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.

It seems everyone hates corporations these days, but that is nothing new. For more than a century, Americans have swung between denouncing large firms as predatory Leviathans and attempting to conscript them for nonbusiness ends. That process may now be entering a new phase — one with broader implications for whether America remains a free country.

In the Progressive Era, corporations were portrayed as extractive engines of class power, tolerated only if constrained by supposedly impartial regulators and administrative oversight. Since the New Deal, many of those same critics shifted ground, arguing that corporations could be harnessed to advance environmental goals, collect taxes, deliver health insurance, impose maximum working hours, and pursue public priorities that legislatures had avoided, delayed, or even rejected.

Now the New Right has mounted its own indictment, charging corporate America with “woke” cultural coercion, economic disloyalty, and an unhealthy intimacy with left-wing regulators and the administrative state. The result is a curious consensus of hostility, in which corporations are cast either as tyrants or as sycophants, rather than as what they are in a free society: organizations that coordinate capital and labor to produce goods, services, and prosperity within the rule of law.

The Progressive Era attacks on corporations grew out of the massive expansion in economic activity following the Industrial Revolution. Local markets merged into a national economy, and firms scaled up in response. The federal government began regulating at the national level under the Constitution’s Commerce Clause, with measures like the Interstate Commerce Commission and the Sherman Antitrust Act asserting authority over what was seen as harmful corporate conduct.

The perceived harm took many forms: corporate profit was equated with exploitation, and corporate power was viewed as an instrument of entrenched wealth and class division, sometimes even a tool of political corruption. Over time, new corporate sins were added — manipulation of consumers, suppression of workers’ rights, and eventually the perpetuation of inequality and environmental degradation. In effect, the American left developed a theory of corporate vice, holding that corporate incentives are inherently misaligned with the public good.

The application of this theory of vice led to several purported remedies. Foremost was regulation and the entire apparatus of three-letter agencies that today intrude into almost every area of life, in the name of democratic control. Equally, however, if less conspicuous, was a growing suspicion of the idea of shareholder primacy, and the emergence of the idea that markets are morally insufficient. The ultimate result of this theory gaining dominance was the New Deal, with not just restrictions on virtually every area of corporate activity, but its attempt to use corporations directly to serve public ends.

The theory of vice eventually hit its limits. Courts and Congress applied some restraint, and thinkers like Milton Friedman persuaded many that ordinary corporate activity was not inherently suspect. By the late twentieth century, the American left had developed a new framework — a theory of corporate virtue.

This new theory held that corporations were not only morally redeemable but could advance broader social, economic, and political goals. It built on a key premise of the earlier theory of vice: that firms should be managed not solely for owners and investors but for all stakeholders, including society at large. Initially framed around corporate social responsibility, it evolved in the twenty-first century into ESG (environmental, social, and governance) and its subset, DEI (diversity, equity, and inclusion), which spread rapidly across corporate America.

As this theory took hold, corporations became vehicles for a wide range of initiatives. Diversity mandates reshaped hiring, climate priorities filtered through supply chains, and platform moderation influenced acceptable speech. Corporate activity itself became a form of political signaling. These efforts were reinforced by new internal structures — vice presidents of sustainability, proxy advisers, and external scoring systems.

By the time of COVID and the Black Lives Matter movement, much of corporate America and its surrounding institutions had embraced this framework. The older regulatory superstructure reinforced it. Firms that resisted could face political pressure, lawsuits, or penalties. Corporations became political actors not because markets demanded it, but because political incentives pushed them in that direction.

The political right has since mounted its own response, developing a rival theory of corporate vice. Much of it mirrors the left’s earlier critique. Corporations are now cast as coercive actors imposing social change that cannot win at the ballot box. Where regulation was once justified as democratic control, opposition to ESG reflects the same impulse in reverse — using state power to counter corporate influence.

This new critique also revives older themes. Claims that profit-seeking drove outsourcing echo long-standing labor arguments. Concerns about immigration — both low-skilled and high-skilled — reprise earlier critiques of corporate labor practices. These strands converge in the charge that corporations have “hollowed out” American communities and abandoned local ties.

The regulatory machinery built in the Progressive Era is now being redeployed in the opposite direction — against ESG and DEI. What regulators once encouraged, they now discourage through familiar tools: pressure, litigation, and penalties. The result is political whiplash. As administrations alternate, compliance burdens shift with the electoral cycle, and firms adjust accordingly.

This dynamic is predictable. Corporations respond to incentives, including political ones. When alignment with political power offers advantages, firms will adapt. As public choice economics suggests, political actors have incentives to expand their influence, not limit it.

There are signs, however, that the New Right is also developing its own theory of corporate virtue. In principle, such a theory could be constructive — emphasizing political neutrality, wealth creation, and a focus on core business functions within the rule of law. That approach would align with a traditional conservative view of enterprise.

In practice, the emerging version points elsewhere: toward protectionism, industrial policy, closer ties between firms and the state, and reliance on political patronage. This is a different form of corporate entanglement — less ideological, perhaps, but no less political.

The consequences are similar. When firms prioritize political alignment over serving customers and investors, resources are misallocated and incentives distorted. It is a formula not for growth, but for stagnation.

A better path is a classical liberal theory of corporate virtue: firms exist to coordinate labor and capital for productive ends; their social contribution is wealth creation within the rule of law; profit signals value creation rather than moral failure; and business and politics should remain separate. Regulators should set stable, predictable rules — not direct outcomes — and market discipline should guide behavior.

The choice should be clear. A return to mission-focused enterprise depends on it. Free enterprise, not political enterprise, built America — and it remains the only path to sustaining it.

At one time, the rich could generally count on the Republican Party not begrudging them financial success, even of the outlying variety. That’s no longer the case. Arguments that such elites may be bad for America, and maybe just bad, period, now come from both sides of the political spectrum. Some even propose class genocide.

“Billionaires should not exist,” said Vermont Senator Bernie Sanders when introducing a plan for a new wealth tax.

In Why Democracy Needs the Rich, John O. McGinnis, a law professor at Northwestern University, offers a different opinion.

He didn’t title the book Why Our Economy Needs the Rich. McGinnis does include the standard case for the wealthy, that through hard work, risk taking and foresight, they make our shared economy more productive. Without Elon Musk, for example, Tesla wouldn’t be what it is. If its customers, employees, and the IRS all benefit from that, why shouldn’t Musk be rewarded?

In McGinnis’ book, that line of reasoning is an afterthought. His main concern is whether the wealthy, especially the very wealthy, make our democracy better than it would be without them.

It’s an important question because if being rich is wrong, then the US is wrong. As McGinnis notes, we are both the richest nation in the world and the richest per capita of any with a population over 20 million.

And while each person in our democracy has one vote, to expect that everyone will have equal influence on political outcomes is naïve. Some work harder at it. They form political action committees, knock on doors for a candidate, or run for office. Others have exceptional speaking skills or large social media platforms for promoting policies.

As McGinnis puts it, “elite influence in democracy is not only inevitable but often beneficial, channeling expertise and coherence into public debate.” Consequently, the political realm has its own “one percent” whose influence exceeds their numbers.

He identifies these elites as those holding influential positions in special interest groups, the government bureaucracy, and the clerisy — the latter including prominent celebrities, academics, journalists, and other members of what is sometimes called the cultural elite. The problem, McGinnis argues, is that these groups tend to skew left politically.

He offers data to support this claim. Among federal bureaucrats, 95 percent of donations in the 2016 presidential election went to Hillary Clinton. In journalism, a 2004 Pew survey found that liberals outnumbered conservatives five to one. In academia, McGinnis estimates the ratio of liberal to conservative professors at top universities today is likely twenty to one. Most strikingly, in the film industry, a study of political contributions from 996 leading actors, directors, producers, and writers found they supported Democrats over Republicans by a 115-to-1 ratio.

Such dominance is maintained, McGinnis believes, through gatekeeping that favors the training and hiring of, for instance, new academics and journalists who think like their superiors. And this is where the wealthy, who also possess outsized political influence, can improve things by being a democratic counterweight to entrenched left-leaning power.

There are many routes to acquiring wealth. “Unlike the intelligentsia,” McGinnis writes, “the wealthy cannot easily exclude individuals with unorthodox views from joining their ranks.” For that reason, the rich arrive at their positions from a variety of backgrounds, beliefs, and political leanings. For every George Soros, there is a Peter Thiel. For every Bill Gates, there is a Miriam Adelson. In other words, the wealthy look like America, ideologically speaking.

And contrary to popular belief, the rich are also a dynamic and constantly churning class, especially at the highest levels. McGinnis notes that almost 60 percent of those on the current Forbes 400 list were not on it twelve years earlier. And 90 percent of the grandchildren of the wealthiest one percent drop out of that lofty tier. Recently, the dynamism of the wealthy may even be on the rise. In 1982, 60 percent of the Forbes 400 came from wealthy backgrounds. That is only 32 percent today. McGinnis even questions the received wisdom that the rich are getting richer in relative terms. He notes that in 1937, John D. Rockefeller’s net worth was 1.5 percent of US GDP, almost the same as Elon Musk’s 1.6 percent share in 2025.

In making these points, McGinnis never decries the right of left-leaning elites to have outsized influence on our political process. He only claims that the wealthy serve as an important counterweight to them. “A democracy, like a tree, flourishes with many roots,” he writes. In a nation founded on freedom of thought and a never-ending contest of ideas, a fuller representation of national perspectives promotes better political outcomes.

It’s a nuanced argument, which McGinnis bolsters by noting that the financially successful tend to have a more pragmatic worldview than other elites, as their wealth invests them in the economic success of the nation while also insulating them from worry about disapproval.

The wealthy’s activities also spread benefits across the political spectrum, McGinnis argues. The rich are traditionally leading supporters of the arts and charity. The first hospital in the United States appeared in 1751 thanks to a group of successful merchants that included Benjamin Franklin. More recently, rich alumni helped Harvard University weather the storm of President Trump cutting off their public funding.