed rule would largely defer to state and local standards instead.

That matters because state requirements vary considerably, and Head Start’s federal rules are generally more restrictive. A program that believes its current ratio works well can keep it. But another might decide that slightly larger classes allow it to pay teachers more, deal with staffing shortages or serve additional children.

If the proposed changes go through, the people closest to young children — not federal bureaucrats — can weigh these trade-offs. The proposal provides options, but it doesn’t require programs to use them.

A little humility on the part of regulators is good to see when it comes to preschool, since there isn’t an agreed-upon definition of high quality. Moreover, while mandates regulating a certain level of teacher credentials, class sizes and hours of instruction are often equated with quality, research on the effectiveness of these inputs is mixed.

Tennessee’s pre‑K program, for example, met nine of 10 National Institute for Early Education Research quality benchmarks. But a randomized study found that initial benefits faded and participating children subsequently experienced worse academic and behavioral outcomes on several measures.

Head Start’s own national impact study similarly found early academic advantages that largely disappeared by elementary school.

This doesn’t mean that preschool is harmful or that children never benefit from Head Start. But these results should make us skeptical that government officials know which combination of rules will produce the best results for millions of diverse children.

Beyond the mixed findings of studies, parents simply have very different preferences. Some want full-day, center-based care. Others prefer part-time preschool, religious providers or home-based care. Still others want relatives to care for their children, or to care for children themselves.

America is far too large and diverse for a one-size-fits-all preschool model dictated from Washington. Trimming federal mandates makes it easier for programs to tailor their offerings to what local parents actually want.

The new proposal does not consistently follow its own deregulatory logic, however. While relinquishing federal control in many areas, HHS would become more prescriptive in others — including new federal requirements concerning nutrition, physical activity, marriage promotion and English-language instruction.

If parents, providers, and state and local officials can determine appropriate class sizes and hours, surely the feds can trust them with these questions as well.

Reducing federal micromanagement of Head Start is a significant improvement. But the fight over these regulations (and the temptation on both sides to impose their preferred rules) raises a more fundamental question: Why is the federal government making these decisions at all?

The Constitution gives Washington no general authority over education, and six decades of federal preschool policy have not shown that centralized rules produce lasting gains.

The best approach is to leave early childhood education in the hands of families, providers, communities and states — not Washington.

Look closer, though, and Intel’s inflated share price hardly vindicates the administration’s purchase. And the grand experiment that Intel kicked off isn’t just as bad as I warned. It’s worse.

The administration’s holdings are growing at breakneck speed. The running tally at the Cato Institute counts 31 government equity deals — spanning companies in steel, critical minerals, semiconductors, nuclear power, rocket motors and quantum computing — enacted by three different federal agencies acting under murky legal authority. The Commerce Department has based more than a dozen semiconductor and quantum computing deals on the Chips and Science Act, which does not expressly authorize federal shareholding. Some of the equity deals appear to have been coerced by the administration — or at least conditioned on the granting of a permit, subsidy or other government privilege. And more stakes are rumored to be on the way. In a single year, Washington went from one position to a diverse and questionable portfolio, with nary a vote from Congress or the American public.

These stakes have already corrupted American businesses. The Trump administration exercised its “golden share” of U.S. Steel last year to prevent the company from shutting down production at an antiquated Illinois plant. And when Apple CEO Tim Cook visited the White House in August 2025 to lobby for a tariff exemption, Trump and Commerce Secretary Howard Lutnick reportedly pressured Cook to manufacture Apple’s chips using Intel’s factories. Apple ultimately received the tariff carveout. Then, 10 months later, Trump announced (and took credit for) a deal between Apple and Intel that reportedly blindsided Intel’s own executives.

Nvidia and SpaceX have announced tie-ups of their own with Intel, reportedly under similar pressure from the White House. Japan’s SoftBank, meanwhile, invested $2 billion into Intel days after the government’s stake was first leaked — in line with the firm’s history of splashy spending to curry favor with Washington.

Government favoritism has shown itself in other ways, too. Three months after the Pentagon invested $1 billion into L3Harris’s rocket-motor unit, the Trump administration and Lockheed Martin handed the firm two contracts to dramatically expand missile propulsion systems — arrangements L3Harris described as its largest to date. Critical minerals firm MP Materials received the administration’s very first equity stake in July 2025 and signed a contract with the government that guaranteed mineral purchases at a price floor well above the market rate.

The deals have also invited cronyism. The Pentagon’s Office of Strategic Capital, with as much as $200 billion in lending capacity, is run by a former Cerberus Capital Management executive whose old firm invests in the same industries. One beneficiary, Vulcan Elements, is backed by Donald Trump Jr.’s venture capital firm. Lutnick’s former investment firm is connected to USA Rare Earth, which is now partially state-owned. And the president himself has disclosed myriad stock trades involving Intel and other companies either with government ownership or in the state-backed firms’ close orbit.

These are just the seen costs; the unseen ones are bigger. As expected, speculators are investing billions of dollars in companies based on perceived political momentum, rather than the companies’ actual performance or promise. According to a Cato Institute analysis, if Intel’s share price had followed the growth rate of the broader semiconductor industry over the past year, its market capitalization would have been $268 billion less than it is now. Not all these billions reflect an unearned political premium — Intel CEO Lip-Bu Tan’s turnaround plan has borne some fruit — but a good chunk of them surely do. The company’s linchpin foundry business is still hemorrhaging money, and Trump’s announcement of the still-unconfirmed Apple deal alone inflated Intel’s market cap by tens of billions in a single day.

This textbook capital misallocation has spread beyond Intel. Hedge funds are reportedly betting against MP Materials and other U.S. critical minerals companies because their stocks seem to be growing based on political “rhetoric,” not “economic substance.” Other investors have openly begun pricing stocks based on the firms’ coziness with Trump. All these dollars are finite capital that cannot go to other, more deserving American companies — and that means lower growth down the road.

Any taxpayer gain from the government’s investments, meanwhile, is an illusion twice over. First, profits are realized only if the government sells, an unlikely move because private investors would abandon the firms, too. Second, the government’s windfall is so far driven by just Intel. Strip it out, and the picks have returned little. Several of them, in fact, traded lower in early August than when the government bought in. Even Intel’s premium is not guaranteed: The stock dropped almost 40 percent from June to August, as investors questioned both the artificial intelligence boom and the company’s turnaround. Unsurprisingly, Trump didn’t brag about that.

These are the most serious problems from the Intel deal, but there are others. A government investment signals that unbacked rivals are riskier bets, raising their cost of capital and creating an invisible barrier to new ideas and market entrants. Most of the deals are of dubious legality, and there are no rules surrounding what an administration can buy, what information it must disclose, when it can sell or how it reports to Congress. The clearest tell in this regard is that the pending defense policy bill would only now explicitly authorize the Pentagon to take ownership stakes, subject to certain guardrails.

This legislative provision gets the solution exactly backward. Instead of authorizing government equity deals, Congress should set hard terms for divestment now, before the government’s holdings become a permanent feature of the U.S. economy and a permanent departure from America’s free enterprise system. The United States has spent years explaining to the rest of the world that governments make lousy shareholders. It would be a shame to prove it.

The American Left reveres Sweden’s childcare system. Jacobin celebrates it as delivering on a “collective responsibility.” The People’s Policy Project praises the Nordic nation’s generous public funding. Congresswoman Alexandria Ocasio-Cortez and Senator Elizabeth Warren champion taxpayer-funded universal childcare modeled in part on Sweden. “What we have in mind and what my policies most closely resemble are what we see … in Sweden,” Ocasio-Cortez has said of her broader policy agenda.

They’re right that Sweden heavily subsidizes childcare, with public funding following families using public or private providers. But one feature of Sweden’s childcare system would shock many on the American Left.

Sweden, often held up as an exemplar of high-quality early childhood education, does not regulate preschool staffing through mandated child-to-staff ratios.

That’s right. Sweden has no legally mandated child-to-staff ratio for förskola (preschool), which serves children ages one to five. Many other countries do, and all U.S. states do. Yet as the OECD notes, “There is no regulation or guideline for child-staff ratios” in Sweden.

Has the lack of a government mandate led to mayhem in Sweden? Does the absence of a required ratio mean that a single overburdened childcare worker is expected somehow to supervise hundreds of children alone?

Not in Sweden, which has a similar proportion of children in its population as the United States. Even without any explicit mandate, typical child-to-staff ratios remain quite reasonable. According to the Swedish National Agency for Education (Skolverket), the ratio of full-time staff positions to children in preschool is roughly 5:1.

If the government is not prescribing every staffing decision, what ensures that providers make responsible choices? Competition and market signals.

A preschool that created unreasonable conditions would swiftly face reputational consequences. Sweden gives families the freedom to choose private preschools. Parents can select environments they feel best meet their children’s needs, encouraging preschools to provide a high-quality environment as they compete for families. About 22 percent of Swedish preschoolers attend privately run preschools.

Judging by Sweden’s example, child-to-staff ratio mandates apparently aren’t necessary. And it’s not clear that they offer many benefits, either. A 2022 systematic review and meta-analysis of studies from the United States and several other countries found surprisingly little high-quality evidence that smaller ratios improve child outcomes among children ages zero through five. The researchers noted that any effects on measures such as literacy were “inconclusive” and that existing research provides “little guidance on what the appropriate adult/​child ratios and group sizes are.”

But while any benefits remain uncertain, one effect of strict ratio requirements is well documented: they raise costs, reducing affordability.

In the United States, the wide variation in state regulations—from California and Michigan, which allow one staff member to supervise no more than four toddlers (ages one to three), to Florida and Texas, which allow up to 11—provides ample opportunity to examine the effects of more stringent staff-to-child ratio requirements.

In the state with the least restrictive child-staff ratio mandate, toddler care costs $7,254 annually, while in states with the most restrictive child-staff ratio, toddler care costs an average of $20,196—more than 2.5 times as much. One explanation is that high-income states have both stricter ratios and more expensive childcare. But even after controlling for state income, stricter childcare regulations are associated with higher costs for families. Research shows that more regulations mean fewer childcare centers, especially in lower-income communities.

In part, that’s because these strict ratios also create needless compliance burdens: inspectors may cite childcare centers when a teacher briefly steps out of a classroom that remains supervised by several other staff members.

By not regulating staffing ratios, Sweden proves the choice isn’t between mandates and bad care. In the United States, the choice often comes down to trusting the people closest to the children or pricing their families out of care altogether.

Sweden’s approach asks policymakers to place their confidence in childcare professionals and families instead of micromanaging these arrangements. If Sweden can trust parents and providers to deliver quality care, so can we.

The results are in, and they embarrass a century’s worth of U.S. lawmakers and defenders.

The statute is the Jones Act, passed in 1920 to rebuild and protect the U.S. merchant marine fleet after World War I disrupted American shipping capabilities.

It requires that any vessel moving cargo between two American ports must be built in an American shipyard, be American-owned and be at least three-quarters American-crewed. Miss any one of these marks and the shipper is barred from carrying a single barrel of fuel from Houston to Honolulu.

The stated justification for the act is national security.

We need American ships and American sailors to fight wars.

But 100 years in, it’s hard to repeat this justification with a straight face.

An American-built cargo ship costs $190 million to $250 million to build; the same vessel costs about $30 million from a foreign shipyard. U.S. shipyards now build less than 1% of what China and South Korea do, and roughly 300 U.S. shipyards have closed since the early 1980s.

Legislation meant to sustain a merchant fleet has presided over its collapse.

Fewer than 100 oceangoing ships qualify under the Jones Act today, and the American tanker fleet is so thin that moving oil from Texas to the Northeast costs about three times what it would to ship it from Africa.

Michael Bloomberg recently called the act “a national sales tax” — except that Washington never sees a dime.

Instead, the premium is captured by a few U.S. shipyards and carriers operating relatively free of competition. Economist Thomas Grennes found that consumers lose more than what the statute hands to sailors, shipbuilders and carriers.

In March, the Trump administration suspended the Jones Act for energy and fertilizer shipments. It’s not the first waiver of its kind, but it is the longest in recent history.

With the waiver’s expiration looming, the administration just announced a 90-day extension along with stricter terms.

The numbers speak for themselves.

The Cato Institute’s Colin Grabow documented that in under five months, Puerto Rico took in more mainland fuel than in any full year since 2015.

Shipments to the West Coast, Alaska and Hawaii hit nearly 14 million barrels, about 170% of the recent annual average.

Whole trade routes quickly appeared: Gulf Coast fuel to Hawaii, New Jersey jet fuel to California, propane to Puerto Rico.

America’s government-protected fleet seldom served these locales. Remove a prohibition and the market pours resources where they are needed.

As Grabow noted, “That’s strong evidence for the longstanding critique that the Jones Act suppresses domestic commerce by preventing economically viable trade between Americans.”

The question then becomes: Why won’t the Jones Act die?

The answer, as the oldest story in political economy tells us, is that it benefits a few special interests at the cost of all the rest of us.
The handful of shipyards, carriers and labor unions that profit from the Jones Act defend it vigorously. The average person pays just a few cents more at the pump or the register.

It adds up, but not many people trace it to a statute they’re mostly unaware of. One side is lobbying. The other is you, and you’re busy.

The lobby mobilized against a limited waiver as if the republic were under siege.

Grabow described a national ad campaign drawing millions of views from an account with just a few hundred subscribers, a 10-state media blitz, a form-letter-writing machine and roughly one op-ed or letter per week, mostly written by people on the industry payroll.

Two influencers who had never mentioned shipping policy, Kaya Jones and Olivia Krolczyk, posted identical lines about “protecting 650,000 Americans” a day apart, and one disclosed a paid partnership.

A commissioned study for the Transportation Institute warned, with gross exaggeration, that 100,000 jobs were “at risk.” Fifty-two House Republicans, the speaker among them, bought into the economic illiteracy and urged the White House to let the waiver die.

Such machinery does not stop at persuasion.

A few years ago, documents pried from the Maritime Administration revealed that an advisory committee meeting participant suggested, probably half in jest, that every past and present Cato Institute and Mercatus Center scholar (presumably including me) be charged with treason for criticizing the Jones Act.

As economist Art Carden observed, that dragnet would have to be enormous, since the critics run from free-market economists to the far-left Nobel laureate Joseph Stiglitz.

Unfortunately, the Jones Act is representative of much American legislation: a narrow group harvesting a fortune while the costs are spread across hundreds of millions of us. By design, those costs are all but invisible.

Whether it’s protectionist sugar quotas, occupational licensing laws or bespoke tariffs for connected companies, you, dear taxpayer and consumer, fund them all.

Ask yourself how many statutes you are paying for right now. It’s more than you think.

The Migration Policy Institute released its latest estimate of the illegal immigrant population recently, based on Census Bureau data, finding that it grew to 15.8 million in 2024.

Why did Vance, Trump, French and Bovino feel the need to inflate the count so grossly? Politics. These officials seem to think that the greater the number of illegal immigrants living in the United States, the more urgent the need for mass deportation.

In fact, it’s the opposite: the higher the number, the worse the idea of mass deportation becomes. MPI’s estimate is the most rigorous yet, but if these officials are right about the true number, mass deportation’s fiscal cost, economic damage, social carnage and threat to our freedom would be far greater than we think. 

The math is simple. The more illegal immigrants, the more Americans would have to pay to deport them. The Department of Homeland Security estimates that a single deportation costs on average $18,245. This means that when Trump invents the presence of 10 million more immigrants, he’s adding a theoretical $182.4 billion to the price tag. 

And that’s just the cost of deportation. The cost to federal revenue is even starker. Illegal immigrants pay sales tax — and, often, Social Security tax, income tax and property tax. The more illegal immigrants we deport, the more the cost of funding government would shift to American citizens and legal residents. The Congressional Budget Office estimated that recent illegal immigrant arrivals would have cut deficits by nearly $1 trillion over 10 years, and found that Trump’s crackdown in 2025 had already erased $500 billion of those savings. 

Illegal immigrants receive very few taxpayer benefits because they are ineligible for all the largest federal public benefit programs, and most states also restrict eligibility for smaller state programs. Since the benefits being paid are a known quantity, a larger illegal immigrant population suggests that the cost per immigrant is actually far lower than we think. 

But the taxpayer expenses are dwarfed by the broader economic impact: less stuff produced for the American people. The Peterson Institute for International Economics has estimated that just 8.3 million deportations would leave U.S. gross domestic product 7.4% lower than otherwise by 2028, the equivalent of about $2.5 trillion. Lower output means fewer goods and services — everything from food to childcare — for Americans.

If the Trump administration’s hyperinflated figures were true, it would also suggest that illegal immigrants commit crimes at much lower rates than we thought. Using a far lower estimate of the number of illegal immigrants in the country, scholars had already calculated that, compared to native-born Americans, illegal immigrants were far less likely to be incarcerated. But again, since we know who is in prison, if the free immigrant population were to grow, the immigrant incarceration rate would fall in turn. 

In other words, the Trump administration apparently believes that illegal immigrants are far less represented in the crime data than anyone else. Of course, the rate of crime — not the absolute number of crimes — is what matters, because the rate is how we estimate the likelihood that someone will become a victim of a crime. More immigrants would mean a much lower victimization rate — that the presence of illegal immigrants reduces the likelihood that Americans will be victimized.

Finally, the more deportations required for mass deportation, the more the campaign will violently intrude into the lives of Americans. According to the best estimates, about 12 million Americans, including 1.2 million spouses, lived with illegal immigrants. If these estimates are actually low, then many more Americans will end up losing their families or be forced to leave the United States along with them.

For some, the rule of law alone justifies mass deportation, since deportations will stop legal violations. But DHS has yet to hit even 1 million deportations, and self-deportations don’t substantially change the picture. If the true illegal population were 26 million rather than 16 million, a policy of mass deportations would mean we’re decades further from resolving the problem.

A much more sensible approach is to fix the legal immigration system. Then just let the illegal immigrant population apply for legal status through that system. Immigrants came illegally precisely because the current system provides no viable path to immigrate legally. A better system would restore the rule of law without all the pointless costs of mass deportation and prevent the situation from repeating. 

Much of this silence, the report explains, is strategy: Large US firms don’t like the tariffs but have routed their objections through industry associations and legal filings to avoid blowback from the government or partisan customers. Doing so arguably makes good business sense, given President Donald Trump’s repeated targeting of companies that criticized his tariffs, publicized their price effects, or sought refunds following the White House’s Supreme Court loss. When a single presidential tweet can cause a company’s stock to crater, it’s often smarter to let smaller, more sympathetic firms “carry the water,” explained one trade lawyer.

Yet the silence from large firms – and the noise from small businesses – reflects a harsh financial reality: For big companies, the tariffs are a nuisance while for most all others they’re an existential threat hitting from three different directions. Given that smaller businesses employ almost half of America’s private sector workforce – and that they’re what eventually become market-driving big businesses – these disadvantages mean real economic harm, now and in the future.

The first hit is the taxes themselves. Between January 2025 and June 2026, the government collected almost $284 billion in gross import taxes, roughly 90% of which was paid by American importers, including tens of thousands of small businesses. The Center for American Progress estimates that the average small business importer’s bill was around $306,000 larger during the first year of Trump’s tariffs than in the prior 12 months. Firms with fewer than 50 employees paid roughly $175,000 more.

Research shows that around half of all US tariffs were absorbed by importers last year instead of passed on to customers and end-consumers, and the Federal Reserve’s latest Small Business Credit Survey reported that 60% of US small businesses ate at least some of their new tariff costs. No surprise, then, that the same survey found that 42% of small firms – mostly in retail and manufacturing – reported that increased tariff costs were a top financial challenge.

Most everybody bears a direct tax burden, but tariffs disproportionately harm smaller businesses, leading to the second hit. Unlike income and sales taxes, companies generally pay tariffs to the government upon an item’s entry into the country and long before a single unit is sold. Diverting working capital to pay these taxes or secure customs bonds is a particular problem for smaller companies without the deep cash reserves or easy access to capital markets that large, public companies have. Many small firms have taken on debt to pay the tariffs or drained their personal savings, and stories abound of businessowners forced to pay surprise tariff bills by running up credit cards, emptying retirement accounts, taking out second mortgages, or turning to costly loans or cash advances. They can only repay these debts when they make a sale.

Small firms are also at a major disadvantage in terms of the resources available to navigate the 17 and counting US tariff regimes in place, up from just three before Trump’s first administration. Since 2017, the Harmonized Tariff Schedule has added roughly 800 pages, undergoing 74 separate modifications in the last 20 months. Deciphering these ever-changing tariff rules has become a full-time job at many businesses – a position smaller firms don’t have and can’t afford. Thus, as the Federal Reserve Bank of Richmond’s August 2025 survey showed, around half of small and mid-sized manufacturers reported no certainty about their input costs compared with 23% for their bigger competitors.

Large firms also can deploy customs and supply chain strategies to mitigate trade costs, and they often have the market power to insist that unaffiliated suppliers or customers share any new tariff burdens. Small companies lack these relationships or the capital to forge new ones. The Fed’s small business survey thus reports that just 13% and 8% of respondents changed to domestic or different foreign suppliers, respectively, and only 3% moved production onshore. When the small business coalition We Pay the Tariffs surveyed its members this summer, just 3% had found a domestic supplier that met their specifications and budget. Instead, they just… pay the tariffs!

Large businesses have the political clout – along with lobbyists and trade lawyers on retainer – to win some of the hundreds of new tariff exemptions or protections from import competition. According to OpenSecrets, the number of firms lobbying Washington on tariffs tripled from 2024 to 2025 and continues to rise. Few, if any, small firms are spending dollars on these efforts, and none of them can obtain special tariff treatment by giving the president a golden trinket or Oval Office photo op.

Even Trump’s tariff refunds can disadvantage smaller companies – their third extra burden. The administration deserves some credit for quickly refunding the bulk of the tariffs the Supreme Court canceled earlier this year. However, because the process for delivering these refunds is not automatic – importers must affirmatively apply to get their money back – and requires legal skills and knowledge that many small businesses lack, approved tariff refunds have been concentrated in large, high-value entries made by big companies like Apple and Nike. They and other public firms have since reported receiving billions in tariff refunds, while many smaller businesses – such as two-person sneaker business Proof Culture in Ohio – have wondered whether the effort to file their refund claim is worth the $25,000 they’re still owed.

The Trump administration is challenging some tariff refunds in court, fighting a class action and insisting that importers file individual lawsuits to obtain relief for certain entries. Thousands of companies have incurred this legal expense, but tens of thousands of others haven’t – likely because they’d pay more in lawyer fees and paperwork headaches than they’re owed from the government.

Put it all together and you’re left with small companies paying unlawful tariffs and replacement tariffs, facing extra burdens when they do, and facing the worst odds of getting refunds their larger competitors are collecting, with interest. It’s a vicious triple-whammy and one baked into a tariff system with rules so complex and discretionary that they inevitably advantage the companies with the deepest pockets and priciest lawyers.

This explains the odd spectacle of American toymakers, spice importers, wine merchants, and baby retailers being the voice of the tariff resistance in the courts. For them, Trump’s tariffs aren’t just a sliver of profits – they’re life and death.

Unfortunately, Trump’s own effort crashed and burned after the collapse of the 2019 Hanoi summit. Blame for that result was much debated. Afterwards, Pyongyang abandoned engagement with both the United States and the Republic of Korea. And after that, the Ukraine War dramatically transformed the DPRK’s regional status: Russia’s compensation for North Korean military aid spurred economic growth and military development. Beijing upgraded its contacts and enhanced its assistance as well.

Pyongyang has so far rebuffed Trump’s suggestions for renewed contact. However, Kim has avoided the splenetic rhetoric that first characterized the two leaders’ relationship. He may still desire an opening with Washington—better to have another big partner to pressure the other two for even better deals. In any case, he continues to improve his geopolitical position, maximizing his leverage vis-a-vis the U.S.

Once the ruling Kims began building nuclear weapons, the possibility of CVID—or Complete, Verifiable, and Irreversible Denuclearization—disappeared as a plausible, let alone likely, outcome, absent war. Today, North Korea refuses to even discuss the issue. And who can blame Kim? After Iraq, Libya, and Iran, Kim would be a fool to abandon his ultimate deterrent. It has long been evident that Washington’s only realistic approach to the DPRK is to push negotiations on arms control—not CVID—tacitly„ if not formally accepting the regime’s nuclear status. Today, realism is even seeping through the Blob.

Fostering such a dialogue won’t be easy. Kim may be skeptical about Trump’s willingness and ability to deliver. Thus, Trump would be wise to include some kind of immediate inducement in any new initiative toward the North.

Of course, such an offer would likely be criticized in Washington as making concessions without obtaining an agreement. Thus, the president should choose something that doesn’t plausibly harm American interests or, better yet, would benefit America as well as North Korea. One possibility: dropping the ban on travel to the DPRK. Doing so would be simple and beneficial. It would also signal interest in societal as well as governmental engagement.

The president should act now, since the State Department recently renewed its ban. Almost a decade ago, State declared that normal American passports were not valid for travel to the North. Special permission is required, even for aid workers, journalists, researchers, and policymakers.

The formal justification for the ban was the tragic death in 2017 of Otto Warmbier, a 22-year-old college student visiting the DPRK as a tourist. The restriction made little sense then and has since lost any purpose. Observed Robert King, a longtime special envoy for human rights in North Korea:

Warmbier’s plight understandably received enormous coverage. The administration claimed that travel to North Korea was too dangerous for Americans. However, the cause of his injuries remains unknown. There was no medical evidence of abuse. Indeed, the DPRK authorities long recognized that American prisoners had value only if alive.

Between 2009 and 2017 15 other Americans were detained by North Korea, but only four were tourists, and all had “done something,” according to the head of a humanitarian NGO with whom I talked, though nothing which warranted punishment. That organization investigated every case and judged the threat facing its workers, who routinely labored in the DPRK, to be minimal. In fact, we met while traveling separately, and safely, to the North.

The real lesson of the tragedy, according to private conversations with other tourist operators and multiple published reports citing other travelers, appeared to be to choose a responsible travel agency. The State Department could vet companies and, if Pyongyang chose to revive the tourism trade, work with North Korean officials to better educate travelers and treat claimed infractions differently.

In any case, removing the ban would have little practical impact now. North Korea only recently reopened its borders after the Covid-19 pandemic but quickly reinstated the tourism ban, except for Russians. Earlier this year, the government even canceled the already publicized Pyongyang marathon. However, ending the ban would be an important symbolic step, treating the DPRK like other countries and welcoming future contact among peoples. As such, it could accompany a Trump initiative to reestablish contact with Pyongyang.

Of course, Washington could do more, such as suspending some sanctions and proposing high-level official visits. Most dramatic would be offering diplomatic relations at some level—which should be viewed as a requirement, even a necessity, for America, rather than a reward for the North. Frankly, it is more important to talk to one’s adversaries, especially when they are armed with nuclear weapons and constructing ICBMs, than to one’s friends.

U.S. policy toward the Korean Peninsula long ago guaranteed the ROK’s security against the North. However, Washington has failed to end North Korea’s threats against the South and potentially beyond, as well as South Korea’s needless defense dependence on America. Moreover, U.S. involvement impedes the admittedly long-shot objective of reunification of the peninsula as well as Chinese willingness to put greater pressure on Pyongyang.

Although Trump prefers grand gestures, small steps will probably be necessary to forge a path for more dramatic diplomatic initiatives. Ending the travel ban would be a good place to start. Although the State Department strongly warns against travel to 23 different nations, many of which are objectively dangerous, it forbids trips only to North Korea. (Visiting Cuba is legally restricted but allowed for a variety of approved purposes.)

Lifting the ban would be a small, simple action with little downside even if it proved unsuccessful. However, it might aid the administration in developing new diplomatic strategies to address a region that has grown more complex and dangerous since the president’s dramatic summits with Kim.

The New York City Economic Development Corporation (NYCEDC) issued a 44-page request for proposals last month inviting grocery stores to bid to operate one or more of the five stores it plans to open across the city. It intends to achieve the promised affordability by mandating a 30 percent discount on core items, and it predicts shoppers’ total bills will fall by 15 percent. But it has not defined those benchmarks, nor has it disclosed the annual taxpayer cost. Having written the conclusion, NYCEDC is asking private grocers to fill in the missing economics.

Thirty percent below what?

The first problem is the number on which the whole sales pitch rests. A “core basket” of fresh food and other staples must sell for an average of 30 percent below retail. But 30 percent below which retail price?

The RFP says the comparison may use “available market data,” the operator’s advice, “and/​or other observable data points,” while admitting that the pricing methodology will be finalized only after operators have been selected. Companies must therefore bid on a discount for which the measuring stick doesn’t exist.

Some contract details naturally come later. Still, the city cannot meaningfully compare bids until it defines what constitutes an equivalent product and explains how factors such as temporary sales and actual buying patterns will be treated. Comparing private-label peanut butter with a premium national brand could yield impressive paper savings without showing that shoppers pay 30 percent less for a comparable item. Until those choices are made, “30 percent below retail” remains a campaign slogan.

The public store’s private machinery.

City Hall fixed the discount before knowing what it would cost to deliver. Mamdani campaigned on city-owned stores relieved of rent and property taxes, with centralized distribution holding down prices, while leaving day-to-day operations conveniently vague. The RFP resolves that ambiguity with stores that are “publicly funded, privately operated.” The promised central warehouse has vanished.

Private operators will handle everything from sourcing food and managing logistics to hiring workers and running the stores. City Hall will furnish the sites and buildout, control prices and branding, and negotiate the subsidy. So much for the revolution.

That’s what happens when a pitch rests on a childlike theory of retail in which food appears on the shelf and whatever remains after checkout becomes the owner’s profit. Remove rent and profit, the fable goes, and deep discounts should follow. The RFP reads like a guided tour through everything that theory wished away, from spoilage and supplier contracts to refrigeration, security, and inventory. All of it lands on the operator, leaving City Hall to dictate the discount and haggle over who absorbs the loss.

The taxpayer’s open tab.

Outsourcing the work doesn’t make the campaign arithmetic add up. The administration says that a 30 percent discount on core basket prices will lower a shopper’s entire grocery bill by 15 percent. If core items make up about half the bill, a $100 basket at market prices would come out to roughly $85 after the discount. The exact shortfall will depend on volume and sales mix, yet the RFP offers no estimate of the subsidy needed after the city covers occupancy costs.

My Cato colleagues Scott Lincicome and Ryan Bourne pointed out last year that supermarket margins leave little room for the discount Mamdani promised. The Food Industry Association reports a 2.1 percent average net profit margin in 2025, compared with just under 1.5 percent over the past three decades. Erasing all profit would therefore free only about two cents per dollar of sales. “Free” occupancy helps the operator by moving those costs onto the public ledger. Any remaining shortfall can be covered by an “affordability payment,” the RFP’s polite name for a subsidy.

The city has committed $70 million for construction and initial fit-outs at the five stores, a capital expense rather than annual operating support. The agreements will last at least 10 years, and the RFP tells bidders to include the discount and “best-in-class” worker pay and benefits in their annual subsidy estimates. Those estimates would also account for possible community programs, such as nutrition workshops or cooking demonstrations. It offers no formula or ceiling and allows bidders to provide a range for the annual subsidy each location would require.

The RFP scores bids on a 100-point scale, but the requested annual subsidy accounts for only 20 points. Qualifications receive 45 points, and another 35 assesses how the bidder proposes to stock and staff the stores and advance City Hall’s broader policy agenda. The bidder asking taxpayers for the least money needn’t win. Choosing an experienced grocer over a lowball artist can be sensible. Even that 20-point cost comparison, however, rests on mushy inputs.

Bidders may propose alternative core basket categories and calculate their subsidy requests using a retail benchmark NYCEDC has yet to define. They may also submit a range of figures rather than one number. The RFP promises full credit to the “lowest” request, but a range has no single price to rank. A bid of $5 million to $10 million could look cheaper or more expensive than one seeking $7 million to $8 million, depending on how NYCEDC scores them.

The proposal criteria also reward an ideological wish list, with its costs folded into the payment request. The RFP’s bland reference to “wider policy goals” encompasses ambitions that extend well beyond cheaper groceries. It requires undefined “best-in-class” pay and benefits, including health coverage, plus what it calls a “labor peace agreement” to avert strikes or other disruptions if a union seeks to organize a store. It favors local or sustainable sourcing and invites community programming, while telling bidders to include those ambitions in their payment estimates. Whatever their merits, the additions turn a grocery store into a leftist policy Christmas tree, with taxpayers paying to keep it lit. As Bourne and Nathan Miller observe, the redesigned plan is mainly a subsidy with a municipal label.

Even after an award, NYCEDC must decide who bears the losses when costs or demand exceed projections. A fixed annual payment would give taxpayers a predictable bill and reward cost control, though the grocer would bear the overruns. Reimbursing actual deficits would shift that risk to taxpayers and weaken cost discipline. It would also require the city to determine how much of an operator’s shared supply chain and back-office costs are attributable to the municipal stores. A hybrid could establish a base payment that adjusts when specified costs or losses move beyond an agreed range. Final contracts normally settle such details. City Hall has nevertheless declared the project an efficient use of public resources before choosing a basic payment structure. The shopper’s discount has been decreed, while the taxpayer’s price remains blank.

Somehow, amid all this uncertainty, the RFP still finds room for limited-edition merchandise developed with New York designers. The subsidy formula may be blank, but at least the tote bags are on schedule.

The rush for subsidized groceries.

Selling core basket goods far below surrounding prices will raise demand and create an obvious resale opportunity. The RFP anticipates excessive bulk purchases, yet it demands full shelves and calls for “robust demand management.” The voluntary savings card is supposed to track individual purchases so operators can identify repeat bulk buyers and help enforce any limits, though shoppers needn’t even use it. City officials say there will be no residency or income verification. The city thus has no reliable way to identify repeat bulk buyers.

A subsidy that rises with sales raises the taxpayer bill as demand increases. Capping it would make purchase limits or empty shelves more likely. If “robust demand management” means limits on subsidized staples, City Hall should drop the euphemism and call it rationing.

Cheaper groceries without City Hall.

The RFP treats limited grocery access and inadequate purchasing power as one problem. A new store can improve access in the area, but five fixed locations will primarily benefit their surrounding neighborhoods. As an income-assistance measure, a universal discount also subsidizes shoppers who do not need assistance. Neither concern establishes a case for a city-branded chain backed by public capital and annual subsidies for at least a decade.

One week before releasing this RFP, Mamdani announced a separate citywide package of more than 50 small-business reforms. The administration conceded that opening delays and inconsistent enforcement make it harder for food businesses to start and survive. Its own diagnosis points toward lowering barriers for all grocers.

Then there is the larger irony Matt Yglesias identifies. New York politicians and labor unions spent years fighting Walmart’s entry, even though its scale and logistics enable it to offer low prices without asking City Hall to reimburse losses on discounted goods. The city now plans to spend at least $70 million, plus annual subsidies, to construct an ideologically acceptable version of the low-cost model that its supposedly enlightened political class opposed.

Five stores will not transform New York’s grocery market, although they could pull business from nearby unsubsidized stores that must cover their own occupancy and construction costs. Among the performance measures the RFP identifies, none track closures or lost sales at surrounding grocers. Nor, of course, does it identify the taxpayer cost per household helped.

The municipal stores may indeed produce cheaper receipts. Any government can make $100 of core basket goods ring up at $70 if taxpayers absorb enough of the cost. The meaningful test is whether those benefits justify the full public expense and any disruption to nearby grocers. The RFP leaves the first undefined and identifies no measure of the second. It treats a discounted receipt as evidence of efficient government.

This is Peter Pan economics in procurement form, asking New Yorkers to believe in a 30 percent discount while taxpayers furnish the pixie dust. City Hall can lower the number on the receipt, but it can’t make the cost disappear.

The vice president rightly called on Congress to support the Trump administration’s efforts to crack down on waste, fraud and abuse in federal welfare programs. Better oversight, stronger eligibility verification and improved data matching can reduce improper payments and strengthen public trust.

But the scale of the problem must be kept in perspective. Vance reported that the administration has stopped $56 billion in fraudulent spending — a worthwhile achievement. Yet that figure is small compared with the more than $1 trillion the federal government spends every year on more than 90 welfare programs.

America’s broader budget challenges are far bigger. And they are driven primarily by the unsustainable design of federal spending programs, not by fraud. Even eliminating every fraudulent payment would do little to change the federal government’s fiscal trajectory. The main debt drivers are structural: an aging population, rising health care costs, flawed federal-state financing arrangements and entitlement programs whose spending grows automatically under existing law. Congress should thus go further than addressing fraud. Aligning spending authority with fiscal responsibility would do more to improve stewardship than federal fraud-fighting efforts can accomplish alone.

Stabilizing the nation’s finances will require structural reforms to major entitlement programs so that they better align benefits, incentives and financing with fiscal, demographic and economic realities.

The statute is the Jones Act, passed in 1920 to rebuild and protect the U.S. merchant marine fleet after World War I disrupted American shipping capabilities. It requires that any vessel moving cargo between two American ports must be built in an American shipyard, be American-owned and be at least three-quarters American-crewed. Miss any one of these marks and the shipper is barred from carrying a single barrel of fuel from Houston to Honolulu.

The stated justification for the act is national security. We need American ships and American sailors to fight wars. But 100 years in, it’s hard to repeat this justification with a straight face.

An American-built cargo ship costs $190 million to $250 million to build; the same vessel costs about $30 million from a foreign shipyard. U.S. shipyards now build less than 1% of what China and South Korea do, and roughly 300 U.S. shipyards have closed since the early 1980s. Legislation meant to sustain a merchant fleet has presided over its collapse.

Fewer than 100 oceangoing ships qualify under the Jones Act today, and the American tanker fleet is so thin that moving oil from Texas to the Northeast costs about three times what it would to ship it from Africa. Michael Bloomberg recently called the act “a national sales tax” — except that Washington never sees a dime. Instead, the premium is captured by a few U.S. shipyards and carriers operating relatively free of competition. Economist Thomas Grennes found that consumers lose more than what the statute hands to sailors, shipbuilders and carriers.

In March, the Trump administration suspended the Jones Act for energy and fertilizer shipments. It’s not the first waiver of its kind, but it is the longest in recent history. With the waiver’s expiration looming, the administration just announced a 90-day extension along with stricter terms.

The numbers speak for themselves. The Cato Institute’s Colin Grabow documented that in under five months, Puerto Rico took in more mainland fuel than in any full year since 2015. Shipments to the West Coast, Alaska and Hawaii hit nearly 14 million barrels, about 170% of the recent annual average. Whole trade routes quickly appeared: Gulf Coast fuel to Hawaii, New Jersey jet fuel to California, propane to Puerto Rico.

America’s government-protected fleet seldom served these locales. Remove a prohibition and the market pours resources where they are needed. As Grabow noted, “That’s strong evidence for the longstanding critique that the Jones Act suppresses domestic commerce by preventing economically viable trade between Americans.”

The question then becomes: Why won’t the Jones Act die? The answer, as the oldest story in political economy tells us, is that it benefits a few special interests at the cost of all the rest of us.

The handful of shipyards, carriers and labor unions that profit from the Jones Act defend it vigorously. The average person pays just a few cents more at the pump or the register. It adds up, but not many people trace it to a statute they’re mostly unaware of. One side is lobbying. The other is you, and you’re busy.

The lobby mobilized against a limited waiver as if the republic were under siege. Grabow described a national ad campaign drawing millions of views from an account with just a few hundred subscribers, a 10-state media blitz, a form-letter-writing machine and roughly one op-ed or letter per week, mostly written by people on the industry payroll.

Two influencers who had never mentioned shipping policy, Kaya Jones and Olivia Krolczyk, posted identical lines about “protecting 650,000 Americans” a day apart, and one disclosed a paid partnership. A commissioned study for the Transportation Institute warned, with gross exaggeration, that 100,000 jobs were “at risk.” Fifty-two House Republicans, the speaker among them, bought into the economic illiteracy and urged the White House to let the waiver die.

Such machinery does not stop at persuasion. A few years ago, documents pried from the Maritime Administration revealed that an advisory committee meeting participant suggested, probably half in jest, that every past and present Cato Institute and Mercatus Center scholar (presumably including me) be charged with treason for criticizing the Jones Act. As economist Art Carden observed, that dragnet would have to be enormous, since the critics run from free-market economists to the far-left Nobel laureate Joseph Stiglitz.

Unfortunately, the Jones Act is representative of much American legislation: a narrow group harvesting a fortune while the costs are spread across hundreds of millions of us. By design, those costs are all but invisible. Whether it’s protectionist sugar quotas, occupational licensing laws or bespoke tariffs for connected companies, you, dear taxpayer and consumer, fund them all.

Ask yourself how many statutes you are paying for right now. It’s more than you think.

The cameras are installed in most urban areas across the country and record the license plate number of every car that drives past them, storing information about people’s movement in a database, for use by local governments and police departments.

According to the company, Flock has 120,000 active cameras across the United States. Many police departments and investigators claim they make solving crimes and locating individuals easier than ever.

But critics are stacking up, citing alleged police misuse, privacy rights violations and mass surveillance.

“It reminds me of these sci-fi AI, like, the government’s‑watching-you kind of movies,” anti-Flock organizer Brian McKellar told The Post.

Over the past several months, Flock cameras have been the cause of constant protests and the formation of grassroots groups against them, like DeFlock. Vigilante vandals have even taken to obstructing and destroying the cameras themselves.

Perhaps the most interesting feature is the protests aren’t along party lines. Progressive social media like Bluesky is flooded with people accusing the cameras of being tools of a fascist government, while conservatives with a libertarian streak tend to see it as an issue of big government overreach into our private lives.

McKellar, of Idaho Falls, is a self-identified conservative who believes in law and order, but he thinks the cameras go too far.

“I don’t live in Idaho because I want to be surveilled all the time. I like the country. I like the West. I like being in the Wild, Wild West,” he told The Post.

McKellar, 40, only became aware that his local police department had taken to using Flock cameras for surveillance last year, when another resident made a complaint about them during a town hall meeting.

The revelation disturbed him so much he helped launch DeFlock Idaho this summer. It’s a grassroots organization of citizens, who pressure city councils to reject Flock cameras and work to obtain public records about how they’re being used.

“It’s not even just the Feds anymore. It’s the city and the county that can now watch and surveil me in detail,” McKellar told The Post. “This is definitely not just a conservative issue. I don’t think there’s a line between where you sit on a party affiliation.”

A spokesperson for Flock told The Post their technology “supported more than 1 million criminal investigations and public-safety incidents” in 2025 and was used in 20% of solved cases in jurisdictions which use the cameras.

They also claim more than 10,000 missing people were located using Flock that year.

“Every chief in this state that has these can go over scenario, after scenario, after scenario where it has helped solve crime,” police chief Paul Melanson of Farmington, Connecticut, said in a Tuesday press conference.

Or as Chief Deputy of the Adams County Sheriff’s Office in Illinois put it: “It’s like having extra sets of eyes.”

But one major concern raised by critics is police misuse of data. There are no uniform national rules restricting how the information collected by Flock cameras can be accessed or used, and police departments across the country have wildly different retention periods for the data.

“We’re seeing officers abusing the system to stalk their exes [and] women that they’re interested in,” Dave Maass, director of investigations at the Electronic Frontier Foundation, told The Post.

The Institute for Justice reports that, in just the past five years, there have been 39 cases of romantic stalking by police via Flock camera. Officers have used the devices to track the movements of current, former, or prospective partners who have no connection to a crime or investigation.

In one especially shocking incident, Former Deputy Jaquarius Yarbrough of Richmond County, Virginia, allegedly used the license plate tracking system to stalk a woman he was having an affair with 1,639 times over several months.

“What we’re talking about are cameras that are documenting everywhere your car goes,” Maass said. “There are databases where police can type in your license plate and see everywhere you’ve gone… The government shouldn’t be creating databases of movement.”

He noted that opposition to Flock cameras has “always been a cross-partisan issue,” once people are made aware of them: “People will see it go up on their corner and they’ll be like, ‘What is that?’ Once they Google it and they see that this is something that is tracking them, they start to get mad.”

The anger seems to be boiling over.

According to the Guardian, Flock cameras have been vandalized, damaged or destroyed at least 33 times across 23 states. People have “paint bombed” the cameras to cover their lenses or made 3D printed objects to obstruct them, and a few have even left American flags behind at the scene as a symbol of resistance.

Some vandals have been charged, like 44-year-old Jevon Martinez of New Mexico. He was arrested in July for allegedly destroying three cameras and leaving behind a note saying “You’re welcome, the Republic of New Mexico.”

Legislators are taking a more pragmatic approach.

In California, Senate Bill 1013 would require officer training, annual audits, and logs of all database searches conducted by police. And last month Kentucky Representative Thomas Massie proposed a bill that would deprive jurisdictions using Flock cameras of funding.

The potential consequences of false positives are also a major concern of Flock’s opponents. An internal analysis by police in Roseville, California, found that 71% of alerts for stolen or felony-linked vehicles sent by Flock cameras to the department contained misread license plate numbers.

In Ohio, a man is suing his city after police pulled him over because they believed him to be driving a car with stolen plates based on Flock camera data. That turned out to be untrue, but not before police released K‑9s on him in a move his attorneys call “unlawful excessive force.”

Another incident in Sherwood, Arkansas, saw police officers detain a couple with a 1‑month-old child in the backseat at gunpoint after a Flock camera incorrectly flagged their vehicle as stolen.

And a San Diego man spent nearly a month in jail for attempted carjacking because he was driving a red Alfa Romeo matching a suspect’s car, even though the Flock camera used to nab him placed his car five miles away from the incident in question 23 seconds after the crime.

“Flock understands that communities have questions about privacy,” a spokesperson for the company said. “Those decisions belong to communities and their elected officials. Flock supports clear legal guardrails, local control, documented search purposes, audit trails and transparency. Public safety and privacy should coexist.”

But Patrick Eddington, a senior fellow in homeland security and civil liberties at the Cato Institute, says this “vehicle fingerprinting system” almost certainly raises constitutional concerns.

“I don’t think there’s any doubt that this is ultimately a Fourth Amendment issue,” he told The Post, referring to the amendment which protects Americans against unreasonable searches and seizures by the government and requires warrants to be based on probable cause.

“When people are just going about their daily lives, and having the government collect this data on them in the absence of any kind of criminal predicate, that itself is absolutely constitutionally problematic,” Eddington said.

He also urged those who assume the technology won’t affect them because they have nothing to hide to think twice.

“It doesn’t matter whether you think you’re doing nothing wrong,” he said. “It only matters whether or not the cops or the prosecutors decide that you are doing something wrong. And then your life gets turned upside down. And in most cases, it’s never the same after that.”

There are three takeaways from the OECD’s announcement last month, and none of them help the case for the tax.

Underperforming revenue reflects unrealistic expectations. The Organization for Economic Cooperation and Development has never had a good grasp on how much its international tax regime could raise. In 2020, it put the more comprehensive two-pronged plan at about 4% of global corporate income tax revenues. Three years later, it inflated to 9% for the Pillar Two minimum tax alone. In 2024, the projection was 6.5% to 8.1%. The OECD’s latest estimate for 2024 revenue is 2.4% to 3.4% of global corporate revenue.

The early models were optimistic by construction. They relied on older data that overstated profit shifting, assumed near-universal adoption, and failed to account for carve-outs and safe harbors that any global political compromise was always going to require.

Reality cut into each assumption. About 55 of the original 140 jurisdictions have started implementing the new taxes, and multiple income exclusions and safe harbors narrow the tax’s reach. Most consequentially, global profit shifting declined over the past decade, undermining both available revenue and the rationale for Pillar Two in the first place.

It’s not just the OECD’s global revenue figures either. National estimates also were optimistic, built on the false promise of revenue foreign treasuries expected to collect from US multinationals. That revenue was never really theirs.

As the Tax Foundation’s Daniel Bunn argued, either Democrats would tighten US minimum taxes to keep the revenue at home, or we’d end up with the current state of affairs, where Republicans pushed for the existing US system in place of the OECD rules. Neither scenario ends with foreign governments claiming significant portions of the US tax base.

The hit to investment is still to come. The OECD release claims that targeted companies saw no measurable decline in investment or employment in 2024. Like the early revenue projections, the claim is premature. The absence of a significant detectable first-year decline doesn’t show that investment is unaffected.

The substance-based carveout means the tax falls most heavily on profits from intangibles, not physical assets and payroll. Under current rules, physical investment doesn’t directly trigger the tax because the exemption scales with new investment. But the exemption is set to shrink over time, and European Commission-funded research argues for eliminating it entirely. As the carve-out shrinks, the tax will penalize real investment and employment.

More telling is the OECD’s own report, which notes that other research contradicts its reassurances that the new tax will raise revenue without changing behavior. The report estimates an effective tax rate increase of 1.7 percentage points. Applying recent estimates of how taxes affect investment implies the OECD tax will reduce investment by about 8%. Eventual investment declines are forecast by other OECD research, the United Nations, and private research.

The OECD project was probably unnecessary. The largest increases in effective tax rates occurred among multinational companies subject to a domestic income inclusion rule, or IIR. Companies outside an IIR showed smaller tax increases, with less statistical certainty. The OECD taxes also had smaller effects on US multinationals than on the full sample.

These findings suggest that countries didn’t need a globally coordinated system of overlapping domestic minimum taxes, undertaxed-profit rules, and reporting regimes to produce the tax-rate increases documented by the OECD. Countries could have adopted their own residence-based minimum taxes, without an OECD mandate, and achieved a similar result.

This is what the United States did. Removing US multinationals from the sample increased the estimated effect on effective tax rates. The OECD speculates this is partly due to the separate US top-up system in place since 2017, and partly due to the temporary safe harbor. So, one interpretation of this result is that US firms entered the new system with higher tax burdens already in place, as has been documented elsewhere. Exempting them under the side-by-side agreement, therefore, doesn’t appear to have materially weakened the minimum tax.

The US already taxes the foreign earnings of US multinationals through net controlled-foreign-corporation tested income known as NCTI. Although the US and OECD rules differ, they both impose additional home-country tax when foreign income is taxed below a specified minimum rate.

The OECD constructed a sprawling and costly international regime to achieve a result that individual governments largely could’ve accomplished on their own.

Key Takeaways

The only way the OECD tax collects more is by directly taxing the investment and jobs it currently exempts. From here on out, every euro of additional revenue will come with new economic costs. And the modest revenue it did raise could’ve been collected without the OECD’s elaborate apparatus of overlapping rules, safe harbors, and costly reporting systems.

At the end of the day, the OECD global tax is a transfer from the private sector to governments that doesn’t create new wealth. That transfer is only positive if the resulting government spending is productive enough to outstrip what the private sector would’ve done with the funds and any resulting economic costs.

With compliance costs alone likely running into the billions, and future lost investment from higher effective tax rates, the global minimum tax is shaping up to impose costs that are strikingly large relative to the modest revenue it raises.

These aims aren’t mutually exclusive. Rewards are how stablecoin platforms compete for the funds customers hold and move, and too tight a limit would blunt competition that could make moving money cheaper for ordinary Americans.

The fault lies with neither banks nor platforms, but with Congress. The central question is whether a reward is “economically or functionally equivalent” to interest on a bank deposit, a test the bill never defines. Your own example, 5% cash back for loyalty-program members who keep a $1 minimum balance, may well survive that test. But the bill names loyalty programs both among the rewards it permits and among those it forbids. Nobody can yet say which applies.

Rather than draw that line, the bill would leave this quagmire to agency rule-making. In the meantime, it is worth remembering that every coin—even a digital one—has two sides.

When the restoration project for the Lincoln Memorial Reflecting Pool failed following a no-bid contract awarded to Atlantic Industrial Coatings — a company tied to President Donald Trump — the Trump administration faced a dilemma. The attempt to paint the pool bed “American flag blue” ahead of our nation’s 250th anniversary had gone disastrously wrong. Rather than accept responsibility for a rushed timeline and a botched epoxy coating that almost immediately began peeling, administration officials took a page out of their typical playbook and chose to shift the blame.

High-ranking officials, including U.S. Attorney for the District of Columbia Jeanine Pirro — perhaps acting under broader directives from acting Attorney General Todd Blanche or even Trump himself — sought scapegoats to distract from the administration’s obvious failures and mollify the president. Most notably, they targeted 67-year-old former U.S. Olympic canoeist David Hearn. Hearn, who had simply paused during a bike ride to examine the peeling material, was indicted on a felony count of malicious property destruction, facing up to 10 years in prison.

Public outcry frequently suggests that Hearn should sue for damages — an intuitive reaction. Just as a doctor would face civil liability for performing an unnecessary, invasive procedure without examining a patient, prosecutors should be accountable when they fail to exercise due care. After all, Pirro’s office presented false narratives to a grand jury without conducting a meaningful investigation, unleashing the full weight of federal prosecution. In a July 2 press conference, Pirro claimed Hearn was observed “forcefully” and “violently” removing a pool liner — a claim prosecutors maintained in court despite lacking supporting evidence. Ultimately, DOJ prosecutors misled the grand jury, the judge and the public.

Only after her case crumbled — likely fearing forced discovery of internal documents — did Pirro move to drop all charges, acknowledging the damage stemmed from flawed installation rather than criminal acts. Her motion to dismiss blamed the Department of the Interior for misleading her office, though both Trump and Interior Secretary Doug Burgum publicly rebuked Pirro. Her refusal to aggressively execute the president’s legal agenda now leaves her tenure uncertain, following former Attorney General Pam Bondi’s dismissal for failing to achieve “wins” for the president.

But regardless of who is to blame, prosecutors retain an independent duty to evaluate evidence and assess credibility, which they plainly failed to do.

Of course, Hearn, along with the other individuals whose cases have been dismissed, should be entitled to massive civil damages. Yet under current law, the prosecutors who brought the baseless felony charge against him cannot be sued. Rather, they remain completely insulated from civil liability.

Constitutional rights require enforcement mechanisms to function effectively, yet when prosecutors violate a private citizen’s rights through malicious prosecution, legal options for recovery are non-existent. First and foremost, there is no statute authorizing suits against federal actors who commit constitutional violations.

This accountability gap is compounded by judicial precedent that confers absolute immunity on prosecutors for conduct that falls within their core prosecutorial duties — such as courtroom advocacy. As a direct result of this precedent, a prosecutor who intentionally fabricates evidence, conceals exculpatory material or knowingly presents false narratives in court remains entirely shielded from civil suits for damages.

Fortunately, the solution is very straightforward. First, lawmakers must enact a federal statutory cause of action statute — such as the proposed Bivens Act — that creates an explicit statutory right of action for individuals to sue federal officials who violate any of their constitutional rights. However, an explicit cause of action is insufficient on its own, as it would simply open the courthouse doors only to trap litigants in the vestibule. Therefore, Congress must also do away with the judicially concocted doctrine of absolute prosecutorial immunity that elevates prosecutors on a pedestal above their professional counterparts.

Without these essential statutory changes, what happened to David Hearn can happen to any one of us. Likewise, absent congressional action, federal prosecutors will continue to operate with impunity, leaving victims of egregious prosecutorial misconduct entirely without a legal remedy.

The actions of the prosecutors who brought this case should face meaningful scrutiny. The onus is on Congress to ensure that happens.

For years, lawmakers have distorted the market through zoning laws that restrict new building and limit housing density. More recently, however, cities around the United States have been working to loosen restrictive zoning codes to increase housing supply. Chicago, meanwhile, has so far kicked the can down the road on zoning reform.

In the spring legislative session, the Illinois legislature failed to pass zoning reform included in Gov. JB Pritzker’s BUILD plan. At the same time, it authorized a $200 million grant for new housing development. While expanding housing supply can moderate prices, the measure serves as a measly Band-Aid fix that fails to address the root of the housing supply problem.

The legislature would do better to repeal excessive and restrictive zoning laws that impede additional construction, especially regulations that restrict density.

Boston is having much the same problem, as it happens.

Recent research from the Cato Institute finds that Boston’s restrictive zoning has increased house size and raised rents. Indeed, the city’s density and single-family zoning restrictions contributed significantly to higher rent, higher house prices and increased average size of housing units. If Boston relaxed these restrictions, the research finds, “single-family home sale prices would fall by 4.4% ($28,488), and by 2.2% ($13,394) when paired with multifamily zoning.”

Chicago’s density zoning restrictions, though less onerous than Boston’s, certainly inflate the cost of housing. Vacant, developable lots do not abound in most U.S. cities, and Chicago is no exception. Thus, the answer to the housing problem lies in increasing housing density — more people occupying the same lot sizes as are available now — and in allowing more space to build in areas where previous zoning laws had limited development.

Boston’s housing problems, like Chicago’s, are hardly unique. Decades of research confirm that housing, as legislators are finally starting to notice, is a supply and demand problem, but restrictive zoning limits supply, preventing the market from solving the problem. Take single-family zoning, which accounts for 41% of Chicago’s residential space. These policies bar anything that is not a detached home or two-flat meant for one or two families — so no 30-unit apartment buildings. Where the laws of supply and demand would usually incentivize developers to build single-family homes into apartment buildings, zoning laws have made this impossible.

Zoning near train stations and major bus lanes, for example, is often restrictive on the theory that more people will want to live near public transportation, so allowing dense development there would drive up land values and price out lower-income residents. In response, many cities force developers to sell a certain quota of units for below market value or pay a fee to the city when building near transit. Other transit-related zoning laws require developers to build out parking spaces for their residents, regardless of whether they own cars.

On this front, at least, Chicago is making some progress. Last year, the city passed an ordinance to eliminate parking requirements near major transit stations and bus lines, as residents have less need for cars in those areas. It also allowed developers to build smaller apartments than the typical minimum lot requirements within a certain distance from a transit station.

These measures are a step in the right direction. And Boston has attempted some, most notably in its 2021 legislation, the Economic Development Bond Bill, which made changes to Massachusetts’ Zoning Act. It allowed, for example, multifamily housing and 15 housing units per acre within half a mile of train stations. Researchers estimated that in the next 60 years, “median sale prices of single-family homes could fall by 8.5% ($131,617) near train stations in areas with highly restrictive zoning, such as suburban municipalities.”

Opponents of Pritzker’s BUILD plan cited concerns of losing local control. These concerns don’t fall on deaf ears. Indeed, Chicago aldermen shouldn’t wait for statewide legislation to repeal restrictive zoning laws. The data will be on their side if and when they decide to act.

From those of us in Boston to our friends in Chicago: It’s time to put housing back in the market’s hands.

The same day, however, the court issued Trump v. Cook, which left in place removal protections for Federal Reserve Governor Lisa Cook. Trump had purported to fire Cook, citing allegations that she had made false statements in connection with a mortgage. The majority opinion relied heavily on a contested historical analogy to earlier national banks and the perceived economic stakes of continued Fed independence.

That decision’s persuasiveness aside, there is broad agreement that monetary policy should be insulated from political actors. We don’t trust politicians to exercise restraint in the face of electoral pressures to juice the economy. Surveying our current office-holding politicians, that is an understandable concern. But perhaps the causal arrow runs in both directions, and our politicians have become less serious partly because we have defined their jobs downward.

By insulating major policymaking from democratic control, as we had done most obviously with independent agencies, we may have weakened our own incentives to demand serious political governance.

Chief Justice John Roberts’ majority opinion in Cook makes the consequentialist case for independent monetary policy, citing “the calamities that could arise from even the ‘suspicion’ of political manipulation of monetary policy.” Justice Brett Kavanaugh, concurring, warned that “even temporary uncertainty about the status of the Federal Reserve could spark political upheaval … as well as turmoil in the U.S. and world economies.” (All that may be true, though Cato Institute scholars have argued persuasively that monetary policy rules, required by Congress, are more important than monetary policy independence.)

At oral argument, Paul Clement (representing Cook) stressed the importance of ensuring “that the markets and the public have faith in the independence of the Fed from the president and from Congress.”

The “ultimate imperative” for the Fed, Clement suggested, “is that the markets don’t think that rates are being lowered for political pressure” but rather for “prudent financial management of our monetary policy.” The unstated premise is that we can’t expect prudence from elected politicians. And fair enough: The appeal of shielding some important decisions from politicians is obvious. Frankly, I wouldn’t want most of them opining on my next snack, much less the national money supply.

But our success in insulating so many levers of power from political control may well enhance our ability to elect, tolerate, or ignore manifestly ridiculous political actors. When the machinery of government most likely to affect everyday American life runs outside politicians’ direct control, voters may discount candidate competence in favor of spectacle or grievance on Election Day. Indeed, it’s not far-fetched to think that primaries and elections for a job that unambiguously included control over monetary policy might have had very different outcomes.

Of course, plenty of critically important federal departments — State, Defense and Justice, to name a few — have always been subject to political control. But while Americans may have strong opinions about the war in Iran or high-profile Justice Department prosecutions, they are far more likely to cite inflation or the economy as the country’s most important problem. Indeed, without “denigrat[ing] any other agency,” Clement suggested that “there’s a reason that the markets watch the Fed a little more closely than they watch really any other agency of government.”

To be sure, technocratic expertise can be critical in crafting policy. But policymaking requires balancing inevitable trade-offs among competing interests, and that balancing calls for judgment — informed by expertise, not supplanted by it. We elect representatives to exercise their judgment on our behalf, rarely for any technical proficiencies. In allowing Congress to give away much of its power — to the executive branch generally and to independent agencies in particular — we may have dulled our incentive to elect the kind of representation we would demand if politicians visibly wielded the power we sense really matters.

We can — and the Constitution’s framers did — structure government institutions to channel and check political ambition, placing some matters, like free speech and religion, entirely beyond democratic reach. But structuring policymaking bodies to circumvent the democratic process engenders a political passivity that undermines the framework of self-government.

The Slaughter ruling took one step toward restoring our constitutional design, which relies on politicians and voters responding to, not obscuring, incentives. Unfortunately, the court’s decision in Cook could blunt what might have the candidate-improving impact of that step by maintaining the electorally protected status of the actors making perhaps the most salient policy decisions for the average American. It’s not that we should forgo serious people in those roles, but we deserve such officers throughout the rest of government, as well.