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For three years, the Washington foreign policy establishment has insisted that there is only one acceptable outcome in Ukraine: total victory over Russia achieved through relentless military aid, indefinite financial support and escalation readiness regardless of the risks. But strategy and morality are not always the same thing — and real leadership demands confronting reality as it exists, not as we wish it to be.

I write this not as an academic or pundit, but as someone who worked at the center of this conflict. As U.S. ambassador to the European Union during the first Trump administration, President Donald Trump tasked me with bringing Europe into alignment — truly into alignment — behind Ukraine. 

That meant ending the EU’s habitual double-game: proclaiming solidarity with Kyiv while enriching Moscow through energy purchases and dragging its feet on serious sanctions. I saw firsthand how Europe’s hesitation and transactional approach sent Moscow exactly the wrong message. It told President Vladimir Putin the West was divided, unserious and ultimately unwilling to sacrifice comfort for principle. That perception was part of his calculus.

The uncomfortable truth is that the United States is closer to strategic exhaustion than our rhetoric admits. Europe’s defense industries remain underbuilt. American stockpiles are finite. And while Russia has paid a staggering price, it has not collapsed, surrendered or reversed course. Worse, every escalation increases the probability of something unthinkable: a desperate Kremlin resorting to tactical nuclear weapons. That would not be ‘just another step’ on the escalatory ladder; it would fundamentally shatter global stability.

Against that background, the Trump administration’s instinct to seek a quasi-business resolution is not weakness. It is classic realpolitik — recognition that the job of American leadership is to maximize U.S. security, economic leverage and strategic flexibility while minimizing existential risk.

Russia releases drone footage of alleged Ukraine attack on Putin residence

Business leaders know what Washington too often does not: the perfect deal rarely exists. The question is not whether we can achieve a morally pure resolution; it is whether we can lock in outcomes that are measurably better for American interests — and for Ukraine — than a perpetual, bleeding stalemate.

A negotiated settlement, backed by enforceable conditions and leverage, could do precisely that.

First, a settlement can provide Ukraine with a bespoke security guarantee — credible enough to deter renewed aggression but structured to avoid NATO Article 5 entanglement. This isn’t a vague promise; it is a contract with clear performance terms. The U.S. guarantee would stand as long as Russia adheres to its commitments. But if Russia violates the agreement, the snapback provisions would trigger instantly — not months later, not after diplomatic waffling — immediately unlocking full-scale U.S. and NATO support for Ukraine, including offensive weapons, advanced air defense, training and intelligence integration.

Just as important, the consequences of Russian cheating would be explicit, not theoretical.

If Moscow breaks the deal, the United States would reserve the option to openly back Ukraine in retaking every inch of territory — up to and including restoration to its pre-2014 borders. Moscow would know this going in. Deterrence works best when penalties are unmistakable.

President Zelenskyy: President Trump is trying to bring about peace

And crucially, this would all be public. No more pretending, hedging or quiet back-channel shipments. The world — and Russia — would know that renewed aggression automatically and lawfully unleashes overwhelming Western support, with the U.S. leading confidently and unapologetically. That clarity is a deterrent in itself.

Equally important, this structure protects U.S. sovereignty in the agreement. If Ukraine violates its obligations, the American guarantee becomes void at our sole discretion. Not a bureaucratic process. Not a committee vote. The United States decides. That means Ukraine has every incentive to maintain discipline and treat the arrangement not as a blank check, but as a powerful partnership grounded in responsibility.

Second, a negotiated deal can generate tangible U.S. economic advantage. Ukraine holds minerals and rare earths essential to American industry, national security and technological supremacy. China knows this. Russia knows this. Only Washington’s old guard pretends resource control is not strategic policy. A structured agreement ensuring privileged U.S. access strengthens manufacturing, energy resilience, and economic security.

Third, a settlement can wedge open the relationship between Moscow and Beijing. Right now, the war has pushed Russia completely into China’s arms. That alignment is bad for the United States and for global balance. A disciplined settlement begins unwinding that dependency. America doesn’t need friendship with Moscow; it needs leverage over it. Realpolitik is about advantage, not affection.

Fourth, a deal can compartmentalize strategic theaters. If Russia insists on regional influence, the U.S. can demand reciprocal space in our hemisphere — particularly in Venezuela, narcotics interdiction, and energy-linked criminal networks — reducing adversarial reach in the Americas.

Critics will scream ‘Munich.’ They always do. But Adolf Hitler was leading a rising ideological empire bent on global conquest. Russia is a demographically and economically declining power seeking regional positioning. Brutal, yes — but not irrational. Mature powers negotiate with rivals when negotiations produce superior outcomes.

Dan Hoffman discusses challenges for Russia-Ukraine peace efforts

Others claim any deal rewards aggression. That assumes deterrence is binary — victory or failure. In reality, deterrence is layered.

A settlement that leaves Russia bloodied, sanctioned, strategically constrained and facing automatic, overwhelming Western military escalation — potentially including U.S. support for Ukraine restoring its 2013 borders — if it cheats is not a reward. It is a warning carved into treaty stone.

Meanwhile, the humanitarian and financial realities matter. Endless war means endless dead Ukrainians, shattered cities and endless U.S. taxpayer exposure with no defined victory condition. That may thrill think tanks that never fight wars, but it is not serious governance.

Most importantly, a business-style settlement introduces accountability — currently absent from Washington’s ‘as long as it takes’ mantra. Under a structured deal, compliance is measurable. Triggers are automatic. Support is not improvised — it is guaranteed. Enforcement is not theoretical — it is built in. And unlike today, America would no longer need to whisper its involvement. It would act openly, decisively and with treaty authority.

Mike Pompeo urges Trump to hit Putin with a

The alternative? A forever war with rising nuclear risk, continued strategic drift, and deepening alignment between Russia and China. That is not strategy. It is inertia dressed as courage.

Realpolitik does not abandon values. It protects them intelligently. A disciplined, enforceable settlement — with clear snapback provisions benefiting both the U.S. and Ukraine; explicit authority to openly arm Ukraine and potentially support full territorial restoration if Russia cheats; and a guarantee revocable at America’s sole discretion if Ukraine violates terms — is not capitulation.

It is strategic control.

In geopolitics, as in business, the strongest player is not the one who insists on endless confrontation. It is the one who knows when to fight — and when to close the deal.


This post appeared first on FOX NEWS

President Donald Trump’s bold decision to capture, arrest, and bring Venezuelan strongman Nicolás Maduro to trial for drug-related offenses is far bigger than Operation Absolute Resolve itself. It resets the global chessboard. Here are ten reasons why.

First, the Venezuelan operation proves that American military and intelligence capabilities aren’t just better than anybody else’s — they operate in a wholly different dimension. 

Russian President Vladimir Putin has thrown his entire military at Ukraine in hopes of establishing Russian domination and killing President Volodymyr Zelenskyy. The bloody war has dragged on for three years, costing hundreds of thousands of lives and hundreds of billions of dollars, while draining both countries. And still, that war grinds on.

President Trump sent a small group of special forces into Caracas. Within three hours, they had captured President Maduro and his wife, transporting them to New York to face justice in a U.S. court. No Americans were killed.

‘Operation Absolute Resolve’ among the most ‘complicated and exquisite’ military operations, says Rep Derrick Van Orden

Operation Absolute Resolve, like Operation Midnight Hammer, which destroyed Iran’s nuclear capabilities in a matter of hours, was carefully planned, flawlessly executed, and 100% successful. Nobody but America could do that — and leaders around the world know it.

Second, as President Trump says, if you kill Americans, you will be held accountable. Maduro and the drug cartels have killed tens of thousands of Americans with drugs. Not only have we now secured our borders and stopped the flow of fentanyl, but we are bringing drug cartel leaders — including the Maduro family — to face justice.

Third, President Trump has just reversed decades of failed American foreign policy. For years, American leaders of both parties ignored the importance of the Western Hemisphere. They dismissed the growing threats from the countries themselves and from anti-American powers seeking to establish footholds in our hemisphere. American leaders turned a blind eye to drug smuggling and human trafficking. The Biden administration, for its own political purposes, actively encouraged a mass invasion across our border by illegal aliens. 

Operation Absolute Resolve, like Operation Midnight Hammer, which destroyed Iran’s nuclear capabilities in a matter of hours, was carefully planned, flawlessly executed, and 100% successful. Nobody but America could do that — and leaders around the world know it.

While we were focused on the forever wars in the Middle East and the dogma of climate change, three groups were moving into South and Central America — the Chinese, the cartels, and the communists.

Trump’s new national security strategy puts the Western Hemisphere at the center of our foreign policy. Trump allies and reformers now govern Argentina, Chile, Paraguay, and El Salvador — and potentially Venezuela. His long-term vision is a North and South America united by similar economic and governance systems, working in harmony for peace and prosperity.

Fourth, President Trump has reestablished the Monroe Doctrine, which forbids foreign powers from operating in the Western Hemisphere. Two hundred years ago, President Monroe warned European powers against interfering in the Americas. Sixty years ago, President Kennedy used the Monroe Doctrine to keep Soviet missiles out of Cuba. Forty years ago, President Reagan used it to stop the Soviet Union from establishing military bases in the Caribbean. The Monroe Doctrine was a foundational principle of American foreign policy, establishing the Western Hemisphere as an American zone of influence.

Rep. Malliotakis calls Maduro’s capture a ‘day of justice’

The Obama administration abandoned the Monroe Doctrine. Secretary of State John Kerry unilaterally declared it dead. The Biden administration also abandoned the Monroe Doctrine by looking the other way while Russia, China, and Iran established footholds in several countries.

By sending the American armada into the Caribbean, President Trump reinstated the Monroe Doctrine and declared, ‘American dominance in the Western Hemisphere will never be questioned again.’

The new Monroe Doctrine is not an effort to keep our southern neighbors down; it is intended to keep malign powers out.

Trump delivers justice Venezuelans have long awaited, confidant of Machado says

Fifth, President Trump uses not only military might but all aspects of American power — especially trade, finance, and technology — to influence world events. Before he dispatched special forces to capture Maduro, Trump put massive economic pressure on Venezuela. Maduro relied on a ghost fleet of unregistered tankers to illegally ship oil abroad, especially to China.

These transactions were sanctioned but never enforced. Oil sales brought Maduro about $200 million a week, which he used to bribe and blackmail Venezuelan kleptocrats and pay his military. President Trump enforced those sanctions and seized the oil tankers. By cutting off his main source of funding, it was only a matter of time before Maduro ran out of money.

Sixth, critics are quick to accuse Trump of the policies he once criticized — regime change, nation-building, and forever wars. They’re wrong. President Trump has learned from the failures of the past — he doesn’t want to repeat them. President George W. Bush overthrew the Iraqi and Afghan governments, fired government technocrats, and imposed U.S. occupations that were doomed from the beginning. He tried to impose Western-style democracies on countries that were neither suited for it nor wanted it. He got us tangled in decades of wars we couldn’t win, with massive losses in blood and treasure.

Nicolas Maduro was ‘the world’s largest drug dealer’ with a global network: DHS official

President Obama made the opposite mistake. He helped topple dictators during the Arab Spring but then walked away from the ensuing chaos, under the misguided assumption that these countries would immediately embrace democracy on their own.

President Bush tried to do too much. President Obama did too little. Both failed.

If critics had listened carefully to President Trump’s press conferences and statements, they would realize he aims to chart a different course. Trump said the U.S. would ‘run’ Venezuela until governance could be turned over to the Venezuelans. That’s a far cry from decades of occupation and nation-building.

Until Maduro and his predecessor, Hugo Chávez, seized power, Venezuela had a long tradition of democracy, with regular elections, a free press, and an independent judiciary. Trump isn’t trying to run Venezuela forever. He is already negotiating with remaining members of the Maduro government and political opposition groups for a smooth and quick transfer of power to the Venezuelan people, overseen by the U.S.

Seventh, the oil. The future, in both manufacturing and artificial intelligence, belongs to countries with technological superiority and inexpensive, abundant energy resources. Venezuela has the world’s largest known oil reserves but needs investment to modernize production. American companies have a long history of working with Venezuelan oil companies, and we can do so again. It will be a win-win for the U.S. and Venezuela.

But there is a secondary effect of increased Venezuelan oil production: over time, it will drive down global prices. Russia and Iran rely on oil sales to fund their governments. More oil worldwide means lower prices, which means less income for our enemies.

Eighth, corrupt, incompetent, America-hating dictators should take note. With American help, Maduro is now gone. If the United States and Venezuela, working together, succeed in establishing a new government that restores capitalism and democracy, it will succeed.

If so, could Venezuela be the spark that ignites other democratic reform movements? Cuba is kept alive by Maduro’s drug money. What happens when that money runs out? What happens to the pro-Maduro Colombian government once a new Venezuelan government is formed?

Trump ‘very specific’ about ‘temporary’ move in Venezuela: Kiron Skinner

Ninth, the world will now see firsthand what the American legal system looks like. Maduro will be tried in the U.S., in a public courtroom, with the world watching. The Justice Department has worked for years to build a solid case against Maduro for narcoterrorism, drug trafficking, and money laundering. It will show Maduro’s personal connections to drug cartels and human trafficking. It may also shine a light on malign foreign involvement by Iran, Russia, and China.

Finally — and in some ways most importantly — President Trump has overcome the loser syndrome. For years, China has told the world that America is a nation in irreversible economic and moral decline. We fought and lost forever wars in the Middle East. Biden’s Afghanistan withdrawal was shambolic. We have been pushed around by our enemies and disrespected by our allies. Our own leaders have been corrupt, incompetent, and unresponsive.

That has now changed. Our economy is at the starting gate of significant growth. Trillions are being invested in American manufacturing. Our technology and energy sectors are unleashed. We have the most powerful and capable military in the world. Our leaders — especially President Trump — are decisive, confident, and unafraid. More and more people at home and abroad no longer see an America in decline but an America perhaps poised for a new Golden Age.


This post appeared first on FOX NEWS

Recently, Minnesota and Governor Tim Walz have come under scrutiny for Medicaid Fraud. The debacle received renewed focus on December 1 when Treasury Secretary Scott Bessent posted on X that he had directed the US Treasury to investigate allegations of fraud and that taxpayer dollars were allegedly “diverted to the terrorist organization Al-Shabaab.”

Unfortunately, misuse of Medicaid funds is nothing new. In 2023, the Office of Minnesota Attorney General Keith Ellison charged three individuals as part of a scheme to defraud the Minnesota Medical Assistance (Medicaid) program out of nearly $11 million, the largest Medicaid fraud prosecution in that state’s history. These charges spurred a wider crackdown on Medicaid fraud in the Land of 10,000 Lakes.

What distinguishes the current scandal from background levels of fraud is abundant evidence that “someone was stealing money from the cookie jar and they [state officials] kept refilling it.” This quote, highlighted by Economist Michael F. Cannon, comes from one of the defense attorneys in the fraud case. Cannon then reiterated his insight from 2011: “The three most salient characteristics of Medicare and Medicaid fraud are: It’s brazen, it’s ubiquitous, and it’s other people’s money, so nobody cares.”

This comes at the cost of reducing quality of care and access to care for the poorest Americans. The solution comes from getting government out of healthcare, not by enlarging Medicaid’s “cookie jar,” or by refilling the jar more frequently.

Improper Payments? Fraud? Waste? What’s the Difference?

When federal officials discuss various errors in their program, they choose specific language. Understanding the distinctions in how each term is used helps decipher how a federal program is performing.

In its own findings, the Government Accountability Office (GAO) notes that Medicaid is highly susceptible to “improper payments” with an improper payment rate second only to Medicare. The GAO defines improper payment as “payments that should not have been made or that were made in the incorrect amount; typically they are overpayments.” This is distinct from their definition of fraud, which is “obtaining something of value through willful misrepresentation.” The GAO comments, “While all fraudulent payments are considered improper, not all improper payments are due to fraud.” An improper payment could be an honest mistake on the part of either the citizen receiving Medicaid or the public employees administering the program.

The GAO also distinguishes waste as “when individuals or organizations spend government resources carelessly, extravagantly, or without purpose” and abuse “when someone behaves improperly or unreasonably, or misuses a position or authority.”

Specific allegations or investigations regarding waste or abuse are beyond the scope of this author, but incentives suggest that both are present and widespread among state Medicaid programs.

The Bad News: Medicaid’s Design Makes It Susceptible to Error (Including Fraud)

Medicaid is a joint federal-state program that funds health insurance coverage for America’s poor. The federal government transfers funds to states, which then administer Medicaid programs, with some variations from state to state. 

This income threshold to be eligible for Medicaid increased under the expansion of The Affordable Care Act (also known as the ACA or Obamacare). Because ACA enrollees receive more federal dollars than traditional Medicaid, state policymakers are incentivized to prioritize serving more Medicaid expansion enrollees (the slightly less poor) over those in traditional Medicaid (the poorest Americans). 

The Centers for Medicare & Medicaid Services (CMS) estimates Medicaid’s improper payments within three categories:

  1. Managed care: Measured errors in payments states make to private insurance companies that are contracted to deliver Medicaid benefits (known as managed care organizations).
  2. Fee-for-service: Measured errors in payments states make directly to providers on behalf of fee-for-service beneficiaries, including payments made to ineligible providers.
  3. Eligibility: Measured errors in state eligibility determinations for both types of Medicaid beneficiaries.

In fiscal year 2024, improper payments in Medicaid were estimated at $31.1 billion — equal to five percent of total Medicaid spending. This highlights a major weakness in the program, whose size and complexity lead to clerical errors and procedural mistakes. Additionally, when states fail to collect the necessary documentation (such as up-to-date income verification), improper payments (including fraud) are more likely to occur.

Saul Zimet recently wrote in The Daily Economy:

The government bureaucrats who kept sending hundreds of millions of dollars to the fraudsters year after year had every indication of what they were enabling, but their incentives were to enable rather than prevent the theft.

Unfortunately, Medicaid’s design encourages state policymakers to maximize transfers. In some instances, that may mean lax oversight of where the money goes and who is eligible to enroll in Medicaid. COVID-19 stimulus funding required states to relax eligibility requirements and accelerate approvals to receive Medicaid: the environment was ripe for accidental improper payments as well as waste and fraud.

Since Medicaid’s inception, state policymakers have taken advantage of accounting gimmicks (such as provider taxes) to maximize the amount federal taxpayers shell out into state programs. The motivation for state officials is clear: increase your spending and have federal taxpayers in other states pay for it. Transfers to state and local governments often come with strings attached — the terms and conditions of receiving the transfers — allowing federal policymakers more influence over state and local spending. Whether or not the use of a provider tax loophole represents a misuse of Medicaid’s framework is the subject of debate. Research from the Paragon Institute highlights areas that, at the very least, require substantial investigation and reform to prevent states from shifting costs to federal taxpayers.

The Worse News: Medicaid’s Errors May Be Worse Than Official Government Estimates

From 2015-2024, the GAO reported $543 billion in improper Medicaid payments. Unfortunately, that may be lower than the actual total. Research from economists Brian Blase and Rachel Greszler found that improper payments during that period are estimated to actually be $1.1 trillion, more than double the GAO’s estimates.

The discrepancy comes from Blase and Greszler’s inclusion of eligibility checks in the audits of improper Medicaid payments, which both the Obama and Biden administrations excluded. The halting of Medicaid enrollment audits is especially concerning because during this same period, many states expanded Medicaid under the ACA and Medicaid saw a record number of enrollees during the pandemic. Blase and Greszler comment, “Eligibility errors of this nature are particularly concerning as it can indicate that individuals are allowed to remain enrolled in the program during times in which they do not qualify, potentially diverting limited resources that could otherwise be invested in better serving vulnerable populations.”

Blase and Greszler’s research raises serious concerns about Minnesota. Is the fraud being investigated just the tip of the iceberg?

The Solution: Get Government Out of Healthcare

In addition to the improper payment rate of Medicare and Medicaid (and the disincentive to investigate what becomes of ‘other people’s money’): fraud risks are being investigated in the other portion of the ACA: the premium tax credits paid from the US Treasury to an insurance company to cover an enrollee of an ACA exchange health insurance plan. 

Healthcare is also the single largest category of the federal budget, with about 26 cents of every dollar spent going to various healthcare programs, which are also the single largest item on most state budgets. Not by accident is healthcare highly regulated at both the federal and state levels. Federal and state tax codes incentivize working Americans to purchase health insurance through an employer, leaving little room for insurance offered through civil society and voluntary contracting. There’s a lot unknown in health care, but one thing is clear: government encroachment is not helping.

Healthcare, nearly twenty percent of the US economy and growing, is in desperate need of reform. Rolling back regulations on insurance offerings, the healthcare profession, and innovation, as well as reforming the tax code and spending to encourage consumer-driven choice will encourage competition, lower costs, and empower patients. 

Greater consumer choice — and less reliance on distant federal programs — will help reduce the fraud endemic in government healthcare.

Recently, two Federal Reserve governors delivered speeches with interesting differences. Michael Barr warned against weakening bank supervision, citing “growing pressures to scale back examiner coverage, to dilute ratings systems” that could lead to a crisis. Stephen Miran countered that “regulators went too far after the 2008 financial crisis, creating many rules that raised the cost of credit” and pushed activities into unregulated sectors.

Both governors make valid observations about their respective concerns. Yet neither addresses a more fundamental problem: the regulatory cycle itself may be the primary source of financial instability. Rather than preventing crises, financial regulation tends to shift risks to new areas, setting the stage for different—not fewer—failures.

The Regulatory Ratchet

Barr himself describes the pattern: “time and again, periods of relative financial calm have led to efforts to weaken regulation and supervision…often had dire consequences.” But this observation cuts both ways. Periods of crisis lead to regulatory overreach, which creates unintended consequences, which leads to calls for reform—and the cycle repeats.

The Savings and Loan crisis of the 1980s and early 1990s illustrates this dynamic clearly. Following widespread S&L failures, regulators imposed stricter capital requirements through the 1988 Basel Accord. Financial institutions responded by using securitization to reduce their regulatory capital requirements while maintaining risk exposure—creating the shadow banking system that would later amplify the 2008 crisis. The new regulations didn’t eliminate risk; they relocated it to where regulators couldn’t see it.

After 2008, the pattern repeated. Dodd-Frank increased capital requirements and restricted proprietary trading through the Volcker Rule. As Miran notes, “many traditional banking activities have migrated away from the regulated banking sector” because regulatory costs made these services unprofitable for banks. Credit migrated to private credit funds, collateralized loan obligations, and other non-bank lenders. 

Today, private credit markets exceed $1.5 trillion, largely outside regulatory oversight. When the next crisis arrives, it will likely originate in these sectors—not because markets failed, but because regulation distorted incentives and redirected risk to less efficient channels. “Shadow banking” now accounts for $250 trillion globally, nearly half of the world’s financial assets, with minimal regulatory oversight.

Managing Risk, Not Preventing It

This regulatory cycle reveals a deeper problem with how policymakers think about financial stability. Both prevention-focused regulation (Barr’s preference) and “peeling back regulations”
(Miran’s approach) assume regulators can outsmart markets. Neither addresses the knowledge problem at the heart of financial regulation: regulators are always fighting the last war while markets adapt faster than rules can be written.

A more effective approach recognizes that financial risk cannot be eliminated—it can only be managed when it materializes. Financial regulation, if there is going to be any, should focus on crisis resolution rather than crisis prevention. This means three things:

First, establish clear rules about who bears losses when failures occur. Uninsured creditors, not taxpayers, should absorb losses. The FDIC’s resolution authority works precisely because it allows banks to fail in an orderly way, with clear priorities for claims. Extending this principle—making “too big to fail” institutions write “living wills” that detail how they would be unwound—creates market discipline without micromanaging risk-taking.

Second, eliminate implicit guarantees that encourage excessive risk-taking. When creditors believe regulators will intervene to prevent losses, they stop monitoring risk carefully. The 2008 bailouts reinforced expectations of government support, which may explain why risk-taking continued despite stricter regulations. A credible commitment to let failures happen—even of large institutions—would do more to encourage prudent lending than any capital requirement.

Third, simplify the regulatory framework itself. Complex rules create opportunities for regulatory arbitrage and make it harder for market participants to understand their actual risk exposure. Miran identifies one such complexity: leverage ratios that penalize holding safe assets like Treasury securities, creating “contradictory incentives” that distort markets rather than stabilizing them.

Canada’s experience offers a useful contrast. Canadian banks weathered the 2008 crisis better than their American counterparts, despite having less stringent capital requirements and a more concentrated banking sector. The key difference? Canadian regulators focused on ensuring orderly resolution of failures rather than preventing all risk-taking. Banks faced real consequences for poor decisions, which encouraged more conservative behavior than any amount of supervision could mandate. Since 1840, the United States has experienced at least 12 systemic banking crises—Canada has had zero. During 2008, Canadian banks maintained an average leverage ratio of 18:1 compared to over 25:1 for many US banks. The US bailed out hundreds of banks; Canada bailed out zero.

Breaking the Cycle

The debate between Barr and Miran represents the latest turn in the regulatory cycle. Both assume their preferred approach will prevent the next crisis. History suggests otherwise. Until policymakers recognize that financial regulation shifts rather than eliminates risk, we will continue cycling between crisis, overreaction, unintended consequences, and the next crisis.

The alternative is clear bankruptcy procedures and eliminating implicit guarantees. Let markets—not regulators—price risk. Let banks—not bureaucrats—manage portfolios. And most importantly, let failures happen to those who take excessive risks, ensuring that profits and losses remain where they belong: with the institutions that make the decisions.

The lithium market heads into 2026 after one of its most punishing years in recent memory, shaped by deep oversupply, weaker-than-expected electric vehicle (EV) demand and sustained price pressure.

In 2025, lithium carbonate prices in North Asia sank to four year lows, forcing production cuts and project delays as the industry grappled with the consequences of years of aggressive supply growth.

The second half of the year saw a rebound as lithium carbonate began a slow ascent. By December 29, prices had risen 56 percent from their January start position of US$10,798.54 per metric ton to US$16,882.63.

While volatility and brief price rallies highlighted the market’s sensitivity to sentiment and policy signals, analysts increasingly see the sector’s first-half downturn as an inflection point. With high-cost supply under strain and inventories gradually tightening, expectations are building that 2026 could mark the start of a rebalancing phase, supported by long-term demand tied to electrification, energy storage and the broader energy transition.

Battery energy storage systems to drive lithium growth

Energy storage is emerging as the fastest-growing pillar of battery demand, with major implications for the lithium market heading into 2026. Indeed, according to Benchmark Mineral Intelligence’s Iola Hughes, growth in this segment is accelerating well ahead of the broader battery market.

“We’re expecting about 44 percent growth (in 2025),” she said. That’s compared with roughly 25 percent growth across total battery demand. As a result, energy storage is set to account for about a quarter of total global battery demand in 2025, a share that is rising rapidly. The shift is even more pronounced in the US, where Hughes expects storage to make up a significant “35 to 40 percent of battery demand in the next few years.”

That growth is being driven by falling costs and the growing role of lithium iron phosphate (LFP) chemistry, which Hughes described as the dominant technology in stationary storage.

“It very much is the story of LFP right now,” she said, pointing to recent innovation and lower costs, which have helped to make LFP “the best chemistry” for most storage applications.

Globally, deployment remains highly concentrated. China and the US account for roughly 87 percent of cumulative grid-scale storage installations, but new markets are emerging quickly.

Saudi Arabia, Hughes noted, has surged from effectively zero to the world’s third largest market in a matter of months, deploying around 11 gigawatt-hours in the first quarter alone. “That really goes to show just how early this market is in its story,” she said; it also indicates how quickly new sources of battery demand can materialize.

Cost declines sit at the core of the expansion. Fully integrated storage systems in China are now approaching, and in some cases falling below, US$100 per kilowatt-hour. Hughes said this has fundamentally changed the economics of storage, making deployments viable even as policy support tightens. “The prices are so much cheaper, the economics are a lot stronger, even in a normal, unsubsidized environment,” she said.

In the US, growth remains concentrated in a handful of states — led by California and Texas — but Hughes stressed how early stage the market still is. New Mexico, now the fifth largest storage market, is built on just a few projects.

At the same time, the scale of energy storage projects is increasing rapidly. Giga-scale installations, defined as projects larger than 1 gigawatt-hour, are moving from novelty to norm.

Hughes said nine such projects are expected to come online this year, accounting for about 20 percent of battery demand, with more than 20 in the pipeline for next year, representing close to 40 percent.

Policy remains a key variable. While investment tax credits for storage remain in place in the US, Hughes warned that tighter sourcing and eligibility rules are reshaping supply chains, particularly for LFP. The pipeline of announced LFP gigafactories has grown sharply this year — up more than 60 percent — led largely by Korean manufacturers.

“We’re in a much better position when it comes to sourcing of cells for energy storage than we were even three months ago,” she said, though challenges remain around production tax credits and heavy reliance on Chinese cathode supply.

Underlying the storage boom is a broader shift in electricity demand.

After more than a decade of stagnation, US power demand is rising again, driven by data centers, AI, electrification and reshoring of manufacturing. Hughes said estimates now point to electricity demand rising 20 to 30 percent by 2030, placing energy storage at the center of energy security planning. “Storage has become a central topic in the energy security conversation,” she said, adding that its role will only grow.

Looking ahead, Hughes said LFP is likely to dominate shorter-duration storage, while sodium-ion and other battery technologies compete in longer-duration segments.

For the lithium market, the message is clear: as storage scales up in size, geography and strategic importance, it is becoming one of the most powerful demand drivers shaping the sector’s outlook for 2026 and beyond.

Lower costs driving LFP adoption

Howard Klein, RK Equity co-founder and partner, argued that falling costs remain a central driver of LFP battery adoption, reflecting a familiar economic dynamic: as prices decline, demand accelerates.

While lithium is a key input, he suggested that ongoing manufacturing efficiencies and economies of scale are likely to continue pushing LFP battery costs lower over time, potentially offsetting upward pressure from higher lithium prices.

Klein emphasized that even if LFP costs rise modestly, battery storage will remain highly competitive as a source of grid power. Compared with conventional generation options such as gas or coal, storage already offers a compelling cost and performance proposition, he said, and does not rely solely on subsidies to remain economically viable.

Geopolitical instability on the rise

Critical minerals are increasingly at the center of US foreign policy, and that shift is set to reshape the lithium value chain through 2026, according to Klein. He noted that geopolitics now underpins many of Washington’s strategic priorities, from Eastern Europe to Africa and the Arctic.

“The entire foreign policy agenda is largely being driven by critical minerals,” Klein said, citing regions including Ukraine, Russia, the Democratic Republic of Congo, Greenland and Canada.

China’s willingness to weaponize its dominance in key supply chains has sharpened that focus.

On that note, Klein pointed to Beijing’s renewed rare earths export restrictions in October, noting that these measures were applied globally, not just against the US.

“They showed that they wield a significant negotiating stick, and they’re willing to use it,” he said.

In Klein’s view, that move has triggered a forceful response from western governments. “I think they’ve overplayed their hand to some degree, because now you’ve had this very big reaction from the US.”

That reaction is translating into a renewed push to localize and reshore critical mineral supply chains — an effort that has gained rare bipartisan backing in Washington.

“Unlike so many other things in America, which are hyper-partisan, both sides agree we need to resolve this,” Klein said, adding that the policy momentum will continue to shape the lithium industry.

While rare earths remain the immediate pressure point, Klein said the policy lens is widening. The US recently added 10 minerals to its critical minerals list, which now stands at a total of 60. Lithium, he said, sits high on that agenda, not out of enthusiasm for the metal itself, but because of its role in batteries.

“It’s an understanding by the government that batteries and battery technology are very, very important, and the entire battery supply chain needs to be supported,” Klein said. That support extends beyond lithium to graphite, manganese, nickel, cobalt and battery components such as anodes and cathodes.

The approach is increasingly coordinated across western economies. Klein described it as “a G7 effort,” with the EU and Canada aligned alongside the US through a mix of bilateral and multilateral initiatives.

That coordination is already translating into capital flows. He pointed to US-backed progress at Thacker Pass, EU funding for Vulcan Energy Resources (ASX:VUL,OTC Pink:VULNF) and a 360 million euro grant for European Metals Holdings (LSE:EMH,ASX:EMH,OTCQB:EMHLF) as early examples. Canada, he added, is also ramping up support.

“Canada announced C$6 billion over 26 investments,” Klein said, adding that more announcements are likely by the time the Prospectors & Developers Association of Canada convention rolls around in March.

Klein sees geopolitics, industrial policy and supply chain security converging into powerful lithium tailwinds. “This is a super hot topic,” he said, and one that is likely to drive increased lithium-related activity well into 2026.

Should the US build a strategic lithium reserve?

To dilute China’s grip on the sector, Klein is advocating for a strategic lithium reserve in the US as a more effective and market-neutral alternative to company-specific subsidies. He argues that the industry’s core challenge is not demand, but extreme price volatility caused by global oversupply and what he describes as non-market behavior, which has driven prices below sustainable levels and distorted investment signals across the sector.

“The problem in lithium is volatile prices — prices below the marginal cost, catastrophically low prices that put companies out of business,” he said, pointing to persistent oversupply as the primary distortion.

In Klein’s view, a reserve would act as a counterweight by creating steady, large-scale demand that stabilizes prices within a sustainable range. “The main focus is to stabilize price … not at a super high level, but at a level where companies can make an economic return,” he said. That stability, he added, is essential to incentivize investment in mines, processing and conversion facilities across the US, Canada and allied jurisdictions.

Unlike targeted government support, Klein said a reserve would allow the market to determine which projects succeed.

“I want the market to decide which projects and companies are the best, not necessarily the government,” he said, noting the diversity of competing lithium resources, from US clay and brine projects to Canadian hard-rock deposits.

A more predictable price environment with fewer large swings would lower the cost of capital and give private investors greater confidence to finance viable projects.

Klein stressed that a lithium reserve should not be confused with a stockpile.

“People use ‘stockpile’ and ‘reserve’ like they’re the same thing, and they’re not,” he said. While a stockpile focuses on availability for emergencies, a reserve is designed as a market-stabilizing mechanism that can buy and sell material to smooth volatility. Availability, he said, is a secondary benefit.

He sees the concept as most relevant for mid-sized, fast-growing markets like lithium, graphite and other battery materials that lack deep futures markets and long-term hedging tools.

“Those are the markets that could be amenable to a reserve,” he said, contrasting them with large, liquid commodities like copper or very small, niche minerals tied mainly to military use.

Looking longer term, Klein said a lithium reserve aligns closely with the growth of EVs, energy storage, data centers and grid electrification, as well as geopolitical efforts to diversify supply chains away from China.

“This is no longer just a renewables or EV thing — this is national security, clean energy and building an electro-state,” he said, arguing that reducing volatility would make it easier for automakers, utilities and manufacturers to commit capital without fear of being caught on the wrong side of wild price swings.

North American cooperation key for lithium

Gerardo Del Real, publisher at Digest Publishing, also highlighted the impact of geopolitics on the lithium value chain, emphasizing the need for North American coordination to reduce reliance on dominant producers like China.

“I think this is the path towards that. It has to happen,” he said, noting that collaboration between the US, Canada and potentially Mexico could strengthen regional supply security and reduce vulnerability to global disruptions.

Del Real framed the issue in broader energy terms, pointing to the strategic value of domestic resources: “If we are serious as a country and as a region in being somewhat independent from China and from the Russians … we have a luxury of resources in the US, in Canada … there could be a very powerful path forward.”

On market dynamics, he suggested investors are focused on timing and catalysts, with policy shifts, demand surprises or supply disruptions likely to drive sentiment in 2026.

He also warned that the market may be underestimating the importance of coordinated regional supply initiatives as a factor shaping pricing and project economics.

Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.

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To the surprise of no one, Democrats reflexively denounced Trump’s daring middle-of-the-night grab of Venezuelan dictator Nicolas Maduro and his wife.  

If Joe Biden, who offered a $25 million reward for Maduro’s arrest, had done what Trump did, these same politicians would be organizing a ticker-tape parade.  

Their condemnation of Trump has nothing to do with the law, although they pretend that it does. Instead, it is transparently driven by their contempt for a president that they despise.

Bereft of reason, they oppose whatever Trump does even if it conforms to their previously expressed beliefs.

Almost in unison, Democrats decried Trump’s action as ‘illegal,’ ‘unjustified’ and ‘unconstitutional.’ Many insisted that he was required to seek permission from Congress.  

None of that happens to be true. 

Inherent Constitutional Authority

The president is empowered by the U.S. Constitution as commander in chief of the armed forces to direct military action to protect Americans, fortify U.S. interests and defend our national security.  

The scourge of drugs emanating from Venezuela has long been poisoning our citizens. Our government estimates that roughly 200 to 250 metric tons of cocaine is shipped out of the Latin American country annually. America, by virtue of its prosperity, is a favored destination.  

On this basis alone, the incursion into Caracas was legal, justified, and legitimate.

For years, Maduro has led the notorious Cartel de los Soles, a violent drug cartel that is designated by the U.S. as a foreign terrorist organization responsible for murders, torture and crimes against humanity so egregious that even the United Nations recognized it.

Article II, Section 2 of our Constitution vests inherent powers in the president to unilaterally order armed forces into military actions. His command authority is supreme, and he may conduct campaigns and deploy operations by his own judgment.  

Short of a formal declaration of war, a president does not need prior authorization from Congress to act. That principle is embedded in our Constitution and has been upheld by the U.S. Supreme Court since the early founding of our Republic.

In more modern times, the president’s authority over armed action has only expanded. Cases involving Truman, Clinton and Obama solidified presidential power to direct military operations without congressional consent. 

Trump had every legal and constitutional right to defend the United States against the transport of deadly illicit drugs and to arrest the man most responsible, who has been federally indicted for numerous crimes. 

And no, Trump did not violate the War Powers Act as some of his critics have alleged. The resolution that was passed in 1973 stipulates a reporting requirement to Congress within 48 hours of deploying forces into hostilities. It is not a prohibition to act.

Indeed, it implicitly recognizes a president’s inherent power to use military force without specific congressional approval. Every single American president has done so since the end of World War II.  Trump is no exception.  

The ‘Take Care Clause’

The president has another authority at his disposal. The ‘Take Care Clause’ in Article II, Section 3 of the Constitution mandates that the president ‘shall take Care that the Laws be faithfully executed.’

To put it simply, Trump is duty-bound to ensure that all federal statutes are enforced. This includes the apprehension, arrest, and prosecution of wanted fugitives who are criminally charged with U.S. crimes and must be brought to justice.

Effectuating the arrest of Maduro qualifies as enforcing all laws. Just because the accused is the de facto head of state in another country does not afford him protection or immunity from the long arm of American law. That is written nowhere. 

U.S. Secretary of State Marco Rubio described Maduro as ‘a fugitive of American justice.’ Given his armed protection, military troops were necessary to accomplish his arrest. According to Trump, the ‘operation was done in conjunction with U.S. law enforcement.’

This was also the case in 1990 under nearly identical circumstances.    

Then-President George H. W. Bush ordered the military to capture Manuel Noriega, the corrupt dictator of Panama who was indicted on drug trafficking charges and endangering U.S. citizens. After a surprise military operation in the country’s capital, he was taken into custody and spirited back to the U.S. for trial.

Noriega’s legal team of defense attorneys vigorously challenged both his arrest and America’s legal authority to try him. Those maneuvers failed, along with his various claims of immunity. He was convicted and imprisoned.

So, we’ve seen this movie before. Maduro’s lawyers will mount the same legal challenges. But if the past is prologue, there is little reason to believe that the ending will be any different.  

This leaves the rather vacant claim by Trump adversaries that his actions somehow violated the norms and customs of international law. It is a common accusation that is often lacking in substance.  

Some point to Article 2(4) of the United Nations Charter, which prohibits member nations from ‘the use of force against the territorial integrity’ of any state. However, the Charter provides an exception for self-defense.

As evidenced by the charges stated in Madura’s indictment, his actions as a narco-terrorist flooding the U.S. with deadly drugs fully justifies Trump’s actions as defensive in nature. Continued drug trafficking posed an imminent threat to the lives of American citizens.

If a conflict of American versus international law exists, our president’s obligations under Article II of the Constitution takes precedence and priority over Article 2 of the U.N. Charter. Members of the United Nations can complain all they want, but the U.S. has veto power in the UN Security Council.           

Most Venezuelans seem relieved that the long nightmare of tyranny, oppression and death at the hands Hugo Chavez and Nicolas Maduro is finally over. Their land is rich with the world’s largest oil reserves.

If free and fair elections are held, as they should be, the impoverished citizens of this proud nation can share in a brighter future of freedom, economic recovery and financial prosperity.

They will have President Trump to thank for that.


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President Donald Trump issued a pointed warning to Venezuela’s new leader on Sunday, suggesting severe consequences if she continues to resist U.S. demands following the American-led operation that resulted in the capture of Venezuelan President Nicolás Maduro.

In an interview with The Atlantic, Trump said Delcy Rodríguez would ‘pay a very big price, probably bigger than Maduro’ if she fails to ‘do what’s right,’ adding that his administration would not tolerate what he described as her defiant rejection of the U.S. intervention.

Defending that approach, Trump said, ‘Rebuilding there and regime change, anything you want to call it, is better than what you have right now. Can’t get any worse,’ he added.

The White House did not immediately respond to Fox News Digital’s request for comment. 

Trump’s remarks followed a stunning predawn announcement Saturday that U.S. operators had carried out a mission to capture Venezuelan President Nicolás Maduro and his wife.

Speaking at a news conference at Mar-a-Lago, Trump said a U.S.-appointed team would ‘run Venezuela’ until the country’s political leadership was stabilized.

He also pledged a return of U.S. energy investment to the cash-strapped Latin American country which sits atop the world’s largest oil reserves. 

Trump framed his foreign policy approach, according to The Atlantic, through what he described as a modernized version of the Monroe Doctrine, the 19th-century policy opposing European colonial influence in the Western Hemisphere. 

Trump referred to his approach as the ‘Donroe Doctrine.’

Trump also hinted that Venezuela would not be the last nation to face U.S. pressure, raising the prospect of additional interventions beyond Latin America.

As an example, he reiterated his long-standing interest in Greenland, a semiautonomous territory of Denmark, a NATO ally.

‘We do need Greenland, absolutely,’ Trump told the magazine, citing U.S. national security interests and strategic location.


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President Donald Trump and Elon Musk appear to have repaired their once-strained relationship, according to a post shared by the billionaire Tesla founder on X.

In a post shared Sunday, Musk wrote, ‘Had a lovely dinner last night with @POTUS and @FLOTUS,’ before adding, ‘2026 is going to be amazing!’

The photo, taken from a Saturday evening event at Mar-a-Lago in Florida, sparked speculation that the pair’s bromance may be back on after more than a year of tension.

After the 2024 campaign, Musk became one of the Republican Party’s biggest political donors, contributing hundreds of millions of dollars, according to Reuters.

Trump later tapped Musk to advise the government efficiency effort and set up DOGE, focused on reducing federal spending and streamlining operations – but Musk stepped back from the role in mid-2025 amid mounting criticism. 

Tensions also resurfaced when Musk publicly criticized Trump-backed spending proposals and raised concerns about the size of federal outlays.

‘I’m sorry, but I just can’t stand it anymore,’ Musk said in a June 3 post about Trump’s Big Beautiful Bill.

‘This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it,’ Musk complained.

Trump shot back that he was ‘very disappointed’ in Musk’s criticism of his bill at the time before adding, ‘Elon and I had a great relationship. I don’t know if we will anymore.’

Musk shot back on X saying, ‘Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.’

At one point, Musk suggested he could form a new political party. But by late 2025, both sides appeared to strike a more conciliatory tone.

In September, the two were seen shaking hands at Charlie Kirk’s memorial service in a box at State Farm Stadium in Glendale, Arizona.

Musk was also seen at a White House dinner in November as Trump hosted Saudi Crown Prince Mohammed bin Salman. 

Elon Musk seen at black-tie White House dinner

FOX Business’ Edward Lawrence also asked Trump at a cabinet meeting on Dec. 2 if Musk was ‘back in [his] circle of friends’ after their falling out.

Well, I really don’t know. I mean, I like Elon a lot,’ Trump replied.

Fox News Digital has reached out to the White House for comment.


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