The heightened surveillance began in March 2025 with a geographic targeting order (or, GTO) issued by the Department of the Treasury. This temporary order lowered the threshold for currency transaction reports (CTRs) from $10,000 to just $200 for money service businesses like Western Union that operate in 30 zip codes along the border.

The surveillance order was quickly met with challenges in court by the Institute for Justice, and other organizations. And for a welcome change of pace, the courts agreed that something wasn’t adding up.

In Texas, the court described the $200 surveillance order as “unreasonable” because it “overreaches,” “defies common sense,” and “likely violates the Fourth Amendment.” The court issued an injunction to put the surveillance on ice until each side could make its case. A similar injunction was issued in California.

Yet, the Treasury had other plans. Instead of respecting the ongoing litigation, it issued a new order with a $1,000 threshold covering four times as many zip codes.

In the announcement of the new order, Financial Crimes Enforcement Network (FinCEN) Director Andrea Gacki said, “The reports generated by this Geographic Targeting Order will continue to help law enforcement investigate powerful illicit networks operating along the southwest border and beyond.” Yet strangely, when Gacki appeared before Congress just a few days later, she was unable to say how many criminals were caught because of this surveillance regime.

Instead, all we have been able to see is that small businesses have become trapped under hefty compliance burdens. And in a cruel twist of irony, the policy meant to catch criminals is likely pushing people into illegal markets.

One small business estimated that it would likely go from filing nine reports per week to filing 50,000 reports per week under the initial order. That is nothing short of an impossible standard to comply with. Another small business watched long lines of customers waiting to cash checks and send money to family dried up as customers became concerned about the new surveillance requirements.

Unfortunately, neither of the lack of results nor the impact on businesses has swayed the Treasury. In September 2026, the order was expanded again. What started in 30 zip codes was expanded to 304 zip codes. What started with a six-month limit has now gone on for nearly two years.

It didn’t matter to the government that there was a court case challenging the surveillance. It didn’t matter to the government that people were losing their businesses. Instead, all that seems to matter is the idea that the government should have unchecked access to our financial lives.

For the average person, it’s easy to write these concerns off. After all, this heightened surveillance regime is supposedly tucked away along the southern border. Yet, what’s happening in the south is only one piece of a vast financial surveillance system built under the Bank Secrecy Act for the past 56 years.

Banks are forced to verify your identity, report you for using more than $10,000 in cash, and report you for doing anything out of the norm. And for what? An estimated $59 billion a year is spent complying with the Bank Secrecy Act as banks file more than 28.7 million reports on customers to the government. Yet, the reports filed initiated only around 275 criminal investigations.

The Treasury should stop this heightened surveillance regime, and Congress should reform the laws that makes it possible. At the very least, geographic targeting orders should require a greater standard of evidence to justify their issuance. However, Congress should go further. It should repeal the Bank Secrecy Act and require law enforcement to get a warrant to go after financial records. Cashing a paycheck, sending money to family, or doing something out of the norm should not automatically put you on a government watchlist.

The people living in these communities should not have to prove their innocence to use financial services. Nor should small businesses have to choose between reporting their customers and closing their doors. It’s time to end unchecked surveillance, in all of its forms.

Since Trump returned to the White House in January 2025, his administration has sent mixed messages on arms control. On the one hand, the president has expressed support for efforts at “denuclearization” and for the world to have fewer nuclear weapons. But his administration’s actions paint a very different picture, and actions speak louder than words. The Trump administration is pursuing programs that would fuel the arms race between Russia, China, and the US, such as the creation of the Golden Dome and the testing of nuclear weapons. Reports also indicate that the Pentagon plans to build and deploy more tactical nuclear weapons, a move that would undoubtedly increase the odds of nuclear weapons being used.

Deterrence involves risk, and nuclear deterrence even more so. It goes without saying that nuclear weapons are massively destructive. Threatening to use one risks another being used against the threatening party. This is the risk — and it’s a very dangerous one.

The problem becomes one of credibility, of making sure that the other side understands that a country will use nuclear weapons should push come to shove. The credibility of nuclear weapons rests on their existence. Their destructiveness makes the potential use of just one is horrific enough. If that’s the case, why, then, does the US need more of these weapons?

hose wanting more nuclear weapons seek them to deter non-nuclear attacks. By having lots of nukes and threatening to use them first in a crisis to limit damage from retaliation, the US can credibly threaten nuclear destruction. This is an effort to avoid a rival from deterring our ability to deter with nuclear weapons, from “deterring our deterrent.”

But there are still two problems with this line of thinking. First, having more nuclear weapons and putting them on an offensive footing would increase the chances of them being used. To limit damage, there must be a commitment to use nuclear weapons off the bat, to take out the enemy’s before it launches theirs.

Second, there’s little to no guarantee that increasing the number of nuclear weapons would increase the perception of them being used. The sheer destructiveness of nuclear weapons — and the fact that limiting damage and counterforce targeting would cost millions of lives — makes threats to use nuclear weapons against conventional forces uncredible. More options do not make the US president more likely to use nuclear weapons. It’s a reason why, contrary to popular accounts at the time, US threats to use nuclear weapons failed to end the Korean War; two exhausted sides from a drawn-out war did that. Likewise, it was the fear of a Soviet nuclear strike, not its nuclear superiority, which restrained the US from invading Cuba during the Cuban Missile Crisis.

Rather than focus on increasing America’s nuclear arsenal, policymakers should strengthen their survivability. This survivability prevents a rival from destroying America’s nuclear weapons before they’re launched, allowing the Sword of Damocles to continue dangling above would-be aggressors. Hardening missile silos and creating stealth technologies for bombers and submarines carrying nuclear weapons are some ways to achieve this survivability.

This means that the US doesn’t need more nuclear weapons, nor does it require the 3,700 stockpile it currently possesses. The US can cut at least a third of these nuclear warheads, and it can do so by disassembling America’s intercontinental ballistic missiles. These sorts of missiles are exposed to enemy surprise attacks, making their preemptive use more tempting, creating a “use-it-or-lose-it” scenario. More missiles fail to strengthen nuclear deterrence and these types of nuclear weapons make their use more likely. Intercontinental ballistic missiles should be scrapped, and disassembling them would leave the US with more than enough nuclear weapons to threaten retaliation.

The insignificance of having more nuclear weapons also means that the US should commit to not using nuclear weapons first in a war or a crisis. This no-first-use posture would reduce temptations for one side to strike out of fear of the US using its nuclear weapons first. In turn, this would also cut down on the number of accidents involving nuclear weapons.

Deterrence is a balance of costs and benefits. Right now, the costs of not taking these measures to reduce the number of nuclear weapons is simply too high for the US and for the world. It would cost approximately $946 billion over a decade, according to one estimate, to modernize all of America’s nuclear weapons. Most importantly, the human costs associated with increased chances to use nuclear weapons are far too high. Even on the lower end of the casualty list where the US uses tactical nuclear weapons in, say, Europe, at least two million people would die. And that is assuming the use of nuclear weapons doesn’t escalate further, which could result in at least 89 million dead. It should also be noted that these casualty numbers are “immediate” deaths. In other words, many more would die from fires, radiation poisoning, and shock waves.

US policymakers should frame and hang the American military strategist Bernard Brodie’s line throughout the Pentagon: “Thus far the chief purpose of our military establishment has been to win wars. From now on its chief purpose must be to avert them.” Doing so would remind policymakers and defense officials of the purpose of nuclear weapons: to deter wars, not to win them. This can be done with fewer nuclear weapons and a less aggressive nuclear posture. With the onset of competition between the United States, China, and Russia, the time is ripe to do so.

Beneath both claims lie three assumptions: that all US factory jobs are “good jobs,” that they’re attainable for anyone with a high-school degree, and that they’re the kind of jobs Americans want. New research punctures them all.

A September study from the Federal Reserve Bank of Cleveland compares manufacturing wages with those of similar workers (same age, education, etc.) in other industries. It finds that the premium US manufacturers paid in the 1980s had turned negative by the early 1990s and, save a blip around 2015, has stayed there. Workers with a high-school diploma or less have faced an even bigger penalty since the late 1980s, excluding only an aberrational pandemic surge. Only college-educated factory workers consistently come out ahead versus their non-manufacturing peers.

The study’s findings are consistent with previous research showing that the long-standing “manufacturing wage premium” has essentially disappeared. For well over a decade, in fact, average hourly earnings for blue-collar (aka “production and nonsupervisory”) workers in manufacturing were significantly less than the same workers in the services sector.

The Cleveland Fed report also deflates the assumption that factory work is much the same today as it was decades ago, when a sole breadwinner with a high-school diploma could count on lifetime job security to support his family and retire comfortably. That may have been true in the early 1980s, when the manufacturing wage premium was positive and almost 80% of industrial workers lacked any college education. By June 2025, however, the US manufacturing workforce had become far more educated: Employees with at least some college outnumbered those without it by a 60.6% to 39.4% margin, and the share of workers with a college degree or higher rose from 10% to roughly 35%.

Research from the Economic Innovation Group, meanwhile, shows that recent gains in US manufacturing jobs — driven by order backlogs and the AI boom, not tariffs — have been concentrated in the advanced, higher-skill aerospace and electrical equipment industries, while most lower-skill industries keep shedding workers, consistent with longer term trends. Separate EIG research further shows that a significant number of US “manufacturing workers” are actually performing higher-skill services — R&D, marketing, human resources, sales, etc. — for “factoryless” producers with offshore facilities or large onshore manufacturers with diverse operations both in-house and outsourced. These aren’t your uncle’s manufacturing jobs.

These realities help to explain why the third assumption — that American workers are itching to fill factory jobs — is also misguided. Start with what people say: A 2024 Cato Institute survey found that, while about 80% of respondents said the US would be better off with more manufacturing jobs, just 25% said they’d personally be better off working in a factory. Cato’s March survey, meanwhile, found that respondents would — assuming equal pay and education requirements — prefer a job in the skilled trades or at an e‑commerce warehouse over one at a factory.

Even this level of interest is probably exaggerated, as Americans’ “revealed preferences” indicate: The main driver of the decline in US manufacturing employment since 1960, according to the study from the Cleveland Fed, is “the lack of younger workers entering the industry,” not a lack of available work. Today, the US manufacturing sector has more than 500,000 job openings — well above pre-pandemic levels — and employers have long cited “attracting and retaining a quality workforce” as a key challenge. Yet, as Bloomberg’s Brooke Sutherland has noted, there are roughly half a million unemployed Americans who last worked in manufacturing, thus suggesting mismatched skills and wage expectations or unappealing work.

None of this means that all American factory work is bad, or that unemployed American manufacturing workers haven’t struggled. But the reality of modern US factory work argues strongly against treating a simple increase in “manufacturing jobs” as goal for national policy or a measure of policy success.

For starters, research shows that all nations tend to lose manufacturing jobs as they develop, regardless of their trade and industrial policies. Jobs get automated, systems get streamlined, and wealthier consumers devote more spending to services instead of goods. (One only needs so many outfits and appliances.) All three have certainly occurred in the US: long-term manufacturing employment declines are almost mirror images of labor productivity gains and track US factories’ embrace of robots. But the loss has also occurred in China, which supposedly stole all the US’s factory jobs yet had 18 million fewer manufacturing workers in 2022 than at its 2013 peak.

A headcount target also invites the wrong policies — ones that can pull finite workers toward whatever jobs are most labor-intensive (and usually the lowest-paying and the easiest to automate) and away from advanced, globalized manufacturers that pay well. Research shows, in fact, that across-the-board tariffs could modestly boost overall US manufacturing employment in the long run (and after a painful adjustment period), but the levies would do so primarily by increasing basic and lower-skill industries while shrinking higher-skilled ones. At the same time, tariffs burden US consumers, including the very ones these policies are intended to support. Male-dominated, blue-collar service occupations — many of them good-paying — today outnumber manufacturing production workers by more than 4‑to‑1. Tariffs on goods only hurt services workers, helping to explain why the levies poll so poorly among today’s working class.

Counting factory jobs reveals only how many Americans work in factories. It says nothing about whether these workers, or the nation overall, are actually better off. America’s politics should adjust accordingly.

The digital ruble is not an app, a card, or simple electronic cash. Instead, it is a direct connection to the Central Bank.

The risks of CBDCs are many. Under ordinary circumstances, governments have to go through commercial banks to access citizens’ money. But the default state of a CBDC is that the government has ultimate surveillance and control over people’s finances and how they use their money. Tracking purchases, freezing funds and locking people out of the economy become only a click away.

Rather than address these concerns head-on, Central Bank official Alla Bakina simply dismissed them as fake news. But how can that be true when the Central Bank itself has said it is investigating how to attach conditions to the digital ruble so that money can only be spent in ways the regime deems acceptable? Moreover, how can that be true when the Central Bank has already imposed restrictions limiting people to a monthly balance of 300,000 rubles ($3,660)?

You don’t need a crystal ball to see how such surveillance and control will be harnessed. Russians who dare to speak out against the Kremlin often find themselves on the state’s list of “terrorists and extremists” and their bank accounts frozen.

Anna Chekhovich, financial director of the Anti-Corruption Foundation (ACF), watched powerlessly as the regime went after her organization’s funds. It was only after the fact that she learned that the Anti-Corruption Foundation had been targeted by the Justice Ministry with accusations of money laundering. However, what appears much more likely is that the ACF was targeted for being critical of the regime. Since then, the regime has repeatedly frozen the accounts of both the organization and its employees, even going so far as to designate them as a terrorist organization in 2025.

In such cases, the state used the financial system to go after its opponents. The key difference with a CBDC, however, is that the state has immediate access to people’s money. No more tracking down banks or payment services. It’s in the government’s hands from the beginning.

And the Kremlin has rarely had less reason to loosen its grip. On Oct. 16, United States President Donald Trump waived nearly all of the new sanctions and tariffs Congress had passed to punish Russia’s war on Ukraine. A ruler who feels unchecked, who no longer fears consequences abroad, will not hesitate to use new tools at home to crush any type of dissent.

Despite the Central Bank’s best efforts to stress that the digital ruble is voluntary, it’s worth asking just how voluntary it really is or will become in practice. Banks and retailers are forced to support the CBDC. The regime recently began paying public employees with the digital ruble and the Central Bank announced that peer-to-peer cryptocurrency trading will be illegal starting in July 2027.

That is a lot of pressure for a currency few Russians say they want. In a 2025 state-run poll, 40% of Russians saw no benefit, and 37% struggled to identify how the digital ruble could possibly benefit them. Today, despite the launch of the digital ruble, Russians are using cash in record numbers.

History shows what can happen when demand falls short. In Nigeria, the hybrid authoritarian regime orchestrated a cash shortage in an attempt to spur CBDC adoption. It didn’t go well. Lines outside the banks turned into protests — and those protests turned into riots. In the end, CBDC adoption among the population rose from just 0.5% to 6%.

Nigeria is not an outlier. Around the world, more than 150 governments are exploring CBDCs, which is why the Human Rights Foundation built the CBDC Tracker in 2023 to document the proliferation of these digital currencies and the human rights concerns their implementation amplifies. One finding stands out above all else — the governments that are pursuing CBDCs more aggressively are authoritarian regimes.

Russians deserve to know that the digital ruble isn’t just another form of money. It’s tyranny technology being spearheaded by authoritarian regimes in a bid to secure control over money. That is what the Russian people are being asked to opt into.

On June 23, 2026, the Massachusetts Supreme Judicial Court struck down a misguided ballot measure that would have repealed the state’s 1994 ban on local rent control, instead imposing a binding statewide cap on rents. Now policymakers are proposing a different ineffective “solution”: regulating the tools used to arrive at housing prices through bans on algorithmic rent pricing.

From Cambridge to Boston, policymakers have bought into false assertions that this technology is facilitating collusion and price-fixing. The technology does not, in fact, enable collusion, as each property management company uses the software independently; the pricing recommendations generated for one company are not visible to or shared with other companies. This was the conclusion of an investigation by the Department of Justice, which produced neither an admission of liability nor monetary penalties for the companies.

Property management companies should be free to use algorithmic technology that crunches market data and suggests appropriate rates for their rental units. And lawmakers should focus instead on the underlying problem: a housing supply shortage.

Massachusetts, however, wants to ban algorithmic rent pricing. First, the Cambridge City Council approved a policy order directing staff to begin the process of prohibiting residential property management companies from contracting with firms that use algorithmic models to recommend prices. Now Boston City Council is turning its attention to an order for a hearing to investigate and potentially ban algorithmic price recommendations in the Boston rental market. Similar legislation in Massachusetts and Vermont is aimed at outlawing this algorithmic software.

The truth? These algorithms help landlords price their inventory by analyzing rent prices for comparable units, factoring in vacancy rates and seasonal demand. Using these tools is simply faster and more accurate than clicking through rental listings and doing math with a pen and paper.

These bans are not only ill-advised, they are also redundant. Existing state and federal antitrust laws, like Massachusetts Chapter 93A, already provide guardrails against collusion and improper data sharing. Banning an entire category of business technology is an unnecessary response when such protections are already in place.

Banning modern tools that property owners use to manage their investments without legitimate evidence that the tools cause harm will make it more difficult to finance and develop new housing. Focusing on these mistaken bans distracts from pursuing the one solution economists agree is essential to address affordability: increasing housing supply.

In the next four years, Massachusetts is estimated to need more than 222,000 additional housing units. As it stands, the market will have difficulty responding to this demand, because harmful restrictions prevent it from doing so. Recent research confirms that zoning restrictions drive up the price of housing while increasing the size of housing units and preventing new development. With supply constrained, rents rise regardless of which technology landlords use to determine prices.

Algorithmic technology, when properly designed and monitored, can have a positive impact. It has been shown in many industries to reduce human bias and improve consistency in decision-making. In housing markets, data-driven pricing tools can help standardize rental pricing on the basis of objective market conditions rather than subjective judgment.

Eliminating access to these tools could have unintended consequences, particularly for smaller housing providers. With less access to reliable market data, these landlords may set rents above market to avoid underpricing their properties, resulting in longer vacancies, slower leasing and a less efficient rental market.

Massachusetts lawmakers should improve market functionality by allowing housing providers the tools they need to create an efficient housing market. If lawmakers are serious about improving affordability in Massachusetts, they should refocus their energy away from banning useful technology and towards addressing the housing supply shortage by eliminating restrictions that hinder the creation of new homes.

It’s time Massachusetts lawmakers took action instead of perpetuating distractions.

Even more confused are “Christian socialists.” The traditional model for many of them is the early Jerusalem church, where “All the believers were together and had everything in common.” (Acts 2:44) Moreover, “No one claimed that any of their possessions was their own, but they shared everything they had.” (Acts 4:32)

Of course, this had nothing to do with socialism. The community was communal, but not coercive. Indeed, it was subversive of the political order, promoting life apart from the ruling authorities in which people, resources, and activities were beyond control of the Roman Empire and the subservient Jewish religious establishment.

Moreover, even this system evidently faltered. While Ananias and Sapphira had no obligation to turn over their property for the apostles’ use, they lied about the amounts and suffered accordingly (Acts 5:1–11). The Jerusalem model apparently did not spread overseas along with the faith.

Yet the Institute of Christian Socialists declares that it is “Building a Movement of the Ecumenical Christian Left.” The Institute’s mission “is to support US churches, their members, and institutions in confronting the world’s captivity to capitalism and in claiming, embodying, and promoting the radical socialism of the Christian faith and life.”

While there may have been genuine Christian socialists over the last two thousand years, they hardly characterized the faith. Certainly not the apostles. The latter were, according to Biblical accounts, largely indifferent to economic and political systems. They didn’t even dictate Jerusalem-style communalism for believers, declaring that it was voluntary. And the concentric rings of responsibility that moved outward—Christians were expected to work to support themselves, care for their families, support members of the community of faith, and “do good to all people” (Galatians 6:10)—conflicted with genuine socialist tenets.

Paul stated that he was worthy of support from those to whom he ministered but instead chose to support himself. And while pressing the Corinthian church to be generous he refused to instruct its members to share even with needy Christian brothers and sisters. Instead, he urged giving, generous and cheerful, but far short of anything approaching socialist “sharing.” The later church was anything but socialistic. Even the monastic life was often economically productive. The life of participants was abstemious rather than socialist, chosen rather than imposed, and spiritual rather than political.

What does the Christian faith command? The Institute declares: “The Gospel entails a commitment not just to resisting or reforming capitalism, but to overturning it, while working toward new forms of political economy that are life-sustaining, egalitarian, and just.” That may be a gospel, but it is not The Gospel. Jesus said little of political economy and certainly did not inform us that there was only one “life-sustaining, egalitarian, and just” economic system. He lauded the tax collector who repented and promised to repay anyone he had mistreated. Jesus did not demand that everyone turn their wealth over to the authorities, his followers, or anyone else. Nor did Jesus define what constituted a “life-sustaining, egalitarian, and just” order.

Finally, the Institute details its vision as “God’s new creation of a society marked by the interdependent health of our common earthly home, the shared enjoyment of our common wealth, and the just participation of all in our common social and political life together.” However, it’s not clear what any of these have to do with socialism, at least as the system exists in reality.

The foundation of socialism is coercion, in which governing elites rule “our common earthly home” and enforce their view of “the shared enjoyment of our common wealth.” Where has such a system turned out well? As for ensuring “the just participation of all in our common social and political life together,” how many politicians pursue such a course? Sinful human beings, whether those who rule or who are ruled, routinely fall short.

None of this is to deny that capitalism is a flawed system. All human institutions fall short of the glory of God. However, a market-based order has had remarkable success in generating wealth and improving living standards. Advocates of “Christian socialism” may prefer immiserating poverty for all to varying wealth for most, but the chief beneficiaries of such an approach are ideological warriors and government apparatchiks, not the least of these, who desperately seek a better life for themselves and their families.

The challenge posed by capitalism is that it rewards those who are economically productive rather than morally good. However, it provides the wealth necessary for others to help those who are in need. Socialism does neither. Rather, it simply presumes the creation of resources by others, to be redistributed by self-anointed political leaders.

Capitalism also promotes greater liberty and diversity by separating personal wealth and political authority. In contrast, socialism combines the two, increasing the reward for those able to seize the levers of power. Good intentions matter little. As Lord Acton warned us, “power tends to corrupt and absolute power corrupts absolutely.” When has socialism avoided the human frailties common to all?

Indeed, wealthier market-oriented societies tend to be more democratic, though nothing is automatic—and today, at least, China remains a notable exception. However, for all the fears understandably expressed over the influence of money in politics, the influence of politics over money has proved to be much more pernicious. Ultimately, political authority is the more powerful and dangerous force, most in need of balance.

Socialism is a failed system, but Christian socialists still have a message worth listening to. Successful, comfortable believers should beware complacency, especially in a world in which proponents of the “prosperity Gospel” distort Christianity for profit, some evangelical churches act like adjuncts to the Republican Party, and many middle-class believers see little of the often-dire human needs around them. However, socialism, whether secular or Christian, offers no answers.

Democrats are certainly thinking about it. Semafor reports that former Biden officials are licking their chops at the prospect of using government ownership to pressure gun and oil companies. Doug Farrar, who worked for then-Federal Trade Commission Chair Lina Khan during the Biden administration, sees a future president leveraging government ownership to turn the screws on AI companies, “especially a Democrat who wants to seriously regulate this industry.” Remember when the Biden administration bullied social media platforms to remove content it didn’t like during the COVID pandemic? That was done without government ownership.

I warned about this two weeks into Trump’s second term after he signed an executive order seeking to create a sovereign wealth fund, noting that a government investment fund would eventually become a vehicle for Democratic administrations to pursue policies Republicans oppose. The White House ditched the idea for a formal fund and proceeded to cobble together an ad hoc presidential portfolio despite having no clear legal authority to do so.

The Trump administration’s supporters cite its claims that equity stakes are better for taxpayers than blank checks, or that they are necessary to bolster supply chains for national security. Setting aside that they aren’t the administration’s true motivation, neither justifies Washington becoming a shareholder in a portfolio of companies.

Sure, if the government is already handing a company money, getting shares in return sounds better than a straight giveaway. But the trade-offs can’t be ignored.

When the government picks a racehorse, that horse is given advantages and privileges that leave the competing horses at a disadvantage. But the danger goes well beyond current competitors. Upstart firms, including those that don’t yet exist, already face a steep hill to climb in bringing their products and ideas to market. Government ownership steepens that hill, threatening to stifle the entrepreneurial spirit critical to America’s economic success.

The value of the shares on the government’s books isn’t the same as revenue in the Treasury. Realizing the gains requires selling the shares and subtracting what taxpayers put in. And as my colleague Scott Lincicome explains, Intel’s stock gains partly reflect expectations of government favoritism, including pressure on other companies to use Intel products. That points to the possibility that the government is diverting private investment from businesses with better commercial prospects.

Even if the administration could sell its entire Intel stake today, it would net roughly $28 billion—less than 1.5% of the $2 trillion deficit Washington ran up in the fiscal year just ended under President Trump and a Republican-controlled Congress. The stakes the administration has acquired should be divested, regardless. But if the administration wants to raise funds productively, it could revisit Cato’s recommendations to sell excess federal buildings and privatize government businesses like Amtrak.

The national security rationale also sounds reasonable until you realize the federal government already has plenty of ways to support companies on such grounds without becoming an owner. Our Restoring Free Enterprise initiative lays out both market-based and government alternatives to equity stakes that would help bolster critical supply chains. Easing permitting requirements and removing tariffs on production inputs would make it easier for private companies to invest and expand supply. And the government can address specific defense needs through purchase contracts or stockpiles of critical materials.

Invoking “national security” also has a long-standing tradition in Washington as an excuse for politicians to justify actions they might not otherwise get away with. Back in April, the administration pursued a bailout that could have given the government 90% of Spirit Airlines on dubious national security grounds, until a group of the airline’s bondholders balked at the terms.

Last week, Politico reported that the Federal Aviation Administration is exploring an ownership stake in a company that develops software for managing air traffic control. National security or not, having the government become an investor in a company it is supposed to evaluate objectively is an objectively bad idea.

Defenders will also point to promises that the government will remain a passive shareholder and argue that concerns about federal control over the corporate boardroom are overblown. That’s a painfully naïve view of how Washington works. The Trump administration is already using contracts and regulatory authority to favor companies it owns.

While Trump’s supporters may applaud that favoritism today, will they still applaud when a President Gavin Newsom or President Alexandria Ocasio-Cortez does it?

No.

That is why Republicans should use the time they still have to end this ownership experiment instead of waiting until a Democratic president makes them wish they had.

Two countries can have similar levels of wealth inequality and very different economic systems. In one, the richest people may owe their position mainly to inherited assets. In another, many may have built their fortunes within their own lifetimes. A billion dollars inherited from a great-grandfather and a billion dollars created by building a new company look identical in the statistics. Economically, they tell very different stories.

That’s an important distinction because much of the American political debate assumes that large fortunes are accumulated at the expense of others. Sen. Bernie Sanders has said that billionaires should not exist. Rep. Alexandria Ocasio-Cortez put the idea more plainly when she said, “No one ever makes a billion dollars. You take a billion dollars.” Joseph Stiglitz, a Nobel Prize-winning economist, has argued that some large fortunes reflect monopoly power, political influence, and other forms of rent-seeking, an argument he developed in his 2012 book The Price of Inequality.

As Stiglitz correctly points out, some fortunes do come from political privilege, monopoly protection, fraud, or other forms of extraction. However, particularly in the United States, fortunes created in competitive markets often arise differently. A founder builds a company that offers a product, service, or process that customers value more than the alternatives. If the company succeeds on a large scale—as with Bill Gates’ software innovations or Jeff Bezos’ logistics networks—the founder may become extraordinarily rich while customers receive most of the gain.

William Nordhaus, a Nobel laureate, tried to measure the extent to which gains go to consumers.. In a study of U.S. nonfarm business from 1948 to 2001, he estimated that producers captured about 2.2 percent of the total gains from innovation. Most of the gains went to consumers through lower prices, better products, and new capabilities.

That point is easy to miss because the founder’s fortune is visible while the gains to everyone else are spread across millions of people. A $50 billion fortune appears on a list. The billions of dollars’ worth of time saved by better software, the cheaper delivery made possible by better logistics, or the extra computing power produced by better chips do not appear in one place. Yet those scattered gains are often much larger than the fortune that attracts public attention.

The deeper issue is growth. Progressives like Sanders and Ocasio-Cortez who see billionaires as takers prefer redistribution as the solution to perceived or real want in the United States. That can change who receives a given amount of income today. But it comes at the cost of growth, which changes how much income, knowledge, technology, and productive capacity exist tomorrow.

Robert Lucas, another Nobel Prize-winning economist, thought economists paid far too much attention to the question of redistribution and far too little to the question of growth. He called the focus on wealth distribution “the most seductive, and in my opinion the most poisonous” tendency in economics. Looking back at the Industrial Revolution, Lucas wrote that “virtually none” of the enormous improvement in human welfare came from direct redistribution. The potential benefits of redistributing current production, he wrote, were “nothing compared to the apparently limitless potential of increasing production.”

The difference becomes enormous over time. A transfer changes someone’s position once. Higher productivity compounds year after year. Over decades, that process produces higher wages, better housing, safer work, cheaper food, longer lives, and technologies that earlier generations could not buy at any price.

Europe’s recent economic pattern therefore deserves attention. On the classification used in the Forbes-based dataset, 60.1 percent of billionaire fortunes in the EU were not self-made in 2026.

Many of Europe’s largest fortunes remain tied to family-controlled fashion houses, luxury brands, retailers, industrial groups, and carmakers built generations ago. Bloomberg’s ranking of the world’s richest families includes Europe’s Hermès, Albrecht, Ferrero, and other multigenerational dynasties. Europe still creates successful new companies, but relatively few grow large enough to displace the old giants. The International Monetary Fund notes that European firms tend to be smaller, older, and slower-growing than American firms. Mario Draghi, the former president of the European Central Bank and former prime minister of Italy, made the disparity especially clear in his 2024 report on the future of European competitiveness: No EU company with a market capitalization above 100 billion euros ($112 billion) had been created from scratch in the previous 50 years, while all six U.S. companies then valued above 1 trillion euros ($1.12 trillion) had been created during that period.

Finance is part of the explanation. An IMF study describes the European financial system as dominated by banks and notes that U.S. equity markets play a much larger role in American corporate finance. Banks are well suited to lending against houses, factories, machines, and other assets that can serve as collateral. A young company with an unproven technology often has little collateral and a high chance of failure. It needs investors willing to lose money on many bets in exchange for the possibility that a few will become very large companies.

Redistribution policies also play a role. The higher tax burdens required to sustain Europe’s robust welfare states directly impact capital formation. Higher corporate and personal taxes leave less private wealth available to flow into the risk-tolerant venture funds needed to scale new businesses, while also reducing the ultimate financial reward for founders and investors who take those outsized risks.

That leaves Europe with smaller pools of such risk capital. The European Central Bank estimates that U.S. venture funds hold roughly 930 billion euros ($1.044 billion), about six times the 150 billion euros ($168 billion) held by EU venture funds. The gap is especially large at later stages, when successful startups need substantial sums to expand. Europe can produce good ideas and still have difficulty financing them all the way to global scale.

Regulation adds another obstacle. European rules often pursue legitimate goals, including privacy, safety, worker protection, and consumer protection. But the costs of regulation do not fall evenly. A large established company can hire lawyers and compliance officers. A young company with 20 employees has fewer resources to absorb the same burden. The European Commission now acknowledges that businesses face high compliance costs and, in some cases, legal uncertainty, and that inconsistent or restrictive rules can make it harder for innovative firms to scale. Its current agenda includes reducing regulatory burdens and making EU rules more innovation-friendly.

The result can be perverse. Rules designed to restrain large firms can end up protecting them. The incumbent already knows how to live with the rules. The startup must learn the rules while trying to survive. Regulation can therefore end up protecting the very companies policymakers hoped to restrain by making it harder and more expensive for new competitors to enter the market.

The American system also has weaknesses. Health spending per person is the highest among Organisation for Economic Co-operation and Development members, while competition and price transparency remain weak in parts of the health system. Private health-insurance markets are highly concentrated in most states. These weaknesses matter, but they are different from the question at hand.

The American economy remains unusually good at allowing new firms to raise capital and grow quickly. Deep stock markets give successful companies another source of financing after venture capital. Unsuccessful firms can also fail, releasing workers and assets for other uses. A review of U.S. bankruptcy law describes bankruptcy as a collective process for resolving debts and determining how assets are divided among creditors. That framework makes commercial failure easier to resolve and capital easier to redeploy.

The Austrian economist Joseph Schumpeter called the larger process “creative destruction.” Capitalism, he wrote, “never is but never can be stationary.” Its “fundamental impulse” comes from new goods, new methods of production and transportation, new markets, and new forms of business organization. That process “incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.” Schumpeter called creative destruction “the essential fact about capitalism.”

The destruction is easy to see. A factory closes. A familiar company disappears. An old technology becomes worthless. The creative side is easier to overlook. Workers, capital, and customers move toward firms that can produce more value with the same resources. Over time, that churn is one of the ways an economy becomes more productive.

This perspective also complicates the usual discussion of economic mobility. Research on the so-called Great Gatsby Curve shows that countries with higher income inequality also tend to have less intergenerational mobility. In practical terms, the curve asks how strongly a child’s eventual income is tied to the income of his or her parents. A stronger link means that family background matters more and mobility is lower. A weaker link means that parental income does less to predict where a child will end up.

By that measure, the United States is less mobile than several northern European countries. Miles Corak, an economist, estimates that a 100 percent income difference between two fathers is associated with roughly a 50 percent difference between their sons in the United States, compared with less than 20 percent in Denmark, Norway, and Finland. The curve describes an association across countries rather than proving that inequality itself causes low mobility.

Corak’s finding is important, but the very top of the economy raises a different question. Who gets to create the next great company and challenge the current elite? That question matters for long-run growth because new firms can create new industries, technologies, and sources of productivity. Immigrant entrepreneurship offers one indication of openness. In 2023, 44.8 percent of Fortune 500 companies had been founded by immigrants or their children.

Europe also loses some of the companies it produces. The ECB reports that close to 30 percent of European unicorns founded between 2008 and 2021 relocated abroad, with the vast majority moving to the United States. The companies cited better access to capital, a larger unified market, and simpler regulation. That relocation can have cumulative effects because future hiring, investment, supplier relationships, and spinouts may increasingly occur elsewhere.

The broader economic gap between the United States and Europe has widened as well. In 2010, IMF data put the United States and the European Union at roughly the same nominal economic size, at about $15 trillion each. By 2026, the data put U.S. GDP at about $32.4 trillion, compared with roughly $23 trillion for the European Union. The gap exceeds $9 trillion, and the EU economy is about 71 percent as large as the American economy in nominal dollar terms.

The divergence extends beyond exchange rates and nominal GDP. On the OECD’s purchasing-power-adjusted measure for 2025, GDP per person was about $90,000 in the United States and $64,600 in the European Union, a gap of roughly 39 percent. OECD productivity data show that output per hour worked in the EU fell from about 90 percent of the U.S. level in 2000 to 75 percent in 2024. U.S. labor productivity grew by an average of 1.8 percent a year from 1995 to 2024, compared with 1.1 percent in the EU.

Some European countries still outperform the United States on particular measures. In 2024, Denmark produced about $92.20 of output per hour worked, compared with $84.10 in the United States using the OECD’s constant purchasing-power measure. The EU-wide trend nevertheless runs the other way. Small annual differences in productivity growth compound into large gaps over time.

Household data point in the same direction. OECD data on gross adjusted household disposable income, measured per person and adjusted for purchasing power, put the United States at about $71,300 in 2024. The comparable figures were about $61,300 in Germany, $53,500 in France, $49,400 in the United Kingdom, $47,500 in Italy, and $44,600 in Spain. Americans therefore had about 16 percent more money to spend than Germans, 33 percent more than the French, and 60 percent more than Spaniards on this measure.

The adjusted measure matters because it includes social transfers in kind such as publicly provided healthcare and education. It therefore captures part of the value of Europe’s larger welfare states rather than simply ignoring those services.

None of this means that every billionaire is a hero or that every inheritance is harmful. A fortune built on political favoritism tells us something different from a fortune built by making a product cheaper or better. An inherited company can remain innovative. A self-made fortune can depend on monopoly power. The origin of wealth is a clue, not a verdict.

Still, the contrast is revealing. The Forbes-based data used here show more turnover at the top in the United States and more inherited wealth in Europe. The differences in venture finance, scale-up conditions, and productivity are consistent with that pattern.

Large fortunes are not, by themselves, evidence of economic health or decay. Their origins tell us more. A market economy works best when new firms can challenge old ones and failure releases resources for better uses. The American advantage is not the existence of billionaires. It is the greater turnover behind them.

Markets FTW

I hate mosquitoes. I realize that hatred is not an especially sophisticated philosophical position, but some creatures make nuance difficult. Mosquitoes arrive uninvited, take your blood without asking, and leave behind pain, irritation, and sometimes disease. I have been known to joke that they are the socialists of the insect world. So, I was delighted to discover Terratis, a French startup whose business model is, essentially, to ruin the sex lives of mosquitoes.

Founded in 2024 and based in Montpellier, Terratis breeds enormous numbers of male tiger mosquitoes, Aedes albopictus. Workers then expose them to X‑rays in batches of roughly 400,000, rendering the males sterile. The company releases the sterilized males into populated areas, where they compete with fertile males for females. The females mate, but lay eggs that don’t hatch. There is an additional beauty to the scheme. Male mosquitoes do not bite. Only females take blood meals.

Terratis currently produces about 1.5 million sterile mosquitoes per week and hopes to reach 40 million per week within two years. The early results are encouraging. In Brive-la-Gaillarde, where the company released 11 million sterile mosquitoes beginning in May 2025, Terratis reported that roughly half of the eggs awaiting hatching in spring 2026 were sterile. The company expected that share to reach 90 percent by the end of the summer.

The target is worth attacking. Tiger mosquitoes can transmit dengue, chikungunya, and Zika. France recorded 809 locally transmitted cases of chikungunya and 30 of dengue in 2025, a record year. The mosquito, originally native to Southeast Asia, has spread around the world and is now established across much of France.

Tiger mosquitoes do not transmit malaria. That (dis)honor belongs to infected female Anopheles mosquitoes. But the history of malaria gives some sense of what humanity has suffered from mosquito-borne disease.

The historical numbers are staggering. Researchers have estimated that malaria killed somewhere between 150 million and 300 million people during the 20^th century, accounting for perhaps 2 to 5 percent of all human deaths during those hundred years. The disease may have accounted for as much as 10 percent of all deaths worldwide early in the century.

Modern medicine, insect control, bed nets, better housing, drainage, antimalarial drugs, and other innovations have produced enormous progress. According to the World Health Organization’s 2025 World Malaria Report, malaria interventions have averted an estimated 14 million deaths since 2000.

Yet malaria remains horrifyingly common. In 2024, the WHO estimated 282 million cases and 610,000 deaths worldwide. Africa accounted for 95 percent of malaria deaths, and roughly three-quarters of malaria deaths in the African region occurred among children under 5.

Those numbers explain why mosquito control deserves considerably more attention than the irritation of being eaten alive during dinner on a patio. Mosquitoes remain extraordinarily effective delivery systems for human misery.

Terratis now faces the difficult part that separates an ingenious idea from consequential innovation: scale. Producing 1.5 million mosquitoes a week sounds impressive until you contemplate how many mosquitoes inhabit a city. Frederic Simard of France’s Institute of Research for Development describes the technology as being at the “iPhone 1.0 stage.” Terratis wants to get production into the tens of millions per week. Researchers can imagine an industry eventually producing billions.

That requires automation, capital, experimentation, falling unit costs, and customers willing to pay. I wish Terratis every success. Humanity has spent several thousand years providing mosquitoes with free meals. It seems only fair that capitalism should finally make their sex lives miserable.

Markets FTW, indeed.

Chart of the Week

My Cato Institute colleague Gale Pooley has a useful new example of why long-run price comparisons require more care than they usually receive. The average U.S. price of regular gasoline reached about $4.47 a gallon in late September. That sounds expensive. Yet the dollar price by itself tells us remarkably little about affordability over time.

The first necessary adjustment is for income. Using blue-collar hourly compensation, Pooley calculates that in 1929 an American worker had to work about 24 minutes to earn enough money to buy a gallon of gasoline. Today, the same gallon costs roughly 6.5 minutes of work. The money price rose enormously, but the time price fell by about 73 percent. Put differently, the amount of work that bought one gallon in 1929 buys about 3.7 gallons today.

That distinction is central to the work that Gale and I developed in our 2022 book Superabundance: The Story of Population Growth, Innovation, and Human Flourishing on an Infinitely Bountiful Planet. We measure prices in time rather than money. A time price is simply the money price divided by hourly income. The method captures something that conventional price comparisons often miss. Innovation can reduce the cost of producing goods while also making workers more productive and raising their earnings. Looking only at the sticker price therefore tells only part of the story.

Pooley’s gasoline example adds another necessary adjustment. The usefulness of the product can change dramatically. A gallon of gasoline powered a popular Oldsmobile Cutlass about 20 miles in 1980. A modern Toyota Camry Hybrid can travel about 50 miles on the same gallon. What ultimately matters to the consumer is transportation, rather than gasoline for its own sake. A gallon that carries you two and a half times as far provides much more transportation.

The same problem appears when comparing the cars themselves. A 1980 Cutlass cost about 738 hours of blue-collar compensation. A modern Camry costs about 753 hours. The time prices are similar, but the products differ greatly. Today’s car offers better fuel economy, safety, reliability, emissions control, electronics, comfort, and performance. When Pooley combines the cost of the car with the gasoline required to drive 100,000 miles, the time required falls from about 1,209 hours in 1980 to 980 hours today, a decline of roughly 19 percent.

That is the broader lesson. Nominal price comparisons across long periods can be deeply misleading. Even inflation-adjusted prices do not fully capture changes in earnings, product quality, and performance. Proper comparisons should ask how much work people must exchange for a good and what that good actually delivers. Over long periods, both sides of that equation can change enormously.

Once based at the University of California, Berkeley, Zucman is back and campaigning for Proposition 40, which would impose an allegedly one-time 5% tax on the net worth of Californians worth more than $1 billion. Zucman, who coauthored the proposition, estimates that the tax could raise about $100 billion and claims that 90% of the proceeds would go to health care.

The California Legislative Analyst’s office is far more cautious, saying it would raise only “tens of billions” and could cause a long-term loss of income-tax revenue as wealthy people leave the state with the companies they created.

I’ve written plenty about why wealth taxes are economically destructive, administratively nightmarish and unlikely to achieve anything close to what their advocates promise. But Zucman’s prescription is wrong for a more fundamental reason, as his (and my) native country shows: Raising taxes to fuel ever-larger demands for government spending is a recipe for disaster.

Unless you’ve been living in a remote cave recently, you’ve likely seen all the protests and destruction in France. But do you know why it’s happening?

As another economist, Paul Krugman, rightly noted back in 2017, “France offers a social safety net beyond the wildest dreams of U.S. progressives: guaranteed high-quality health care for all, generous paid leave for new parents, universal pre‑K, and much more.”

For decades, France has answered any perceived desire with government spending, then responded to the resulting fiscal problem by seeking new revenue sources. Today, French government spending consumes roughly 58% of GDP.

Krugman gloated that France wasn’t suffering social collapse and speculated that it was due to all the spending. He certainly can’t say that anymore. In fact, he is now worried that France may be on the precipice of a debt crisis. The truth is that France hasn’t done well for some time, even when Krugman cheered its spending.

One of the groups in the street today, young people, has faced widespread unemployment for a long time. The youth unemployment rate in France (ages 15–24) has hovered between 17% and 27% since 2000. In the second quarter of 2026, it was 21.6%, against 14.8% in the Eurozone and 9.9% in the U.S.

French people also pay some of the highest taxes in the developed world, and they’re not happy with the return. The government already takes more than 52% of the country’s output in revenue, runs deficits exceeding 5% of GDP and has accumulated debt approaching 120% of GDP. Nonetheless, French students complain that the government is shortchanging schools, while everyone sees that it is shortchanging its army and police.

The students aren’t wrong to feel left out. At The Two Cents Substack, Hoover Institution scholar Hanno Lustig calculates that, between 1995 and 2024, spending on social protection and health (most of which benefits older people) rose from 53.1% to 58.7% of all French government spending. The share devoted to education, defense and public order fell from 15.2% to 13.7%. Transportation fell from 5.3% to 3.8%.

In other words, France has built an enormous welfare state, much of it devoted to older citizens, while letting other state capacities and basic services fall apart. As transfers of wealth swallow a larger share of the budget, everything else gets squeezed.

That is the fiscal ratchet Californians should worry about when Zucman tells them Proposition 40 is necessary to “save” health care. Proponents claim Washington “cut” Medicaid, but that language is misleading. California’s deficit started long before any Washington spending reductions. Besides, federal Medicaid spending isn’t falling — not even close. The Congressional Budget Office estimates it will reach $708 billion in 2026, 8% more than in 2025. What Washington did in the 2025 budget reconciliation law was reduce Medicaid’s future growth relative to previous projections, partly by changing eligibility and enrollment rules and financing arrangements.

This is how the ratchet works. Once the government projects a spending increase, anything less becomes a cut. And once Washington fails to finance the entire projected increase, Californians are told that Sacramento must backfill the missing money. And how should it do that? Conveniently, by creating an entirely new tax.

France has run this experiment for decades. It has an incredibly generous welfare state paid for with very high taxes; it’s even tried a wealth tax and has a value-added tax, yet somehow it’s never enough. Its welfare state has not eliminated scarcity. It has merely transferred the job of rationing scarce resources to politicians.

Zucman looks at California and sees hundreds of billions of dollars of private wealth waiting to solve a public finance problem. Californians should look across the Atlantic and ask a different question: What happens after politicians decide that every spending adjustment can be delayed until tomorrow by finding another pot of private wealth?

France should not be sending California tax advice. It should be sending a warning.

Reality, it turns out, is much more complicated.

Today, the Cato Institute released the 2026 edition of its Freedom in the 50 States report, and the data defies simple maps and binary analyses. The report scores every state on 97 policy variables across 10 categories of economic and personal freedom: fiscal, housing, occupational, tech/​consumer, education, speech, medicine, firearms, policing and recreation. For the first time, the report also grades all 50 governors on how they have affected economic and personal liberty in their respective states. For every policy variable examined, the report asks one question: Does the state’s position enhance or restrict the freedom of American adults to peacefully act in their own self-interest and dispose of their property as they see fit?

The answers will probably surprise you.

For starters, the top-line results show that the nation does not divide neatly along the aforementioned red and blue lines. Arizona ranks first overall, followed by Montana, Nevada, Florida and Idaho. The top-scoring governors are, in descending order, Montana’s Greg Gianforte (R), Colorado’s Jared Polis (D), Florida’s Ron DeSantis (R), Texas’s Greg Abbott (R) and Iowa’s Kim Reynolds (R). Meanwhile, the lowest-performing states are South Carolina, Alaska, Massachusetts, New York and Hawaii. The bottom-scoring governors are Massachusetts’s Maura Healey (D), Rhode Island’s Dan McKee (D), California’s Gavin Newsom (D), Hawaii’s Josh Green (D) and New York’s Kathy Hochul (D).

The top freedom advocates surely deserve praise for besting their counterparts, yet they still have room for improvement. In fact, no state achieved a raw score above 75 percent — i.e., the state enacted 75 percent of the pro-freedom policies examined — for either economic or personal freedom. (The 0–10 scale is curved.) And in only one category did any state get a perfect 100 (eight states received this in firearms freedom). Low-scoring states, of course, have even further to go.

The report also reveals how varied freedom is nationwide. Instead of states choosing between “red” economic freedom and “blue” personal freedom, the two actually travel together: States with high or low scores in one type of liberty tend to have high or low scores in the other (a solid correlation of about 0.6).

Hawaii provides the most extreme example, ranking last in both economic and personal freedom overall, but 12 other states have an economic freedom score that falls within five places of the state’s personal freedom score. Meanwhile, only 14 states fall into what we usually think of as “Republican” (high economic, low personal) or “Democratic” (high personal, low economic) quadrants, with several of those just barely across the dividing line.

Beneath the surface, the connections get weaker: Of the four economic categories, only fiscal burden and occupational freedom are closely correlated, while housing relates weakly to the other three.

In other words, a state with low taxes and light occupational licensing is no more likely to let you build the house you want. Among the six personal freedom categories, there are only two decent connections — education freedom tracks with both firearm freedom (0.48) and medical freedom (0.42) — but speech, policing and recreation mostly go their own ways. And states that score worse on law enforcement overreach (civil forfeiture, qualified immunity, surveillance cameras, etc.) tend to score well on firearm, education, occupational and fiscal freedoms.

Overall, the report shows that most states have a diverse assortment of freedoms, which defies easy explanation. Often, in fact, the state that’s best at one kind of liberty is mediocre or even lousy at another.

Tennessee, for example, ranks dead last on both policing and medical freedom, yet second on speech and sixth on fiscal policy. Vermont is second on housing and 48th on recreational freedom, while next-door New Hampshire is first on fiscal burden and medical freedom but 46th on speech. Nevada is first on recreational freedom but falls flat on housing, while its northern neighbor Idaho is the mirror image: first on housing and last on recreational freedom. Back East, Pennsylvania is second on tech/​consumer freedom but 45th on education, while Indiana is almost the opposite at 48th and sixth, respectively. Many other states reflect similarly divergent priorities.

Common labels often mislead on specific policies, too. Texas, for example, earns its “conservative” reputation by ranking eighth on fiscal burden, yet government employees, according to Cato Institute calculations, are 11.5 percent of the state’s total nonfarm workforce, the same share as California (47th on fiscal burden). Minimum wages are supposed to be a blue-state thing, and California’s $16.90 per hour is indeed higher than Arizona’s $15.15. But measured against per capita income, the gap nearly vanishes: Arizona’s comes to 38.7 percent and California’s to 40.5, while red-state Missouri’s (40.6) and Nebraska’s (38.6) rank first and sixth in the country. Whatever you think of public payrolls or minimum-wage laws, you can’t judge them from party labels alone.

The Cato report is more than just a ranking; it’s a “cheat sheet” for policymakers and voters alike. Officials looking to enhance freedom in their states can use the report to identify current weaknesses and get ideas for improvement — ones already enacted by other states. The link between human freedom — both economic and personal — and individual well-being is strong and long-standing.

For voters, the scorecard helps them judge political leadership and consider where they might live in the future. Except for a handful of praiseworthy outliers, assessing freedom in a state requires a follow-up question: Free to do what? A graduate looking to save, a parent shopping for schools, an entrepreneur following her dreams, an empty-nester building a forever home — each has priorities that might best be served by a different address, sometimes just a few miles away from their current one.

Even the most pro-freedom officials have plenty to fix in their states, and none of it requires a revolution. Pick the freedom you care about, find the state that does it best, and tell your legislator or governor to copy the idea. And if they don’t make a change, well, there are 49 other states that might — if they haven’t already.

For years, the Pasco County sheriff’s office ran a predictive-policing program using algorithms to assemble lists of residents supposedly destined to commit future crimes. Deputies identified “prolific offenders” — a misnomer since these individuals had not committed crimes — who faced relentless, warrantless harassment designed to drive them out of the county. Only after protracted litigation by the Institute for Justice did the sheriff concede constitutional violations, shutter the program and agree to a six-figure settlement in late 2024.

While one might expect progressive Chicago to reject such tactics, the city’s police department had a database that used analytics to predict which residents were most likely to be involved in shootings — as either the shooter or the victim. The Chicago Police Department’s approach perhaps wasn’t as aggressive as Pasco County’s but similarly yielded no meaningful drop in crime. The program was decommissioned in 2019.

But the problem of surveillance persists.

Across the country, law enforcement agencies have begun outsourcing the Fourth Amendment’s requirement of individualized suspicion to opaque software and automated tracking networks. As my Cato Institute colleague Matthew Cavedon recently pointed out, automated license plate readers “aren’t license plate readers anymore; they’re people readers at this point.”

Proponents insist that law-abiding Americans have nothing to fear because police have no interest in our daily routine, touting plate readers as vital investigative and deterrent tools. Yet where dragnet databases exist, abuse inevitably follows. The Chicago area is no exception.

In Naperville, Officer Oscar Maldonado is accused of using the Flock database to track the movements of his girlfriend’s ex-fiance. William Copp, a former Holiday Hills police chief and part-time Prairie Grove officer, used Flock to stalk his former partners and others, according to McHenry County prosecutors. And just this month, Illinois State Police said Jeremy Harrison, a former Joliet lieutenant, also abused Flock.

Maldonado, Copp and Harrison aren’t alone in their alleged actions. Across the country, the Institute for Justice has documented over 270 license plate reader abuses nationwide.

Flock defends its cameras by claiming they merely “capture what anyone could already see standing on the street,” focusing on “the vehicle, not the person.” The fiction that a fully integrated, 24/7 camera grid merely replicates a patrol officer on a street corner ignores scale and permanence. No human officer could track millions of drivers simultaneously, preserve their historical travel patterns indefinitely and recall their movements with a single keystroke.

This dragnet functions in tandem with the proliferation of the criminal code and a Supreme Court that has blessed pretextual traffic stops. Under prevailing Supreme Court precedent doctrine, an officer needs only a minor traffic or equipment violation — an air freshener dangling from a rearview mirror or a busted taillight — to stop someone based on race or ethnicity.

Federal agencies routinely exploit this dynamic. U.S. Border Patrol has been operating a secret program analyzing our financial records and travel patterns to flag everyday drivers as suspicious, passing the tips to local police. Local police can then trail the target until they go 1 mile over the speed limit, pull them over and question and search citizens who never suspect that the routine traffic stop was actually orchestrated by Border Patrol.

But the cooperation goes much further than just traffic stops, as WBEZ’s Lisa Kurian Philip recently pointed in her report detailing how federal immigration authorities have accessed Flock data at Elgin Community College and other Illinois colleges.

Enacting strict guardrails on automated surveillance tech is a necessary first step, but administrative patches will not shield Americans from Big Brother. At an absolute minimum, lawmakers must require law enforcement to obtain a judicial warrant before querying license plate reader databases.

Yet even a warrant requirement does not cure the fundamental danger of an omnipresent camera network recording our every movement. The framers enacted the Fourth Amendment out of aversion to general purpose warrants — the reviled writs of assistance that granted British authorities broad, suspicionless power to inspect anyone at will. Pervasive, automated surveillance resurrects that very practice in the modern era.

As we commemorate our nation’s 250th birthday, we should remind ourselves that we were born out of a desire for freedom from a tyrannical government. The founding premise of the American constitutional order is that the government must justify its intrusions to the citizen, not that the citizen must justify his daily movements to an algorithm. If lawmakers don’t reassert that boundary today, the freedom to navigate public life without suspicion will exist only in memory.

Meanwhile, SpaceX continues developing Starship, the largest rocket ever built, with the ambition of making space travel cheaper and more routine.

On Friday, Alex Gibney’s nearly four-hour documentary, Musk, opened nationwide. The film presents Musk as a deeply flawed man whose wealth and power have become dangerous. There is plenty of evidence for the first part of that judgment. But the documentary raises a larger question. How much offensiveness should society tolerate from people who push the technological frontier forward?

My answer is quite a lot.

Musk insults journalists, politicians, and critics. He promotes conspiracy theories, makes extravagant promises, and sometimes treats employees harshly. His interventions in politics have alienated former admirers, including environmentalists who once championed Tesla. His management of X has angered advertisers and free-speech advocates alike. His involvement with the Department of Government Efficiency antagonized many, and government auditors questioned its claimed savings. He can be arrogant, impulsive, vindictive, juvenile, and spectacularly rude.

But Musk’s failings should be weighed against his contributions to human progress.

Consider SpaceX. When Musk founded the company in 2002, rockets were largely disposable. SpaceX developed boosters that could land and fly again, helping reduce the cost of reaching orbit and enabling more frequent launches. Its Dragon spacecraft restored America’s ability to launch astronauts from U.S. soil after the space shuttle program was retired. Its Falcon rockets transformed the satellite-launch industry. Starship could eventually make it possible to transport much larger payloads at lower cost, opening new opportunities for scientific research, manufacturing, and exploration.

Perhaps SpaceX’s most consequential achievement for ordinary people is Starlink. By the end of 2025, the satellite internet service had more than 9 million customers across more than 155 countries and markets. In remote communities where laying fiber-optic cables is prohibitively expensive, Starlink provides access to online education, telemedicine, banking, and commerce. Rural schools in Alaska have used it to improve educational access. After Hurricane Helene devastated parts of the American Southeast in 2024, emergency responders deployed Starlink terminals to restore communications.

In Ukraine, Starlink and its military counterpart, Starshield, have been especially important. Russian attacks destroyed or disrupted much of the country’s communications infrastructure. Satellite connections helped Ukrainian soldiers coordinate operations, operate drones, and communicate with commanders. Civilians also benefited from access to the internet when conventional networks failed.

The recent restrictions on Ukraine’s Starshield service illustrate the dangers of relying heavily on a single provider, as Musk has blamed the disruption on the White House and reporting over the weekend suggested it was Musk’s idea. Such uncertainty strengthens the case for competition and clear rules governing essential infrastructure. It also demonstrates just how valuable the underlying technology has become.

Musk’s contribution to electric vehicles has been similarly consequential. He did not invent the electric car, joining Tesla after its 2003 founding. But he helped transform electric vehicles from a niche product into a serious competitor to gasoline-powered automobiles. Before Tesla, EVs were often viewed as slow or purely utilitarian. By prioritizing high performance, cutting-edge technology, and sleek design, Musk helped make electric cars highly desirable and genuinely “cool.” Established automakers responded with massive investments of their own. Because of this massive shift in consumer demand and industry standards, it is fair to argue that Musk has done more than any other individual to accelerate the global transition away from the internal combustion engine. Tesla also helped advance battery technology and large-scale electricity storage.

Neuralink, Musk’s neurotechnology company, is developing implantable brain-computer interfaces designed to translate neural activity into digital commands. By using thousands of microscopic electrodes surgically implanted into the brain, the device has recently enabled individuals with severe paralysis to control computers, move cursors, and play video games using only their thoughts. While the technology remains experimental, its potential medical benefits, such as restoring communication, mobility, and independence for patients with severe neurological conditions, are considerable.

Not every Musk venture will succeed. Grok Bot remains an emerging technology. The flying Roadster is an engineering demonstration rather than a practical transportation solution. Starship faces substantial technical challenges. Musk’s ambitious timelines have often proved unreliable. Yet technological progress requires people willing to attempt things that others consider impractical.

Musk did not personally invent every technology associated with his companies. But he helped assemble the engineers, capital, factories, and organizations needed to make difficult technologies work at scale.

History provides useful parallels.

Thomas Edison was combative, fiercely competitive, and sometimes ruthless. During the battle over competing electrical systems, he backed animal electrocutions to demonstrate the supposed dangers of alternating current. Yet his work on practical electric lighting, sound recording, and industrial research helped transform modern life.

Henry Ford was a notorious antisemite who promoted conspiracy theories through his publications. Yet his application of mass-production techniques brought automobile ownership within reach of ordinary Americans. The price of a Model T fell from $850 in 1908 to $260 by 1925. Ford helped democratize personal mobility. Furthermore, his perfection of the moving assembly line revolutionized global manufacturing. By establishing a blueprint for unprecedented efficiency, Ford’s methods were quickly adopted beyond the automotive sector, driving massive productivity gains and transforming industrial production worldwide. Perhaps paradoxically, the assembly line helped the Allies defeat Hitler by turning America into the arsenal of democracy.

Steve Jobs was famously demanding and could be cruel to colleagues. His perfectionism made him difficult to work with. Yet he helped bring personal computers, smartphones, and other transformative technologies to mass markets.

None of these examples proves that unpleasantness causes innovation. Many disagreeable people accomplish nothing, and many important innovators are personally decent. But the historical pattern raises an uncomfortable possibility. Some characteristics that make innovators successful also make them difficult to get along with.

Psychological research lends support to that possibility. In a 1998 meta-analysis, psychologist Gregory Feist found that highly creative people tended to be more open to new experiences, less conventional, more independent, more self-confident, and more ambitious than their peers. They also showed higher levels of hostility and impulsivity. The research concerned scientific and artistic creativity rather than entrepreneurs specifically, but it suggests that creativity and social agreeableness do not always travel together.

Here lies the real trade-off.

We would prefer brilliant innovators who are modest, considerate, politically inoffensive, and easy to supervise. Some undoubtedly fit that description. But if the psychological traits associated with exceptional creativity sometimes accompany arrogance, impulsiveness, and hostility to convention, society cannot assume that it can select for the former while eliminating the latter.

A society that places a high premium on conformity, deference, and social approval may discourage some of the very people most willing to challenge established technologies and institutions. The price could be slower innovation, fewer experiments, and delayed benefits for everyone else.

That does not mean suspending ordinary standards of behavior. Musk should be held accountable for violations of the law, misleading claims, and genuine harms caused by his decisions. His companies should face competition and the same legal obligations as their rivals.

But there is a difference between enforcing standards of conduct and expecting that innovators possess socially acceptable personalities. We should be especially reluctant to turn personal dislike or political disagreement into a reason to dismiss their achievements or obstruct legitimate enterprise.

That matters because innovation creates benefits that extend far beyond the innovator. Cheaper access to space helps researchers and entrepreneurs who will never meet Musk. Better batteries help consumers who will never own a Tesla. Satellite communications serve people whose lives may depend on reliable connections. Competitors imitate successful technologies and improve upon them. The resulting gains can continue accumulating for generations.

Of course, other entrepreneurs might eventually have developed many of these technologies. The question is how quickly. Bringing useful innovations to market years or decades earlier creates substantial value. Those gains should count when we evaluate the people responsible.

Gibney is entitled to criticize Musk’s character, conduct, and exercise of power. But the documentary’s emphasis on his failings risks obscuring the extraordinary advances he has helped bring about.

I would prefer a Musk who was more considerate, more restrained, and less inclined to insult everyone who disagrees with him. But I cannot assume that the same man, stripped of his unconventional temperament, would have pursued the same extraordinarily difficult ambitions with the same determination.

The real choice is therefore not between praising Musk and condemning him. We can do both. It is whether society remains willing to accommodate difficult, unconventional people whose talents can produce enormous benefits for everyone else.

Background on Cohort Default Rates

The Cohort Default Rate (CDR), established in the 1990s and amended several times, measures how many students default on their student loans within three years of beginning repayment, with default defined as the borrower being at least 270 days behind on payments.

If 40 percent of a college’s student borrowers default within three years, the college loses access to student loan programs. If the college’s CDR is above 30 percent for three years, it loses access to the student loan and the Pell Grant program. So, if nothing changes for the 1,800 colleges with nonrepayment rates above 25 percent, many may exceed the 30 percent or 40 percent default-rate thresholds.

Why Is This Tsunami Coming Now

This tsunami is coming now because, during COVID-19, both the Trump and Biden administrations repeatedly paused student loan payments. As a result, most borrowers did not have to make payments for three and a half years. Even after repayments restarted, borrowers who didn’t repay faced no consequences for a year thanks to the so-called On-Ramp. This means many borrowers didn’t repay for four and a half years and faced no negative consequences. Millions of borrowers who tried to enroll in the SAVE repayment plan also received extensions, many of which are still in effect. In other words, some borrowers haven’t made a student loan payment since March 2020. This likely reduces repayment salience and awareness and makes repaying your loans seem like something only suckers do.

Essentially, the tsunami is coming because borrowers are now being required to repay their student loans after years in which they were not required to make payments or faced no consequences for failing to do so.

What Should Be Done

There is some good news. Defaulted student loans were recently transferred from the ED to the Treasury Department (USDT). USDT inherited a deeply flawed process for getting students out of default. For instance, students often had to mail or fax their paperwork, which simply doesn’t make sense in this day and age. There was even a computer bug that told some students trying to get out of default that they had no student loans. Rather than put band-aids on a broken process, USDT overhauled the system and recently launched the Defaulted Loans Support Center, which simplified, clarified, and streamlined the process. This effectively ends the wild goose chase that some students previously needed to navigate to get out of default.

But we also need borrowers to want to get out of default. Some of this will be spurred by outreach from colleges and loan servicers. Colleges in danger of losing access to federal aid programs will be much more interested in making sure their students know they need to repay. But borrowers also need to recognize and act on their responsibility to repay their debt.

Three policy reforms should also be implemented.

The first is to turn back on two tools that encourage and, in many cases, force borrowers to repay. Administrative Wage Garnishment (AWG) allows the government to take up to 15 percent of a defaulted borrower’s paycheck. The USDT Offset Program (TOP) allows the government to withhold government funds such as tax refunds or benefits that would have been sent to a borrower and apply those funds to the borrower’s student loan balance instead. Both AWG and TOP have been turned off, partly to allow the new repayment plans to be set up and partly to avoid angering borrowers before the upcoming election. Both AWG and TOP should be turned back on. This would not only collect substantial funds, but it would also nudge borrowers to take the reins by repaying, rehabilitating, or consolidating their defaulted loans.

Second, we need a better way to deal with those who will never be able to repay. Even with AWG and TOP, some borrowers will never be able to repay their loans. Stories about low-income octogenarians having their Social Security checks garnished to repay loans they took out decades ago are a PR nightmare that will collect minuscule amounts of money for taxpayers while providing enormous fuel for those pushing to forgive all student loan debt. To address these cases, perhaps borrowers could have their remaining debt forgiven once their payments exceed what they would have paid under the Repayment Assistance Plan, which forgives any remaining debt after 30 years of payments. We could also update settlement thresholds. Right now, the most generous settlement offer allowed is 90 percent of unpaid principal and accrued interest. That figure could become variable rather than fixed, with lower percentages for each year a borrower has been under the poverty line or for repaying certain fractions of the original amount borrowed. The goal is to get borrowers and balances that will never be repaid—and that the private sector would have written off long ago—off the books without creating severe moral hazard problems.

Third, we should move beyond default rates. Income-driven repayment is the right choice for student loans, as it prevents defaults from short-term liquidity issues rather than true insolvency. However, it also renders default rates all but meaningless. We should replace CDR metrics with repayment-rate metrics, such as the percent of a cohort’s total debt that has been repaid.

The tsunami of student loan defaults is coming. If the only response Washington musters is to temporarily wave the default rate accountability metric, we will have missed a golden opportunity to fix long-standing but neglected problems with the student loan system.

The political consequences have been stark. Inflation was a leading concern in 2024, when the Democratic Party lost the White House. Donald Trump then campaigned on rapidly lowering prices. Instead, tariffs and the Iran conflict’s oil shock have left him and Republicans floundering on an issue that previously burdened Democrats.

Isabella Weber of the University of Massachusetts at Amherst saw earlier than many economists how politically toxic unexpected inflation could be. Her new book, “Anti-Fascist Economics,” even argues that this political combustion helped Trump specifically and boosted “the extreme right around the world.”

The fact that Trump himself is now underwater on the cost of living suggests it is incumbents presiding over inflation who face the backlash. But let’s grant Weber’s premise. If high inflation breeds authoritarianism, understanding what causes it becomes a democratic imperative. This is where her book is unconvincing.

She starts with a half-truth. Pandemic shutdowns snarled supply chains, Russia’s invasion of Ukraine drove up food and energy costs, and the Iran conflict delivered another oil price spike recently. Negative supply shocks in these “systemically significant sectors,” she writes, raise prices of basics, hitting the poor hard and making production more difficult, thereby raising aggregate inflation.

The difficulty begins when Weber turns this partial mechanism into a general theory. These transitory cost shocks, she argues, gave firms the “perfect opportunity” to raise prices beyond their now-higher costs. Executives’ boasts about “pricing power” prove it — in Weber’s telling, profit-seeking sellers exploited the very real shocks to raise inflation yet higher.

Most economists doubt this theory. If firms could profitably raise prices at will, why await a cost shock? Why would competitors and entrants not undercut firms raising prices above the fundamentals? And where did customers find the money to pay all these higher prices? If gas stations gouge consumers while household spending power is fixed, families have less money left to spend at restaurants or furniture stores. One price — gas — rises, but it is offset by demand and price pressure falling elsewhere. Broad inflation can persist without collapsing sales only when aggregate spending rises, too.

That theory alludes to a simpler explanation for inflation. Between February 2020 and March 2022, the money supply grew by $6.2 trillion. Washington ran huge budget deficits while the Federal Reserve held rates near zero and bought trillions in assets. By mid-2022, all this stimulus meant nominal gross domestic product — total dollar spending — was growing at 10 percent a year, instead of its pre-pandemic trend of 4 percent per year. This excess demand, not greed, was the underlying cause of price increases.

Explaining high prices and profits doesn’t require tacit collusion by firms. Overseas shocks shifted demand toward American substitutes, raising their prices; the broader spending boom allowed other prices to rise across industries, given that more money was chasing goods and services. Because retail prices adjust faster than costs fixed by contract, such as wages or existing inventory, profit margins widened temporarily in many sectors.

Yet Weber credits all the stimulus for the rapid recovery while largely absolving it of the ensuing inflation. The same dollars, apparently, could stimulate production but not prices — a convenient distinction for which the book supplies no explanation.

This diagnosis affects Weber’s analysis of the options the United States had in dealing with inflation. In her telling, economists on “Team Wait-and-See” correctly anticipated that supply chains would heal without monetary tightening but were too indifferent to near-term suffering. “Team Austerity” would raise interest rates, causing unemployment to bring inflation down. Her alternative — price caps, commodity reserves, antitrust and public provision — would “target the specific prices that drive inflation,” until supply recovered. One camp is callous, another cruel and hers, conveniently, humane and “anti-fascist.”

Yet all this is written as if economists don’t know what subsequently happened. Supply chains did heal, but the money supply was squeezed and the Fed raised rates by 5.25 percentage points. This monetary tightening saw spending growth slow and inflation fall back a long way toward target. This happened without mass unemployment — an outcome she treats, oddly, as vindicating her opposition to tightening rather than challenging it.

That might have prompted a rethink. Perhaps the book’s opening explains why it did not: Weber recalls spending years seeking “a serious fight against inflation” that would protect workers from cost shocks without interest rate hikes. It is only mildly uncharitable to say she found a crisis for her preexisting cure.

Weber has become a leading advocate of theories that frame one-off shocks and corporate conduct as inflation’s drivers while relegating macroeconomic policy to the margins. Politicians in both parties find the diagnosis congenial. It shifts attention from fiscal and tariff choices toward the businesses adjusting prices in response.

Her ongoing success muddies the public’s understanding of the monetary roots of inflation, in turn inviting price controls and other policies that won’t cure inflation but will create shortages, declines in quality and inefficiency. If inflation feeds fascism, economists have a duty to understand what feeds inflation.

Unfortunately, Sen. Dan Sullivan, the alternative, is no better on this particular policy. In 2019 he joined five other senators at the White House to urge President Trump not to issue a Jones Act waiver for domestic liquefied natural gas shipments.

Alaska has borne this burden from the start. Seattle shipping interests lobbied for the 1920 law to shut off cheaper routes to Alaska through Canada. In 1984 Alaska voters approved a ballot initiative, now state law, directing the governor to press Congress for repeal. Their elected officials have largely ignored them.

Vast and remote, Alaska is heavily reliant on waterborne freight. Its voters, already facing the high prices Ms. Strassel describes, deserve a Senate candidate willing to stand up to the shipping lobby. Neither is.

Unfortunately, such thinking has permeated Westminster for two decades. The financial crisis, pandemic and Ukraine war were all shocks emanating abroad, supposedly leaving successive chancellors little choice but to approve vast debt. Only the Truss mini-budget is cleanly admitted as our mistake, with other external forces driving yield spikes since.

Well, somebody forgot to tell Switzerland about these inescapable global forces. Its ten-year bonds yield 0.54 per cent, and our gilts yield ten times that. Over the past year, British yields have risen 0.8 points and Swiss yields 0.3. Since 2021, ours have climbed more than four points and theirs six-tenths of one.

This isn’t proof that Britain’s higher debts caused the recent yield moves. Swiss inflation, the franc and monetary policy differ markedly. But it raises the question: why are some governments better placed to absorb these global upheavals? One reason is that Britain has talked incessantly about fiscal discipline since 2010, whereas Switzerland delivered it, leaving its taxpayers less exposed to interest rate risk.

In 2001, nearly 85 per cent of Swiss voters approved a constitutional “debt brake” amid worries about deficits. This limits most annual spending, including investment, to expected tax receipts, adjusted for the economic cycle. In other words, annual spending is capped at the level of sustainable tax revenues.

Budgets do not need to be balanced every single year. If a downturn depresses receipts, spending can broadly continue, with borrowing covering the gap. In booms, however, governments must run surpluses. Over time, the budget balances. And this specific set-up disciplines politicians. If they want new permanent spending, they first must raise revenues, or wait until growth improves, to finance it. Issuing more bonds is not an option.

Unlike in Britain where our fiscal promises recede into the forecast horizon, the Swiss rules, with constitutional underpinning, have teeth. Governments cannot rewrite them on budget day when the numbers turn awkward. If forecast errors result in over-borrowing, the mistakes are chalked up in a compensation account, to be corrected through tighter future budgets.

Even emergency spending is constrained. The Swiss parliament can authorise extraordinary borrowing, as it did for the pandemic or for Ukrainian refugees. Yet they typically must pay this back within six subsequent years. Knowing those bills must be settled quickly makes politicians less likely to borrow vast sums during crises.

The results are astounding. In 2007, Britain and Switzerland had almost identical gross government debt burdens, at 43 and 44 per cent of GDP, respectively. Nearly two decades and several global crises later, Switzerland’s has fallen to 39 per cent, while ours has doubled to 102 per cent, according to the International Monetary Fund. And the gulf keeps widening. Last year the Swiss ran a budget surplus of 0.5 per cent of GDP, while Britain borrowed another 5.4 per cent.

Politicians were aware of the Swiss approach. In 2012, the Conservatives’ Free Enterprise Group, led (ironically) by Liz Truss and Kwasi Kwarteng, proposed a British debt brake rule modelled on Switzerland’s, arguing that George Osborne’s fiscal constraints were not demanding enough.

Instead, Britain adopted “rolling” deficit targets years away. On average, a recent Institute for Fiscal Studies analysis shows that chancellors since 2010 have aimed to borrow 1.1 per cent of GDP by year five of their forecast. Actual borrowing has averaged 3.8 per cent, even excluding 2020. We continually underestimate the red ink.

The point is not that Switzerland escaped global shocks, nor that debt alone sets bond yields. It is that governments choose how vulnerable we are when those yield shocks arrive. Our politicians chose badly.

In 1994, Frankfort enacted new controls that supporters promised would make health insurance more affordable and accessible. By 1996, the number of health insurers selling directly to consumers plummeted from 40 to two. Both of the remaining carriers requested a 28 percent premium hike.

The market’s collapse prompted the legislature to reverse course in 1996 and 1998, repealing many of the harmful regulations responsible. Eventually, the market recovered.

Twenty years later, the Affordable Care Act re-imposed substantially similar regulations. The law’s supporters promised this time would be different. Instead, Kentucky families are again facing insufficient choices and premiums they cannot pay.

The number of insurers in Kentucky’s individual market is again down to two in most counties. In five counties, there are three. In 10 counties, there is only one.

Obamacare premiums are rising faster than Congress can subsidize them. This year brought Kentucky residents a 30 percent premium hike. Insurers are planning another 19 percent premium hike for 2027.

Legislation proposed in the last session would have pulled Kentucky out of this nosedive and saved Kentuckians 60 percent or more on their health insurance.

In the 2026 session, Reps. Vanessa Grossl and T.J. Roberts filed House Bill 91. The measure aimed to free Kentucky consumers and small businesses to buy health plans from carriers in U.S. territories. Why territories? Because President Obama himself exempted territories from Obamacare’s most expensive and destructive regulations.

Leading up to Obamacare’s implementation, officials in American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands foresaw that the law would do to their insurance markets what it is now doing to Kentucky’s. They warned that “insurance issuers currently serving the individual and small group markets are likely to withdraw, making coverage unavailable at any price.” One territory’s individual market collapsed before the regulations even took effect. They begged Obama for relief.

Obama obliged. In 2014, he exempted territories from the regulations that are now tearing Kentucky’s market apart. That rule remains law today.

Permitting territorial plans in the commonwealth would allow Kentucky families to enroll in quality, affordable health plans that meet their needs. Researchers consistently find that for most consumers, premiums for Obamacare-exempt health plans are 60 percent below those for the lowest-price Obamacare plans.

The policy would have even freed millions of Kentuckians to buy coverage that respects their religious beliefs. Among the regulations from which Obama exempted territories is Obamacare’s mandate to buy coverage for contraceptives.

The only thing preventing Kentucky families and small businesses from buying territorial plans is Kentucky law. The Commonwealth’s insurance code forbids health plans unless they receive regulatory approval from the commonwealth itself. That barrier is unambiguously Frankfort’s to remove.

In effect, recognizing territorial plans applies to insurers the standard that Frankfort already applies to physicians. Kentucky law recognizes physician licenses from “another state, United States territory, or Canadian province,” if those standards “are substantially equivalent” to Kentucky’s. The fact that Obama exempted territories from Obamacare makes their standards the only standards in the United States that are substantially equivalent to what Kentucky enacted after its painful experience in the 1990s.

Expanding the market to territory plans allows Kentuckians access quality, affordable, enforceable insurance protection from established carriers, with a named regulator and an enforceable contract standing behind every policy. The law would write the licensing territory’s regulations into the insurance contract, so that Kentucky courts could enforce them.

It would also subject the insurers now operating in Kentucky’s individual market—Anthem, WellCare, and Molina—to greater competition. Aetna, Cigna, Humana, and UnitedHealthcare already do business in the territories, and have provider networks in Kentucky.

Legalizing territorial health plans would not take any choices away. Kynect would remain open for Kentuckians and carriers who prefer Obamacare plans. Consumers who qualify would still receive subsidies, which would still rise along with premiums. For Kentuckians struggling to afford coverage, the bill would simply add another option.

Frankfort does not need to wait on Congress to act. It does not need to spend a dime. It just needs to stop standing in the way of Kentuckians enjoying the same freedom to choose their coverage that citizens in U.S. territories enjoy.

The Swiss government is much smaller than ours. According to the Organization for Economic Cooperation and Development, in 2024 total government spending in Switzerland was only about 32.5 percent of gross domestic product, compared with about 39.6 percent in the United States. Swiss voters have also locked in fiscal discipline with a constitutionally required debt brake — a form of balanced-budget rule — that ties spending to projected revenue, permits deficits during downturns and requires the government to run surpluses to pay them back.

Yes, Switzerland also has a low-rate wealth tax, but the rest of its fiscal system offsets the damage. The country generally has no individual capital gains tax, low corporate income taxes, and moderate value-added and individual income taxes. And even with the rest of the system compensating, researchers have found that small decreases in the wealth tax rate have large positive effects on reported wealth.

The lesson from Switzerland is not that the U.S. needs a wealth tax or more revenue. It’s that the U.S. needs to spend less. Switzerland is a model despite its wealth tax, not because of it.

The usual response to a deficit warning is that the government just needs more money. It doesn’t. Thanks to the remarkable strength of the private sector, federal revenue rose by 3%, to more than $5.4 trillion, over the fiscal year. But spending rose by 6%, reaching $7.4 trillion.

Some will blame the Supreme Court for striking down most of President Donald Trump’s tariffs and forcing the government to issue refunds. But even if Washington had kept the $130 billion in illegal levies, it would cover less than one-tenth of the gap. Tariffs were never a serious revenue source at our insanely high level of spending.

Look at where the money went. Spending on the three main entitlement programs, Social Security, Medicare and Medicaid, grew by 7%. That’s faster than total spending growth. Defense grew by 5%. Interest on the debt rose by 11%, exceeding $1.1 trillion. That last figure is the bill for every earlier year of borrowing — years when Washington was sending clear signals that it isn’t serious about fiscal responsibility.

If you want to see where such irresponsibility can lead, look at France. The country that big spenders from Paul Krugman to Sen. Bernie Sanders have cited as proof that big government is viable and full of upsides is now on the brink of a serious crisis. France’s debt equals 120% of its GDP, and interest payments are rising quickly. Slow growth and social unrest aren’t helping.

The U.S., of course, has some advantages that France doesn’t, largely because we’re a country of innovators with a private sector unmatched at creating wealth. Nonetheless, debt that is swelling out of control should still worry us. First, the same anti-wealth and anti-growth forces that brought France to where it is now are gaining popularity here. Second, we too will see debt reach 120% of GDP in a few years, and our interest payments are already consuming an alarming share of resources.

A wise Congress would put us on safer footing if only because debt raises interest rates for everyone, from homebuyers to small businesses. This operates as a drag on growth, and hence on wages. In other words, controlling debt should be part of an affordability agenda in the same way as streamlining regulation.

When legislators decide to take affordability seriously, I recommend looking at a September Advancing American Freedom report on this topic. Its section on fiscal restraint offers a useful menu of reforms, including targeting the programs that most drive the debt.

Start with Social Security. Under current law, benefits will be cut by roughly 20% when the program’s trust fund runs dry in the early 2030s. Nobody believes Congress will actually let that happen, but we’d better hope its answer isn’t to double down by borrowing the difference between payroll taxes and benefits.

Nor are tax increases an option. The payroll tax meant to fund entitlements is now 12.4% of wages. It began at 2% when Social Security was first rolled out. It is also the most burdensome tax for many Americans. Enough already. The fixes AAF fellow Rachel Greszler proposes are worth considering: Index the retirement age to life expectancy, use an accurate inflation measure for cost-of-living adjustments, and move gradually toward a flat universal benefit that protects lower-income retirees while ending Social Security’s de facto welfare for the wealthiest.

Next is Medicare. More than 40% of its financing already comes from general revenue rather than from payroll taxes. The report recommends converting the program to premium support, giving beneficiaries a fixed contribution to spend on traditional Medicare or on competing private plans. It would also raise the eligibility age to 67, matching Social Security, and trim subsidies for well-off seniors. That’s a start.

As for Medicaid, the problem is one of pricing. And yet competition based on price — the best cost-control tool — has never been seriously tried. Washington covers 90% of the cost of states’ expanded Medicaid programs for adults. A state can buy a dollar of spending with just a dime of its own money. Changing the states’ incentives would be key here. Implementing risk-adjusted per-capita caps, through which the federal government would give states a fixed amount per enrollee, would do just that. States would pay for their own inefficiencies or would be able to use every dollar they save by becoming more efficient.

The same logic supports returning more welfare programs to states, starting with the federal share of SNAP. State governments have to balance their budgets in some form.

None of these reforms are painless. But the alternatives will prove far more painful. The U.S. will either continue paying a slow, unlegislated tax called inflation or face a fast, ugly fiscal crisis when bond buyers stop giving Washington the benefit of the doubt.

Given the radical and opaque nature of the Trump administration’s moves—recall that Washington hadn’t taken a non-crisis stake in a healthy company in decades—Cato this week launched our Restoring Free Enterprise project to document, analyze, and counter the trend. As I wrote in the project’s introductory essay and in an August piece for the Washington Post, the government’s ownership stakes raise serious problems that have already begun to materialize: capital misallocation, politicized business decisions, preferential treatment, state coercion, corruption, and more.

Yet the biggest problem of all might be the simplest: Nobody—not even the Trump administration’s own lawyers—can point to a single U.S. law that expressly authorizes the executive branch to do any of this. That omission is glaring, and it matters for the stakes themselves, for how they might get unwound, and for whether anything stops the next president, of either party, from doing more of the same.

What the law actually says.

It’s been 16 months since the government took its first stake (last June’s U.S. Steel “golden share”), yet the Trump administration still hasn’t offered a clear and detailed legal justification for that deal or any other equity-based transaction. When Sens. Jack Reed and Roger Wicker asked about the legality of the Defense Department’s equity deals at a Senate Armed Services hearing in March, the Pentagon’s top industrial-base official said government lawyers would soon submit something to Congress on the issue. You’ll be shocked to learn that we’re still waiting for the memo. Other agencies have been similarly circumspect, offering little more than a press release with a statutory citation and no elaboration. Sometimes, we don’t even get that.

The Trump administration’s silence is notable—and troubling. Without a clear and official paper trail for all these equity deals, the public is left to guess as to how these expansive new powers—influencing or even controlling private companies!—are permissible under the law. The table below, constructed from press releases, SEC filings, and third-party reporting, is one such guess (and it’s admittedly incomplete). As the final column shows, none of the laws implicated by these deals expressly authorizes the federal agency at issue to take an ownership stake in a private, U.S.-based company:

In court, a Justice Department lawyer and Commerce Secretary Howard Lutnick recently argued that the CHIPS Act expressly authorizes the government’s Intel stake, but this is clearly false. Instead, these laws say the government can offer grants, loans, and other subsidies to target companies, and some of them contain broad language—e.g., “mitigation agreements” for transactions reviewed by the Committee on Foreign Investment in the United States (CFIUS) or “payments” and “other transactions” under the CHIPS Act—into which one could argue that equity arrangements fall. Yet none of these laws is new—the Defense Production Act that created CFIUS dates back decades; the Advanced Technology Vehicles Manufacturing (ATVM) loan program program started in 2008; the Industrial Base Fund began in 2011; CHIPS was enacted in 2021; and the Office of Strategic Capital in 2022—and no president has ever used them to acquire direct ownership interests like the ones Trump keeps taking. (A single ATVM loan to Tesla in 2010 gave the government the right to eventually exercise warrants to buy Tesla stock between 2018 and 2023, but the warrants were terminated when Tesla repaid the loan in 2013.)

In other words, numerous presidents of both parties did not read these laws as a broad license to indefinitely hold stock in numerous private companies. Only Trump did.

As Georgetown’s Peter Harrell explained last year, the administration’s best legal argument here is simply that the language of these laws is vague and does not expressly forbid taking a golden share, equity stake, or other slice of the corporate pie, and a target firm could always just walk away if it didn’t like the government’s terms. Yet this argument fails for several reasons.

For starters, this is Washington we’re talking about, and there’s already evidence in several cases that these companies couldn’t just walk away from the equity deals (i.e., demands) they were presented. As I noted in the Post, in fact, the Intel deal and others appear to have been coerced by the Trump administration or “conditioned on the granting of a permit, subsidy or other government privilege.” When the federal government wants a slice of a company whose business depends on something Uncle Sam has, saying no isn’t really an option. And it’s foolish (at best) to pretend otherwise.

There’s also clear evidence that Congress knows how to say “equity” when it wants equity, just like it knows how to say—and does say—“grants” or “loans” in these very same laws. In CHIPS, for example, Sens. Bernie Sanders and Elizabeth Warren proposed an amendment forcing subsidy recipients to hand over equity, but it never passed. This year, Republican-led committees in the House and Senate have advanced legislation to authorize the Pentagon to make government equity investments with certain limitations, but those aren’t yet law, either. On the other hand, the Troubled Asset Relief Program expressly required the Treasury Department to obtain warrants (or senior debt) from the institutions it bought assets from, and the CARES Act barred Treasury from lending to eligible large businesses without receiving warrants or equity. (Both laws were also enacted during crises, of course.)

In a forthcoming essay for the Restoring Free Enterprise project, Cato legal expert Molly Nixon examines this statutory language in detail, finding that none of the laws behind today’s equity stakes contain anything like it. That matters—or, at least, it should.

The Trump administration also knows about equity authority—until it doesn’t. When Trump’s Venezuela oil deal was announced, for example, a spokesman for the Pentagon’s Office of Strategic Capital initially said that the office doesn’t take equity stakes in private companies. A few days later, another U.S. official claimed, without evidence, that Congress had given OSC exactly that power. Semafor, meanwhile, reports that Congress previously had declined Pentagon requests for equity authority, and over at Lawfare, Benjamin Press elaborates on the administration’s selective memory in this case (emphasis mine):

The administration’s new “interpretation,” meanwhile, appears to be distressingly thin. As Semafor reported last month, a June 2025 memo from the Office of Management and Budget claimed that a $400 million investment in MP Minerals was legal simply because it was “necessary to avoid an imminent threat to human life and government property.” The opinion also cited the Defense Production Act, a 2017 defense authorization, Article II of the Constitution, and—I kid you not—the “venerable tradition of presidential obligations in advance of appropriation” stretching back to 1792. (None of these things, of course, actually authorize equity stakes.) Former Pentagon officials briefed by Semafor said they were “skeptical” of OMB’s legal reasoning. “[I’m] surprised that the current team has discovered the authority to do this under the Defense Production Act,” one former OSC official told the outlet, adding that “laws can be elastic, but elasticity snaps at some point.” Sigh.

These justifications, by the way, are the best of the bunch. Some, such as the Commerce Department’s “participation interest” deal with Westinghouse or the government’s cut of Nvidia and AMD chip sales to China, don’t even bother with a statute. (Nvidia is now getting sued in Delaware on the grounds that the government is “constitutionally barred from imposing duties or taxes on exports.”) Trump’s Venezuela oil deal is even sketchier.

Finally, there are the obvious and troubling implications of an executive branch declaring sweeping and unprecedented new powers simply because Congress didn’t expressly bar such actions. As I explained in a new podcast accompanying the Restoring Free Enterprise project rollout, that’s an argument for unlimited executive power, not just for equity stakes, and it directly contradicts our constitutional system of government and enumerated powers. Even folks who are decidedly not from my libertarian side of the law, such as Georgetown’s Harrell and Biden-era Assistant Secretary of Defense Laura Taylor-Kale, are uncomfortable with where this is all heading.

So, how do we stop it?

That leads us to what might be the worst part of it all: Without any clear legal framework for doing this stuff, there’s no clear way to undo it or to stop more transactions in the future. As already noted, the pace of these deals has accelerated in 2026, and Trump has literally said that his standard for taking government equity stakes is simply “when people need something.” Trump and his team will surely announce more deals this year and next (another one popped up while I was typing this). And whoever wins in 2028, Republican or Democrat, will inherit both the portfolio and the unbridled power to expand it. The economic and political consequences—private capital increasingly flowing to the connected, a government with a direct financial interest in a growing set of firms, crony losers flocking to D.C, for an equity bailout, a president who increasingly uses stock deals to reward and punish American companies, and plenty more—could be enormous.

Congress could pass a law to force divestment and dismantle these (implied) powers, but that’s easier said than done. Some Democrats are uncomfortable with the equity deals, but many others—and not just Bernie Sanders and his fellow travelers—simply want more transparency and structure around them. Meanwhile, the party campaigning against “socialism” this fall is ironically the one advancing bills to authorize equity investments rather than terminate them. There are welcome exceptions—Sen. Jon Husted introduced a bill requiring covered stakes to be liquidated, and Sens. Thom Tillis and Mike Rounds have criticized the deals—but they probably won’t be the rule as long as Trump’s in office. Thus, securing a veto-proof majority for broad divestment legislation will likely be a serious challenge for the foreseeable future.

That leaves the courts, but the path here is also difficult and murky. Most companies with government equity stakes have little incentive to challenge a deal that inflates their stock prices, and the same goes for their shareholders. Any such challenge, moreover, would risk upsetting an all-powerful federal government and its, ahem, temperamental president. The same risk applies to federal contractors who might challenge government contracts awarded to state-backed firms on conflict-of-interest grounds.

These incentives likely explain why there’s been just one shareholder lawsuit to the equity deals so far. There, plaintiffs have challenged the Intel deal as a breach of its directors’ fiduciary duties (because they gave the government shares in exchange for nothing). Many legal experts think it’ll be a tough case to win, and, even if it is eventually successful, there are dozens of other deals that would also need to be challenged.

Finally, Congress could sue the Trump administration, similar to how the House of Representatives challenged—successfully in part, and unsuccessfully in others—President Obama’s implementation of the Affordable Care Act. That case required only a House majority, which Democrats will likely have next year. But here, too, there are major uncertainties surrounding whether Democrats will actually want to trim these new powers and whether a federal court would rule in their favor, given courts’ deference and these laws’ ambiguities.

In short, the same government that took these unprecedented equity stakes without clear statutory permission has no clear path for getting out. To restore both free enterprise and the rule of law, however, it’s imperative that we chart one.

Markets FTW (whether you like it or not)

Despite legally and morally dubious Trump administration airstrikes, the Wall Street Journal reports that “[r]ecord supplies of cocaine still arrive in the U.S., Europe and as far away as Australia every day, cheaper and purer than they’ve been in decades.” The Journal goes on to document how, in response to crackdowns by U.S., European, and other government officials, drug traffickers didn’t stop trafficking—they just found new and creative ways to satisfy unchanged global demand for the drug. (Example: “Smugglers have learned to embed the drug in charcoal, leather hides, cement and fruit pulp, and then take it out after pickup at a destination port.”)

Shocking, I know. I’m sure more taxpayer money and innocent victims will solve this problem any second now.

Chart of the Week

High mortgage rates bite.

Generational wealth gains (more)

Tariffs haven’t “fixed” the trade deficit.

Most Americans would recoil at such proposals. Yet when it comes to people diagnosed with psychiatric disorders, many people seem willing to make an exception.

A physician who administers treatment to a competent adult against the patient’s will violates one of medicine’s most fundamental ethical principles: informed consent. Why should that principle carry less weight when the doctor is a psychiatrist? Yet in a recent City Journal article, Stephen Eide and Valerie Franchitti of the Manhattan Institute argue that public support for involuntary psychiatric treatment reflects a welcome recognition of its potential benefits.

Strangely, the article entirely avoids the concept of informed consent. Where it acknowledges any limitations to involuntary treatment at all, it considers only the possibility that coercive treatment may increase stigma against mental illness.

But the more fundamental objection is liberty. A psychiatric diagnosis does not extinguish your right to control your body. Competent adults have the right to decide what substances they consume, which medical treatments they accept, and what risks they take, even when others consider their choices unwise or self-destructive. As the psychiatrist Thomas Szasz wrote in 1997, “I oppose involuntary psychiatric interventions not because I believe that they are necessarily ‘bad’ for patients but because I oppose using the coercive apparatus of the state to impose psychiatric relations on persons against their will.”

Eide and Franchitti write, “The public is right to suspect that involuntary treatment can be effective.” They cite data from the New York State Office of Mental Health showing substantial reductions in hospitalization, incarceration, homelessness, substance abuse, and suicide attempts following enrollment under Kendra’s Law, which mandates outpatient psychiatric treatment. Yet these data do not establish that coercion caused those improvements. Participants also received increased access to psychiatric services, case management, and other support. Without adequately separating the effects of those services from the effects of coercion itself, the reported improvements cannot establish that compulsory treatment was responsible.

The authors also justify involuntary psychiatric treatment by citing subway attacks, mass shootings, and other violent incidents. But there is a fundamental difference between holding people accountable for violating others’ rights and confining them because they might become dangerous. Communities can enforce laws against assault, trespassing, and public nuisance without criminalizing homelessness or mental illness.

Moreover, involuntary commitment to a psychiatric hospital or rehabilitation facility—sometimes for prolonged periods—deprives people of their liberty without a criminal conviction. Although civil commitment involves judicial procedures and opportunities for review, continued confinement may depend heavily on mental health professionals’ assessments of whether patients meet release criteria. As Szasz warned, coercive psychiatrists can thus function as “judges and jailers not physicians and healers.”

Severe mental illness can impair decision-making, sometimes profoundly, but diagnosis and incapacity are not the same. Even among psychiatric inpatients housed for severe mental illness, a meta-review of the research at BMC Psychiatry shows, most retain the capacity to make treatment decisions. Outside of hospitalized patients, decision-making capacity is even higher.

The legal scholar Elyn Saks, who has lived with schizophrenia, brings both personal experience and academic expertise to the debate over involuntary psychiatric treatment. Having experienced involuntary hospitalization, physical restraints, and forced medication, Saks has questioned the assumption that mental illness justifies overriding patients’ wishes. In her book Refusing Care she examines the ethical and legal problems posed by involuntary hospitalization, forced medication, and physical restraints. Saks and the psychiatrist Dilip Jeste have also reviewed empirical research on decision-making capacity among people with psychiatric and substance use disorders, analyzing how capacity varies among individuals and how clinicians can assess and enhance patients’ ability to make informed decisions.

Though the medical field has developed structured interviews with standardized scores for mental incapacity, doctors can disagree on assessment. Mental capacity is also decision-specific and time-specific, not a permanent status attached to a diagnosis. That same BMC Psychiatry review of the literature describes the impairments seen in psychosis as “temporal, identifiable, and responsive to interventions,” such as presenting information in simpler terms.

Even when incapacity can be established, we must adhere to the principle of least restrictive intervention. Any intervention must be justified by the circumstances, limited to what is necessary, and designed to preserve as much individual freedom as possible. Compulsory treatment takes different forms, each imposing distinct restrictions on individual liberty. Assisted outpatient treatment allows people to remain in the community but subjects them to a court order governing treatment. Involuntary inpatient commitment deprives people of their physical liberty through hospitalization, while forced medication goes further by overriding bodily autonomy. So impaired decision-making capacity does not automatically justify confinement, let alone forced medication.

Medication can reduce psychotic symptoms, and some psychiatric patients who initially refuse treatment later believe it helped them. But evidence that medication works is not the same as evidence that compulsion produces better outcomes than voluntary treatment, particularly when a person’s decision-making capacity may improve as an acute episode subsides.

In 2024, a scoping review in the journal Psychiatry, Psychology and Law found mixed evidence of benefits and harms from involuntary inpatient treatment. Patients admitted involuntarily often experienced improvements in symptoms and functioning, but they also tended to enter treatment with more severe illness, making it difficult to determine how much of the improvement resulted from compulsory intervention itself. Involuntary admission was also associated with higher financial costs and worse patient experiences, including feelings of coercion, loss of freedom, and lower satisfaction. In 2018, The Canadian Journal of Psychiatry published a systematic review of coercive measures; it found that patient experiences were predominantly negative and frequently involved adverse consequences. Overall, no consistent evidence shows that involuntary treatment itself causally improves outcomes, although it unquestionably restricts patients’ freedom and imposes costs on taxpayers.

These concerns are compounded by a health care system that financially incentivizes psychiatric overdiagnosis and overmedication, regardless of whether additional interventions yield commensurate benefits for patients.

The difficult case arises when a person genuinely cannot reason about treatment options or communicate an informed choice, and when delaying intervention creates an immediate risk of harm. In such cases, the ethical principle should be the same as elsewhere in medicine: Temporary treatment may be justified when informed consent cannot be obtained, using an advance directive or surrogate when available, and only to the minimal extent necessary to manage the emergency and restore the patient’s ability to decide. A credible, imminent threat to another person presents a separate public-safety justification for state intervention. But even support for those types of emergency interventions is not the same as support for broad, long-term involuntary psychiatric treatment based on supposed mental incapacity.

City Journal frequently advocates free markets, individual liberty, and limits on government intervention. Yet these writers appear willing to grant the state considerable authority over people’s medical decisions without adequately distinguishing those who lack decision-making capacity from those who retain it. If we distrust government officials to make economic decisions for us, why should we trust them to make decisions about our bodies and medical care?

There’s been a rapid pace of AI-led mathematical breakthroughs in recent months. OpenAI announced last month that after 88 hours of work, its AI had cracked the Navier-Stokes existence and smoothness puzzle, one of the seven Millennium Prize Problems that has baffled mathematicians for almost a century. On the same day, Google DeepMind released AlphaGenome Atlas, which maps the predicted molecular effects of all 9 billion possible single-letter changes to human DNA.

But if the nature of innovation is changing, are humans losing their value?

In his 1981 book, economist Julian Simon called people “the ultimate resource” because nothing else can create new ideas. Simon argued that new human ideas lead to innovation, and innovation drives economic growth and underpins modern prosperity. Forty-five years on, and with announcements of AI breakthroughs dominating headlines almost every week, it’s easy to be skeptical of Simon’s claim.

Ideas, as the science writer Matt Ridley wrote in 2010, “have sex.” In The Rational Optimist, Ridley argued that innovation is not the work of solitary geniuses but happens when human minds come together. As societies become increasingly open and specialized, more people with different expertise meet, discuss, and recombine ideas. The result is what Ridley called the “collective brain”: the knowledge spread across society that no individual holds.

For recent AI breakthroughs, every system runs on humanity’s collective brain. OpenAI’s agents worked from a cached copy of the internet, and AlphaGenome was trained on thousands of experiments on human and mouse DNA, all of it somebody’s lab work. For years it was implied, simply because no alternative existed, that for ideas to have sex, both partners had to be human. If ideas no longer need two human minds to have sex, as Ridley put it, one might conclude the collective brain has found a replacement for humans altogether.

That assessment is overly pessimistic, however. Since these breakthroughs recombine ideas humans had already written down (albeit at inhuman speeds), the machines look less like second parents and more like a very fast medium through which human ideas meet and get down to business. One-nil, humans.

Beyond depending on existing human knowledge, OpenAI’s breakthrough also relied on human methods. To tackle Navier-Stokes, OpenAI ran about 10,000 agents at once, divided into groups that explored different areas and talked among themselves. As groups made progress, the most useful insights were consolidated and fed back to the other agents. Roughly 2.7 million messages were exchanged before an answer emerged.

Many rival agents worked in parallel with immense specialization, most of them failing while the rest built on what was most valuable. Free market galore!

Humanity is surely better off with the additional knowledge AIs produce. Yet, whether it is agents creating mathematical proofs that could solve centuries-old problems, or my own AI delivering thousands of words of research reports I haven’t found time to read, the bottleneck to innovation still lies with us.

In DeepMind’s case, AlphaGenome Atlas can predict what genetic variants can do, but it doesn’t comprehend the biology beneath them. A list of predictions settles nothing on its own. A human mind must decide which subset to study, and Atlas’s predictions are not findings until somebody in a laboratory confirms them. Knowing that a DNA variant matters isn’t the same as knowing why.

In OpenAI’s case, mathematicians worldwide are still assessing the proof’s validity. Three days after the announcement, without naming any company, 25 Fields Medal winners published an open letter about AI and the discipline of mathematics, noting that “solving problems is only a tool and proxy for achieving the primary goal of conceptual understanding and insight.” The signatories note that AI can accelerate mathematical work, but human understanding produces the next question worth asking.

The gap between output and understanding predates AI. The economic historian Joel Mokyr, who won the 2025 Nobel Prize, distinguishes two types of knowledge. “Prescriptive knowledge” is knowing that something works. Think Edward Jenner knowing that exposure to cowpox provides immunity against smallpox, long before anyone knew why. “Propositional knowledge” is understanding why something works, such as comprehending the underlying science or natural laws. Mokyr’s answer to why the Industrial Revolution did not stall like earlier golden ages is that Europe got both types of knowledge moving together.

The latest wave of AI discoveries could make one pessimistic about humanity’s role in the future of innovation. But Mokyr’s point is that the two types of knowledge should move together, and understanding why something works matters just as much as knowing that it does. Candidate proofs are not theorems, and predictions are not findings.

AI-MODEL CLAUDE HAS ‘INTERNAL NEURAL PATTERNS’: ANTHROPIC

AIs can crunch statistical correlations, draw on what humans already know, and generate prescriptive knowledge far faster than any human mind can convert the output into something verified, trusted, and useful. That is why we need more educated minds, not fewer.

The scarce resource, indeed the ultimate resource, is still us.

Meanwhile, the Democratic Socialists of America advocate public ownership of the largest corporations and essential industries. In New York, DSA member Mayor Zohran Mamdani plans to open city-owned grocery stores.

Despite ideological differences, both MAGA and DSA claim that government can support jobs, communities, resilience and innovation better than market forces, and both describe it as a necessary break with a long-standing American free-market consensus.

Yet there is nothing new about such policies. They have been tried many times before and the track record is long and disappointing. The experience of my home country of Sweden in the 1970s and 1980s is informative, since state ownership was justified by many of the same, often conflicting, objectives that are now being invoked by Washington.

Sweden established the Swedish Investment Bank in 1967 to channel long-term finance to industry and in 1970 it founded the state holding company Statsföretag (Swedish State Company), which brought 22 companies under a single umbrella to coordinate and expand government ownership.

Soon, what first seemed like a strength—that state ownership could achieve many goals simultaneously—became a corporate governance nightmare. Boards and management fought over whether profitability or industrial policy should take precedence, making both strategic decisions and accountability difficult.

State ownership also turned government into both umpire and player: the same politicians who regulated industries and distributed subsidies now had a financial interest in the success of particular companies.

Some companies used government resources and guarantees for activities that seem distant from core state responsibilities. A state-owned restaurant group sent two employees to work for McDonald’s in the United States on a fact-finding mission. Armed with this know-how, they later started Clock, a rare example of a government-run hamburger chain, including the distinctly Swedish “Hawaii burger,” topped with pineapple.

At one point, the Swedish Investment Bank led a consortium trying to salvage the Spanish galleon San José, which had sunk off the Colombian coast in 1708 with a treasure of gold believed to be worth billions. The consortium fell apart, and the San José remains on the ocean floor.

Industrial policy gradually became an ad hoc system for rescuing failing companies. Instead of creating new industries, the government increasingly bailed out shipyards, steel companies and textile firms under pressure from trade unions and local politicians. The rescue operation became known as the “Industrial Emergency Room.”

Between 1976 and 1982, the Statsföretag group accumulated total losses of around $2 billion in today’s money, a huge sum for a small economy. Shipyard bailouts had cost the equivalent of $17 billion.

Kjell-Olof Feldt, minister of finance in the Social Democratic government that took over in 1982, described state-owned companies as “a black hole” in the public finances. A spokesman for the biggest center-right party observed: “State ownership of business has, with few exceptions, been a gigantic failure.”

Assar Lindbeck, the Social Democratic economist who first proposed creating the investment bank, came to regret his advice, noting, “I have never heard any informed observer argue that the Investment Bank served any useful purpose during its existence.”

Remarkably, less than 15 years after the new policy had been launched, a consensus had emerged that it had been a costly failure. In the 1980s and 1990s, loss-making companies were closed down and many state-owned companies were sold. One study showed that productivity in companies increased after privatization by between 12 and 36 percent.

Yet this retreat took longer than those involved wished. Feldt, the minister of finance, spoke of “the resistance generated by the system itself, i.e. the state administration and the interest groups dependent on the flow of public funds.”

One important lesson for America today, as it begins to repeat some of Sweden’s failed experiments from the late 1960s and the 1970s, is that when public ownership replaces private ownership, the feedback of a decentralized market is replaced by organized lobbying and institutional self-preservation. The result is not only worse policies but also a political system that becomes less capable of correcting its own mistakes.

For years, Sweden’s National Debt Office kept a six-foot model of the T.T. Sea Scape in its headquarters, a tanker built with government support during the shipyard crisis, as a reminder of the costly industrial policies of the 1970s. Perhaps it is time for the Sea Scape to make one final voyage—across the Atlantic, to be displayed in the halls of Congress.

However, real socialists do participate in and even dominate politics in other nations, including the United Kingdom, from which America sprang. Andy Burnham recently took over as UK prime minister, effectively ousting an unpopular left-leaning centrist, Keir Starmer. At the recent Labor Party conference, Burnham expressed his determination to take his party and country hard left.

Like any number of revolutionaries, he appealed to his class background for credibility. He told his colleagues: “Ours is the same story of so many families, British families of my generation. A story of working-class aspiration. A desire to get on and give back, never pulling up the ladder. And a post-war Britain that backed them to do it.” He naturally wanted to bring back this world: “Imagine living in a Britain where people feel the country has their got back again. A Britain for everyone, no matter who we are or where we’re born. We would be unstoppable. And we will be.”

Obviously, the British people are able to govern themselves. They don’t need lectures from Americans. After all, it is Britannia that ultimately did much to pass on democracy to millions—hundreds of millions, actually—of people around the world today. That is not meant to sugarcoat coercive colonialism, which even by London too often brutalized subject peoples. However, British political and religious struggles ultimately helped birth parliamentary democracy, religious freedom, (classical) liberal economics, and much more.

Alas, Burnham appears ready to wage war against that heritage. For Burnham’s enemy is anyone who resisted the UK’s sharp collectivist turn after World War II. He told his audience that “Britain has been on the wrong path for a long time. Deindustrialization. Deregulation. Privatization. Austerity. Brexit. And what has it given us? A country run for vested interests. Not in the public interest. With power held in too few hands. And too many places left to drift. I am ready to do things my predecessors wouldn’t. I will make a break with the direction of the past 40 years and put Britain on a new path.”

By that, he means, return to real socialism, at least the variant that was dominant when Margaret Thatcher became prime minister in 1979. Although the UK was never communist, or anything approaching the Soviet Union and its European satellite states, it owned and otherwise controlled much of the economy. And the results were not pretty.

Burnham declared that “In 1945, we had the vision to win the peace. We had the bravery to make change. We built good homes, secure jobs, health and education for everyone. We gave Britain hope again. We made working-class aspiration feel real for families like mine. We built the common good. Or at least we did until the 1980s. Suddenly, the commonwealth we had created, this party, the wealth we had created for the many was seen as an opportunity for the few.”

Yet British socialism was never as idyllic as Burnham suggests. The Labor Party triumphed in the 1945 election. However, the Conservatives retook control in 1951, winning three straight contests. They triumphed again in 1970, and after two tumultuous Labor victories amid economic turmoil and political strife, lost power to Thatcher, who won three times. She was followed by another Conservative government, and then the “neo-liberal” Blair era, a moderate Labor interregnum of which Burnham evinces no memory whatsoever.

If Burnham perceived the pre-Thatcher time as one of “good homes, secure jobs, health and education for everyone,” he must be the only one. My father was in the U.S. Air Force and I spent my high school years of 1970–1973 living near Oxford. State regulation and union rules stultified the economy. Labor unions effectively ruled the Labor Party and often appeared to be as powerful as, if not more than, the government. Political conflict was deep and destructive. A coal strike resulted in mass electricity blackouts. Working people suffered more than the rich in an economic system in which the economic pie was shrinking, not expanding. I lived through this era, which forever darkened my view of supposedly “compassionate” socialism.

This is why the British people, most of them, other than Burnham’s family, anyway, turned to Thatcher. Reported the Christian Science Monitor’s Ryan Lenora Brown, it “was the deeply divided Britain that Thatcher and her Conservative Party took control of in May 1979—beleaguered and world-weary, its patience for government tanking and its economy on shaky ground.” As the Monitor’s Takashi Oka then detailed:

What could socialism deliver that would make this world desirable, let alone the best that is humanly achievable? Money is not everything, especially for Christians. However, money is necessary to meet basic human needs. Those with the least most depend on economic growth to raise their standard of living. The crisis for socialism is when government officials run out of people’s money to spend. That happened in 1979. And it is fast approaching in the UK today. Warned Liam Halligan of The Telegraph: “the slow-motion car-crash that’s been unfolding on the UK’s sovereign bond markets for at least the last 18 months—a disaster now gathering pace that will inevitably, unless we drastically change course, spark a fully blown market meltdown.” The people who would suffer the worst in such a financial wreck would be those who Burnham claims to represent.

Abstract statist ideologies, which force an entire population to live according to the dictates of the latest ruling elite, inevitably yield worse results than more liberal, freer systems. Burnham declared: “The British Right talk about ‘taking back control’. Never let them forget, they are the ones that gave it away in the first place.” However, he wouldn’t shift authority back to the British people. Rather, he would transfer it to yet another set of ambitious ideological imperialists. Which is decidedly not the way to make Britain “work for” its people again, as Burnham declared. He complained that the UK was “A country run for vested interests. Not in the public interest. With power held in too few hands. And too many places left to drift.” Yet he would reinforce, not reverse, that trend.

Collectivists pushing dirigiste policies will be with us always. Some will be on the right, some on the left, and all will typically promote themselves, not the great mass of people who would suffer from their proposals. So it is with today’s socialists who most loudly proclaim their solidarity with the people over whom they seek to rule.

Free markets are not perfect. No human institution is. However, they transcend socialist precepts. Economic liberty is a reality that generally empowers and enriches its participants, particularly the “least of these,” who are most at risk in systems which reward the politically influential with economic privilege. Socialism—real socialism, in which politicians control most economic policies and transactions—consistently fails to meet the most basic needs of those it ensnares.

While no economic system is “Christian,” some economic systems deliver results that no Christian should wish upon those around them. Andy Burnham’s reasonably seeks “To move beyond a decade of drift and division. To bring a spirit of unity and positivity back to our country. To unlock the working-class aspiration that is still there in every postcode in this great land.” However, this was not the world that he holds up as his beau ideal of a good society. Returning the UK to 1979 is no solution to today’s manifold policy challenges.

His sharpest critics see this as ranging from sycophantic revenge on the general officer class to simply misguided personnel policy. Hegseth defined it in his speech as “accountability and long overdue.”

That accountability he’s referring to speaks to a symptom of a much larger problem within the general officer class, a feeling that our nation’s military leaders at times get over their skis. An element of this is when generals drift into decision-making that happens off the battlefield. Generals wading into matters of policy and politics happens more than one might think.

This is, however, in conflict with the choice made by America’s founders to subordinate the military to civilian control, leaving policy and politics to those duly elected or appointed by the people.

Where the civilian-military balance is most out of control today is in the regional combatant commands (COCOMs). Regional COCOM leadership have become accustomed to ruling over their own fiefdoms of U.S. forces positioned across every major area of the world while also waging significant influence in the halls of power at home. Secretary Hegseth could be onto something in terms of accountability, but only if the structure and criteria of his mandated reduction aims significant scrutiny at the power wielded by the regional COCOMs.

These commanders often play the role of grand strategists, diplomats, political operators, and PR machines — duties far beyond the intent for military leadership in America. These blatant invasions of the civilian space feels routine because regional COCOMs maintain their own legislative affairs and public affairs staff — despite the Pentagon performing these same functions in Washington. While certainly there is a degree of coordination, it is evident to anyone who has worked with the regional COCOMs that they run largely independent operations and at most in parallel to the civilian side.

Let’s look at some recent examples. Since the start of Operation Epic Fury, Admiral Brad Cooper, U.S. Central Command (CENTCOM) Commander, has engaged in numerous meetings with high-ranking government officials in the Middle East, including Saudi Crown Prince Mohammed bin Salman, Israeli Defense Minister Israel Katz, and Lebanese President Joseph Aoun. In these meetings, Admiral Cooper was the highest-ranking U.S. official present, and CENTCOM public releases did not indicate that a civilian counterpart of equal rank was present.

Meetings with foreign leaders at these levels are the responsibility of the President or his Cabinet. Regional commanders should, at most, be invited as participants at the discretion of the President or the Defense Secretary, but should not be leading or deputized to lead such engagements without civilian leadership present.

This isn’t just a CENTCOM dynamic. In 2023, when the U.S. remained heavily engaged in providing proxy support to Ukraine, U.S. European Command (EUCOM) Commander General Chris Cavoli conducted similar engagements, including with Ukrainian President Volodymyr Zelenskyy.

Military to military engagements, with both allies and adversaries alike, are critical points of connectivity and regional COCOM commanders should be central in fostering those relationships. However, that is where their role should end. Civilian leadership at appropriate seniority levels should not only be present in engagements with foreign government leaders, but should always be in the driver’s seat of those conversations.

Beyond breaching the civilian-military balance abroad, regional COCOM commanders also distinguish themselves as public figures at home, building their own profiles amongst the halls of Capitol Hill and the media. Regional COCOM commanders often engage and maintain relationships with Senators and Representatives independently without civilian counterparts present.

It is also noteworthy that, despite the Senate Armed Services Committee’s responsibility for vetting and confirming both civilian appointees and promotions to regional combatant command leadership posts, the SASC only calls for military leadership to testify at annual posture hearings. The House Armed Services Committee (HASC), to its credit, hears from both civilian and military leadership for their annual hearings.

Regional COCOM commanders are also active in the media. The risk of overstatement, understatement, or contradiction on politically charged issues is high-risk for them, particularly with a press-centric administration and the level of media engagement the Commander-in-Chief himself conducts. Just look at how CENTCOM and U.S. Pacific Command (PACOM) injected into the media space in the midst of the Iran war and you can see the danger.

In mid-September, Admiral Cooper boldly claimed “I am not concerned at all,” when asked in a 60 Minutes interview about widely reported shortages of U.S. critical munitions stockpiles as a result of the Iran war. The depletion of the stockpiles, and long lead times for replenishment, have seriously affected U.S. plans to deter China from invading Taiwan, given the overlap in weapons required to ensure a U.S. deterrent is credible.

Just one week after Admiral Cooper’s 60 Minutes interview, Time Magazine ran an exclusive profile on USPACOM Commander Admiral Samuel Paparo. The main topic of the conversation? Why prioritization of deterrence in the Pacific is essential to avoiding war between the U.S. and China. The authors of the piece did not hesitate to point out discrepancies in Paparo’s public versus reported private commentary about how resource expenditure in the Middle East is harming the central mission of deterrence in the Pacific.

Not only did these interviews result in a bad PR cycle for the Pentagon, but it illustrates the dysfunction and factionalism that exists when military leaders decide to play policymakers.

The blurring of civilian and military lines from unrestrained regional COCOMs is an underreported issue. But Secretary Hegseth’s effort to reduce the general and flag officer class presents a prime opportunity to address it. The Secretary and his team should consider how a reduction in rank and resourcing for the regional COCOMs could properly bring them back into alignment with appropriate civilian leadership, overseeing and directing their engagement outside of explicitly military functions and responsibilities.

Stars and medals are certainly symbols of sacrifice and bravery but should not elevate or communicate a status of authority above civilian leadership. Civilian control of the military is an essential component of the American republic and we should take this opportunity now to preserve it.