As a college student with little understanding of how money works, Caleb Hammer racked up thousands in credit card debt, an outsized car note, and private student loans. That’s when he discovered the previous generation of financial advice personalities: Dave Ramsey, Graham Stephan, and Robert Kiyosaki, author of Rich Dad, Poor Dad. He absorbed their lessons, stabilized his spending, accelerated his earnings, and dug himself out of debt. 

“Now my mission is to have the conversations that I wish someone had with me over a decade ago,” he says of his YouTube channel, where more than 500 applicants have now submitted their spending situations to his tough-love, line-by-line audit. 

Hammer’s social media rise has been meteoric: his top-ten-ranked YouTube series, Financial Audit, has collected billions of views, and its most watchable moments are repackaged for Facebook, Twitter, and TikTok. The message of fiscal discipline and personal responsibility seems to be reaching new audiences. The YouTube channel has three million subscribers and now offers premium subscriptions, a user community, and branded budgeting software.

Hammer’s success demonstrates demand for financial accountability and education, and provides vivid examples of how personal choices create needless financial crises. His content capitalizes on internet discourse and the economy of attention, using moral outrage and entertainment value to present lessons that Americans desperately need.

Hammer deliberately leans into controversy and games the attention algorithm by getting special permission from his guests to create unflattering thumbnails that call them “moron,” “loser,” and “liar.” 

It’s a considerably spicier format than those of Dave Ramsey and Suze Orman, who emphasized conservative social values along with financial responsibility. While Hammer condemns “BS purchases” and living beyond one’s means, he doesn’t specifically suggest how people ought to conduct themselves beyond their financial choices. Still, guests submitting all their financial statements provide plenty of opportunity for Caleb’s vivid criticisms: “You are behind on your mortgage and you DoorDashed Wendy’s? You creature.”

The episode content can be explosive. Married couples learn about each other’s debts and spending habits for the first time. Gamers spending the rent money on digital goods get a serious setting straight, as do Disney-obsessed parents spending their kids’ college funds and ex-sugar-babies trapped in cycles of payday borrowing. Viewers get vivid warnings against traps like sports betting and compulsive shopping, but also of bad debt, insidious “pay in four” installment plans, and predatory car loans. 

For Hammer’s guests, the results are undeniable. As an incentive to submit to this ritual humiliation, they receive financial counseling, mental health care where appropriate, free access to his budgeting and investing software, and a handcrafted budget designed to get them out of debt and onto firm financial ground. They also get a huge helping of accountability on a very public stage (the faint of heart ought not wander into the comments section) after signing the show’s many disclaimers, waivers, and consent agreements.

Of the self-selecting applicants who appeared on Hammer’s Financial Audit program in 2024, “the average guest had paid off $22,807 of debt in 12 months [after the audit], and the median had paid off $12,000 in 8 months.”

When Private Choices Have Public Consequences

While growing his audience and creating his central messages of personal finance, Hammer hasn’t revealed much about his personal politics. But combing through the spending habits of struggling citizens reveals uncomfortable truths about modern poverty: self-defeating behavior often plays a role. His content consistently emphasizes how individual financial decisions ripple outward, affecting not just the spender but also lenders, family members, and, at times, taxpayers.

Particularly, Hammer articulates how the fungibility of money results in taxpayers footing the bill for bad decisions (not to mention family and friends who lend to or rely on the irresponsible interviewees). Of one resident of a rent-stabilized apartment who spent frivolously elsewhere, he groaned, “Great. Thanks, City of Seattle, everyone’s rents went up endlessly to subsidize her Hawaiian vacation.” The comment is partly rhetorical flourish, but it reflects a broader theme of the show: financial irresponsibility rarely exists in isolation.

Of one guest’s refusal to get a better job, he wailed, “She is holding back our civilization! Our GDP would be double if we didn’t have these types of people.” When the guest pushed back, arguing that her reckless spending stimulates the economy and contributes to GDP, he slumped onto the desk, whimpering, “No, you’re right, we do need morons like you to go spend more than they have.” 

The show has a general appeal to schadenfreude or morbid fascination, but his guests aren’t total outliers. Financial insecurity becomes a way of life for many, and we end up publicly subsidizing that situation in cases where we should not. 

Access to Information ≠ Behavior Change

What makes Hammer’s success notable is not just the spectacle, but the substance. He is delivering a form of basic financial education — budgeting, delayed gratification, the mechanics of compounding — that isn’t taught systematically in schools. While some educators resist attempts to replace traditional economics courses with personal finance, Hammer’s content suggests the broad social value of starting with everyday, individual incentives.

The basic principles of personal finance function less like technical knowledge and more like civic virtues: defer gratification, differentiate between wants and needs, spend less than you earn, and pay back what you borrow. 

A layer of added complexity, still readily accessible in plain language, reveals how compounding works (for you or against you), and how to avoid accumulating debts and account fees that sap away your savings. Hammer repeatedly emphasizes the time element of savings and investing: his median guest has already lost at least a decade of potential compounding, which can shrink potential retirement income by half. 

Guests don’t end up on Hammer’s Financial Audit after making good money decisions. That wouldn’t fulfill his format. But for those who don’t have to undo years of damage, many other YouTube channels offer endless, free advice, from financial fundamentals to advanced insights for experienced investors.

The abundance of information has exposed a deeper problem. Anyone with an internet connection can access high-quality financial advice suitable to their situation. The harder challenge is behavioral — helping people recognize good advice and, more importantly, act on it.

Hammer’s format, equal parts education, confrontation, and entertainment, appears to bridge that gap.

“People come in for the tea,” he says, using the Gen Z shorthand for gossip. “They exit with the finances.”

His rapid rise suggests the future of financial literacy will depend as much on engagement and emotion as on information.

Whose side is Silicon Valley on anyway?

That’s what Secretary Hegseth may be wondering, given Anthropic’s refusal to grant the US military autonomy over its Claude model — a stance that makes the company an abject outlier in Silicon Valley. Many tech firms are eagerly building alliances and selling services to the federal government. Government contracts are booming, and patriotism is the new subscription software service. 

Elon’s leadership of the Department of Government Efficiency (DOGE) is the highest profile example of bringing tech talent into the government. Although DOGE overpromised a trillion dollars of cuts and underdelivered, it still helped reduce the size of the federal workforce and pared back egregious waste at the State Department. Elon has also played a role in geopolitics by offering Starlink services to Ukrainian military forces and putting a hundred or so US government satellites into orbit via SpaceX.

But Silicon Valley’s realignment behind American interests extends well beyond Elon’s network of companies. Anduril, a major tech defense firm founded by Palmer Luckey, is supplying the US military with relatively cheap next-gen hardware and software. And the meteoric rise of Palantir, headed by Alex Karp, has been revolutionizing government intelligence and law-enforcement operations.

President Trump has aggressively courted the CEOs of Silicon Valley — and not without reason. These are the titans of the US economy managing companies worth trillions of dollars and employing millions of people. They are also on the cutting edge of technological innovation and, therefore, driving the process of creative destruction. And some key tech leaders were instrumental in helping Trump win the 2024 presidential election.

Elon Musk was the most visible and well-known tech CEO campaigning for Trump, but a large number of others, from Peter Thiel to Joe Lonsdale to Larry Ellison, and many more — pejoratively called the “tech bros” — also threw their support behind Trump. Huge swaths of the crypto community backed Trump because he promised clear, fair regulation for their industry.

This support for Trump from the tech and crypto industries represents a remarkable departure from the political status quo in Silicon Valley. San Francisco, Berkeley, and tech companies have long been bastions of Democratic and Progressive ideology. And to be fair, they remain deeply blue. The “vibe shift” or realignment towards the political right has mostly been limited to corporate executives, founders, and venture capitalists. The employees of Amazon, Apple, Meta, Alphabet, and dozens of other big tech companies remain committed to Progressive ideology by roughly a 3:1 margin.

Tech executives have moved towards the political right for two reasons: energy and self-preservation. The explosion of AI has changed the technology game and ended the era of ‘pure’ software. Silicon Valley can no longer remain insulated in the world of bits; its advancement now depends entirely on the world of atoms. More than at any time in its existence, Silicon Valley needs a physical presence to advance. 

Beyond insatiable energy needs, the shift into hardware — rocketry, EVs, and autonomous drones — has forced tech companies into the same regulatory thicket that entangles the rest of the industrial economy. They must confront all the red tape created by government bureaucrats, but strongly lobbied for and supported by the political left.

Why would Google or Microsoft have cared about restrictions on nuclear power or fossil fuel utilization in the 2000s? Why would they be concerned about the EPA and other regulatory agencies choking off the development of new mines or the production of refined rare earth minerals? Their business was driven by coding and by programmers. They were only constrained by their access to talent, their customer base, and their ingenuity.

Fast-forward to the early 2020s, and the world has shifted in important ways. The push for electrification and the development of the solar panel industry has revealed the importance of the world of atoms. Silicon Valley cannot program its way to electric vehicles, solar panel production and distribution, or advanced batteries. They need inputs and refining know-how that are in rare supply in the US due to decades of tightening bureaucratic regulations.

Then there is the issue of artificial intelligence (LLMs) revolutionizing the technological infrastructure. AI represents a major advance in computing. But building and operating these models requires advanced semiconductor technology, large outputs of these advanced semiconductors, and most importantly, electricity to power these semiconductors in data centers. And so the tech companies that have inhabited the world of bits for decades have rediscovered that they depend on silicon. And they also depend on the electrons powering that silicon.

Which brings us back to the issue of realignment. Silicon Valley companies have discovered that they need inordinate amounts of electricity to drive their technology forward. But they have a problem: many politicians and regulators have been warring against energy development for decades in the name of protecting the planet. The US electric grid is old and relatively inefficient. Most legacy utility companies have tied their own hands at the demand of climate crusaders — retiring coal and gas power plants or, in the case of Germany, shuttering nuclear power plants.

Most of the data centers that tech companies want to build cannot tap the existing electrical grid without raising retail electricity rates or straining current power supplies. They also cannot rely solely — or even primarily — on wind or solar power, because these sources are intermittent and battery storage remains prohibitively expensive. Yet politically, wind and solar were treated as the only acceptable options under the Biden administration and in deep-blue states like California. The Trump administration and Republicans offered a necessary corrective, promoting all forms of energy development and advancing a policy of energy abundance.

Silicon Valley’s rightward shift has another cause: self-preservation. The Democratic Party has lurched dramatically left over the past twenty years. In the 1990s and 2000s, blue states like California would tax businesses and the wealthy more heavily than red states, but they weren’t seeking aggressive confiscation and redistribution of wealth. Now they are. The success of Democratic-Socialists in New York City and in Seattle, as well as the proposal to tax people’s wealth, not just their income, are symptomatic of Democrats’ leftward shift.

Perhaps more alarming is the perceived authoritarianism of the left, which began with pandemic-era lockdowns and has since evolved into aggressive enforcement of speech codes and militant identity politics. Rebellion and protest began erupting within tech companies. This political and cultural shift has sent a message to tech executives loud and clear.

Rather than simply bearing higher taxes to support broader welfare programs, and otherwise being respected or at least ignored, wealthy founders and venture capitalists have discovered that they are hated by left-leaning constituencies. The reaction to Elon and DOGE is instructive.

People were so outraged by him and his politics that they vandalized Teslas and firebombed dealerships. The open hostility in rhetoric towards wealth, success, and productivity caused leaders in Silicon Valley to reassess the political landscape — resulting in significant political migration to the Republican Party and physical migration to red states.

This realignment is still in its early stages. Whether this shift is transitory remains to be seen. But at the very least, being a Republican is no longer a mark of shame among the leaders of Silicon Valley, though it may still be among the rank and file. We are also in the early stages of the physical realignment caused by confiscatory tax proposals in California and other states, labyrinthine bureaucratic regulation, and general hostility to entrepreneurship and business. California alone has seen several billionaires relocate in the past few months, including the founders of Google and Meta.

Nothing guarantees Silicon Valley and San Francisco will remain the center of the tech world. In fact, if history is any indication, industrial and creative centers often change locations — just ask anyone living in Detroit or Chicago in the mid-twentieth century, or in Scranton, Pennsylvania, in the late nineteenth century. This might be a bit premature, but we are heading for a Silicon Rust Belt on the West Coast replaced by Silicon Prairie or Silicon Hills. If that materializes, it won’t be because of trade policy or unfettered capitalism. It will be because of political and regulatory failure.

It was a brutal winter in New England. Many mornings, I got out of bed to fire up our snowblower and tackle the latest round of snow. When the wind was blowing, I often got snow blasted right back in my face.

I could have fought reality, but instead I came to see—as the burnt-toast theory suggests—that inconveniences (like burnt toast) can lead to positive outcomes.

While snowblowing, I don’t have to wait too long for positive opportunities to crop up. As I settle into a rhythm, my mind stills, and ideas often arise for the essay I’m writing. Morning exercise takes the form of snow removal. If you enjoy skiing, or, as my wife and I do, getting out in the woods on snowshoes, the cold, snowy winter offered other advantages, too.

Although the burnt toast theory originally appeared on TikTok, it does have a resemblance to the butterfly effect in chaos theory—the idea that small changes can produce large effects. And it certainly reminds us of the ancient Taoist parable of “The Old Man Lost His Horse,” in which the initial event of a poor farmer losing his horse brings perhaps good tidings.

The qualifier “perhaps” is important because the “everything happens for a reason” rendition of the “burnt toast” theory can seem hollow in the face of inevitable human tragedy. The Taoist farmer is wise enough to know that he doesn’t know what may be right around the corner.

Psychologists such as Dr. Brianne Markley and Dr. Alexandra Stratyner note that the burnt toast theory encourages “reframing,” which helps individuals view minor setbacks not as failures but as protective or redirecting events. This shifts our mindset from frustration to curiosity and acceptance, thereby increasing our resilience. 

By recognizing that we cannot control every outcome, we ease the anxiety of micromanaging our lives. The upside is learning equanimity in life’s circumstances, from ordinary annoyances to major disruptions, something the Stoic philosophers practiced two thousand years ago.

The Stoics

You may have thought the Stoics were above being impacted by burnt toast. On the contrary, they practiced their philosophy on small events so they would be better equipped to handle major life events. 

Upon waking, Marcus Aurelius told himself, “Today I am going to meet a busybody, an ingrate, a bully, a liar, a schemer, and a boor.” (Meditations, 2.1)

The Philosopher King was not complaining. This was another chance to put his philosophy into practice. He reminded himself that his daily work was to change his mindset about the “wrongdoers”: “I know that these wrongdoers are by nature my brothers, not by blood or breeding, but by being similarly endowed with reason and sharing in the divine.” Marcus didn’t avoid taking necessary action in the world, even while he recognized his common humanity with “wrongdoers.”

He continually admonished himself to be a better practitioner: “Strive to be the man your training in philosophy prepared you to be… Stop all this theorizing about what a good man should be. Be it!” (Meditations, 6.30 and 10.16)

Do you think it would be easier if life didn’t serve up burnt toast? You are not alone. Marcus wrote, “Everyone dreams of the perfect vacation—in the country, by the sea, or in the mountains. You, too, long to get away and find that idyllic spot.” (Meditations, 4.3)

“How foolish you are,” Marcus observed, since “at any time you are capable of finding that perfect vacation in yourself.” 

This is what Stoic philosophy trains us to do. It teaches us to live by our values and purpose, and to furnish our minds so that even “the briefest inward glance brings peace and ease.” 

This is the goal, even when life delivers us pain, injustice, and daily struggles. 

‘A Veritable Fortress’

In essence, the burnt toast theory serves as a modern proxy for the Stoic recognition that our distress stems not from the event itself, but from our judgment of the event. “Free from passions, the mind is a veritable fortress,” Marcus reminded himself. (Meditations, 8.48)

French philosopher Pierre Hadot called Marcus’s fortress an “inner citadel.” “Burnt toast” — a metaphor for the setbacks we encounter in our daily lives—can be the catalyst for finding this inner strength, leading to less focus on external outcomes and more control over our own reactions. Some contend that burnt toast thinking could lead to a lack of responsibility, but Stoicism is the antidote to this fear. 

Born into slavery, Epictetus became one of the most celebrated Stoic philosophers. He asked himself, “How much longer will you delay before you think yourself worthy of what is best, and transgress in nothing the distinctions that reason imposes?” (Handbook, 51.1)

He chided himself, asking, “Are you still waiting for more theory before you practice what you preach? What kind of teacher, then, are you still waiting for, that you should delay any effort to reform yourself until he appears?” Epictetus makes it clear that our delay is a failure to realize our potential.

The challenges of life, big and small, Epictetus argued, are our personal Olympic events: 

If you come up against anything that requires an effort, or is pleasant, or is glorious or inglorious, remember that this is the time of the contest, that the Olympic Games have now arrived, and that there is no possibility of further delay, and that it depends on a single day and single action whether progress is to be lost or secured. (Handbook, 51.1.2)

The Stoics constantly urged us to build robust habits by putting our values into practice every single day. Their advice is timeless because they didn’t tell us to think only positive thoughts, which is impossible. Instead, we are to focus on training for our personal Olympics as we respond to our burnt toast. 

Putting a practical philosophy into practice is not an easy path through life. Seneca, in his Letters on Ethics, emphasizes that virtue is a good you must commit to immediately. In letter #37, he wrote, “There is no better way of binding yourself to excellence of mind than the promise you have given, the oath of enlistment you have sworn: to be an excellent man.”

Seneca added, “Only as a joke will anyone tell you that this is a soft and easy branch of service.” 

Epictetus stressed the power of building good habits through action: “Every habit and capacity is supported and strengthened by the corresponding actions.” (Discourses, 2.18.1)

It should be obvious, for example, “If you want to be a good reader, read; if a good writer, write.”

On the other hand, “if you lie in bed for ten days, and then get up and try to walk a fair distance, you’ll see how weak your legs are.”

Here is the lesson: We become what we do.

Epictetus demolished the “I’ll do better tomorrow” excuse. He instructed, “When you lose your temper, you should recognize not only that something bad has happened at present, but also that you’ve reinforced the habit, and you have, so to speak, added fresh fuel to the fire.” (Discourses, 2.18.5)

The lesson: “If it would be good for you to pay attention tomorrow, how much better it would be to do so today, so that you may be able to achieve the same tomorrow also, and not put it off once again until the following day.” Today — not tomorrow — is your Olympic event. (Discourses, 4.12.21)

When you let your emotional horses out of the barn, you won’t easily call them back. Epictetus warns, “Don’t you realize that when you’ve let your mind roam free, it is no longer in your power to call it back, either to decorum, or to self-respect, or to good order?” (Discourses, 4.12.6)

Watch your mind and notice that a twinge of annoyance can escalate into full-blown fury if left unchecked. Learn for yourself how timeless Epictetus’s advice remains. 

The drive to bring jobs back to American soil is a compelling political instinct. But soundbites aside, Washington’s campaign to engineer domestic employment through tariffs, subsidies, and executive pressure reveals a fundamental misunderstanding of how markets and jobs actually work.

Jobs represent ever-evolving responses to consumer trends, resource development, market expansion, technological change, and entrepreneurial imagination. Some of today’s occupations — prompt engineer, EV charging station technician, dispensary budtender, app developer — couldn’t have been imagined a decade or two ago. Others, like food delivery drivers, household organization consultants, or telehealth coordinators, exist because consumers have demanded greater convenience and care. 

The gig economy itself — a phenomenon barely imaginable before the smartphone — reflects exactly this kind of market-driven reinvention of work.

Value Is Discovered, Not Decreed

Carl Menger, in his 1871 Principles of Economics, argued that value is not an intrinsic property of goods or industries but a subjective judgment made by individuals based on their own needs and circumstances. And since needs and circumstances change, so too does the perception of value. Consider something as simple as diapers: a parent of young children assigns great value to a reliable brand like Pampers; that same parent, a decade later with grown children, assigns it none. The product hasn’t changed. The person’s needs have. 

Friedrich Hayek understood why this matters for policy. In his 1945 essay “The Use of Knowledge in Society,” he argued that the information needed to allocate resources effectively is not concentrated in any one place — it is dispersed across millions of individuals, embedded in local conditions, personal preferences, and fleeting circumstances that no central authority can fully observe or anticipate. 

Consider Play-Doh. The product now beloved by children worldwide began as a wallpaper cleaning compound. The putty almost faced extinction when vinyl wallpaper rendered it obsolete, but fortunately, a schoolteacher recognized that the non-toxic compound was ideal for children’s crafts. The product was rebranded and relaunched as a toy in the 1950s, and jobs associated with Play-Doh shifted from industrial cleaning supply manufacturing to creative play and childhood education. In 2024, the company rolled out Play-Doh Imagination Curriculum, complete with programming and educational materials that “have been developed by leaders in play and imagination, whose experience spans more than 40 years of expertise in qualitative research, inclusive design and creative arts.” Entrepreneurial adaptation drove the transformation — and no federal agency could have predicted it, let alone planned for it.

Consider PetSmart. When it was founded in 1986, PetSmart was a straightforward pet supply retailer. Today, the bulk of its economic activity lies less in product sales and more in services: grooming, training, boarding, veterinary care, and pet adoption events. This shift emerged because pet owners increasingly embraced their animals as family members and demanded services to match. PetSmart’s mission — to “help everyone experience more joy with pets” — reflects a broader cultural transformation. The most common reason for pet ownership today is pleasure and companionship, a far cry from the functional role animals once played. The jobs followed the values.

Consider Peacock. NBC’s streaming platform takes its name from the network’s famous multicolored feathers logo, developed in 1956 as a promotional tool to encourage Americans to upgrade to color television. Fast forward seventy years, and the consumption of home entertainment has generated an entire ecosystem of streaming-age employment: content creators, data engineers, and digital rights managers. These are not jobs that were moved from somewhere else — they were invented. As the broadcast industry shifted to streaming, the labor market transformed along with it.

Creative Destruction Is Not a Problem to Be Solved

The continuous process by which employment positions and old industries are dismantled to make room for new ones was coined by Joseph Schumpeter as “creative destruction.” In Schumpeter’s framework, the entrepreneur is the engine of economic transformation — an active disruptor who recombines resources in novel ways to meet emerging demand. The churn of job categories is not a market malfunction; it is the market working exactly as it should.

The 1991 film Other People’s Money dramatizes this tension with unusual clarity. Danny DeVito plays “Larry the Liquidator,” a Wall Street corporate raider targeting a small, family-run New England wire and cable company. His argument is unsentimental but economically coherent: the company is inefficient, copper wire is being replaced by fiber optics, and the capital locked inside it would generate far more value elsewhere. In the film’s pivotal shareholder meeting speech, Larry puts it plainly:

You know, at one time there must’ve been dozens of companies making buggy whips. And I’ll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company? You invested in a business and this business is dead.

Just as the car replaced the need for buggy whips, so too will new innovations generate obsolescence for some of today’s products and positions. This is why the current push to repatriate manufacturing jobs through tariffs and executive pressure commits what some might recognize as a category error: treating the economic snapshot of a previous era as a permanent template for what American employment should look like. The jobs being chased are not lost — they have been superseded.

Protectionist measures also misread the supply chain reality of modern manufacturing. The components of consumer goods routinely cross borders dozens of times before final assembly. Tariffs inevitably raise costs for both producers and, ultimately, for consumers. Diapers illustrate the point concretely. The modern disposable diaper sold in American stores sources its superabsorbent polymers primarily from manufacturers in Japan and Germany, relies on globally distributed production for its adhesives, elastic components, and fluff pulp, and moves through an international logistics network before landing on a store shelf. It is, in every meaningful sense, a product of globalized supply chains — and it is better and cheaper for it. And given the rising costs of raising kids, parents need all the help they can get.

You Can’t Mandate a Better Economy Into Existence — But Entrepreneurs Can Build One

The cost of protectionism, however, goes beyond higher consumer prices. When governments insulate old industries, they do not merely slow destruction — they slow creation. The capital and labor locked up in a subsidized, tariff-protected sector are unavailable to the entrepreneurs building the next economy. Protection does not preserve prosperity. It mortgages it.

Now, none of this is to say that economic transitions are painless. They are not. Workers in disrupted industries face real hardship, and a society that cares about its members will want to ease those transitions. But the core lesson from Menger, Hayek, and Schumpeter must not be lost. Value is determined by individuals acting on their own preferences and the entrepreneur’s restless recombination of resources is the true engine of prosperity. The best employment policy, therefore, is one that removes obstacles to innovation rather than erects obstacles to change.

The jobs of tomorrow have yet to be realized. But one thing is certain: they will create value that no industrial policy could have molded or modeled. Giving entrepreneurs room to operate, rather than burdening them with the cost of propping up yesterday’s economy, is not indifference to American workers. It is the greatest service we can render.

Recently, as I sat in my small undergraduate economics class, another student raised his hand to share a thought about the current state of markets. Though quite well-spoken, he quickly began expressing disdain for the system of capital markets that has created the prosperity and flourishing of modern life, encapsulated in the oft-cited sentiment that “the elites are getting richer while the rest of us are held down!” 

The student cited the success of entrepreneurs such as Jeff Bezos and Elon Musk, along with the growth of wealth inequality in the United States and between the developed and developing worlds. This sentiment has only grown in light of political division and rampant populism, and has now spread to both left and right, albeit with different “flavors.” While my classmate may have been speaking to sentiments that are deeply felt for Americans across the political spectrum, the quantitative and qualitative reality could not be further from the truth. In fact, the very market forces now blamed for inequality have quietly delivered more concrete improvements to ordinary life, especially for the poor, than any system in human history. Arguments for aggressive government redress of inequality often risk undermining precisely the innovations that benefit consumers most.

Empirically, statistics about inequality are often static, based only on income without taking account of consumption. This means they ignore price declines, quality improvements, and common access to goods formerly thought of as luxury. Furthermore, access has largely replaced ownership as the priority for many consumers due to the relative convenience of streaming services such as Netflix rather than purchasing and owning DVDs, for example. What matters for human flourishing is not whether billionaires exist, but whether regular people can do more, flourishing in the “ordinary business of life” as Alfred Marshall famously said. This can be seen in our access to services never dreamed of even thirty years ago. Uber and Lyft have reduced transportation costs substantially, and generated substantial consumer surplus just in the past fifteen years. The convenience of such a service for both drivers and riders has expanded access in previously underserved areas. 

As an MIT study points out, “In many cities, ride-sharing platforms extend affordable transportation into outer neighborhoods where taxis rarely traveled, expanding mobility for people without cars…a form of latent quality-of-life enhancement not captured in income statistics.” Ride sharing is just one of many examples of increased consumer surplus, only made possible by a profit incentive on the part of entrepreneurs. The same could be said for food delivery, smartphones, and Amazon. Time is a real economic good, as Bastiat’s broken window fallacy points out, and convenience that increased consumer surplus disproportionately benefits lower-income households, even when these gains are not captured by income statistics.

Twentieth-century Austrian economists F.A. Hayek and Joseph Schumpeter offer helpful resources to explain the benefits of markets despite popular narratives. For Hayek, markets themselves — interaction of buyers and sellers — coordinate knowledge that no government has the ability to possess, meaning attempts to centrally correct perceived ‘inequality’ are not merely undesirable, but epistemically incoherent. As Hayek points out, “The economic problem of society is thus not merely a problem of how to allocate ‘given’ resources… it is a problem of the utilization of knowledge not given to anyone in its totality.” The consumer benefits of rideshare and delivery services are a direct result of competitive price discovery made possible by capital markets, local knowledge, and trial and error. In an almost prophetic sense, Schumpeter argues that “the fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers’ goods, the new methods of production or transportation…” 

Within Schumpeter’s model of “creative destruction,” such innovations may be painfully disruptive at first, but they prevent stagnation — which would be far worse — and ultimately expand human possibility.

The benefits of capitalist innovation are diffuse, incremental, and uncelebrated, while the costs are concentrated, visible, and politically mobilizable. Schumpeter anticipated this, pointing out that “The capitalist process, not by coincidence but by virtue of its mechanism, progressively raises the standard of life of the masses. But it also, in doing so, creates conditions that make the masses unwilling to tolerate the social discipline required by the capitalist system.” 

The frustration and impatience with markets of the populace is caused and enabled by the very success of the market system. Both the left and right mistake transition for decline, pointing out the “inequality” of entrepreneurs who benefit from their innovation while omitting the access and surplus offered to them. 

Returning to my undergraduate classroom, the frustration of my peer is real, but his diagnosis is sorely mistaken. The ‘cure’ offered by populist would-be saviors and technocrats is worse than the disease, stifling both producers and consumers through regulatory overreach. The greatest achievements of markets rarely look like triumphs; they look like ordinary conveniences. So ordinary, in fact, that we forget how extraordinary they are.

If April Fools has a patron saint in politics, it may be the candidate who promises lower costs and less war, then delivers the reverse on both. Just months into his second administration, the gap between Donald Trump on the campaign trail and Donald Trump in office has already become difficult to ignore. These were not peripheral campaign themes; they were central to the case for Trump’s return. As with so many politicians before him, the promises that helped fuel victory now sit uneasily beside the realities of governing. 

The United States today carries more than $39 trillion in federal debt relative to an economy producing about $30 trillion in annual nominal output, while inflation remains above the Federal Reserve’s long-run target at 2.4 percent, with core inflation at 2.5 percent. The post-COVID economy has hardly returned to a feeling of normalcy; instead, Americans remain uneasy about prices, growth, and the possibility of a downturn. 

On the campaign trail, Trump promised affordability and peace. He argued that domestic mismanagement and global conflict were making life harder at home.  

Affordability 

“But if I win,” Donald Trump said on October 30, 2024, “We will rapidly defeat inflation and I will make America affordable again.” Yet once back in office, his administration returned to one of Washington’s oldest economic delusions: mercantilism. Tariffs were imposed haphazardly and sold as national strength, even though the costs were always likely to land at home. What was marketed as relief for ordinary Americans instead threatened to make some of the most basic pillars of affordability — housing, groceries, and other everyday goods — even more expensive.

Housing offers one of the clearest examples. The National Association of Home Builders estimates that recent tariff actions add about $10,900 to the cost of a typical new home. That burden lands in a housing market where younger Americans already lag their predecessors in homeownership. Nor was the pass-through effect hard to foresee. Americans had just lived through the inflationary aftermath of COVID-era supply shocks, and IMF research published in February 2026 found that a 100-hour shipping delay can raise consumer inflation by roughly 0.5 percentage points at its five-month peak. In that sense, the idea that tariffs would also raise costs at home was not some arcane theory. It was the plain lesson of recent experience.

Food was hardly spared either: higher steel tariffs raise the cost of tin-coated steel used in food cans, and those costs do not simply disappear inside the supply chain. The Wall Street Journal reported that steel-can prices could rise by 10-15 percent, meaning a $2 can of vegetables could cost 18 to 30 cents more. 

A president who campaigned on affordability thus embraced a policy mix that put pressure on two of the most politically sensitive parts of any household budget: shelter and groceries.

The contradiction became even sharper when the tariff strategy began to unravel legally. Reuters reported that the Supreme Court ruled on February 20, 2026, that President Trump had overstepped his authority by using the International Emergency Economic Powers Act to impose sweeping tariffs, leaving roughly $175 billion potentially subject to refunds. Since then, importers have gone to court seeking recovery. More than 1,000 firms have joined, including FedEx, Hasbro, L’Oréal, Dyson, Bausch + Lomb, Costco, Goodyear, and J. Crew.

That leaves behind an especially perverse result. Consumers absorbed part of the tariff burden through higher prices, yet the legal right to seek reimbursement belongs to the importing firms that remitted the duties at the border. In other words, Americans were asked to pay more under a policy sold as patriotic affordability, while businesses are now forced into court to claw back money collected under tariffs the Supreme Court found illegal. The contradiction is difficult to miss: Trump promised to make America affordable again, but his administration delivered higher costs, legal disorder, and a growing scramble for refunds across corporate America. 

Peace

Trump did not present peace merely as a diplomatic aspiration. He framed it as both a humanitarian and economic good. On the campaign trail, he repeatedly claimed he could end the Russia-Ukraine conflict in “24 hours,” said he wanted to “stop the killing,” and also promised to cut energy and electricity prices in half within his first year in office. That pairing mattered because energy markets are acutely sensitive to geopolitical disorder.

When war threatens oil supplies, shipping routes, or regional stability, energy becomes more expensive, and those costs ripple outward into transport, production, and household bills. Peace, then, is not just a diplomatic virtue but an economic good. As the old phrase often attributed to Frédéric Bastiat has it, when goods do not cross borders, soldiers will. An integrated world with free trade means less pressure on oil and gas markets, fewer disruptions to trade, and fewer external shocks passed through to households already strained by inflation.

The promise of quick peace and cheap energy has collided with a much more familiar reality. The administration’s own military posture has remained expensive, not restrained. Congress approved a record $901 billion in military spending for 2026. Trump then said the 2027 budget should rise to $1.5 trillion, and the Pentagon is now seeking more than $200 billion in additional funding for the Iran conflict.

Moody’s has warned that such an expansion would widen deficits, increase the government’s interest burden, and reduce fiscal flexibility, while budget analysts estimate the 2027 proposal alone could add roughly $5.8 trillion to the national debt through 2035 once interest is included. 

Even if America’s debt problem cannot be reduced to defense spending alone, that does not make the cost of permanent preparedness any less real. It simply means the country is adding yet another major claim on already strained public finances.

That is the real April Fools joke. Trump returned to office promising to make life cheaper at home and the world calmer abroad, yet both pledges have given way to the opposite. At home, the burden came through tariffs; abroad, it came through the price of instability. What was sold as national renewal has instead come to resemble a costlier version of the status quo, leaving Americans with higher burdens, weaker confidence, and a growing sense that the slogans were always easier to deliver than the results.

Educators continue to debate a question that sounds philosophical but is actually quite practical: when a student earns a diploma, what exactly have they earned? Is it proof of real, transferable, labor-market-ready skills? Or is it a signal, a flag planted in the employer’s field of view that says this person showed up, tried hard, and turned things in on time?

Most honest observers land somewhere in the middle. Yes, school teaches skills. And yes, the diploma itself also signals something beyond the skills taught. The degree is both product and receipt.

New research throws a wrench into both sides of that supposed balance. Grade inflation, the practice of awarding grades systematically higher than student performance warrants, manages the impressive feat of being bad for learning and bad for credentialing simultaneously. A teacher who bumps up students’ grades by roughly a quarter of a letter grade beyond what they earned costs their average classroom of students a cumulative $213,872 in lifetime earnings per year. 

With an average class size of roughly 21 students, that’s about $10,000 per student, evaporating into the ether of unearned A-minuses.

But wait, surely higher grades mean better outcomes? Here is where the research gets genuinely counterintuitive. Students taught by grade-inflating teachers are actually less likely to graduate high school within five years. They are less likely to enroll in associate’s or bachelor’s programs in the years that follow high school and are more likely to run up absences and suspensions. When grades stop meaning anything, the incentive to earn them, and even show up, disappears. Students may coast through inflated coursework only to arrive unprepared at high-stakes exams that no single teacher controls. The floor gives way precisely when it matters most.

Critically, this is not just a story about struggling students. The reduction in learning appears across the achievement distribution. High performers are not immune to dulled incentives, and lower-performing students are particularly likely to reduce postsecondary enrollment. When the signal gets noisy, everyone pays.

So why does grade inflation persist? Economics offers a cleaner diagnosis than moral outrage. Consider who actually bears the cost of grade inflation: universities trying to screen applicants and employers trying to hire them. Neither of these groups has any hand in how classroom grades are assigned. The parties who suffer the consequences have zero influence over the output.

Now consider who benefits, at least on the margin. Teachers who inflate grades face fewer complaints, less pushback from students and parents, and reduced pressure from administrators eager to boost school rankings. Students, individually, prefer higher grades for less work — even if, in the long term, they’re being robbed. Administrators face ranking systems that incorporate GPA, creating perverse incentives to inflate the numbers that feed those rankings. Everyone in the school has a small reason to let the grades drift upward, and no one inside the building bears much cost for that grade inflation.

Economists have a name for this predicament: the principal-agent problem. In such scenarios, those tasked with making decisions (teachers and administrators) operate with different incentives and better information than those who ultimately rely on those decisions (universities and employers). This incentive mismatch results in the agents, on the margin, prioritizing their own immediate goals — like reducing conflict, easing pressure, or boosting reported outcomes — over the later participants’ need for reliable signals of ability. This dynamic produces the predictable distortions we see in higher grades, making grade inflation less a moral failure than a structural one baked into misaligned incentives.

On top of the incentive dynamics, the system is stuck in a collective action trap. Imagine a single school decides to get serious about honest grading. Their students’ transcripts suddenly look worse than every competing school’s, not because those students learned less, but because they were graded honestly. The reform-minded school’s graduates would be penalized in admissions and hiring. Real reform requires many schools acting collectively, but no school wants to move first. So everyone keeps inflating.

The deeper lesson here isn’t that teachers are villains or students are lazy. It’s that incentive structures, left unexamined, produce outcomes that no individual actor would consciously choose. Solutions, then, must operate at the level where these incentive problems can actually be addressed, which likely means districts and states, not individual classrooms.

The most promising near-term fix is transparency: require transcripts to list the class average grade alongside each student’s individual grade. A B-plus in a class averaging a B is more meaningful than an A-minus in a class averaging an A-minus. Putting the grade in context can help restore its signal. This is an inexpensive and feasible fix that could be implemented tomorrow at the district level, to neutralize the first-mover problem.

An increased emphasis on standardized assessments, imperfect as they are, can also play a role. When used judiciously, they provide an external benchmark that is harder (though not impossible) to manipulate. Expanding their use as a complement to GPA could help colleges and employers to better interpret academic performance.

For schools willing to take bolder action, forced grade distributions (requiring that grades cluster around a target average) remove the social pressure on individual teachers entirely. Many graduate programs already use this mechanism, and it particularly alleviates pressure for teachers to have high grades relative to their peers.

Colleges and universities could move decisively and require their admissions offices to publish their own historical GPA-to-outcome conversion rates by high school, effectively flagging institutions that inflate grades within the admissions market. Employers that track hiring outcomes could apply similar adjustments. Once these implicit discounts are made public, the incentive to inflate grades would begin to disappear.

None of these reforms will be easy. They require coordination across schools, districts, and possibly states. But the alternative is to continue down the current path, where grades become ever less meaningful and education ever less effective.

An inflated currency loses its value, and so do inflated grades. The only question is whether we fix the signal before the market fully stops believing it.

There is an old economics adage that says if you want people to buy more of your good or service, you should raise the price. Right?

You would think something so obviously false would never be tried in the real world. Yet Chicago has decided to put this “law” into practice. Yes — the city has chosen to make visiting more expensive in order to attract more visitors. While contradictory even on the surface, it reflects a deeper assumption common in modern economic policy: policymakers believe they can engineer demand through spending, even when the funding for such spending suppresses demand in the first place.

Chicago recently approved an increase in its hotel tax, raising the rate from 17.5 percent to 19 percent in downtown and nearby areas. The explicit goal is to boost tourism by using the revenue to fund city tourism marketing. The city also created a Tourism Improvement District to fund its tourism organization. At 19 percent, the hotel tax is now among the highest in the United States.

The logic seems straightforward: spend more on promotion, attract more visitors, generate more economic activity. And since tourists do not vote in local elections, perhaps this is even politically painless.

But the policy rests on a major assumption — that demand for visiting Chicago does not respond much to price. Without that assumption, the policy works against itself.

All choices are made at the margin, and tourists are no different. Families planning vacations compare destinations. Convention planners weigh bids from multiple cities. Business travelers may extend or shorten stays based on cost. In all cases, price matters.

A hotel tax directly raises the cost of visiting. A few extra dollars per night may seem trivial in isolation, but travelers rarely book for just one person or one night. Consider conventions involving thousands of room nights. Whether for multi-night stays, getaways, or events, small differences can become decisive. Cities already compete aggressively for tourists and conventions through incentives, adjusted pricing, and other cost advantages — and Chicago has now changed that calculus.

The problem runs deeper than simple price sensitivity. It also reflects circular logic.

Tourism relies on visitors choosing a city based on cost and value. A tax raises the cost of visiting — the very thing the city hopes to stimulate with tax-funded promotion. In effect, the city is trying to offset a price increase with more spending.

This might work if demand were inelastic and marketing fully compensated for the higher cost. But neither is likely. Marketing can inform potential visitors, but it cannot eliminate trade-offs. If Chicago is more expensive relative to other cities, marketing cannot erase that disadvantage — it can only try to work around it. This is a common error among policymakers: assuming spending can substitute for underlying value — even when the spending itself comes from higher costs.

But spending is not value. Tourism does not arise from marketing budgets; it comes from perceived value. Visitors choose destinations based on attractions, safety, convenience, and price — among other factors. Marketing can highlight value, but it cannot create it. Demand cannot be produced directly through spending. If costs rise, marketing can at best mask the problem temporarily.

Hotel taxes often fall on outsiders — tourists who cannot vote — so policymakers see them as convenient revenue sources. But these taxes are not free. Higher prices reduce demand, leading to fewer bookings, shorter stays, and lost conventions. Local businesses like restaurants and service providers bear part of the burden, too. The effects ripple through the entire tourism ecosystem.

Chicago might see higher tourism revenue after the tax. The city might fund visible campaigns or secure high-profile events. On paper, the tax might look like a success. But aggregate numbers can be misleading.

Total tourism revenue could rise even as Chicago loses marginal visitors to cheaper alternatives. Large events might still come, often due to subsidies, while smaller, price-sensitive travelers go elsewhere. The composition of visitors changes, even if totals hold. That is not sustainable and runs contrary to the city’s stated goals.

At its core, Chicago’s hotel tax raises a simple question: can you tax something into existence? The answer is no — a lesson governments seem unwilling to learn.

Tourism, like all market activity, relies on voluntary decisions. Visitors compare costs and benefits. Raising the cost of visiting creates a built-in tension that marketing cannot fully resolve. The method matters: you visit a city because it offers better value than alternatives — not because it spent more on promotion. At its root, this is not a marketing problem, but an economic one.