To be sure, GDP is an imperfect metric that fails to capture everything we value, but it remains a pretty darn good baseline for evaluating living standards here and abroad—one that mirrors many of the nonmonetary things we do really care about. Overall, GDP turns out to be one of the most reliable indicators of human well-being that economists have ever devised, and dismissing it is more a sign of motivated reasoning than economic enlightenment. New research shows, in fact, that GDP’s biggest flaw is probably that it underestimates just how much things have improved over the last century—by a significant amount.

What GDP Is (and Isn’t)
As I’ve written before, GDP has real methodological quirks. It’s basically a clunky aggregation of several economic indicators—private consumption, gross private investment, government spending, and net exports—that, even in normal times, can produce misleading snapshots of national economies. Import surges and collapses driven by recent U.S. tariffs, for example, distorted quarterly GDP prints last year—to the upside and down—in ways that had little connection to the country’s underlying economic health. Furthermore, the metric fails to account for important activities like leisure and unpaid household work; it doesn’t consider inequality; and it has difficulty properly valuing environmental goods, government expenditures, and new innovations. As we’ve discussed, GDP can be gamed by authoritarian governments with a strong incentive to fudge the numbers. And it can be particularly distorted in a handful of economies that are driven by one type of economic activity (e.g., petrostates or tax havens).

Populist critiques of GDP, however, go much further than these common methodological concerns. On the right, economic nationalists routinely sneer at “libertarian” policies that “merely” boost GDP at the expense of—in their view—more important measures of well-being: native-born wages, mortality, family formation, culture, national security, and so on. On the left, meanwhile, “degrowth” theorists see GDP growth as an outright bad thing because it necessarily means environmental destruction and mistakes economic activity for human welfare. A truly rich society, they argue, maximizes health, happiness, and sustainability over the monetary value of production.

In theory, these critiques make some sense: An economy that grows only by embracing pollution or selling vice doesn’t make people better off in the long term. In reality, however, the anti-GDP coalition goes much further by mechanistically rejecting policies they don’t like because they “only” boost GDP. This gets things badly wrong in several ways.

What GDP Shows—and Predicts
For starters, humans do value the stuff that GDP measures, so the metric alone—usually adjusted for inflation and divided by a nation’s population (aka, real GDP per capita, or “RGDPpc”)—is a good starting point for measuring well-being. As Cato’s Jeff Miron explained a few years ago in my book on American workers:

RGDP is also useful because the calculation is widely used and standardized, easing comparisons over time and across countries. Typically, economists use real GDP to compare nations’ economic power and real GDP per capita—adjusted for purchasing power—to compare living standards (but the two tend to track each other). Disagreements surely still arise—like this current one involving Paul Krugman’s defense of European living standards—but GDP is still the standard baseline.

Humans, of course, are not merely consumers and producers and thus have lives beyond GDP. Yet a trove of international data shows that RDGDpc strongly correlates with a wide range of economic and non-economic things humans care deeply about: incomes, employment, life expectancy, caloric intake, infant mortality rates, educational attainment, environmental improvement, technological advancement, leisure time, reported life satisfaction (aka happiness), and more. Here’s one example:

RGDPpc also aligns with alternative measures of well-being, including ones meant to replace GDP.

Contra the degrowth narrative, moreover, GDP growth is good for the poor—incomes at the bottom historically rise in proportion to average (per capita) incomes—and global income inequality falls as previously poor countries (China, India, Vietnam, South Korea) experience strong increases in GDP. In short, the countries lifting most people out of extreme poverty have embraced markets and growth, not degrowth.

The connection between GDP and well-being holds at the subnational level, as well. For example, a recent study tracking European regions between 2008 and 2019 found that higher RGDPpc was linked with longer life expectancy. Economist Adam Ozimek did something similar for the United States last year, finding that metro areas with a higher cost-of-living adjusted GDP per capita enjoyed higher real incomes, more plentiful jobs, and fewer single-parent households:

Other careful research has found strong connections between per capita incomes in U.S. cities and both residents’ lifespans and local crime rates.

The relationship between GDP growth and well-being shows up consistently, across dozens of countries with wildly different politics and cultures. The linkage is so strong, in fact, that it’s become a nerdy joke among economists online:

The relationship also isn’t mere coincidence. Some of it is simply math—the things GDP measures also factor into other metrics—but it’s also common sense: As we’ve discussed, richer, more productive societies can afford more leisure and education, better hospitals, cleaner water, better food, and many other things that GDP doesn’t directly measure. Ozimek’s bottom line sums it up well: “GDP is an undeniably important and helpful indicator. It may not include everything that matters, but it is strongly related to many things that do.” Or, put another, more provocative way, money really does buy happiness—at least at the national level.

But GDP Does Err … to the Downside
In one sense, however, the anti-growthers are right that GDP doesn’t fully capture trends in actual human flourishing over time. The only problem is that they’re correcting in the wrong direction: Instead of overstating modern well-being, research increasingly finds that the GDP calculation does the exact opposite.

Cato’s Miron, for example, cites work by economist William Nordhaus showing that artificial light—measured by the number of work hours required to produce a given quantity of lumens—was approximately 300,000 times more expensive in early Babylonia than it is today. Nordhaus found that the same trend applies for computation: Between 1850 and 2006, the cost of performing a calculation, like adding or multiplying, fell by a factor of 73 trillion. The standard price indices on which GDP is based fail to capture cost reductions of this magnitude, which—as our AI moment indicates—continue today.

The modern U.S. economy’s digitization and servicification raise similar issues. The GDP calculation was designed to measure a world dominated by physical goods (crops, energy, manufactures, etc.), so it has difficulty capturing the true value of “free” and continually updated services. Economists have thus estimated that traditional GDP statistics might miss hundreds of billions of dollars in consumer surplus generated by the digital economy each year—real improvements in modern living standards that are especially important for lower-income households (and mostly missed by GDP).

A new working paper from Stanford economists Philip Trammell and Charles Jones goes even further. They start by noting a fundamental problem with how GDP measures actual living standards over time: It essentially values stuff that’s been around for a long time (corn, bicycles, whatever) the same as life-changing new things (antibiotics, the internet, smartphones, etc.). They open with the classic example of this measurement problem: Nathan Rothschild, the richest person in the world in the 1830s, died at age 58 from an infection that $10 of antibiotics would cure today. No amount of extra consumption in 1836—more candles, horses, food, etc.—could have saved him, even if doing so increased GDP. Thus, progress in human living standards comes mostly from the invention of new or higher-quality goods and services, not simply from consuming more of the old things. Yet GDP can’t really distinguish between the two and thus misses the real value of a new good or service that even billionaires find to be valuable, if not priceless.

To get around this and related issues with GDP, the economists propose a clever solution: measuring actual improvements in U.S. living standards over time by looking at the “value of a statistical life” (VSL), i.e., the price people place on their remaining years, as revealed through everyday risk-taking. The trade-off humans routinely make between money and the risk of dying (e.g., from working a more dangerous job), when aggregated across millions of decisions, implicitly quantifies how much we value our expected future life. Standard and widely used VSL figures, therefore, capture almost everything a person would want to stay alive to experience: better foods, new technologies, cleaner air, more freedom, etc. And the growth of VSL over time can provide a better proxy for how much living standards have actually improved, as compared to RGDPpc. Applying this alternative methodology, the economists’ results are striking: While GDP-based living standards in the United States have merely doubled since 1940 (still good!), the VSL-based measure has increased by five to seven times over the same period—and possibly even more.

The implication for the anti-GDP crowd is clear and uncomfortable: Far from overstating how well off we’ve become, GDP may be seriously undercounting it.

Summing It All Up
Despite some flaws, GDP remains a valuable way to measure economic activity and living standards, especially across countries and long periods of time. A century of evidence shows that societies growing richer, as measured by GDP, live longer, healthier, better-educated, and freer lives. And, contra the degrowth narrative, the people best positioned to pursue nonmaterial things—community, leisure, religion, environmental quality—are those wealthy enough to afford them. If anything, GDP probably understates the gains we’ve made, but that’s not a reason to abandon it.

Indeed, since GDP tracks material well-being and other, non-economic measures of human flourishing, policymakers can and should continue to give weight to the metric when evaluating whether certain economic policies have made (or will make) most Americans better off. Policies that improve growth deserve preferential treatment for this reason, not out of allegedly mindless fealty to “line go up.” None of this means that the government should only consider GDP. There are certainly policies that would raise GDP in the short run and are still morally objectionable or economically wrong-headed. And the measure is incomplete in important ways that demand scrutiny whenever a new data point is published (especially with U.S. trade policy right now). But there’s a huge chasm between “GDP is imperfect and should be considered alongside other indicators of human flourishing” and “GDP is meaningless” or “growth is actually bad.” The first position is sensible economics. The second is a surefire recipe for making Americans poorer and calling it a policy win.

The diagnostic category itself has been steadily widened by the institutions that define it and the financial structure that rewards every participant for applying the ADHD label. As we have argued in our Cato Institute analysis of how the American healthcare system rewards psychiatric overdiagnosis, subjective diagnostic criteria interact with a payment system that rewards diagnosis to produce predictable inflation across psychiatric categories. The result is labeling ordinary behavior as pathological. ADHD is among the cleanest case studies of that pattern.

Foraging minds in an industrial classroom.

Human cognition was shaped over hundreds of thousands of years in small foraging bands, where attentional flexibility was an asset rather than a liability. A child who scanned the horizon, registered novel stimuli, and shifted focus rapidly between threats and opportunities was a child more likely to survive. Sustained, narrowly channeled attention to a single abstract task for hours at a time was simply not part of the ancestral environment, and the cognitive machinery to produce such concentration on demand was never uniformly selected for. What we now call distractibility is, in another light, vigilance. Most animals, including ancestral humans, evolved to be constantly on the lookout for novelty and threat.

Mass schooling, which emerged in the 19^th century in part to prepare children for industrial labor, asks something quite different. It asks 6- and 7‑year-olds to sit still in rows, suppress physical movement, attend to a single voice for extended stretches, and produce written output on a fixed schedule. Most children adapt. The variance in how easily they do so is enormous, and the children at the lower tail of conformity to that demand have come to define the diagnostic category.

Boys end up there more often than girls, for reasons that are not mysterious. Boys, on average, are more physically active, take longer to develop self-control, and are more drawn to rough play. The same pattern shows up in other mammals and tracks the effects of testosterone on brain development. Put boys in a room and tell them to sit still for six hours, and a predictable share of them will fail, not because they are mentally ill but because they are boys. The youngest children in any classroom are also more likely to be diagnosed with ADHD than their older peers, a finding so robust across studies and countries that it points to ordinary developmental variation rather than disease.

The evolutionary frame also provides a more nuanced understanding of the fear that screen time in childhood harms brain development and attention span. The brain is plastic, especially in childhood, and it adapts to the environment it is given. That plasticity is precisely what allowed generations raised under modern industrialized education systems to develop the sustained attention style that schools reward, despite it being so far from our environment of evolutionary adaptedness. But a generation that grows up navigating fast-moving feeds, switching between applications, and processing rapid streams of visual information will predictably develop a different attentional profile than one raised on books and chalkboards.

That does not mean the learning or attention span of youth raised on digital technology is impaired. Heavy media multitaskers and habitual users of touchscreen devices do tend to perform worse on tasks that demand sustained, narrowly focused attention and inhibitory control. But they also tend to perform better on tasks that demand rapid visual search, parallel processing of multiple objects, and flexible reallocation of attention. Action video game play, in particular, has been shown to enhance visual selective attention, processing speed, and the spatial resolution of vision. These effects transfer beyond the trained task, improving general abilities to track several moving things at once, spot relevant objects in a crowded scene, and pick out a target faster when surrounded by distractions.

These cognitive trade-offs elucidate how neural plasticity gives rise to different forms of intelligence. The brain has a finite budget of computational and metabolic resources, and the cortex reallocates them in response to the demands placed on it. The clearest demonstrations come from sensory deprivation: In people who lose their sight, the visual cortex does not simply lie fallow but is recruited for auditory and tactile processing, including Braille reading, with measurable gains in those domains. Congenitally deaf individuals show analogous repurposing of the auditory cortex for vision and smell. Every brain is continuously specializing toward whatever it does most, and different cognitive skillsets have different trade-offs.

A brain trained on rapid feeds and parallel streams gets better at rapid visual search, switching, and parallel processing while getting worse at slow, serial, endogenous focus. A brain trained on long books and chalkboards makes the opposite trade. The picture is not simply that screens damage children’s brains or lower their intelligence. Claims of generalized cognitive harm typically rest on measures of a single attentional style, the one schools happen to demand, and ignore the capacities that grow on the other side of the ledger. Calling the resulting attentional profile ADHD, treating it as a chronic illness, and medicating it accordingly is a category error. The trade-offs are real, but the diagnostic system measures only the deficits because only the deficits are reimbursable.

From hyperkinetic boys to inattentive adults.

The diagnostic category we now call ADHD has been progressively widened almost from the moment it entered the Diagnostic and Statistical Manual of Mental Disorders, the reference text published by the American Psychiatric Association that defines the criteria for every recognized psychiatric condition in the United States. The DSM-II, published in 1968, listed the condition as “hyperkinetic reaction of childhood” and described it in a single sentence, focused on the restless, disruptive child, almost always identified as a boy, who would supposedly grow out of the condition by adolescence. The DSM-III, in 1980, renamed it attention deficit disorder, with or without hyperactivity, and for the first time treated inattention as a stand-alone presentation rather than a symptom of restlessness. That single revision opened the category to a far larger population of children, especially girls, whose attentional patterns had previously been invisible to the diagnostic system.

The DSM-III‑R, in 1987, folded the subtypes back together and introduced the current acronym, ADHD. The DSM-IV, in 1994, separated the disorder again into three presentations—predominantly inattentive, predominantly hyperactive-impulsive, and combined—and explicitly extended the diagnosis into social, academic, and vocational contexts beyond childhood. Studies comparing the DSM-III‑R and DSM-IV criteria directly found that prevalence rose from 9.6 to 17.8 percent under one set of comparisons and from 7.3 to 11.4 percent under another, almost entirely on the strength of newly identified inattentive cases. The DSM‑5, in 2013, raised the age-of-onset requirement from 7 to 12 and lowered the symptom threshold for adults.

Each revision expanded the population eligible for diagnosis, and, with it, the population eligible for stimulant prescriptions, academic accommodations, and disability protections. The trajectory runs in one direction. There is no edition of the DSM in which the criteria for ADHD became more restrictive.

The incentive problem.

Layered atop the definitional and developmental story is a set of economic incentives that quietly lower the threshold for diagnosis. A growing share of these diagnoses now comes from primary care clinicians rather than specialists, reflecting how rapidly ADHD treatment has migrated into routine primary care, and how the expansion of telehealth lowered the friction of obtaining a prescription.

One of the clearest examples of incentives for overdiagnosis comes from how we finance education. When special-education funding is tied to specific diagnoses, schools have a built-in reason to identify more students with ADHD, because the label unlocks additional resources. Researchers have documented systematic differences in diagnosis and treatment that align with funding formulas rather than with underlying disease rates, a pattern consistent with third-party financial incentives shaping who gets labeled. Clinicians do not work in isolation; they respond to expectations from schools, families, and the broader system. Once stakeholders recognize that a diagnosis unlocks services, pressure to apply the label tends to grow.

Primary care clinicians typically practice in fee-for-service systems, where assigning a diagnosis makes the encounter billable and enables reimbursement for follow-up visits and medication management. Patients have their own incentives to seek the diagnosis, including academic accommodations, workplace protections, and access to performance-enhancing stimulants such as Adderall. In an environment where the condition is defined by subjective criteria rather than objective tests, it is unsurprising that some individuals exaggerate or feign symptoms to obtain those benefits.

The pattern is by now familiar. As we documented in our analysis of Medicaid-funded autism therapy, the broadening of autism criteria, combined with open-ended reimbursement, produced an explosion in spending on applied behavior analysis that far outpaced any plausible change in the prevalence of disabling autism. The broadening of ADHD criteria has produced a parallel surge in stimulant prescriptions, and our recent piece against the campaign to formalize “social media addiction” anticipates the same trajectory if that diagnosis is formalized. In each case, subjective diagnosis and financial incentives that reward diagnosis push the boundaries of illness outward.

What this should teach us.

The growth in diagnoses is best understood as the cumulative output of several systems, each behaving in a way its incentives reward. Definitions expand because there is little institutional pressure to keep them tight. Clinicians diagnose because diagnosis is what the system pays for. Schools refer because referrals bring resources. Patients seek labels because labels bring access to special accommodations. The aggregate effect is a steady erosion of the line between ordinary human variation and clinical disease.

That erosion has costs. Children whose ordinary inattentiveness is medicated as a chronic condition, adults who organize their identities around a label, and patients with severely impairing ADHD whose treatment resources are diluted across an ever-larger pool all bear those costs. The path to more reliable diagnoses runs through more reliable incentives: tighter criteria, independent assessments, and payment structures that do not reward expanding the definition of illness. Policymakers should stop structuring schools, insurers, and healthcare systems so that people must acquire a medical diagnosis to receive help, accommodations, or reimbursement.

Children today have greater safety, resource availability, and tools for education than any cohort in human history. It is the schoolroom that asks kids to sit still for hours and the diagnostic system that pathologizes the ones who cannot that are the more unusual and pathological features of modernity. A more honest accounting would distinguish severely impairing attentional disorders from the wider band of ordinary human variation. It would recognize that the temperaments now most likely to be medicalized are, in a different setting, the temperaments that helped aid survival and human progress.

Last month, the agency issued a “complete response letter” declining to approve the therapy, citing insufficient evidence of effectiveness and concerns about the trial’s design.

Oncologists and researchers have pushed back, arguing that the FDA dismissed encouraging response data and applied standards that may not fit patients with few remaining options. For patients with advanced melanoma who have exhausted standard treatments, that decision is not an abstract regulatory judgment—it can mean the difference between having one more option and having none.

The case raises an obvious question: Whatever happened to “Right to Try,” the policy enacted during the first Trump administration? It was intended for precisely this situation. Yet even when patients are told they have a right to try, that right often exists more on paper than in practice.

Congress passed the federal Right to Try Act in 2018 with a straightforward idea: Terminally ill patients with limited options should be able to access investigational therapies without waiting years for full FDA approval. Lawmakers sought to remove bureaucratic barriers and give patients, their doctors, and drug developers greater flexibility.

Critics warned at the time that the law would do less than its supporters claimed. They argued that the real barriers were not just FDA oversight, but manufacturer reluctance, institutional review requirements, and liability concerns.

In that respect, they were right.

The sales pitch was sweeping. When President Donald Trump signed Right to Try in 2018, surrounded by patients, he promised a “fundamental freedom” that would give dying patients hope.

Eight years later, the record is far thinner than the rhetoric. The FDA reports only a handful of uses each year—12 drugs from 2018 to 2022, and just a few more annually since. It wasn’t a new pathway so much as a permission slip that rarely translates into access.

The gap was evident almost immediately. In 2019, STAT News reported that an ALS patient—whose name appears in the law—still couldn’t obtain treatment, as companies declined to provide it.

That wasn’t a fluke. The law doesn’t require manufacturers, physicians, or hospitals to participate. In practice, the “right” to try ends where others’ willingness begins.

The law does not require drug manufacturers to provide investigational products—and it shouldn’t. Companies often decline because of cost, liability concerns, and the risk that adverse outcomes could complicate approval. Physicians and hospitals face similar pressures, including professional risk and institutional oversight, and they, too, must be free to exercise their judgment or decline involvement. Meanwhile, because the FDA still controls final approval, companies have strong incentives to avoid anything that might jeopardize it.

The RP1 case illustrates this gap. Patients with advanced melanoma—many of whom have exhausted standard therapies—may be willing to accept uncertainty in exchange for a chance at benefit. But the current system does not primarily ask what risks patients are willing to accept. It asks what risks regulators are willing to tolerate on their behalf.

That approach may be understandable when dealing with routine conditions or widely used medications. But it is far harder to justify when applied to patients with terminal illnesses, for whom delay is not a neutral outcome but often the worst possible one.

Supporters of the status quo argue that lowering evidentiary standards would open the door to ineffective or unsafe treatments. That concern is legitimate. But it overlooks an equally important point: The current system already rations access, just in a different way. Instead of allowing patients to weigh risks and benefits with input from their physicians, it assigns that judgment to regulators, who make it on everyone’s behalf through a process that is necessarily slow, cautious, and one-size-fits-all.

More fundamentally, we should reconsider the assumption that a single federal agency must decide when patients may access experimental care.

One alternative would be to shift from centralized control to independent certification. Rather than giving the FDA the power to block access, independent organizations—public or private—could evaluate investigational therapies and provide clear, competing assessments of their safety and effectiveness.

That approach would preserve rigorous evaluation while restoring patient choice. Patients and physicians would still have access to expert guidance, but the final decision would not rest with regulators acting on behalf of everyone. It would rest with the individuals who bear the risk. We rely on independent certification in many other areas of life without giving those organizations the power to ban access altogether. Medicine should be no different.

Right to Try fails because it leaves the existing gatekeeping structure intact. Independent certification would take a different approach: inform patients rather than decide for them.

Independent certification would not guarantee access to every investigational therapy, nor should it. Patients, physicians, and manufacturers each have their own rights and responsibilities, and no system can—or should—override them. But we can do far better than a framework that defaults to delay and denial.

For patients facing life-threatening illness, uncertainty is not the enemy. Delay is. The current system asks them to wait for proof that they may never live long enough to see. A right to try that cannot be exercised is no right at all.

Much of his party, at least in rhetoric if not always in conviction, has gone along with him. Today, tariffs are no longer a temporary experiment but a defining feature of Republican economic policy. Whether that remains the case, or the GOP rediscovers its long-standing affinity for free markets, is one of the most consequential questions facing the party today.

Let’s first reflect on how we arrived here. Riding a wave of voter anger over the Washington status quo — and, it must be said, weak Democratic opposition — Trump was elected in 2016 and 2024 on promises that included confronting China, revitalizing manufacturing, and correcting alleged abuses by U.S. trading partners. This, we were told, was how America would be made great again.

After more than five years in office, and with a trade policy largely left in place by former President Joe Biden (which should give Republicans pause), it’s worth taking stock. The results are not encouraging.

On the China front, no one can credibly argue that heavy and sustained tariffs have prompted the country to change its ways. Even the U.S. government has acknowledged as much. Instead of producing reform in Beijing, the administration has often focused on trade battles with longtime allies rather than building a coordinated response to China.

If the goal is to compete with China, the answer isn’t to wall off the United States but to link arms with its allies. Deeper trade ties in the Indo-Pacific would strengthen supply chains and ensure that global rules are shaped by the U.S. and its partners, not Beijing.

But the administration opted for conflict rather than cooperation, engaging in skirmishes with allies that became the preamble to numerous trade deals widely described as liberating the U.S. from years of abuse. The deals signed in the president’s second term, however, have proved ill-conceived. Concluded under the threat of tariffs, the agreements secured modest foreign tariff reductions while locking in significantly higher U.S. tariffs under the guise of reciprocity.

On net, these deals have made trade more difficult and more costly for Americans. Their result has been a sapping of American economic strength.

Perhaps the clearest example is manufacturing. Far from revitalizing the sector, tariffs have proven an unwelcome headwind by raising the cost of key inputs. Manufacturing depends on access to equipment, components, and raw materials at competitive prices, but tariffs make them costlier.

Consider the administration’s tariffs on steel and aluminum. Imposed during the president’s first term, a 2023 government study found that the tariffs increased output in those industries by $2.8 billion annually. The industries that use those metals, however, saw their output decrease by $3.4 billion — a net loss of $600 million.

That should have prompted a rethink. Instead, the tariffs were increased.

Manufacturers haven’t been the only victims. Farmers have faced higher costs on inputs ranging from fertilizer to fencing, while also bearing the brunt of foreign retaliation. Soybean sales to China collapsed during the early years of the trade war and, despite periodic rebounds, remain below recent historical averages.

Such was the damage that the Trump administration provided farmers with billions in bailout payments in 2019, and last year they did it again.

Americans aren’t blind to any of this. Polling shows the administration’s broad use of tariffs has been negatively received by the public. Protectionism isn’t just an economic loser but also a political one. A key factor behind Trump’s 2024 victory was voter anger over rising costs. Higher tariffs, and the higher prices they create, cut directly against that concern.

The protectionist experiment has been run, and the results are in. For the sake of the economy — and their own political future — Republicans need a new trade policy. Or, more accurately, a return to their old one.

After all, Republicans have not always seen trade this way. Urging Congress to renew the Trade Agreements Act to enable tariff reductions, Dwight D. Eisenhower made the often overlooked point that if the U.S. wished to sell its goods abroad, it also had to buy from abroad. Ronald Reagan was even more direct. Protectionism, he argued, was “destructionism” that destroys jobs and weakens industries.

Beyond economics, Republican philosophy offers its own case against tariffs. Tariffs are taxes, and their imposition by executive decree represents a significant expansion of presidential power. For decades, both tariffs and expansive executive power have been — with good reason — anathema to Republicans. Yet earlier this year, the Supreme Court held that the president overstepped his authority by imposing tariffs under the International Emergency Economic Powers Act.

Notably, Trump himself has even at times implicitly recognized the limits of trade barriers. His administration has issued a historically long waiver of the protectionist Jones Act when restrictions proved too costly and rolled back tariffs when they threatened key industries. When the stakes are highest, even proponents of tariffs turn to flexibility.

The choice facing Republicans is not between being pro-America and pro-trade. It is between symbolic protectionism and actual competitiveness. America’s strength has never come from walling itself off. It has come from engaging with the world on its own terms with confidence in Americans’ ability to compete and win.

Re-embracing that tradition would mark an overdue return to the policies that built American prosperity.

It’s a tidy narrative but mostly wrong.

There is no standard measure of the “labor share” — worker compensation as a fraction of gross domestic product — and commonly cited figures are inaccurate. They often omit important sources of employee compensation or distort “corporate” income by failing to account for asset depreciation or by including income from noncorporate or foreign sources. When economists correct these errors, the purported labor-share decline becomes more modest or reverts to historical norms.

Just as important, a rising share of corporate income benefits the 62 percent of American workers who own equities, padding their 401(k)s, IRAs, pension funds and education and health savings plans. With “Trump accounts” for millions of children now coming online, that figure should soon increase, further undermining the zero-sum characterization of a declining labor share as “capitalists” taking from “workers.”

Finally, inasmuch as the decline remains concerning, government policy shoulders much of the blame. In a paper published last month, economists Byunghee Choi and Choongryul Yang find that 45 percent of the declining labor share between the late 1990s and 2019 owed to a reduction in U.S. companies’ hiring and firing. This “rise of inaction” was driven by the increasing costs that firms incurred for worker-related regulatory compliance and employer-provided health insurance.

Consider the latter dynamic. As Elizabeth J. Fowler and Michael F. Cannon recently observed in The Post, exempting employer-sponsored insurance from payroll and income taxes ensures that most workers get their coverage through their employers. That provision, they add, “encourages more comprehensive plans than many workers might otherwise choose, which reduces price sensitivity.” Per-worker insurance costs thus keep climbing. Regulatory mandates in the Affordable Care Act can add to the price tag by eliminating the lowest-cost policies and requiring remaining ones to cover workers’ adult-age children.

Both regulatory and health care costs are typically incurred when a company hires — or, in the case of labor regulation, fires — an employee. When the burdens rise, employers have a greater financial incentive to avoid changing headcounts. The result is less hiring and firing, less labor reallocation across firms, weaker competition for workers, lower wages and ultimately a lower labor share. Choi and Yang estimate that health care alone accounted for about a third of the increase in labor frictions over roughly 20 years.

That is consistent with other research. Economist Niklas Engbom examined 23 OECD economies between 1991 and 2015 and found that nations with more dynamic labor markets enjoyed faster wage growth. Policies that raised hiring costs — business regulations, labor taxes, employment-protection laws — also reduced labor-market fluidity. Research from Columbia University has found similar effects, which recent events bear out: Immediately after the pandemic, the United States — Engbom’s base case for a “typical high-fluidity country” — experienced lower unemployment and faster wage growth than Europe, where governments discouraged employers from changing headcounts.

Policy can create similar costs and sclerosis for workers. Employer-sponsored health care reduces voluntary job turnover because quitting creates burdens for workers and their families, a phenomenon economists call “job lock.” Other tax-advantaged benefits tied to employment — for retirement, dependent care or transit — do the same.

Occupational licensing can likewise discourage incumbent workers from changing professions or locations, as well as block those who lack the requisite credentials. Decades-old criminal records can bar workers from licensed trades or keep them from applying for new jobs to avoid scrutiny of their past mistakes. These and other barriers suppress the job-switching through which American workers have historically accumulated skills, built bargaining power and negotiated higher wages.

Pace populist critics, then, it isn’t greedy corporations that are to blame. It’s mainly government policy, which has discouraged American employers from adjusting their headcounts and American workers from quitting for greener pastures. The resulting stagnation has meant lower wage growth and a lower share of the economic pie going to workers. With today’s U.S. labor market having been stuck in a “low-hire, low-fire” environment for a year, there’s little reason to think this will change anytime soon.

Yet for those truly concerned about the labor share, there are obvious solutions. Fix the policies that make it harder for American workers to move, switch, quit and bargain. Ensure that workers aren’t increasingly costly to employers. That might include eliminating the health care tax exclusion, consolidating workers’ tax-advantaged benefits into a single, portable savings account or letting onerous new rules for overtime and tips expire in 2028. Among the states, it could mean allowing licensed workers to operate across state lines.

Intentional or not, the government has waged a multidecade war on U.S. labor dynamism. The results are clear. What isn’t is whether anyone, on the left or right, is willing to take on the policies that got us here.

Clearly Utah families want more educational options than the system currently provides. That reality matters as the Utah Supreme Court considers whether to eliminate UFA, and as lawmakers weigh what comes next.

UFA, passed in 2023, enables parents to use a portion of state education funding for a wide range of educational options: private schools, microschools, tutoring, special-needs services and homeschool resources.

Since then, a diverse ecosystem of learning options has blossomed across the state. The same thing is happening in other states with similar programs. Lower-income families are prioritized in the application process, so UFA is helping students who need it most. School heads are also reporting a diversifying student body as children from a wider range of backgrounds find their way to schools that fit them.

Families aren’t exiting public schools out of spite — they just need something different. Perhaps they have a child with a learning disability whose assigned school wasn’t equipped to help, one who was bullied and needed a fresh start or a student who succeeds in a smaller setting that a conventional classroom can’t provide. UFA gave them a lifeline. For many, it’s the only reason their child is thriving today.

That program is now under threat.

The teachers’ union sued to kill UFA shortly after the first application window closed. Last year, a district judge sided with the union, ruling that Utah’s constitutional mandate to establish public schools means the legislature cannot create other educational programs. In other words, the ruling held that the mandate is a ceiling and not a floor. The Utah Supreme Court is now reviewing that decision.

Consider what the “ceiling” interpretation would actually mean. If the constitution truly prohibits the legislature from going beyond that minimum and prevents public funds from supporting private educational choices, Utah would need to halt programs that have operated for decades without controversy. For example, Utah’s public preschool programs — which are not universal, free or guaranteed — go well beyond the constitutional mandate to provide K‑12 schooling.

Similarly, Opportunity Scholarships, which award college scholarships to high school students who complete advanced coursework, could be disallowed if the ceiling interpretation prevails. These programs are not facing legal challenges because the education clause has long been understood to set a floor for educating children, not a ceiling.

Specifically in the K‑12 space, it’s worth noting that Utah’s long-standing programs supporting students with special needs at private schools have also not been subject to lawsuits despite going beyond what the constitution mandates. It’s further evidence that the constitution’s education provision has not been treated as a ceiling.

The Idaho Supreme Court recently confronted a similar question and came to the opposite conclusion of the Utah district judge. Ruling against a challenge to Idaho’s education tax credit program, the Idaho court held that the public school mandate doesn’t bar the legislature from going further. “When a constitutional provision mandates the legislature do something,” the court wrote, “it is not reasonable to read that mandate as restricting the legislature’s broader power to do something more.”

The union’s second argument — that the program diverts funding from public schools to private schools — fares no better. Scholarships go to individual children, not private schools, and can be used for far more than tuition, including tutoring, therapy, curriculum and other learning expenses. Crucially, a scholarship only exists because a family chose not to use a public school, so public schools are not losing funding for students they are actually educating.

The numbers also undermine the “defunding” argument since public schools retain significant funding even when students choose other options. Utah public schools spent more than $10.6 billion last year — over $16,000 per student. The maximum UFA scholarship is $8,000.

School districts retain all local funding and some state funding even when students go elsewhere. Total UFA funding amounts to roughly 1% of public school spending. Allowing parents more choices about how to educate their children does not threaten the public school system.

For more than a century, establishing and maintaining public schools has been the bare minimum Utah’s constitution required. UFA finally goes further. It gives children who need something other than their assigned public school access to different learning environments.

Whatever the court decides, the legislature should be clear-eyed about what’s at stake: a program with more demand than supply that is already changing lives and costs a fraction of what public schools spend.

Section 27 of the Merchant Marine Act of 1920, as it’s formally known, requires that goods shipped between US ports travel on vessels that are US-built, US-flagged, US-owned, and crewed predominantly by US citizens. Because of this legally-enforced domestic shipping monopoly, building and operating ships in America today costs far more than doing so abroad, and domestic coastwise shipping is effectively non-existent outside the few places that have no choice, such as Alaska, Hawaii and Puerto Rico.

Rather than bolstering US commercial shipping capacity and the merchant marine, the Jones Act has presided over the steady degradation of both.

Supporters of the law claim it’s essential for national security and has negligible economic costs. They’ve also vigorously opposed waivers of the law, which are permitted in the “interest of national defense,” arguing that exemptions undermine economic and national security and are unnecessary due to sufficient domestic capacity. Their efforts to narrow the waiver conditions have, along with vigorous lobbying, successfully ensured they’re rarely met.

President Donald Trump’s most recent waiver of the law has substantially undermined the pro-Jones Act case. Issued for 60 days on March 17, 2026 – right after the Strait of Hormuz effectively closed – and subsequently extended for another 90, the waiver covers all US territories and more than 659 product categories. That makes it the longest and broadest waiver since 1950. The law also requires that any operator using the waiver file a compliance report on their activities. Here’s what the data thru May 6 show – and what they don’t.

First, the waiver exposes flaws in the law’s national security rationale. The Jones Act ostensibly exists to ensure the US isn’t dependent on adversaries to move critical supplies in times of crisis. Yet, even leaving aside that this “national security” law keeps getting waived when a genuine security emergency arrives, the waiver data tell a benign story. None of the foreign vessels moving millions of barrels of gasoline, diesel, crude oil, and fertilizer between American ports have been owned or operated by Chinese firms or have flown the flag of China. Russia is similarly absent.

The White House has called these vessels’ availability “incredibly effective” for stabilizing US energy markets. Thus, when a real crisis hit, allies and neutral registrants, not adversaries, filled the gap – a gap created by a withering Jones Act fleet of just 93 oceangoing vessels (only 55 tankers) and a moribund commercial shipbuilding industry that recently got bailed out by the South Koreans.

So much for “national security.”

Second, the waiver reveals some of the domestic shipping demand that the Jones Act has suppressed, thus hinting at the law’s substantial economic costs. As industry publication TradeWinds reports, foreign vessels utilizing the waiver have supplemented a fully-booked Jones Act fleet instead of displacing it. This implies the existence of latent demand for coastwise shipping that the law has thwarted – additional transactions between US companies and US ports that would occur daily but for the Jones Act’s costs. In non-waiver times, this activity goes to foreign suppliers, along overland US routes, or via ridiculous workarounds such as sending Gulf Coast fuel to the Bahamas for blending before delivering it to California. For the next few months, it doesn’t.

The waiver data also show the potential for both US long- and short-haul shipping markets – sometimes between a single American company’s US facilities. Distant voyages include diesel from Louisiana to Puerto Rico (due to “non-Availability of US flag vessels”); crude oil from Texas to Pennsylvania; gasoline from Houston to Long Beach; and renewable diesel from New Orleans to Portland. Jones Act critics have long claimed that the law forces supply-constrained US areas to use imports instead of preferable American-made goods; under the waiver, Phillips 66 is shipping domestic oil from Texas to an East Coast refiner, instead of the foreign crude it usually sends.

The short-haul voyages are just as noteworthy. They include gasoline and diesel from Washington to California and Oregon; same-state shipments of fertilizer, ethanol, and refined products in Louisiana, Texas, and California. These are natural trade lanes that have been blocked for decades, all but ensuring more traffic on US interstates and rail lines instead of goods traveling more efficiently on the water.

A robust coastwise shipping sector could exist in the United States, but the Jones Act simply prevents it. That’s “demand destruction” in action, and the waiver lets us see it.

That visibility is another benefit: Unlike a tariff, which raises costs but still allows trade during high-stress periods, the Jones Act’s prohibition on foreign coastwise shipping created a century-long dearth of the information needed to model a more competitive shipping environment. Now, the law’s unseen effects are no longer theoretical; they’re real – and documented in federal records. Economic analyses and public discourse should be better for it.

That said, the waiver won’t show everything Jones Act critics might want. Although 150 days is a relatively long period, it’s still fundamentally different from permanent reform, which would give market actors the consistency and predictability they need to make large, long-term investments. As the administration’s 90-day extension acknowledges, it takes time for shippers to commit to routes, reorganize freight networks, establish new supply chains, and otherwise reveal the potential of unrestricted American maritime trade.

Twenty-three movements are useful datapoints, but they’re not permanent policy change. The waiver will reveal some of what’s possible without the Jones Act, but surely not all, or even most, of it – especially the new companies, services, and even entire markets that might eventually emerge in the absence of the law’s restrictions and distortions.

The waiver also won’t show a major change in fuel, fertilizer, or other prices — something Jones Act defenders have unfairly seized upon. Even a peacetime repeal of the law would likely reduce the price of a gallon of gas by 10 cents at most. A temporary waiver will provide smaller benefits – ones swamped by the seismic forces of a generational energy crisis. The Jones Act is a small, chronic tax on the American economy, not a deathblow. Temporarily lifting that tax will help at the margins; it won’t fundamentally transform the economy.

Nevertheless, the Jones Act waiver has given us something the law’s defenders have spent a century trying to prevent: evidence of what we’ve been missing. Dozens of ships. Millions of barrels. Natural trade lanes. It’s a good start.

Predictably, Washington’s Europe-Firsters snapped for their fainting couches. Sen. Roger Wicker and Rep. Mike Rogers, the Republican chairs of the Senate and House Armed Services Committees, respectively, pronounced themselves “very concerned” by the move, fretting that it “risks undermining deterrence and sending the wrong signal to Vladimir Putin.”

President Trump is right to withdraw troops from Germany and from Europe. Neocon Republicans and Democrats are wrong. There is already a template for a rapid withdrawal from Europe: the one that took place after the end of the Cold War — incidentally, also the last era when the U.S. had a balanced budget. Our only criticism is that Trump’s current withdrawal numbers don’t go far enough. (In fairness, the president promised on Saturday that he is “going to cut way down. And we’re cutting a lot further than 5,000.”)

There is one argument for maintaining U.S. dominance of European security that could hold water: the idea that doing so prevents World War III. As the German scholar Josef Joffe posed it, the U.S. presence serves as a “pacifier” for Europe, which without it would otherwise drift back to security competition or war.

This view is dated and fails to recognize how profoundly Europe has changed. The United Kingdom and France have nuclear weapons, which they would use to defend themselves if needed. The Bundeswehr does not have anywhere near the size to expand into its wealthy neighbors. And a Russia that cannot defeat Ukraine cannot expand into Europe.

Beyond the realist argument above, there are two other arguments for trying to sustain U.S. military dominance in Europe. The first is for continuous forward presence and primacy to deter any plausible threat to any NATO member-state. The second is for “civilizational” allies, and advocates moving troops into the “healthier” countries of Central and Eastern Europe. Both are flawed, and President Trump should reject them.

As the 2025 National Security Strategy correctly states, “Our elites badly miscalculated America’s willingness to shoulder forever global burdens to which the American people saw no connection to the national interest. … The days of the United States propping up the entire world order like Atlas are over.” The NSS accordingly calls for enabling and encouraging Europe to stand on its own feet, ending the perception and practice of a growing NATO, and ensuring fair trade from European partners. None of that necessitates a constant American forward presence.

There is also an argument to move troops out of Germany and closer to the Russian border, to be placed in “civilizational” allies and countries. That would also be counterproductive. To incentivize Germany and other rich Western European states to take more of the burden of European defense, Trump should pull American troops out of the continent. Moving them further toward their main threat will do little to create a sense of urgency.

The core interests of the United States in Europe are limited. Washington’s chief strategic aim for more than 100 years has been to ensure a disunited Europe. The United States did not want a single power bloc led by Imperial Germany, Nazi Germany, or the Soviet Union to dominate Europe politically and economically. As Hans Morgenthau explained in 1950: “We have conceived the two wars which we fought essentially as two holy crusades, engaged in by a good people against an evil one. It so happened, that what was really at stake in those crusades was not at all the extirpation of evil of its own sake, but the restoration of the balance of power in Europe.” There is no hegemonic threat to Europe on the horizon today. The European Union is an economic rival, at most.

What this means is that keeping European power divided entails keeping the major European states, such as Russia, France, Germany, and the United Kingdom, divided. A U.S. absence will incentivize a natural equilibrium and regional blocs coalescing within Europe. Stronger sovereigntist and centrifugal forces within Europe will also likely emerge.

Under the current policy, the United States acts as an unnatural glue that keeps the European Union protected beneath massive American defense subsidies. As history shows, the threat of even partial U.S. withdrawal either pushes European states to rearm rapidly, as in the cases of Germany and Poland at present, or produces local balancing coalitions, such as the German brigade in Lithuania or the Greco-French military alliance. As a Politico Europe headline blared in December, “Trump’s attacks force Europe to speed up post-America defense plans.” Wonderful. Trump should keep going.

Critics of withdrawing U.S. troops from Germany further argue that the U.S. presence there makes U.S. intervention in the Middle East easier, so Americans should want to keep it. For example, the statement of the Senate and House Armed Services Committee chairmen protests that U.S. bases in Germany provide “seamless access, basing, and overflight for U.S. forces” conducting the current U.S. war in Iran. But the United States should not be lubricating power projection into the Middle East. If starting U.S. wars in the Middle East became a bit harder as a result of having fewer troops in Germany, this should be viewed as a feature, not a bug.

German and broader European security do not require American power in theater by the division. According to Europeans, the main threat they face is from Moscow. But a Russia that cannot defeat Ukraine cannot threaten Germany, much less conquer and pacify a continent with four times its population. Russian GDP is only three times Poland’s, or slightly less than Italy and Portugal’s combined. Russia is not a plausible European hegemon and will not be one in the policy-relevant future. Accordingly, keeping Germany free from Russian aggression does not require U.S. troops inside its borders. Encouraging Germany to rapidly rearm and balance Russia, as President Trump is currently doing, is the right approach.

Trump has worried about allied burden-shifting for decades. In a 1987 ad in The New York Times, he admonished American politicians to “stop paying to defend countries that can afford to defend themselves.” His instinct was right then, and he is still right. Removing U.S. forces from Germany is a move that truly puts America first. The president should ignore his critics and follow through on his promise.

So, any politician who wants to help Americans save more deserves at least a hearing. What should such a politician propose?

The first thing to do is remove all government-made barriers to savings. This includes a Social Security design that disincentivizes saving, and a tax code that hits much of our savings twice, as both income and investment returns. Addressing our massive debt—which threatens to bring inflation back and literally destroy the value of the savings we already have—would help too.

Alas, this isn’t what Trump has in mind with his new executive order directing the Treasury to launch “Trum​pI​RA​.gov,” a portal where workers without employer-sponsored retirement plans can shop for private accounts. And some of them will be able to claim a federal Saver’s Match of up to $1,000 a year.

The plans are vague, but we can get an idea from a bipartisan bill currently before Congress. The Retirement Savings for Americans Act would automatically enroll workers earning below the national median income in new retirement accounts and provide government matching contributions. According to RAND Corporation research, roughly 63 million workers would be eligible for these accounts, and 42 million would qualify for the match.

Bipartisan support for the idea is growing. Wall Street firms see new customers. Progressives see expanded government involvement in retirement. Some conservatives see a backdoor route to Social Security privatization. I urge skepticism.

Start with the core of the proposal. The Saver’s Match is not a Trump innovation. It was created by the 2022 SECURE 2.0 Act under former President Joe Biden. Trump’s executive order merely accelerates its rollout and expands its visibility. It will be very expensive.

Romina Bocca at the Cato Institute writes in The Washington Post that if modeled after the bill mentioned above, then “starting in 2027, low-income workers with existing retirement accounts are set to receive up to $1,000 in matching funds, at a cost to federal taxpayers of $9.3 billion through 2032. Expanding eligibility and automatically enrolling workers without existing accounts, as proposed by the bipartisan Retirement Savings for Americans Act, would be far more costly. Some projections put the price tag at $285 billion over the first decade alone.”

That’s real money being added to a federal balance sheet already groaning under the weight of a Social Security system facing roughly $28 trillion in long-term shortfalls.

But the fiscal objection, while serious, is not the deepest one. The deeper problem is that the proposal’s backers misread the savings behavior of the households they claim to help.

Decades of economic research tell a consistent story: Low-income households are not failing to save because they lack tax-advantaged ways to do it. They fail to save because when you live paycheck to paycheck, locking money in an account you cannot access without incurring penalties, such as IRAs, 401(k)s and 529s, is risky.

Vanguard data show that households at the lowest income levels have the highest early withdrawal rates from existing retirement accounts, with penalties accounting for a disproportionate share of their tax burden. According to Boccia, penalties account for 43 percent of all taxes paid by individuals with adjusted gross incomes below $5,000.

Automatic enrollment, which animates much of the enthusiasm for expanded accounts, does not change this calculus for everyone. Research using Danish pension data found that some workers simply offset mandatory contributions by reducing voluntary saving. A large-scale United Kingdom study found that 18–21 cents of every dollar saved through auto-enrollment is offset by taking on debt. A recent study shows that the benefits of auto-enrollment are much smaller than original estimates assumed.

The better path is genuine simplification: a universal savings account that shields its owner from the tax bias against saving, allows contributions from any after-tax income, imposes no restrictions on withdrawals, and requires no government match and no new federal spending. Canada and the United Kingdom have run this experiment. Accounts were used enthusiastically across all income levels, including by moderate- and lower-income households who value flexibility above all else.

Finally, if politicians truly care about securing Americans’ retirement income, they should have the courage both to reform Social Security (to stop lower-income seniors from being hit with an automatic 23 percent benefit cut while preventing massive increase of the debt) and to reform a tax code that creates silly disincentives to save.

President Trump will be the first living American to be featured on the document. These special-edition passports will only be available at the Washington, D.C., passport agency, but they are part of a broader program: They embody the Trump administration’s latest attempt to put the president at the center of the nation’s 250^th anniversary. Indeed, as compared to any other presidency, the Trump administration has been inordinately focused on plastering the president’s name and likeness on all manner of government buildings, projects, and documents.

If you think there’s something unappetizing about this practice, you’re not alone. I grew up in Arkansas, where it was common practice for politicians to engineer the naming of buildings and other public structures after themselves—a practice I felt was more than a little unseemly. Twenty years ago, just after I was elected to the Arkansas House of Representatives, I proposed my first bill: a ban on naming state government buildings after living, elected politicians.

Many of my fellow legislators did not like this bill. Perhaps some of them didn’t like it because it was subtly critical of them. (Perhaps the criticism was not so subtle.) Perhaps some of them didn’t like the title of the first draft of my bill, “The Edifice Complex Prevention Act.” And perhaps some of them harbored dreams of a namesake building for themselves.

One of my legislative colleagues, Daryl Pace, evidently found my proposal puzzling. Shortly after I filed the bill, he approached me and began to speak to me sorrowfully, as one might address a slower-than-average child. “Wouldn’t you like to have a building named after yourself?” he asked me. It was as if he thought I had overlooked a crucial perquisite of elected office.

Government officials’ desire to use public facilities as billboards for themselves has a long pedigree. The practice of placing public officials’ names and likenesses on Treasury securities hit a high point during the Civil War: Images of Abraham Lincoln and Treasury Secretary Salmon P. Chase frequently appeared on U.S. government money and bonds.

Other Civil War personalities also appeared on these notes—including the less well-known Spencer M. Clark, who headed the federal office that would become the Bureau of Engraving and Printing. In 1864, when Clark emblazoned his own portrait on a 5‑cent fractional currency note, Congress apparently decided that the practice of featuring government officials on U.S. currency and securities had gone far enough. In 1866, Congress declared it illegal for any living person to appear on government money or bonds of any kind.

The man in the Oval Office today does not share those 19^th-century scruples. The Trump administration has already brought us the Trump Kennedy Center; the Donald J. Trump Institute of Peace; gigantic banners with the president’s visage hung on the exterior of the Department of Labor and the Department of Justice; smaller Trump portraits on national park passes and White House press passes; tax-advantaged children’s savings plans, designated in the tax code as Trump Accounts; the TrumpRx website; Trump’s name printed on millions of stimulus checks issued during the COVID pandemic; and (pending) Trump’s personal signature on the nation’s paper currency alongside that of the Secretary of the Treasury.

The magnitude of this cosmetic exploitation of government programs by a sitting president is unprecedented. And the list above will no doubt grow longer, as the administration and its allies craft yet more proposals to further publicize Trump’s name and likeness with public resources and thus curry favor with the president. It is reasonable to assume that the 24-karat gold commemorative coin that celebrates the nation’s 250^th birthday—and features Trump’s image—is only the beginning.

With respect to Arkansas, it took a few years, but the state legislature finally wrote my bill into law. A few other southern states enacted similar prohibitions. It seems awfully unlikely that the current Congress will follow suit.

That is a pity. Of course, the spectacle of politicians maneuvering to get their names and images inscribed in all manner of public places and entities is grotesque. But the sheer ugliness of the practice should not overshadow our awareness of its very real moral and political dangers. Those include the encouragement of self-dealing, the problem of taxpayer funding of buildings that double as political advertisements, and the difficulties that arise when honorees later become embroiled in scandal.

Consider the Robert W. Ney Center, an Ohio University building named after state lawmaker Robert Ney in 1997. Ney secured $7 million in funding for the state-of-the-art facility while he was planning to run for Congress. A decade later, Rep. Ney became entangled in the Jack Abramoff lobbying scandal, ultimately pleading guilty to several bribery-related felonies and resigning his congressional seat. And 10 years after that, Ohio University finally succeeded in changing the building’s name.

Ultimately, however, the real problem is not so much one of public choice theory than it is one of the health of small‑r republican culture. Public service, like virtue, is supposed to be its own reward rather than a path to self-glorification. Stamping a politician’s name on some government enterprise is a kind of synthetic, taxpayer-funded manufacture of honor that is more associated with monarchies and autocracies, where public works are understood as personal gifts from a ruler to his subjects. In our republic, the use of government resources is supposed to serve a public purpose. These resources belong to the people; they aren’t supposed to convey personal ownership or credit.

When I was a public official, I came to know a good number of politicians who were a bit mystified by the Edifice Complex Prevention Act. (Perhaps they only pretended to be mystified.) But, for the most part, when I talked about my bill with people who weren’t elected officials, they got it immediately. Indeed, there are even a few politicians today who recognize that matters in this realm have gone too far.

American culture, at its best, rejects badges of royalism. Mixing politicians’ names and likenesses into government enterprises debases public service and the public trust. When we wash our hands of that mixture, it underscores the distinction between the rule of law and the rule of men. Perhaps someday a future Congress and a future administration will appreciate that.

Today’s readers often consider it hypocritical that the Founders denounced Britain for offering black Americans the same freedom for which they were themselves fighting. Some of the revolutionary era’s readers thought the same thing. In 1776, the London writer John Lind published a pamphlet responding line by line to the Declaration, and in it he ridiculed the patriots: “Is it for them to complain of the offer of freedom held out to these wretched beings? of the offer of reinstating them in that equality which, in this very paper, is declared to be the gift of God to all?”

What Lind overlooked was that Americans did not deny that it was self-contradictory for them to hold slaves while proclaiming liberty to be every person’s birthright. On the contrary, their embarrassment over that inconsistency had been particularly glaring when Virginians drafted their Declaration of Rights in June 1776. Thomas Jefferson went even further, admitting that slaves were justified in violently rebelling against their oppressors. The thought that God’s “justice cannot sleep forever” made him “tremble,” he said.

But the real story of the “domestic insurrections” passage is more complicated than modern readers typically realize. The best point to begin understanding it is October 1769, when a poor man named Samuel Howell approached Jefferson, then a 26-year-old lawyer practicing in Williamsburg, to ask for help in defending his freedom against the claim that he was a slave.

Howell’s great-grandfather was a black man who’d had a baby girl with a white woman. Under Virginia laws of that time, the daughter was bound to servitude until the age of 31, and during those years, she gave birth to Howell’s mother. She, too, was enslaved until the age of 31, and during that time, she gave birth to Howell himself. The owner of Howell’s mother and grandmother, thinking that Virginia law also rendered Howell a slave until the age of 31, then sold him.

Two Virginia laws governed Howell’s situation. The first provided that if “any woman servant” or “free Christian white woman” were to “have [a] bastard child by a negro,” the resulting child would be “a servant until it shall be thirty-one years of age.” The second provided that if a “female mulatto…obliged to serve till the age of thirty or thirty-one years shall, during the time of her servitude, have any child…such child shall serve the master…until it shall attain the same age the mother of such child was obliged by law to serve unto.” The first condemned Howell’s grandmother to servitude, and his mother probably qualified as a “female mulatto.” Howell was born during her period of servitude, so he too would be bound to serve until the age of 31.

Nevertheless, Jefferson agreed to argue for Howell’s freedom. His anti-slavery sympathies were well known; during the 1760s, he took six “freedom cases,” including Howell’s, charging nothing for his services as he sought to defend the accused against the charge that they were slaves. In Howell’s case, he first argued that the fact that Howell’s purported owner had sold him rendered the servitude mandate void. “Bond servants” (that is, temporary as opposed to lifetime slaves) were not salable, he asserted, because they were properly classified as a kind of apprentice rather than property. The reason for the 31-year rule, he continued, was actually to ensure that the parents of illicit mixed-race children cared for them instead of abandoning them. Allowing people to sell “bond servants” would give parents a way to evade the law and escape their paternal responsibilities. And because bond servants could not be sold, the attempted sale voided Howell’s bondage status and rendered him free.

It was a creative argument. But Jefferson’s second argument was even more audacious. He claimed that the two statutes governed only the cases of Howell’s grandmother and mother, not Howell himself. Although they might seem to apply to every succeeding generation automatically, they could not actually do so because that would violate natural law. “Under the law of nature, all men are born free,” he told the court. “Everyone comes into the world with a right to his own person, which includes the liberty of moving and using it at his own will. This is what is called personal liberty, and it is given him by the law of nature, because [it is] necessary for his own sustenance.” The statute enslaving the grandmother was bad enough, but to inflict bondage on generation after generation of innocent children was untenable. And the Virginia legislature must have realized this, he added, because the very fact that it had passed the second act, specifying that children “shall be bond or free according to the conditions of their mothers,” proved that lawmakers never believed that the first act would inflict slavery on every descendant of the initial liaison. “It remains for some future legislature,” Jefferson concluded, “if any shall be found wicked enough, to extend [slavery] to the grandchildren.”

Jefferson’s case was idealistic, even naive, and it did not impress the judges. When the opposing lawyer, Jefferson’s mentor George Wythe, rose to present the counterargument, they waved him back into his seat. They did not need to hear what he had to say. They had already made up their minds. With a bang of the gavel, they declared that Howell would remain in servitude.

It was a humiliating lesson: Slavery’s evils might be an interesting subject for coffeehouse debate, but colonial authorities were not prepared to upset a century and a half of economic policy. Still, as biographer Willard Sterne Randall observes, the Howell case marked “the first time Jefferson had spoken the words in public—‘all men are born free’—six years before he wrote the Declaration…and he had said them first in the legal defense of a black slave.”

American Hypocrisies, English Hypocrisies
According to the classical liberalism Jefferson embraced, all people are fundamentally individual beings, responsible for their own actions and consequently endowed with the right to direct their own lives. This quality of self-responsibility, shared by all normal adults, makes people “equal” in an important sense: None is inherently entitled to control another’s actions. Nor is this inherent liberty a function of tradition or culture. It is an unavoidable feature of human life. A person’s individuality and self-possession are inalienable. Slavery, by contrast, is artificial, a man-made institution that can be tested against the standards of justice and found wanting.

As the clash between America and Britain accelerated in the 1770s, Tories would be quick to accuse the revolutionaries of hypocrisy for practicing slavery while protesting in defense of their own freedom. Samuel Johnson, of dictionary fame, sneered: “How is it that we hear the loudest yelps for liberty among the drivers of negroes?” But it was not at all surprising that Americans who every day witnessed the horrors of slavery would dread, to the point of paranoia, the possibility of experiencing the same fate themselves. What is actually remarkable about the patriots is the degree of candor with which they confessed that slavery clashed with their principles. No patriot of stature ever defended the practice. And no considerable political movement in the English-speaking world had ever before condemned slavery as candidly and as often as the patriots did.

Benjamin Franklin, for example, anticipated Johnson’s accusation and offered a reply in a 1770 newspaper article in which he imagined a dialogue between an American and two Britons. When the British characters call the American a hypocrite, he replies that this is unfair because “many thousands [in America] abhor the slave trade as much as [any Englishman] can do, conscientiously avoid being concerned with it, and do everything in their power to abolish it.” Relatively few colonists own slaves, he continues, and it would be wrong to “stigmatize us all with that crime.” Notably admitting that slavery was evil, Franklin, who, a few years later, would become president of the world’s first anti-slavery society, went on to point out that the hypocrisy charge cut both ways: England “began the slave trade,” and while Americans were certainly blameworthy for buying slaves, “you bring the slaves to us, and tempt us to purchase them.” This rhetorical move, which Jefferson would employ in the Declaration six years later, might seem disingenuous to historians, but it’s no more so than the language of today’s political leaders who blame oil companies for climate change, tobacco companies for lung cancer, or fast-food companies for obesity, even though these businesses, too, merely serve consumer demand.

Worse, Franklin continued, when colonial governments tried to limit or prohibit slave importation, the imperial government “disapproved and repealed” those laws “as being prejudicial, forsooth, to the interest of the [Royal] African Company.” He had in mind efforts by the assemblies of Pennsylvania in 1712, South Carolina in 1760, New Jersey in 1763, and Virginia in 1710, 1727, and 1766 to ban or restrict slave imports, all of which had been overridden by London officials.

British policy was, indeed, to prop up the Royal African Company. In 1770, the same year Franklin published his article, King George III vetoed yet another Virginian attempt to tax slave imports, declaring that it would “prejudice and obstruct as well the commerce of this kingdom as the cultivation and improvement” of Virginia. He went further, instructing all colonial governors, “upon pain of our highest displeasure,” to veto “any laws whatever…by which the importation of slaves shall be in any respect prohibited or obstructed.”

It was also illegal in Virginia to manumit slaves except for “meritorious services.” Around the same time that he represented Howell in court, Jefferson took another quixotic step against slavery by drafting a bill to let masters free their slaves when they chose. Thinking himself too young and unknown to offer such a major proposal, he asked the respected elder legislator Richard Bland to sponsor it in the House of Burgesses. Bland agreed—and soon regretted it. When he rose to speak, other members shouted him down so ferociously that Bland dropped the subject. “He was denounced as an enemy to his country,” Jefferson recalled, “and was treated with the grossest indecorum.” The message was clear: Neither the royal government nor the planter class controlling the colony would tolerate outright attacks on slavery, and even modest efforts to limit it could destroy a man’s political reputation.

True, efforts to limit the slave trade or allow manumission were not the same as attacking slavery in toto. But leaders who wanted to eradicate the practice itself thought the first steps must be gradual. Because the slave trade was held in such opprobrium, campaigning against it was the most political way to introduce the idea of prohibiting slavery itself.

This approach did have an element of disingenuousness, since cutting off the importation of slaves from abroad would likely increase the market value of those already in North America, thus creating an incentive to preserve slavery, rather than eradicate it. And there was another, more severe element of disingenuousness: the fact that many, including Jefferson, shared the racial prejudices that appeared to substantiate the claims of those who viewed Africans and their descendants as biologically doomed to servitude. Only a few years after independence, Jefferson published Notes on the State of Virginia, in which he set forth his “suspicion…that the blacks…are inferior to the whites.” A later generation seized on his words to justify slavery, and although Jefferson himself denied this connection (“whatever be their degree of talent, it is no measure of their rights,” he said), he did conclude that biological as well as historical differences between the races made it impossible for them to live together permanently in North America.

Jefferson was one of many white Southerners who, while regarding slavery as evil, found it impossible to imagine a peaceful multiracial democracy. They knew of no historical precedent for such a thing; the record with which the American Founders were familiar suggested that racially and religiously diverse societies could be governed only by emperors, as with Rome, or through legal segregation, as with medieval Jerusalem. No civilization known to man had ever successfully abolished slavery; history seemed instead to prove that mass emancipation led inevitably to deadly reprisals and civil war.

That was precisely what Lord Dunmore seemed to have in mind. He designed his 1775 Proclamation as a weapon of terror. It was an ancient tactic, one used in Greek and Roman times, and classically educated plantation owners were all too familiar with the numerous slave revolts in the Roman Republic, including three “servile wars” between 135 and 71 B.C. Among the most frightening precedents was the Second Servile War, sparked by the Roman Senate’s decision to free 800 Bithynians who had been enslaved for debt. The Senate did this in hopes that they would join the Roman military, but it sparked a bloody uprising instead. “Calamities overspread all Sicily,” wrote the historian Diodorus Siculus. Slaves “committed all sorts of rapines and acts of wickedness; for they shamefully killed all before them, whether bond or free, that none might be left to tell tales.”

Virginians also knew that the people they held in chains were justified in fighting for their freedom, and that embarrassing fact made the specter of rebellion all the more chilling. “The Almighty,” Jefferson wrote when contemplating the possibility, “has no attribute which can take side with [whites] in such a contest.”

The Revolution as Opportunity
All these factors hovered in the background in the summer of 1776, when Jefferson began writing the Declaration of Independence. In his initial draft, he wrote that the king and his deputies were “inciting insurrections of our fellow subjects citizens with the allurements of forfeiture and confiscation.” This did not refer to slavery at all, but to efforts by British leaders to encourage American Loyalists or neutrals (“subjects,” which Jefferson changed to “citizens”) to help suppress the rebellion.

Under Britain’s laws of attainder and forfeiture, rebels were liable to having their property confiscated for treason and likely bestowed on informants as a reward. Jefferson was saying that this “allurement” was designed to encourage infighting among colonists.

Then, he had followed that allegation with a separate clause accusing the king of “prompting our negroes to rise in arms among us; those very negroes whom by an inhuman use of his negative he hath from time to time refused us permission to exclude by law.” Coupling the complaint of inciting insurrection with a complaint about the monarchy’s refusal to let colonists ban the slave trade cushioned the charge of hypocrisy by acknowledging slavery to be “inhuman” (again implicitly admitting that slaves who “rose in arms” were justified in doing so), while also saying that the violence and civilian casualties that would likely result from a servile war were things no worthy monarch would intentionally provoke.

In his next draft, Jefferson expanded on this point. Retaining the “treasonable insurrections” clause (regarding Loyalists), he deleted the “rise in arms” clause and replaced it with a paragraph–long accusation against the king, into which he poured more vitriol than anywhere else in the document. This indignant passage, longer than any other in the Declaration, condemned the king for fostering and maintaining slavery, using words that made the entire list of grievances seem to rise to this climax:

“He has waged cruel war against human nature itself, violating its most sacred rights of life and liberty in the persons of a distant people who never offended him, captivating and carrying them into slavery in another hemisphere, or to incur miserable death in their transportation thither. This piratical warfare, the opprobrium of infidel powers, is the warfare of the Christian king of Great Britain. Determined to keep open a market where MEN should be bought and sold, he has prostituted his negative for suppressing every legislative attempt to prohibit or to restrain this execrable commerce. And that this assemblage of horrors might want no fact of distinguished die, he is now exciting those very people to rise in arms among us, and to purchase that liberty of which he has deprived them, by murdering the people upon whom he also obtruded them; thus paying off former crimes committed against the liberties of one people, with crimes which he urges them to commit against the lives of another.”

This reiterated the complaint that while George III refused to veto Parliament’s bills, he did veto colonial bills and completely banned laws limiting slave importation. The bottom line was clear: The king and his deputies were creating a tragically explosive situation by enslaving people to increase imperial wealth, then unleashing the victims of slavery on white Virginians to increase imperial power.

Jefferson was proud of this passage, and John Adams admired it too. Five decades later, Adams recalled that he was “delighted with its high tone, and the flights of oratory with which it abounded, especially that concerning Negro slavery.” The Declaration’s rhetorical momentum rose from relatively minor accusations of failing to approve “wholesome” legislation to a denunciation of the king as a false Christian, a pirate who would embarrass even “infidels,” and a man willing to trick slaves into murdering his subjects.

Bizarrely, recent historians have viewed this paragraph not as proof of Jefferson’s anti-slavery views but as evidence of his mendacity. They contend that blaming the monarchy for slavery’s presence in America was so implausible that it proves Jefferson was engaging in a rhetorical sleight of hand. Joseph Ellis, for example, accused Jefferson of “juggling two incompatible formulations: One is to blame the king for slavery; the other is to blame him for emancipating the slaves.” Garry Wills, too, claimed that Jefferson was “twist[ing] language and logic in an unfortunate way,” and that the Virginian actually thought “the king’s real crime [was] his attempt to free Virginia’s slaves.”

These accusations are off base. For one thing, the Dunmore proclamation did not free Virginia’s slaves. It only promised freedom to slaves “appertaining to rebels” who were “able and willing to bear arms” for the king, not to anyone enslaved by a Loyalist or to women, children, the infirm, older people, or others unable to fight in the British military.

More important, although Jefferson was indeed engaged in rhetorical legerdemain, it was essentially the opposite of what Ellis, Wills, and others asserted. The political maneuver Jefferson was attempting aimed not to excuse slavery, but to damn it. Convinced that the Revolution offered a rare chance to wipe away the inherited evils of English tradition, he hoped to place Americans irrevocably on the record about slavery’s evil in a way that would force them to work toward its eventual eradication.

Jefferson, Adams, and their colleagues knew the Revolution presented a special opportunity. “I wish with you that the genius of this country may expand itself, now [that] the shackles are knocked off,” Adams wrote a friend in the weeks after independence. “But there is not a little danger of its becoming still more contracted. If a sufficient scope is not allowed for the human mind to exert itself…we shall become more despicably narrow, timid, selfish, base and barbarous.”

Jefferson also thought the moment “for fixing every essential right on a legal basis” was now. With royal government swept away, there was nothing “to restrain us from doing right” and reforming colonial law “with a single eye to reason.” He feared that “from the conclusion of this war we shall be going downhill”; once independence was achieved, politicians would lose “the general pulse of reformation,” and citizens would “forget themselves, but in the sole faculty of making money.” Therefore, “the shackles…which shall not be knocked off at the conclusion of this war will remain on us long, will be made heavier and heavier, till our rights shall revive or expire in a convulsion.”

Jefferson was already planning an ambitious set of legal reforms for his home state, everything from abolishing the established church and providing for the manumission of slaves to establishing a public school system and reforming the criminal code. Now he saw another opportunity. Knowing that people are typically less willing to admit their own faults than to blame others, he hoped that by asserting the injustice of slavery in unmistakable terms while simultaneously scapegoating the king, the Declaration would make it easier for his countrymen to view the practice as un-American. They might come to believe that slavery, like an established religion or the cruel punishments of English common law, was an outworn European notion, forced on Americans more or less against their will. Later historians might quibble about this, but the creation of a social narrative is part of a statesman’s job during the act of founding, that is, of consecrating. When done right, it can draw the people toward what Abraham Lincoln later called their “better angels.”

The Redacted Declaration
There were good reasons to think this gambit would succeed. Public consciousness did seem to be awakening to slavery’s evils. In 1785, Jefferson told a British abolitionist that Americans living north of the Chesapeake were becoming hostile to slavery because the younger generation had “sucked in the principles of liberty as it were with their mother’s milk.” Adams agreed. Slavery, he wrote in 1801, was “fast diminishing.” Vermont banned it in 1777. Other states passed gradual anti-slavery laws, which did not liberate those already in chains but forbade new enslavement. Pennsylvania did so in 1780, Rhode Island and Connecticut in 1784, New York in 1799, and New Jersey in 1804. The Massachusetts Supreme Court declared slavery unconstitutional in 1783 on the grounds that it violated the principle “that all men are born free and equal.” Meanwhile, economists, notably Adam Smith, were explaining that slavery is economically counterproductive. It therefore seemed plausible that with the right incentives, Americans might eliminate it entirely.

Of course, that was not to be. On Tuesday, July 1, 1776, the drafting committee presented the Declaration to the Continental Congress for a clause-by-clause discussion and debate, and Jefferson watched as his fellow delegates whittled away much of its latter half, entirely removing his attack on slavery. No records remain of who said what during these debates, although Jefferson recalled that Adams tirelessly defended every word in the draft, while Jefferson remained silent, as always. The “cruel war on human nature” passage was eliminated “in complaisance [sic] to South Carolina and Georgia, who had never attempted to restrain the importation of slaves, and who, on the contrary, still wished to continue it,” he wrote, as well as some Northerners, who, although holding “few slaves themselves,” were “pretty considerable carriers of them to others.” After deleting the paragraph, the Congress also changed the preceding clause, so that instead of denouncing the king and his governors for inciting “insurrections” by “our fellow citizens” (that is, white Loyalists), the final wording condemned him for “excit[ing] domestic insurrections,” lumping together all types of internal sabotage that the British were provoking.

Watching his Declaration being edited was a maddening experience for Jefferson. When he returned to his apartment, he wrote out several painstaking copies of his original version, with marks to indicate the changes the Congress had made, and sent them to friends, asking them to agree that his initial draft was better. Fifty years later, he did the same in his memoirs. Jefferson’s disappointment at the failure of his effort to embed a denunciation of slavery into the Declaration remained with him for the rest of his life.

Gottlieb argued that preserving Food and Drug Administration oversight of psychedelics and cannabis represented a “healthy balance.” But that framing assumes centralized federal gatekeeping is the only way to ensure safety. It isn’t — and it comes with real costs.

For patients with treatment-resistant depression or post-traumatic stress disorder, delays in access to promising psychedelic therapies represent lost time, prolonged suffering and, in some cases, lost lives. The question isn’t whether these treatments should be evaluated but whether a single agency should decide when competent adults may try them.

And cannabis should not be scheduled at all. We do not place alcohol — a substance with well-documented risks — on a federal schedule. Treating marijuana as something requiring special federal control is a policy choice, not a scientific necessity.

Also, Gottlieb claimed kratom is a gateway to opioid use, but the available data suggest that many people use kratom as an alternative to more dangerous opioids. Overdoses from kratom are uncommon; according to the Centers for Disease Control and Prevention, there were only 233 kratom-related deaths between 2015 and 2025, most involving multiple other substances.

FDA oversight may prevent some harms, but it also prevents access. A system that informs patients and physicians — rather than blocking their choices — would better balance safety with individual autonomy.

However, existing authorities would allow for a voluntary “kick the tires” testing period. Labs could opt to share models with materially new capabilities with the Center for AI Standards and Innovation (CAISI), which is housed within the Commerce Department’s National Institute of Standards and Technology; the director of the Cybersecurity and Infrastructure Security Agency (CISA) could then fund an effort to help a broad set of actors—including local, state, and federal actors as well as other public and private entities—take any necessary cybersecurity precautions. This would help labs avoid popular backlash for knowingly introducing models that may threaten critical systems and public well-being and perhaps subvert more onerous, formal requirements.

Cyber Threats Posed by AI

Anthropic opted not to release their latest model, Mythos, because of its ability to identify and exploit software vulnerabilities. Instead, Anthropic made the model available to a select group of private stakeholders and, following negotiations with the White House, the federal government, to take any necessary precautions. Though some dismissed that decision as a PR move, testing from third parties validated Anthropic’s findings; by way of example, the U.K. AI Security Institute determined that Mythos could oversee a 32-step corporate network attack with some degree of reliability—a process that would take humans 20 hours. OpenAI subsequently developed a model with similar cyber capabilities.

The result is a widening asymmetry: Frontier labs increasingly understand what their models can do weeks or months before the institutions tasked with defending against misuse have any meaningful opportunity to prepare.

Can the President Mandate a Vetting Process?

Whether the president has the legal authority to mandate a vetting process is hard to assess without the Trump administration specifying its own understanding of the law. A preliminary review of national security provisions returns a potential shortlist: the Defense Production Act (DPA), the International Emergency Economic Powers Act (IEEPA), and the Communications Act of 1934. For sake of brevity, the latter two can be dismissed fairly easily. Reliance on those acts to subject U.S. companies to a government “review system” would involve stretched interpretations of the laws, which courts would likely not condone.

The DPA is also an unlikely stable legal basis for the administration’s plan. President Biden leaned on the DPA to require AI model testing under an executive order he issued in 2023; President Trump rescinded that order in 2025. The breadth of the DPA’s terms have made it a recurring vehicle for expansive actions by the executive branch. Pursuant to the DPA, a president may use an “array of authorities to shape national defense preparedness programs and to take appropriate steps to maintain and enhance the domestic industrial base.” However, numerous investigations of the DPA have pointed out that those authorities have limits.

When the DPA was enacted in 1950, its original purpose “was to ensure that the federal government could compel private industry to produce strategically necessary resources to meet the needs of national defense during an emergency,” according to Ashley Mehra. While the law has subsequently been amended and stretched by creative uses of its vague authorities, it is unlikely to fit the administration’s unique legal needs here. The president will be hard pressed to find a clear hook for compelled vetting of an AI model with minimal direct connections to a specific, ongoing national defense effort or domestic industrial base consideration in the DPA. Title I of the DPA empowers the president to direct private parties to prioritize and accept contracts necessary for national defense. Title III enables the president to incentivize the production of certain critical materials and goods, such as with loan guarantees and grants. Title VII includes a range of authorities, including the ability to establish voluntary arrangements among private actors that might otherwise run afoul of antitrust laws, as well as to gather information from private entities. More specifically, the Department of Commerce may rely on Title VII to “conduct assessments of domestic industrial base capabilities.”

Use of Title VII to govern frontier AI models runs counter to the marginal role intended for this part of the DPA. In contrast to Titles I and III, Title VII amounts to a “potpourri” of provisions meant to assist with administration of the act more so than to afford expansive powers. A more common understanding of the information-gathering power afforded therein is the authority to “obtain information from industry and firms, including through testimony or by inspecting their books, records and properties.” Such an inquiry would serve the purpose of identifying any weak points in supply chains that may be relevant to the nation’s readiness for war and related emergencies.

Compelled disclosure of a model to the federal government does not fit neatly into any DPA authorities.

The Legal Path to a Voluntary “Kick the Tires” Period

Though it seems unlikely that the president can force AI labs to participate in a review system, he does not need to if the underlying goal is to translate the results of CAISI’s voluntary evaluations of model capabilities into general cyber readiness assistance. The leading labs already make their models available to CAISI for rigorous testing on a voluntary basis. Given that they have a vested interest in avoiding the following headline: “AI Lab Bypasses Federal Testing; Cyberattacks Proliferate,” they may agree for such testing to occur two or three weeks prior to generally deploying their model.

A more evocative hypothetical stresses this point. Imagine that a leading lab releases a model with notable cyber capabilities days before the November elections. Political actors may allege that local and state officials likely had their election systems undermined by bad actors using the latest AI model. It would be hard to dismiss such a claim under the status quo. One could easily foresee reports on “Model ____ Blamed for Cyberattacks; Election Results Contested.” Such headlines would become far less likely if a short-term “kick the tires” period became standard practice.

Suppose instead that prior to that model’s release, CAISI concludes—based on publicly disclosed, objective evaluations that return clearly established threat models—that the model would indeed expose critical infrastructure, local, state, tribal, and federal actors, and private entities to cyber threats, they can immediately share that information with CISA. The CISA director would then need to evaluate whether a “specific significant incident is likely to occur imminently” in order to trigger additional authorities under the Homeland Security Act.

Significant incident refers to “an incident or a group of related incidents that results, or is likely to result, in demonstrable harm to—(i) the national security interests, foreign relations, or economy of the United States; or (ii) the public confidence, civil liberties, or public health and safety of the people of the United States.” Mass deployment of a model with heightened cyber capabilities seems likely to qualify. As noted above, Mythos is capable of hacks that require 20 hours of human work. If a model of a similar capability was in the hands of even a couple dozen bad actors, there would likely be widespread economic harm and, perhaps, threats to the public health and safety.

The CISA director could then use the Cyber Response and Recovery Fund to help a range of stakeholders—public and private—with “vulnerability assessments and mitigation; technical incident mitigation; malware analysis; analytic support; threat detection and hunting; and, network protections.”

Of course, the biggest “if” here is whether labs would agree to this “kick the tires” period. Labs have reasons to say yes.

A specific, time-bound testing window run by CAISI is preferable to the alternatives on the table—whether that means a mandatory review regime, which would likely run afoul of the law, or the reputational fallout of a post-deployment incident traced back to capabilities the lab knew about but did not flag.

CISA, for its part, would need to commit to handling shared model information with the same care it extends to vulnerability disclosures from private security researchers, lest labs conclude that cooperation invites leakage rather than partnership.

Such an approach would not require new legislation, nor would it require the administration to stretch the DPA past its breaking point. It requires only that the relevant agencies use the authorities they already have, and that the labs recognize that a voluntary framework is the one most likely to keep a mandatory one off the table.

The agenda promises to cut costs for prescription drugs, utilities, gas, childcare, housing, and groceries; improve worker wellbeing with more paid time off and higher overtime pay; ban “surveillance pricing”; and abolish super PACs.

Two things stand out straight away from the list of proposals. First, nothing here would lower inflationary pressure as a macroeconomic phenomenon, which is what drove the affordability anger. Second, in specific markets, there’s scant economic analysis of the structural and policy factors that drive high prices. Most proposals implicitly blame villains like Big Oil, Big Pharma, Big Grocery, Big Tech, utilities, landlords, employers, and billionaires for high prices. This populism means many simpler ideas to lower prices through expanding supply get ignored.

Start with utilities. The so-called Lowering Utility Bills Act targets regulated monopolies where returns are set by regulators, not markets, and promises to lower bills by squeezing those administered returns further. Allowed equity returns would be pushed to the bottom of a federally defined “reasonable” range and certain cost recovery would be curbed. Disallowing lobbying expenses, political spending, private jets, and penalties from ratepayer bills will be popular, but will only marginally affect rates. The advertised $500 savings per household really depends on the indirect price controls, state regulators adopting similar policies, and the utilities absorbing this without creatively shifting the burdens. This means the savings are uncertain. And as power demand surges from data centers, electrification, and grid modernization, underpricing capital also risks deterring the very investment needed to make electricity cheaper and more reliable over time.

Gas prices are another hot issue today. Ro Khanna and Sheldon Whitehouse want a refundable “gasoline price rebate” income tax credit financed by a per-barrel excise tax on crude oil to ease households’ squeeze. They call it a tax on “windfall profits” because it kicks in when Brent crude prices rise above their 2025 average. But the policy only cushions some households after the fact, and then only when the rebate exceeds any pass-through they endure in higher fuel prices. It doesn’t lower the pump price. Indeed, by taxing barrels precisely when oil is scarce and prices are high — as now with the Iran war roiling global markets — it risks raising the marginal cost of crude supply into U.S. refineries.

Other proposals more obviously risk prices moving in the wrong direction entirely. The proposed clampdown on grocery store “price fixing” just empowers state attorneys general to pursue Robinson-Patman price-discrimination claims. In plain English, this would make it easier to sue suppliers for offering large retailers better wholesale deals than others. But those discounts are often how efficient retailers keep shelf prices low. Introduce that legal risk, and many suppliers won’t extend Walmart’s lower cost deals to everyone. They’ll just end them, worsening affordability.

Similar confusion arises in the Stop AI Price Gouging and Wage Fixing Act. It targets personalized online pricing, which unfriendly lawmakers call surveillance pricing and equate with price gouging. But, overall, we’d expect individualized pricing to mean lower prices for thrifty shoppers with a low willingness to pay and higher prices for those happy to pay more anyway. Legislation pressuring more uniform pricing would help the latter group—who would often be those on higher incomes—not those struggling to make ends meet. The net affordability effect for low-income consumers could well be negative.

The labor proposals aren’t really affordability policy at all. The PTO Act would mandate paid leave at one hour per 25 worked, up to 80 hours annually; the double-overtime proposal raises the overtime premium from 1.5x to 2x base pay. Both will benefit some workers. But mandated benefits and higher overtime costs make employing people more expensive. Employers will respond with some combination of higher prices, fewer hours, slowed hiring, lower wage growth, more automation, or less flexibility. You cannot make labor-intensive services cheaper by making labor more expensive.

The childcare proposal pushed by Rep. Ocasio-Cortez and Senator Warren is even more aggressive in raising labor costs. The Child Care for Every Community Act creates an uncapped entitlement whereby every covered child gets access to federally supported care, the federal government pays at least 90 percent of costs, low-income families pay nothing, and other families are capped at 1 to 7 percent of income. That lowers out-of-pocket costs for parents of eligible kids. But the bill also mandates national standards, richer services, facility rules, training requirements, and compensation comparable to public-school or military child-care pay. In other words: it raises the cost of supplying childcare, then hides the invoice by giving it to taxpayers.

The drug and housing supply ideas at least begin by acknowledging that supply matters. Yet even there, progressives reach instinctively for state capacity over market liberalization. The drug bill creates an HHS Office of Drug Manufacturing to produce select medicines and sell at a government-determined “fair price.” That may help reduce prices in some thin generic markets, at least if (and it’s a big if!) the nationalized producer is efficient. But why not first remove the barriers blocking private generic and biosimilar competition? Why not speed approvals, recognize drugs cleared by trusted foreign regulators, and attack genuine patent games?

Housing follows the same playbook. The ambition for building millions of homes is the one genuinely promising plank. If Congress helped states and localities legalize and accelerate construction where people want to live, that would be real affordability. But the proposed agenda also doubles down on demand-side subsidies like down payment assistance for first-time buyers and guaranteed rental assistance. In a housing market throttled by zoning, permitting delays, parking mandates, and local vetoes, more subsidies throw gasoline on the fire. It helps some homebuyers to bid more, but further drives up market prices for others.

As a national affordability agenda, this is a dud. It is not a plan to make America cheaper by liberating supply in core markets, let alone getting and keeping inflation low. It is a plan to make government bigger and to hide various bills via regulatory-grounded and tax-and-spend redistribution.

As our own Handbook on Affordability showed, there’s plenty of ideas for removing government barriers to supply or competition to lower prices or broaden options for households. At a time when most Americans are angry at the recent price level surge, redistributing high prices across other consumers and taxpayers is not only economically damaging, but also unlikely to ameliorate discontent.

To see the difference, we need to think back more than twenty years. While deeply flawed and perhaps rushed, there was nevertheless a debate on Capitol Hill about U.S. military action in Afghanistan and then the invasion of Iraq. The first was directly precipitated by a direct attack, 9/11. The second was preceded by roughly two months of Congressional hearings followed by a vote for an Authorization for the Use of Military Force (AUMF). The AUMF authorizing the war in Iraq passed the Senate by a vote of 77–23 and 296–133 in the House. Those debates and votes have since been widely judged as mistakes—but they occurred.

There was no comparable congressional deliberation on the eve of the president’s unilateral launch of the Iran War. Despite the administration’s prior uses of force in Venezuela and against Iran in June 2025, Capitol Hill showed little appetite for a sustained debate before hostilities began. As American forces were built up in the Middle East, there were no serious efforts to compel a vote in Congress. The most Congress has managed is to act after the fact, through failed war powers resolutions—half-hearted attempts to get proverbial horses back into the barn. Capturing the almost uniform sentiment of congressional Republicans, Rep. Blake Moore said of the vote that it would be “irresponsible to tie the hands of the Commander-in-Chief and our military leaders.” In the upside-down world of Washington, shirking one’s constitutional duties is recast as responsibility.

On the other side of the aisle, while many Democrats fretted about President Trump’s use of force in Iran, those in leadership evaded the core issue, focusing more on process than principle. In the spring of 2026, for example, Sen. Mark Warner criticized Trump for using military force in Venezuela as it distracted from the possibility of regime change in Iran. Warner reiterated those critiques after the start of the Iran War, hitting Trump on the process of the war rather than its substance. Considering such equivocation, it is not unreasonable to argue that Democratic leadership acquiesced to the war powers vote because they knew it would fail, thereby allowing their party to strike a pose of opposition while, in fact, their disagreement was mostly rhetorical.

The corporate media’s role in the Iran War was largely reactive and failed to ask deeper questions about presidential authority or strategic prudence. Instead, mainstream media reporting boiled down to event narration, asking questions like “will he or won’t he,” rather than examining deeper issues about war and its meaning for American society. Coverage has also slow-walked troubling developments like the U.S. military’s destruction of an Iranian school and the killing of 165 Iranian civilians at the start of the war. More troubling have been networks such as Fox News and CBS News, which have been supportive of the war to the point of parody.

The point here is not to determine the merits of arguments for or against the war. It’s to point out that this argument is barely occurring. The mainstream media has taken to covering war as if it were the weather: a condition to be tracked rather than a decision to be debated. This is the antithesis of the self-government we’re promised by the Constitution.

These evasive tendencies aren’t new, of course. The latter half of the Global War on Terror was egregious from the standpoint of congressional and public discourse. Despite his campaign promises on foreign policy, President Obama, learning the same lesson about casualty aversion as his predecessors, revised rather than retrenched. Using expansive interpretations of existing Authorizations for the Use of Military Force, Obama extended America’s covert military footprint in the Middle East. Similarly, Obama launched Operation Odyssey Dawn, a no-fly zone turned regime-change operation without deliberation, much less a vote in Congress. The fallout of the intervention in Libya, as well as U.S. covert action in Syria and support for the Saudi-Emirati coalition in Yemen, led to disastrous outcomes abroad and solidified Congress and the media’s role as bystanders.

For those who hope for a foreign policy more closely aligned with constitutional norms and grounded in robust public debate, the outlook is mixed. While the mainstream press has often been derelict in its responsibilities, a “new media” ecosystem of podcasts, web-based outlets, and independent commentary has, to some extent, filled the gap. Such sources have shortcomings but their emergence is, on balance, a welcome corrective. What remains to be seen is whether such dissenting commentary can elicit and sustain a more robust public debate that spills into politics. While new media has mobilized listeners, translating that energy into political action is another matter. If dissenting media consumers do not become dissenting voters, today’s online commentary may prove as ineffectual as yesterday’s print opposition.

The outlook is bleaker on Capitol Hill. The Iran War has reinforced a decades-long trend of congressional abdication, as legislators defer to the president rather than assert their responsibility to debate questions of war and peace. Recent history offers little reassurance, as heightened polarization has sustained the growth of the imperial presidency. Yet there are glimmers of hope: a small number of resolute conservative voices have joined a growing body of more consistent liberal ones in calling for restraint and a return to constitutional norms. Adding to this chorus will require sustained voter engagement, particularly in primaries, which traditionally see low turnout. If Americans believe foreign policy is crowding out domestic priorities and want consistent congressional oversight of the executive, they must make clear to incumbents that there will be consequences at the ballot box. If, as the saying goes, “the government you elect is the government you deserve,” then American voters must make clear that they demand—and deserve—better.

Outside of electoral politics, polling suggests that opposition to the Iran War is not a fringe position, but the norm—one sustained by voices across the political spectrum. Realizing that sentiment and forcing into politics will require what Abraham Lincoln called “a patient confidence in the ultimate justice of the people,” coupled with the sustained effort to make it so.

In theory, this is defensible. The Fed can tighten monetary policy, slow total economy-wide spending, and offset some of the price pressure from higher energy costs. But it cannot conjure up more oil. Provided inflation expectations remain anchored, monetary policymakers have a reasonable case for looking past a temporary energy-price spike rather than squeezing the whole economy to counteract it.

Jerome Powell recently stated the standard case for keeping calm. “Energy shocks tend to come and go quickly,” he said, and “the tendency is to look through any type of supply shock.” A strict 2 percent inflation target during an oil shock would require suppressing nominal spending to offset a jump in energy’s price. The argument is that the Fed would be compounding the output fall: adding a demand squeeze to a supply squeeze, and so risking recession to prove its anti-inflation credentials.

This is the strongest case for advocating a nominal GDP target, or something close to it. Nominal spending equals prices times real output. If an adverse supply shock pushes real output below trend, targeting a stable nominal spending path may mean inflation drifts temporarily higher. That is not “letting inflation rip.” It is refusing to make monetary policy amplify the output reduction of a real shock.

The problem, however, is symmetry. If central bankers commit to look through negative supply shocks, they should also look through positive ones. Otherwise “flexible” inflation targeting becomes biased towards above-target inflation.

That is, if oil prices fall, productivity accelerates, or new AI technology makes firms more efficient, real output potential can rise faster than expected. Under the same “look-through” logic, inflation should then run lower, allowing consumers to reap the benefits of productivity through slower price growth.

Sadly, that is not how policymakers usually think about it. Nonfarm business productivity rose 2.2 percent in 2025, a much faster rate than almost the whole of the 2010s. Oil prices fell significantly last year too. Scott Sumner asks the obvious question: if policymakers really “look through” supply shocks that they have no control over, why did almost nobody call for inflation to run below target ? On the same logic used for oil price spikes, he wrote, it was “appropriate for inflation to run below 2% during 2025.”

The same asymmetry is also shaping the AI debate. Fed chair nominee Kevin Warsh has presented AI as a major positive supply shock, calling it “the most disruptive moment in modern economic history” and saying he was confident it would improve output. The White House agrees. Kevin Hassett says AI-induced productivity puts “downward pressure on inflation.” But both imply that this gives room for the Fed to loosen monetary policy, rather than the Fed “looking through” these developments over which it also has no control.

They may be right about AI’s growth dividend. But if stronger-than-expected productivity growth is a positive supply shock, the first-order lesson of the Fed’s Iran war stance is not that it gets “room” to ease and offset any disinflation. It is that inflation should be allowed to fall, provided nominal spending stays on track. In fact, when inflation is already above target, treating hoped-for productivity gains as permission to loosen monetary policy banks disinflation before it even arrives.

My worry is that there’s an obvious asymmetry developing here. Negative supply shocks? Look through the above-target inflation. Positive supply shocks? Ease policy to prevent below-target inflation. Heads, inflation overshoots. Tails, we still don’t go below target.

If this is how the Fed uses its discretion, it is instituting a clear inflation bias. The FOMC’s own framework affirms that long-run inflation is primarily determined by monetary policy and reaffirms a 2 percent PCE target. That does not require the Fed to react to every oil-price move. It does surely require symmetry for both signs on a supply shock.

The Fed has already erred in an inflationary direction recently. From 2021 onwards, it let talk of negative supply shocks obscure the more important fact that money was too loose and nominal spending then exploded. The public is still paying for this conceptual error through a permanently higher price level. A central bank that now tolerates overshoots from bad shocks while preventing undershoots from good shocks is not practicing flexible inflation targeting. It is building in yet higher inflation over time.

What can be done to keep inflation on target? A monetary policy rule, as Cato’s Handbook on Affordability suggests. Congress should bind the Fed to objective, transparent monetary rules and require public justification for any deviations. If we were to formalize something like a nominal GDP target, the Fed would then be bound to the look-through logic in both directions.

This silence was expected, but it nevertheless left tariff refunds to be worked out by lower federal courts, administration officials, and private parties—a situation that raised practical, legal, and economic questions. Since then, some of those questions have been answered, and not all the answers are terrible. But the tariff refund process is still far from perfect, and it will generate many winners and undeserved losers due to the choices the administration is now making—and the ones it unwisely made last year about how to launch the president’s great tariff war.

A $166 billion mess.

Let’s first review how we got here. As regular readers know, the IEEPA tariffs were—ahem—legally dubious. The statute doesn’t mention tariffs, had never been used to impose them, and—while it does empower the president to take severe actions during a declared “emergency”—would need to be stretched beyond reason to allow for the unilateral creation of a permanent revenue-generating regime. Every federal court that considered the IEEPA tariffs agreed, culminating in a landmark Supreme Court decision that invalidated roughly $166 billion in duties collected since the first IEEPA tariffs were imposed last February.

That the court didn’t address the issue of refunding those billions wasn’t a big surprise. It rarely wades into technical stuff like that. But the lack of a mandated process set off a furious scramble to figure one out. It started with the case getting remanded back to the Court of International Trade (CIT) for disposition of the refund issue and with that court quickly deciding to give one judge responsibility for both refunds and the thousands of importer lawsuits that had been filed to obtain them. The judge also moved quickly, picking a single suit to order Customs and Border Protection (CBP) to refund all IEEPA tariffs immediately. So far, so good.

Then things got messy. The agency told the CIT judge that its existing import processing system simply couldn’t process mass refunds in the mandated timeframe. The judge relented and ordered CBP to quickly develop a new platform for processing mass refunds, and the agency officially launched the Consolidated Administration and Processing of Entries (CAPE) system last week.

The current situation: far from ideal, trending worse.

With CAPE, the refund process is underway, and that alone is worth celebrating, given that administration officials initially said they would fight any attempt to give back any of the illegal tariff money. Yet CAPE isn’t without problems—beyond some of the technical glitches importers and customs brokers have already reported.

As we’ve discussed, the law requires the government to return illegally exacted taxes; the Trump administration promised the courts that it would quickly refund any tariffs ultimately invalidated; and the ideal tariff refund system would be fast and automatic, with the government proactively returning collected duties to all importers that paid them. Sure, there would be some edge cases that required additional paperwork and bickering, but most refunds could be handled this way. In fact, CBP has issued big, automatic tariff refunds on multiple occasions and does smaller ones every day.

CAPE is far from this ideal and will inevitably allow the government to keep billions in illegally collected tariffs. The portal requires each of the roughly 330,000 importers that paid IEEPA tariffs to sign up for an electronic account, file detailed, entry-by-entry claim documentation, and wait for CBP to scrutinize their paperwork before getting a refund—a costly and bureaucratic process that CBP says will take at least another 60 to 90 days to complete for each importer. This requirement alone, CBP estimates, will exclude hundreds of thousands of (mainly small) importers who paid IEEPA tariffs last year.

At this stage, moreover, CAPE doesn’t apply to almost 40 percent of the entries (imports) on which illegal IEEPA tariffs were paid because, CBP claims, those are more technically burdensome. The agency says it will eventually get to most of these entries in subsequent phases, but there’s no timeline for when.

As I explained in a recent Cato blog post, making importers jump through bureaucratic hoops to get their refunds will inevitably reduce the number of those willing to take the plunge. Some, for example, will choose to forgo a refund because it would cost more to apply for it than they’re owed. (One CEO of a midsize company told me he’s already spent $30,000 on just CAPE paperwork.) Nonprofits and trade associations have stepped in to help defray costs, but this assumes importers even know about them. Many of the smallest ones unfortunately don’t.

Other importers will avoid CAPE because they’re worried it would be a red flag for heightened CBP scrutiny of their paperwork. Some firms have also expressed reservations about seeking refunds out of concern for political blowback or customer lawsuits—justified concerns, given that some lawsuits have already been filed, and that Trump has openly said he’ll “remember” the companies that don’t request refunds.

The system also enables CBP to scrutinize importers’ applications, potentially to reduce refund amounts owed or nitpick applications. On Wednesday, for example, we learned that during CAPE’s first week CBP immediately rejected more than a third (28,000) of the initial 75,000+ claims submitted, each of which can cover thousands of entries. Then CBP rejected another 16 percent of the claims that passed the initial screen (2.1 million of 13.3 million entries). Only 1.7 million entries that passed the second screen were on their way to getting a refund. Importers can refile the rejected claims, but that takes more time and money. And, presumably, these were the claims that importers thought would be easy.

Even for entries that eventually clear CBP’s screens, the actual refund amount is in doubt. The agency has already said that full refunds will not be given in many cases because CBP will consider other Trump tariffs that would have applied if IEEPA tariffs never existed, and that it will subject every refund application to a strict multistage review process. Heavy CBP scrutiny could also lead to penalties for past paperwork errors or even customs audits. Given the well-documented chaos of the 2025 tariff system, administrative errors related to these entries are likely (and have already been found). So, U.S. importers who submit applications expecting full refunds might eventually discover they’re getting much less—and maybe also getting a call from a government auditor.

To be clear, the CAPE system isn’t the worst-case refund scenario. But, as the chart below shows and as we’re already seeing, the system’s design will ensure that the administration ends up paying out much less than it owes. Whether that’s intentional is another question.

Finally, and perhaps most importantly, the government still has time to appeal the CIT’s refund order prior to paying anyone back. The deadline for doing that is June 6, so there’s still plenty of uncertainty about what comes next—and whether the Trump team will fight refunds more aggressively.

But what about consumers?

One thing we do know, however, is that consumers won’t be seeing a penny—at least not directly from the government. Yes, this stinks, but it also makes good sense.

No, really.

For starters, the law and court precedent are clear that tariffs are collected from and refunded to the “importer of record”—the party that brings goods into the country and files the official paperwork with CBP. This framework applies to other corporate and individual taxes, too, and there’s no serious legal argument that it should be abandoned today.

Refunds are delivered this way mainly for practical reasons, most of which are evident with the IEEPA tariffs. Over the last year, there have been millions of entries on which IEEPA duties were paid, and most of these goods traveled several steps in U.S. supply chains before reaching American consumers. It would be impossible for the government to track every transaction for every good after it clears customs, nor would any sane person want the feds to try. Furthermore, not every company passed full tariff costs on to consumers. As we discussed last year, in fact, the consumer price index was a little lower than economists predicted because many U.S. retailers and middlemen absorbed some or all of the tariff hit. Mandating that firms pay customers for money they never received would be both costly and unjust.

For companies that did fully pass on tariff costs, meanwhile, calculating exact refund amounts could be nightmarishly complex. Most didn’t give customers a tariff cost line item on their receipts, and many spread costs across numerous products—some made in America. Some companies, especially smaller brick-and-mortar guys or people working through third-party sellers, might not even know who their customers were. Determining refund amounts would require information they don’t have.

Fortunately, the market is working some of this out—all without government coercion. Some U.S. companies did itemize tariff surcharges and are already saying they’ll refund what the government returns. Most notably in this regard, “FedEx, UPS and DHL Express say they are working to secure tariff refunds on eligible shipments and issue the refunds back to the customers who originally paid them.” Even some companies that didn’t itemize or charge customers directly are getting into the voluntary refund game—often humorously (language warning!). Admittedly, most of these are smaller companies (likely hoping their benevolence will earn some free publicity), but even some larger retailers like Costco have committed to passing on refunds and IEEPA tariff savings where possible. As the National Retail Federation put it, “It may not be a specific item on a receipt that says, ‘This is a tariff refund,’ but you’re going to see the money returned to customers in many cases.” And that might pressure their competitors to do the same.

For many business-to-business transactions, moreover, tariff refunds have already been addressed: Contracts signed during 2025 included explicit tariff language, and importers will be legally obligated to pass refunds on when they get them from CBP. In other B2B cases, importers won’t keep “windfall” refunds because they want to maintain good relationships with their customers. Litigation here is likely inevitable, but companies will work to avoid it in most cases.

This system isn’t perfect: many firms won’t openly offer refunds, and it’s all but certain that American consumers won’t be made whole. But that outcome is not only the law, it’s probably the best we can hope for, given the lack of sound alternatives. Blame the tariffs for that unfortunate reality, not the people who paid them. And if you’re still mad at the government officials who created this costly mess, there’s always the ballot box.

Refund winners and losers—same as it ever was.

Although there’s still lots we don’t know about tariff refunds, the situation already has some clear winners and losers—assuming refund payments start trickling in.

Among the winners are larger companies that have in-house customs compliance departments, experience in dealing with CBP and related import bureaucracy, lawyers who can file lawsuits if things go sideways, and the patience (and capital) to endure the wait for refunds. These firms were better able to withstand the initial tariff onslaught, and they’re similarly better able to navigate a bureaucratic refund process. Larger firms also were more likely to have the market power needed to pass on tariff costs; if they can withstand public pressure to do the same with any refunds, they’ll end up with a big windfall.

The other big winner will be Wall Street. As has been widely reported, hedge funds and other investment firms saw an opportunity in the tariff chaos to buy refund rights from companies that didn’t want to risk a Supreme Court loss or a messy refund process. As the Journal notes, “With tariff-refund claims, investors are capitalizing on the uncertainty businesses and others face about whether they’ll ever be able to cash in—and how long it might take.” So, they were able to buy importers’ claims for pennies on the dollar, meaning a big payday—returns of two- to five-fold—when CBP pays up. And, as Reuters reported, these deals can be structured to avoid legal and PR trouble.

There are, unfortunately, also some big losers—beyond the consumers we already discussed. The biggest one will be smaller businesses that lack the resources to seamlessly navigate CAPE and deal with any fallout from past paperwork mistakes. Beyond money spent on brokers and lawyers, a recent NPR report shows, it takes small-business owners weeks to track down all the documentation needed to request a refund. Forced to spend many hours and dollars trying to get import data together for the possibility of eventually receiving a modestly larger tariff refund (or a customs audit), many small importers simply won’t bother—or they’ll sell their refund claims to Wall Street at a steep discount. Other importers simply won’t know about CAPE or some of the free refund services public interest firms are now providing. Others still will get fleeced by unscrupulous customs brokers charging exorbitant fees for relatively easy (for them) work—something that brokers on LinkedIn confirm is already happening. And, finally, there are the businesses that closed up shop before CAPE ever launched, sometimes because of massive and unexpected tariff bills.

Recall: Tariffs have already disadvantaged smaller U.S. companies versus larger rivals that can more easily navigate trade bureaucracy, rejigger supply chains, raise capital, lobby for carve-outs, absorb upfront tariff costs, or pass them on to customers. Refunds, unfortunately, will do similar things to the same businesses for the same reasons.

The other big loser is U.S. taxpayers. As detailed in a recent Cato blog post, all tariff refunds—IEEPA and otherwise—must include interest at a regulated rate of 4.5 percent for larger transactions and 6 percent for smaller ones, compounding daily. A total IEEPA tariff hit of $166 billion, we estimate, will add an interest cost of more than $20 million per day to the total amount the government must eventually dispense. Every dollar that the government does dispense is a dollar that American taxpayers—who are also tariff-hit consumers—will ultimately have to cover. And the longer the government delays refunds, the more money taxpayers owe. We calculate that the total interest tab likely exceeds $4 billion to $5 billion at this point, and it’s already about $1.5 billion larger than it was when the Supreme Court issued its ruling on February 20. And if the government were, as Trump suggested shortly after the ruling, to drag out refund litigation through the end of his term, taxpayers would owe U.S. importers roughly $25 billion more in interest alone. That’s almost the annual budget of NASA—and for no good reason.

Summing it all up.

So far, at least, the U.S. government’s approach to tariff refunds isn’t as bad as it could have been, especially given initial Trump administration indications that it would fight every step of the way. But the refund system is also not great, no less perfect, because it takes too long and places the burden on all the American importers who did nothing wrong, dutifully paid up, and are now owed their own money. And things could get worse in the coming days if the government appeals the CIT’s refund orders or if CBP searches for ways to narrow payouts or punish applicants for unintended paperwork mistakes made in CAPE or during the chaos of 2025.

Maybe it’s too much to ask for Washington to proactively offer quick and automatic refunds to all who paid Trump’s illegal tariffs, but it’s still frustrating that many businesses will be hurt, not to mention millions of consumers and taxpayers, too.

The most frustrating part, however, is that every single annoyance and injustice described in this column—the compliance burdens, the Wall Street arbitrage, the litigation and political grandstanding, the needless interest expenses—is a direct consequence of an administration that chose expediency over the law, confiscated $166 billion via a series of dubious unilateral taxes, and told federal courts to keep those taxes in place for most of last year because, if they lost at the Supreme Court, refunds would quick and easy for all who paid them. The IEEPA tariffs were not a close legal call; the administration gambled with other people’s money and lost big; and now, even in the best case, the government will get to keep billions in ill-gotten funds it never should have had. In this way, the refund saga is about more than paperwork burdens and legal chaos; it’s about who pays up when the government guesses wrong. And, as usual, it’s the Americans who can least afford it.

Markets FTW

“Endless Shrimp” is back, baby. When Red Lobster declared bankruptcy in 2024, its all-you-can-eat promotion took some of the blame. So why do the company’s new owners think it can work this time around? As the Washington Post reported this week, the company has introduced back-of-the-house changes to improve efficiency; it’s bumping up the price from $25 to $30 in some locations; and the promotion will be for a “limited time.” (Hey, it worked for the McRib, right?) WaPo provides some helpful tips for those interested in “shrimpmaxxing”: Skip the Cheddar Bay Biscuits, take it easy on the sides, and know that you need to eat 23 shrimp to get your money’s worth. Challenge: accepted.

Chart(s) of the Week

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AI dynamism:

Anti-legal immigration.

This is not a problem.

They were wrong.

Like past attempts to remake the Middle East, the post–October 7 vision relies on hubris: namely the belief that Washington and its partners can reshape the region through force alone. For two and a half years, Washington has backed Israel’s regional campaign, incurring significant political, economic, and strategic costs in the process. Continued U.S. support for this project guarantees perpetual conflict at further expense to American interests.

Israel’s post–October 7 vision is aggressive, expansionist, and open-ended. It is defined by three maximalist objectives: to entrench Israeli domination over Palestinian territories by establishing “facts on the ground” that preclude a viable political resolution; to dismantle the Iran-backed militant groups that comprise the so-called axis of resistance; and to neutralize the linchpin of the axis—Iran. To that end, Israel mounted a broad, multifront effort to reshape the regional order further in its favor.

This effort relied on the ability of the United States to insulate Israel from the political, economic, and military costs of its policies. Since October 7, the United States has shielded Israel from diplomatic blowback, helped pay for Israel’s wars, and, in some cases, undertaken direct military intervention to both protect Israel from retaliation and help fight its adversaries.

In Gaza, Israel employed overwhelming force to impose a new status quo on the enclave. Citing its two stated objectives—eliminating Hamas and freeing the hostages—Israel reduced Gaza to ruin and entrenched Israeli control over the enclave. By the October 2025 ceasefire, Israel had destroyed at least 70 percent of buildings in Gaza, displaced 90 percent of its population, and killed tens of thousands of civilians—the total number is unknown due to the extent of the destruction. The post-ceasefire “yellow line” left Israel in possession of more than half of Gaza, and Netanyahu remains adamant that Israel will retain “security control” over the entire enclave.

In parallel with the war in Gaza, Israel accelerated existing efforts to deepen its control over the West Bank. Israel increased and expanded its settlements, seized more land, and launched large military raids, all of which was accompanied by record rates of settler violence. In sum, the suite of policies amounted to de facto annexation and the destruction of a two-state solution. There is little pretense here—Israeli officials including Netanyahu openly boast about preventing a Palestinian state and ensuring lasting Israeli control over “all territory west of the Jordan River.”

American support is central to the post–October 7 vision in these territories. Washington embraced the war in Gaza without reservation. The United States vetoed six United Nations Security Council resolutions calling for a ceasefire in Gaza and provided Israel with tens of billions of dollars in military aid and weapons—which human rights organizations have linked to widespread atrocities. In the West Bank, Washington claims to oppose annexation—Trump said annexation “won’t happen” and that Israel would “lose all of its support from the United States if that happened.” Yet the United States has stood by as Israel pursued just that policy.

By backing Israel’s effort to indefinitely subjugate Gaza and the West Bank, Washington has committed itself to an endless conflict. In Gaza, despite considerable losses, Hamas remains the dominant political and military actor—it has effectively replenished its ranks to prewar levels, recruiting from a desperate population. Israel can degrade the group’s capabilities and kill its leaders, but without a route toward a credible political solution, militancy will persist, whether under the banner of Hamas or something else. In the West Bank, Israel is pushing the enclave toward collapse, risking mass unrest as desperation overtakes prospects for change. Enabling Israeli expansion in the West Bank risks foreclosing any political solution to the Israel–Palestine conflict. Trump’s policies do not match his rhetoric on the issue.

Instead of encouraging Israel to pursue a sustainable political solution to the conflict, Washington’s ironclad support encourages Israeli maximalism. So long as Israel feels it has American support to reject Palestinian self-determination or sovereignty in any form, it is unlikely to compromise. This trajectory will pull the United States deeper into the conflict as the occupation becomes more unsustainable.

As Israel aimed to consolidate its control over Gaza and the West Bank, it also went on the offensive against the loose network of Iran-backed regional actors spanning Lebanon, Syria, and Yemen. Here too, Israel had U.S. support—Washington considerably increased its military footprint in the Middle East to bolster Israel. Yet, as in the Palestinian territories, the post–October 7 vision produced unstable and untenable outcomes at the regional level.

In Lebanon, Israel’s campaign to degrade Hezbollah has expanded into an effort to establish a buffer zone as far north as the Litani River and potentially foment civil war between the group and the Lebanese government. However, a new Israeli occupation of southern Lebanon and the chaos produced by a Lebanese civil war risk empowering Hezbollah by reigniting precisely the same grievances that led to its rise in the 1980s. Trump announced a 10-day ceasefire between Israel and Lebanon in a bid to deescalate with Iran, but Israel shows no indication of altering its strategy.

In Syria, following the overthrow of Bashar al-Assad in December 2024, Israel has sought to keep the country weak and decentralized, encouraging fragmentation along ethnic lines while also carving out a large buffer zone near the Golan Heights. This jeopardizes a fragile postwar order that Trump, claiming he wants to see the country succeed, has endorsed.

In Yemen, the Houthis responded to the war in Gaza by targeting vessels in the Red Sea in protest. Washington responded with a prolonged, multi-billion-dollar U.S. military campaign to defeat the group, which ultimately failed. The result is that the Houthis have demonstrated a new source of leverage over the Bab-el-Mandeb Strait—an outcome directly linked to Israel’s actions.

Across these cases, force has failed to produce order. Yet, for Israel, these operations paved the way for it to go after Iran directly. After a series of tactical blows to Tehran’s regional partners, Israel sought to capitalize on this vulnerability to eliminate what Netanyahu has often called the “head of the snake.”

Israel’s shift toward direct confrontation with Iran unfolded through a series of escalating steps. Two rounds of direct Israel–Iran strikes in April and October 2024—during which the United States defended Israel from Iranian missiles—marked the pivot from decades of indirect competition to open conflict. Next, in June 2025, Netanyahu initiated what we now call the “12-day war,” hoping, according to leaked transcripts, to draw the United States directly into the fight. He succeeded: After again defending Israel, Washington carried out its own first direct strike on Iranian territory (Operation Midnight Hammer), targeting three key nuclear facilities. In late February, the U.S. and Israel jointly launched a war with Iran.

Netanyahu led the push for a large-scale U.S. war with Iran—something he has championed for more than three decades. On his seventh trip to the United States in the first year of Trump’s second term, he presented a confident assessment to Washington: Iran’s missile capabilities would be neutralized within weeks, Tehran would be unable to choke off the Strait of Hormuz, and protesters would return to the streets and topple a weakened regime. Netanyahu acknowledged after the war began that American military support was decisive in enabling him to, in his own words, achieve what he has “yearned to do for 40 years.”

None of Netanyahu’s predictions proved correct—as in other cases across the region, strategic success remains elusive. The Islamic Republic remains intact, is unlikely to capitulate or collapse, and has hardened its resistance to the United States. Both Iran’s nuclear and ballistic missile programs remain intact and likely cannot be eliminated with more bombing. Tehran effectively closed the Strait of Hormuz, causing the largest oil disruption in history—the ramifications of which will outlast the war.

By convincing Trump to initiate war with Iran, Netanyahu entangled the United States in a conflict it can neither easily win nor exit. Washington now seems desperate for an off-ramp—it was Trump who pushed Pakistan to host the initial negotiations between the United States and Iran on April 11. But Trump has adopted the same maximalist demands that precipitated this war, refusing to recognize that Tehran will not bargain away its sources of leverage after the United States and Israel failed to achieve their objectives through force.

Israel has signaled it intends to press forward with its regional vision and is preparing for prolonged conflict on multiple fronts. But Netanyahu can only sustain this campaign with the support of the United States—to maintain this pace and scale of military operations, he needs the guarantee of American help.

Israeli officials likely perceive this as a race against time—they are acutely aware of the seismic shifts in American public opinion and are acting with urgency while they have enough support in Washington. This shift is bipartisan and most pronounced among younger Americans: According to a recent Pew poll, disapproval of Israel among Democrats and Republicans aged 18–49 is 80 and 57 percent, respectively. To combat this, Israel has launched an aggressive public opinion campaign within the United States, particularly online—Netanyahu described social media as one of the most important “weapons” in this effort. With U.S. support declining and generational change on the horizon, Netanyahu’s urgency to harness American power will grow.

Continued support for this project sacrifices American interests at an extraordinary cost. Since October 7, Washington has enabled and initiated wars that have killed and wounded countless innocent people to no benefit for the Middle East or the United States. The United States has drained its resources subsidizing Israel through record amounts of military aid and expending massive sums in a host of military operations—even prior to Operation Epic Fury. Now, the Pentagon has requested at least $200 billion to compensate for the war with Iran, separate from the proposed $1.5 trillion defense budget for 2027. Additionally, the United States has depleted its stockpiles of critical weapons systems defending Israel, especially during the war with Iran—shortages that will take years to replenish. Washington continues to squander time and resources in the Middle East at the expense of more pressing policy issues at home and abroad.

Decades of American efforts to manage the Middle East through force have racked up immense costs for essentially illusory benefits to the United States, yet Washington refuses to change course. This latest attempt to transform the region with Israel is no different. Lockstep American support for Israel has fueled widespread hostility toward the United States while perpetuating the causes of regional unrest and conflict—outcomes that are anathema to U.S. interests. The result is chronic instability and endless American intervention in the Middle East.

The United States does not have an interest in perpetual war in the Middle East. The post–October 7 vision has no clear endgame and imposes significant costs on the United States. It is open-ended, driven by fantastical thinking, and can only happen because Washington insulates Israel from the consequences of its bellicosity. The Trump administration should stop enabling this disastrous campaign and make clear to Israel that U.S. support for this project is over.

The divergence is striking. On purchasing power parity terms, US GDP per head reached $85,810 in 2024, more than 40 per cent above Britain’s. In 2007 that gap was just 25 per cent. Yes, Americans work longer hours and get less holiday. But they also produce 23 per cent more for each hour they do work.

Westminster’s instinct is to call for a growth plan to narrow the gap. Rather inconveniently, America does not have one. It instead has millions of private plans, all colliding untidily. Firms in Texas drill gas. Data centres are sprouting up in northern Virginia. Florida throws up new suburban neighbourhoods. California, even as it half-strangles the basics with regulation, turns eccentricity into software fortunes in Silicon Valley. Nobody designed this economy, nor could they. It is sprawling and chaotic. But it certainly delivers growth.

Discussing how we might catch-up, British commentators often say we need better skills, better health outcomes, better transport and a serious industrial strategy. All have some economic theory underpinning them. Yet, again, none really explains America’s relative success.

Yes, America has the world’s top universities, but its children are not obviously better educated overall, and young Americans are not more likely to hold degrees. The country is less healthy than Britain and its public transport is poor. Until very recently, Washington did little regional and industrial strategy either. There is really scant evidence here of the sort of government-led growth that seems to appeal to Europeans.

No, having lived stateside for almost a decade, I would trace much of the gap, beyond America’s sheer scale, to two attitudes that shape or constrain policy.

First, Americans unashamedly desire abundance. They want cheap energy, big houses, deep capital markets, large shareholdings, higher incomes, and they tolerate the long hours, disruption and downside investment risk required to obtain them. The British young professional’s dream in London is often a Victorian terrace near enough to a railway station. The American version is a detached house, two cars, a 401(k) pension plan and a garage large enough to be a London flat.

True, many Americans also complain the country does not build enough. There is growing bipartisan recognition that permitting homes, transmission lines and infrastructure takes too long. But America’s debate is about building yet more from a high base. Britain’s discussion quickly pivots to the caveats and the country’s environmental, safety and equity goals.

Many Britons visit America, recoil at the expensive tips, World Cup ticket prices and healthcare bill stories, and conclude that high living costs undermine those higher incomes. But this gets the economics partially backwards. Many non-automatable services are more expensive precisely because America is rich. High wages available elsewhere bid up the pay needed to get people to serve meals or staff hospitals, while increasing demand for popular leisure activities.

Which brings me to the second major difference. Americans more willingly accept the fallout from all this striving. Surveys consistently show they are likelier to believe that effort and skill get rewarded in their economy. That belief tempers demands for redistribution, meaning far less working-age cash support. The pandemic aside, the drumbeat for government relief after shocks is markedly more muted too.

America therefore tolerates more inequality and greater postcode lotteries across states, counties and cities. To British eyes, the result can look garish, uncaring and under-governed, but the results point to a truth that Britain’s own debate keeps trying to evade. Prosperity is not summoned by government plans. It is made by people willing to build, risk, fail, scale and disturb the neighbours, and having the opportunity to try.

In terms of economic damage, though, the inflation shock may yet have further to run. Not just because of the oil price spike, but because of the politics the original high inflation unleashed. The chancellor has railed recently against “rip-off” petrol prices, threatening interventions on petrol stations. The SNP has pledged price caps on bread, milk, cheese and other “essentials”. And the Greens are pushing crude rent controls.

Economists reject such measures. Market prices are not arbitrary numbers but crucial signals about scarcity. Cap them and history shows you get shortages, quality deterioration and black markets. But these proposals do not emerge from a vacuum. They arise when high inflation has so scrambled people’s feel for prices that every jump is seen as an injustice requiring political correction. Indeed, this dynamic is an under-appreciated risk of inflationary policies.

Open a standard macroeconomics textbook and the long-run costs of unexpected inflation listed seem quaint. It generates some arbitrary wealth redistribution, it will say, particularly between lenders and borrowers. It requires costly price adjustments and fuels conflict as contracts get renegotiated and companies eke out ways to maintain custom. Households require more financial planning to protect themselves too.

Yet the dirty secret is that many economists see these as tolerable nuisances, provided inflation quickly subsides. Over time, wages catch up, other prices adjust, and any lasting efficiency damage is supposedly limited. This partly explains why many economists, and even central bankers, were so sanguine about massive monetary and fiscal stimulus in the pandemic. A slower recovery seemed the greater danger. If inflation expectations stayed relatively “anchored”, any damage from inflation overshooting was deemed manageable.

The public implicitly understands that inflation is far more corrosive than this, even if they cannot articulate why. Yes, there is the temporary wage squeeze economists acknowledge, whereby consumer prices jump first, with pay rises following later for many workers. But the lingering problem is how a sharp rise in the price level makes everyday life more confusing.

I still get bamboozled in supermarkets about whether certain prices are high relative to substitutes, or merely what everything now costs. Once people lose a sense of what “normal” prices are, and become more attentive to movements, it’s a short step to seeing greed where there is scarcity, and profiteering where there is pass-through.

Bad policy then amplifies the original damage. Faced with high inflation, politicians’ first instinct is “relief”. Britain got the vast Energy Price Guarantee and waves of cost-of-living support. These cushion families’ finances, but cannot eradicate the underlying inflationary pressure. They shift its burden around and by sustaining demand, keep inflationary pressure elevated.

The next reaction to lingering voter anger is price controls. The SNP’s food price caps and the Greens’ rent controls, just like the government’s vet price caps, rail fare freezes and more, shroud the information prices provide, creating harmful incentives. By squeezing margins, they discourage supply, while incentivising other damaging adjustments from landlords or retailers to circumvent or ameliorate risk.

Once inflation violently resets the price level, politics thus rarely stays economically rational. Every salient price rise becomes a scandal. Every supply shock is dubbed exploitation. Politicians stop asking about causes, and instead police symptoms.

By corroding public trust in the price mechanism itself, high inflation thus clears the way for exactly the populist price control proposals now multiplying across Britain. This political aftershock is a cost of high inflation that few acknowledge, but one future policymakers should not ignore.

Created to expand access to higher education, Pell Grants currently provide up to $7,395 per year to low-income students, with smaller awards as family income rises. The program has long enjoyed bipartisan support: progressives value its focus on need, while conservatives appreciate that it functions as a means-tested voucher, giving students flexibility to choose where to enroll.

The problem lies in how the program is financed. Pell relies on a mix of mandatory and discretionary funding that Congress must continually replenish. When other spending priorities crowd out Pell, the program faces shortfalls—shortfalls that are coming due now.

There is a straightforward fix. Over the past century, federal higher education policy has accumulated programs that have outlived their usefulness or never lived up to their promise. The common thread running through many of them is that they enrich colleges rather than aiding students by giving institutions both the incentive and ability to capture the benefit through higher tuition or reduced aid of their own.

These programs effectively siphon money from programs that work, like Pell grants, to finance misguided programs that benefit institutions at students’ expense. Ending these programs and redirecting those funds to Pell would shore up the program for the next generation of low-income students without raising taxes or cutting aid to students.

At the top of the list is the Federal Supplemental Educational Opportunity Grant (FSEOG) program, which shares Pell’s purpose—to provide financial assistance to low-income students—but is far less well-targeted. Whereas the federal government chooses the recipients of the Pell grant, colleges choose FSEOG recipients, even though the federal government typically pays for 75 percent of those grants. Moreover, FSOEG funds are not distributed among colleges based on how many needy students they enroll, but rather disproportionately flow to richer colleges with more political power. The result is a textbook case of money intended for students being redirected to benefit institutions instead.

The combination of college discretion and non-need-based allocation results in a program that is much less effective than Pell grants in supporting students from low-income households. The savings from dropping this aristocratic and arbitrary program and redirecting those funds to Pell over the next 10 years would be around $9 billion.

Work-study provides another example of a program that has been obsolete for decades but persists, nonetheless. Started during the Great Depression with a goal of keeping students in college and out of the labor force, the program was the wrong solution to the high unemployment of the era and is certainly no longer a desirable aim for policy. Like FSEOG grants, the federal government typically pays for 75 percent of work-study awards, yet colleges, not the government, choose which students receive the aid. In the best-case scenario—which is still bad policy—the government is heavily subsidizing on-campus jobs for college students.

In the worst-case scenario, colleges are destroying value by creating jobs that create less value than their overall cost. Eliminating work-study would save $12 billion over the next 10 years.

The federal tax credits and deductions follow the same pattern: money nominally aimed at students that colleges routinely intercept. These tax benefits have not lived up to their promise, largely because colleges have responded strategically to their introduction by raising their prices and cutting other financial aid. When a college responds to a $1,000 tax credit by raising tuition by $1,000 or cutting other financial aid by $1,000, it is the college, not the student, that benefits from the tax credit. The two biggest tax credits, the American Opportunity Tax Credit and the Lifetime Learning Credit, account for $132 billion in tax expenditures over the next 10 years—and because colleges have captured that benefit already, eliminating them would cost students far less than the headline number suggests. Indeed, their elimination could cover the entire projected Pell shortfall over those same 10 years.

Pell Grants are worth saving—and they can be saved. The money is already in the system; it’s just being spent on programs that funnel dollars to colleges, while students see little of it. Congress doesn’t need to find new money. It just needs to stop sending the old money to the wrong place.

Anthropic’s early labor-market evidence finds no increase in unemployment in the most AI-exposed occupations, but slower hiring for younger workers, while overall US unemployment remains at 4.3%. AI will undoubtedly disrupt more jobs over time, but comparative advantage doesn’t disappear because AI gets better: when machines do more of certain tasks, humans will shift toward other jobs, and whole new industries will emerge.

More modest US universal basic income trials have found recipients worked less and enjoyed more leisure, but showed little evidence of better entrepreneurship or lasting mental-health gains. Yet a basic income’s fiscal cost is high. Even $1,000 monthly payments to every American would cost $3.7 trillion annually — 50% of today’s federal budget.

It seems fruitless to debate a bigger new entitlement we cannot currently afford to solve a labor-market apocalypse we haven’t yet seen.

But price caps, transparency mandates, aggressive antitrust regulation and similar proposals would only address the symptoms of unaffordable health care, rather than the disease that causes it: the income and payroll tax exclusion for employer-sponsored health insurance.

We are health policy scholars with diverging views. One of us (Elizabeth) helped to design and implement the Affordable Care Act. The other (Michael) fought that law every step of the way and still supports repeal. Yet we each recognize that many of the problems the law seeks to address stem from this feature of the federal tax code.

Because wages are taxable but employer-provided health benefits are not, the tax code encourages compensation in the form of health insurance rather than cash. Economists across the political spectrum have noted that making employer coverage tax-free encourages more comprehensive plans than many workers might otherwise choose, which reduces price sensitivity. That means higher prices, higher premiums and more health care spending overall.

The negative effects of this policy are extensive, but it hurts lower-income workers the most. Higher-income workers receive the largest tax breaks from the exclusion because they have higher marginal tax rates. Meanwhile, higher premiums and health care prices hit lower-income workers hardest.

Support for reconsidering the exclusion spans the political spectrum. Presidents Ronald Reagan, George W. Bush and Barack Obama all proposed reforms, as did Sen. John McCain (R‑Arizona). The Affordable Care Act included the “Cadillac tax,” which would have provided a partial check on the exclusion through a 40 percent excise tax on high-cost plans. But it never went into effect. Congress repeatedly delayed it and ultimately repealed it in 2019. According to one study, the Cadillac tax would have reduced health care prices by up to 1.3 percent and overall health spending by 2.2 to 3.2 percent.

The politics of reform is daunting. Labor leaders, for whom generous health benefits have represented an important bargaining chip, and large employers that believe health benefits give them a competitive edge in hiring, have fought to preserve the exclusion. But as health care prices continue to climb, the argument against it has only grown stronger.

To rein in the exclusion, policymakers could limit or cap it, thus reducing the upward pressure it exerts on health care prices.

They could also give workers greater control over health insurance spending by separating insurance from employment. That could help strengthen individual market options and lower costs overall.

We believe a hybrid approach combining the two holds the most promise. Reforms based on existing Individual Coverage Health Reimbursement Arrangements could maintain employer involvement while expanding flexibility and potentially attract bipartisan support.

Created in 2019 by the first Trump administration, ICHRAs are traditionally a Republican idea. But Democrats might appreciate how they could strengthen coverage options in the individual market — especially for workers without affordable employer plans. Republicans might be suspicious of capping the exclusion, but they know the true size of government is what it spends. Capping the exclusion amid massive deficits would not expand government.

Each path involves trade-offs. But the lodestar should be a system that improves affordability, slows the growth of health spending, promotes continuity and portability of coverage, and allows individuals and families to choose the coverage that best meets their needs.

If policymakers fail to address that fundamental flaw, then at best they will only provide symptomatic relief. Meanwhile, the underlying disease will keep making health care consume more and more of our national income.

Like in many other states, Kansas lawmakers want to give themselves the power to control curricula and classroom discussion by banning required courses focused on DEI, a term most of the states fail to define (as they do with “Critical Race Theory,” which is often attached to it). None of this is good.

DEI in higher education is a definite problem, but so is anti-DEI legislation. The cure is worse than the disease.

It is worth noting that commentary on the national anti-DEI phenomenon often fails to acknowledge an important distinction: The bills only prohibit schools from requiring DEI courses, but they would not literally ban them. That DEI courses would still be available as electives implies that states are focused on banning compulsion, not exposure.

That is, they want to make sure students are not mandated to embrace and abide by DEI and the illiberal ideology undergirding it.

Does this detail change much? Not really. Though it looks good on paper, banning only required DEI courses may still have a harmful effect on education, introducing a chilling effect on college campuses. Under these bills, what can and cannot be said in a classroom is still left quite vague.

Can a required course discuss — even if it doesn’t endorse — things like Critical Race Theory and other related topics? More broadly, can a required course discuss the history of race relations and the relevant ideologies produced by the long fight for civil rights? In most state bills, that is unclear. Professors may avoid the topic just to be safe, or engage in the subterfuge of redesigning, retitling, and reframing courses to show compliance.

State legislatures may be the most troubling actors in this story, and their efforts are likely to succeed. Even Kansas, one red state with a Democratic governor, has a congressional supermajority of Republicans, so even if anti-DEI legislation is vetoed, it can be overridden by a supermajority.

President Reagan probably didn’t have colleges and universities in mind when he discovered the nine most terrifying words in the English language — “I’m from the government and I’m here to help” — but here it is fitting. Legislatures (and other non-academic bodies, for that matter) are taking it upon themselves to determine what counts as legitimate knowledge.

People who are not academics or even adjacent to academia should not be the sole decision makers for academic issues. Anti-DEI legislation sets a dangerous precedent for government overreach.

It is true that some places have workarounds. Kansas’s Board of Regents, for example, allows exemptions for race and gender courses. But these exemptions must be accepted by that board, which may or may not include people well-informed about how academia works. Even with possible exemptions, the power imbalance between lawmakers and academics remains.

Academics having to ask non-academics for permission on what to teach is a clear sign that higher education is losing its ability to self-direct. Thus, we are just replacing one problem with another: academia’s loss of autonomy.

Anti-DEI legislation is a real political movement. It is a zeitgeist with much momentum, fueled by a desire to right the illiberal wrongs of the past decade of academia. But having lawmakers do that instead of academics creates its own bigger problems.

Yes, this legislation is happening as a response to illiberal academic behavior, but legislative overreach is not so much a solution as it is a new and bigger problem. The proper way to revise curricula is through those who will actually be teaching it.

Figuring out how to return to that idea and maintain academic freedom is a daunting but necessary task.

There’s a general sense that something is wrong with the mental health of kids and teens. Many parents, policymakers, and pundits are quick to point the finger at social media and smartphones. But blaming technology may be more of an excuse to avoid looking at the bigger and deeper causes in society about why the kids are not okay.

What’s among those bigger and deeper causes? One neglected cause is the intense pressure that many young people feel in various aspects of their life offline. These stressors seem to be more closely correlated with rising depression and suicide concerns than social media use. Reports of major depression and suicidality for teens jumped 12–18 percent when compared to when school is not in session, including summer or remote learning during the COVID-19 pandemic. Many young people are harmed from their in-person school experience for reasons not tied to their technology or social media use.

What’s among those bigger and deeper causes? One neglected cause is the intense pressure that many young people feel in various aspects of their life offline. These stressors seem to be more closely correlated with rising depression and suicide concerns than social media use. Reports of major depression and suicidality for teens jumped 12–18 percent when compared to when school is not in session, including summer or remote learning during the COVID-19 pandemic. Many young people are harmed from their in-person school experience for reasons not tied to their technology or social media use.

The intense offline pressures many young people face are often underappreciated. Since the 2000s, teens have faced increasing and often high-stakes testing, the introduction of more academically demanding standards such as Common Core, and many find their out-of-school time more scheduled with a variety of activities, each with its own expectations. Nearly 90 percent of young people reported academic pressure as a source of their distress in a 2018 Pew Research survey. Beyond the classroom stress, students at schools may face bullying and other social dynamics that negatively impact their mental health.

It would not be the first time schools sought to blame their students’ problems on technology. In the 1980s, schools sought to ban beepers, claiming that they were tied to drug deals and classroom disruptions. In the 1990s and 2000s, parents and policymakers bemoaned the influence of violent video games on the rise of teenage aggression. Despite repeated claims and concerns, evidence of the link never materialized. Indeed, a range of research found that despite the popularity of such games, no link could be established between video game violence and teen aggression.

Rather than blaming technology for what’s wrong with their students, schools could help young people learn to put it to better use. By encouraging digital and media literacy, schools could use technology to provide students with the tools they need to have a positive online experience. Social media can be a valuable lifeline to some of the most vulnerable young people, like those in abusive situations or those who often feel isolated offline, such as LGBTQ+ teens. Taking away technology would not solve the problems schools face with students’ mental health. It could make such situations worse.

No one suggests banning schools due to their impact on kids’ mental health. That’s because we understand that the issues affecting teenagers are far more complicated. A similar approach should be taken to technology — and schools could play a meaningful role in that.

The idea that social media is the problem has become so widely accepted that many are probably unaware of the research on the impact of schools and academic pressure on kids’ and teens’ mental health. We don’t engage with that data in the same way as headlines about smartphones, social media, or AI.

Blaming technology may be politically convenient. But if we really care about teens’ mental health, we need to direct that same energy toward the deeper societal pressures kids face every single day.