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A new study of federal court filings suggests that artificial intelligence may be transforming one of the oldest — and most expensive — services in American society: representation in court. 

The paper, now circulating for comments before publication, reports a nationwide surge in civil lawsuits filed by people acting pro se (as their own attorneys). The researchers conclude that many of these filings were researched, drafted, or otherwise heavily assisted by large language models (LLM) such as ChatGPT and Claude. 

The study examined millions of federal court docket entries across multiple years and dozens of categories of litigation. Using large databases of filings, linguistic analysis, statistical comparisons with pre-ChatGPT baselines, and software to detect AI-generated language patterns, the researchers conclude that the rise of generative AI coincides with a major increase in pro se litigation in federal courts. 

That increase is substantial. Federal civil filings surged after the public release of advanced LLMs. The overwhelming majority of the increase came from pro se plaintiffs. The authors report:

In the post-[AI] period, we find that the AI detection rate rises consistently, from near zero at the end of 2022 to 18 percent by early 2026, tracking the trajectory of LLM capability gains and diffusion of LLM adoption rather than any single event. By early 2026, roughly one in five complaint filings contains text that the detector classifies as AI-generated [emphasis added]. 

The right to represent oneself in federal court dates to the founding era and was codified by the First Congress in the Judiciary Act of 1789. In practice, however, the right often existed more in theory than reality. The Sixth Amendment and subsequent rulings assured a right to an attorney for those accused of a criminal offense, but no such protection exists in civil or administrative courts. Federal litigation is intimidating, technical, document-heavy, and expensive. Filing fees may be affordable, but legal representation often is not. 

For generations, many Americans who believed they had been cheated, harassed, wrongly terminated, denied compensation, defamed, discriminated against, or otherwise mistreated under the law reached the same reluctant conclusion: it simply was not worth paying a lawyer and risking unpredictable legal costs to pursue a civil case. Artificial intelligence abruptly alters that calculation. 

Chatbots Enter the Courtroom

A plaintiff can now ask ChatGPT to explain filing requirements, organize facts, summarize precedents, draft motions, prepare responses, and generate properly formatted legal documents at little or no cost. What once required thousands of dollars and weeks of expert legal work can be meaningfully attempted at home in an evening. (For what it’s worth, ChatGPT scored a 297 out of 400 on the Uniform Bar Exam, easily exceeding the passing score in nearly all US jurisdictions. Some 10 percent of US law school graduates never pass the exam.) 

The jump in AI-assisted filings occurred across a wide range of legal categories, from real estate disputes and employment law to slander and libel claims, insurance matters, disability cases, and immigration proceedings. Of particular note, perhaps, is the rapid growth in filings related to detention and deportation, where detainees increasingly appear to be using AI tools to navigate the federal legal system without attorneys. Amid accelerating (often erratic) immigration enforcement, habeas corpus lawsuits have increased 8,400 percent. In other words, a market-generated AI technology may be broadening de facto access to constitutional protections for the groups least able to defend themselves within the legal system. From that perspective, this looks like an impressive democratization of access to justice. 

For decades, reformers have argued that lower-income Americans effectively lack equal access to civil courts because professional legal services (“legal cognition”) are too expensive. Lawyers cost money because legal work requires highly trained cognitive labor: research, drafting, procedural knowledge, formatting, and endless paperwork. Legal aid programs and pro bono services help some people, but many are turned away because the basic economics remained unchanged. 

Now, LLMs have dramatically reduced the cost of producing all that legal text and navigating legal procedure. The result may be a profound expansion of practical access to civil litigation in American history. 

The Risks of AI Litigation

US courts evolved under the assumption that legal services would remain “scarce” and therefore expensive. That scarcity acted as a filtering mechanism. Lawyers didn’t merely draft documents. They discouraged weak claims, translated emotional grievances into legally actionable arguments, imposed professional discipline, and absorbed enormous procedural burdens before cases reached judges. 

AI removes much of that friction. 

The legal profession, for now, is deeply divided over the impact of what they call “robo-litigation” on the future of American justice. Some lawyers and judges see a coming wave of frivolous filings, fabricated citations, and procedural chaos. Others, including many organizations devoted to expanding access to legal services, see something closer to a breakthrough. 

The American Bar Association recently conceded that generative AI could provide “affordable legal guidance” to people unable to hire attorneys but warned about inaccurate advice, ethical problems, and the unauthorized practice of law. Courts increasingly caution litigants that they remain fully responsible for errors generated by AI systems, including fabricated legal citations and imaginary precedents. Several lawyers already have been sanctioned after submitting briefs containing nonexistent cases hallucinated by AI tools. 

Legal aid organizations are more enthusiastic than alarmed. The ABA’s own Center for Innovation has described AI as a potentially transformative tool for improving access to justice. The Thomson Reuters Institute recently called AI a “generational opportunity” to narrow the justice gap (unmet civil legal needs of Americans) by helping underserved populations navigate legal systems that historically have been too expensive and complex for ordinary citizens. One survey discussed by the Legal Services Corporation found that legal aid organizations are adopting AI tools at roughly twice the rate of the broader legal profession. 

In short, the groups most directly confronted with unmet legal demand seem naturally eager to use AI. For legal aid attorneys and reform advocates, the advantages are obvious. A tenant facing eviction, a migrant contesting detention, a worker challenging dismissal, or a disabled claimant denied benefits suddenly can obtain procedural guidance, draft filings, organize evidence, and prepare legal arguments at little or no cost. What elite lawyers may view as a destabilizing automation can look different to people who previously had no practical access to legal representation at all. 

Will Automation Overwhelm the System?

Critics reply that lowering the cost of legal access is also lowering the cost of producing legal “noise.” Federal judges complain of growing quantities of AI-assisted filings containing procedural errors, invented authorities, and poorly grounded legal arguments. Even accurate filings, however, increase pressure on courts that already struggle with overloaded dockets and limited judicial capacity. In many ways, the system’s stability relies on most people not exercising their rights. “Justice delayed” is one of the most politically sensitive measures of a court system. 

And unlike private firms, the federal judiciary cannot rapidly gear up in response to surging demand. Adding more judges requires congressional action. Court procedures are governed by law, precedent, and elaborate procedural rules designed for consistency and due process — explicitly not for rapid adaptation. 

In this sense, the federal courts may be confronting a classic problem identified decades ago by the economist Ludwig von Mises in Bureaucracy. Market institutions can respond dynamically to technological innovation because they are guided broadly by profit, loss, and competitive adaptation. Bureaucratic institutions operating under law necessarily move more cautiously because their authority depends upon rules, procedure, and limited discretion. 

The courts now face precisely that asymmetry. The market has produced a revolutionary technology capable of dramatically lowering the cost of legal cognition. But the judicial system must respond through new legislation, revised procedures, modified administrative rules, and constitutional safeguards. Recently, for example, courts ruled that attorney-client privilege doesn’t apply to chatbots, even if the user is relying on them for legal counsel.

From Disruption to Democratization

Not so long ago, headlines about AI and law focused on whether ChatGPT could pass the bar exam and whether AI would threaten the jobs of junior associates drafting legal briefs. 

Across profession after profession, AI is reducing the cost of cognitive labor once performed only by highly trained people. Journalism, accounting, customer service, education, finance, medicine, and software development — to name a few — all are confronting versions of the same disruption. Institutions built around expensive expertise suddenly face technologies capable of reproducing portions of that expertise at near-zero marginal cost. That we knew.

But few considered the more consequential finding that millions of ordinary citizens suddenly possess tools capable of helping them navigate the legal system. The relationship between ordinary Americans and the legal system is changing fundamentally. The constitutional right to represent oneself existed long before AI. What AI may now be doing is operationalizing that right on a mass scale for the first time in American history. 

Hasan Piker, the far-left political commentator and streamer, has enjoyed a remarkable rise into the mainstream left media ecosystem. He has now campaigned alongside Democratic Senate candidates, been a guest on some of the largest podcasts in America, and appeared on CNN and NBC News. Most recently, the New York Times published a conversation between Piker, the paper’s culture editor Nadja Spiegelman, and the New Yorker writer Jia Tolentino. The topic: is theft ever justified?

In their conversation, Tolentino argues that “stealing from a big box store … [is not] very significant as a moral wrong.” Piker’s response in agreement: “I’m pro stealing from big corporations, because they steal quite a bit more from their own workers.” 

Piker and his interlocutors are at least self-aware enough not to want to justify theft against everyone, so they conveniently set limits to when stealing is acceptable. When asked if it would be acceptable to steal from Zohran Mamdani’s city-owned grocery stores, Piker responds, “No, I would not, because I feel like that’s taxpayer-funded, it’s union labor, and the prices are also adjusted regardless.” 

In other words, theft’s only okay when it comes to the bourgeoisie — they have no right to property because the system is unjust. As Spiegelman puts it, “Jeff Bezos has too much money — he’s a billionaire — so why should I have to pay for organic avocados?”

Microlooting, as they call it, “has a slight political valence to theft, as opposed to just the thrill of getting away with something.” Microlooting, in other words, is theft as a form of political protest. But fundamentally, microlooting is still just theft. “[I]f it was as easy as pirating intellectual property, I would” steal a car, Piker clarified. Thus, there may be an appeal to “political protest” but the practical criteria just seems to be viability. 

And whether the Times’ trio only justifies stealing from the wealthy or justifies stealing broadly, the same result emerges — that they are dismantling the building blocks of our civilization. Liberal democratic capitalism — the system that all three have benefited immensely from — relies on some basic precepts. John Locke articulated these as natural rights to life, liberty, and property. Adam Smith argued that commerce and manufacturing cannot flourish “in which the people do not feel themselves secure in the possession of their property.” And property rights aren’t even just economically useful, but they’re also a necessary condition for liberty broadly. As F.A. Hayek argued, “There can be no freedom of the press if the instruments of printing are under government control, no freedom of assembly if the needed rooms are so controlled, no freedom of movement if the means of transport are a government monopoly.”

And the natural rights at the center of liberal democratic capitalism are not given or taken away, based on who the right-bearer is. The Declaration of Independence’s radicalism was in part because it promised “inalienable rights” to “all men.” The promise of natural rights was never just to people of only a certain ethnicity, nationality, or religion. So too with wealth. Everyone can agree the poorest in our society deserve the same rights to life, liberty, and property as the most wealthy. But reverse that statement, and agreement becomes far less universal. But there’s no difference. If you believe that wealth shouldn’t be a determining factor in someone’s rights, then you should believe that in all cases. 

And even putting the moral question aside, the preservation of property rights — with its attendant injunction against stealing — provides us with the predictability necessary for economic flourishing. Piker assumes that the stability of our society is naturally occurring. It is not. Each time he receives payment from Twitch, swipes his credit card, or purchases a service, he assumes that the set of rules necessary for a functioning capitalist society will persist. And the preservation of property is fundamental to that predictability. One study, for example, found that governments going from no cadastral system (records of land ownership) to a full cadastre system is associated with an immediate 2.86 percentage point increase in GDP per capita. 

Piker’s dismissiveness of the very foundations of our society suggests that there is some better alternative to liberal democratic capitalism. As yet, there is not. 

For 250,000 years, the average person — everywhere — lived off effectively no more than $3 a day. But that all changed roughly 300 years ago, with an unprecedented explosion in global prosperity that lifted the vast majority of people out of poverty. 

The alternative to our current prosperity is poverty, disease, authoritarianism, tribalism, violence, and an early death — staples of pre-capitalist human existence. 

But Hasan Piker isn’t the first person to feel resentful for the conditions created by capitalism — not nearly. Joseph Schumpeter in Capitalism, Socialism, and Democracy was pessimistic about the future of capitalism because of the potential anti-capitalism of a modern intellectual class. For Schumpeter, capitalism unlocked so much productivity that it freed a portion of humanity from the direct world of commerce and work. In other words, capitalism creates a class of people who deal in ideas but are disconnected and alienated from the very system that made it possible for them to deal in ideas. And eventually that disconnect leads to criticism of capitalism.

Discontent breeds resentment…. and it often rationalizes itself into the social criticism which … is the intellectual spectator’s typical attitude toward men, classes and institutions…. The role of the intellectual group consists primarily in stimulating, energizing, verbalizing, and organizing this material [of anti-capitalist sentiments and resentments]…. The intellectual group cannot help nibbling … at the foundations of capitalist society.

Schumpeter’s analysis applies to Piker to be sure but Piker’s only the most recent example in a long train of privileged activists and revolutionaries. Among others, Fidel Castro, Salvador Allende, Pol Pot, and Mao Zedong were all born into wealthy families. And this trend is visible from the very beginning of Marxism. As the historian Sean McMeekin pointed out in his 2024 book on the history of communism: “Marx’s social radicalism did not arise from his own economic situation or any unpleasant experience of business or factory life.” In fact, Marx was “kind of a perennial student,” McMeekin wrote, both chronically in debt and financially dependent. Marx’s income came from collaborator and patron Friedrich Engels, who could only afford to fund Marx’s freeloading lifestyle with profit from his factory and cotton trading. Marx’s work was directly supported by the capitalist system both men resented. 

This pattern also holds true demographically. A 2018 study on the breakdown of American political factions found that progressive activists “are nearly twice as likely as the average [American] to make more than $100,000 a year,” and “are nearly three times as likely to have a postgraduate degree.” An earlier study of student political organizations found that far-left student activists came predominantly from upper-middle-class backgrounds, while far-right activists were more often lower-middle-class or working-class. 

And the problem’s only getting worse at some of our most elite educational institutions. Writing for The Harvard Crimson, Julien Berman found that in 2000 “the opinions of student writers at elite universities … weren’t all that more progressive than those at non-elite ones.” But “[o]pinion sections at elite universities have gotten significantly more progressive,” he writes, with The Crimson being “over three times more progressive in 2023 than it was in 2001.”

Some may object that the relative affluence and education of progressive activists proves the truth of their views — after all, shouldn’t we take more seriously the opinions of the most educated in our society? But to even ask the question requires assuming that left-wing activists arrive at their positions based on well-reasoned arguments rather than, as Schumpeter points out, a resentment for the very system that made their status, comfort, and influence possible in the first place.

Education doesn’t displace human nature. And to take a line from another great thinker, “[e]xperience suggests that if men cannot struggle on behalf of a just cause because that just cause was victorious in an earlier generation, then they will struggle against the just cause.” That is human nature — and no amount of education will change that. And ultimately, Hasan Piker is just the latest left-wing activist to take advantage of that fact in appealing to affluent, educated left-wingers who would rather struggle in resentment against our system than to be grateful for their deliverance from poverty.

Many discussions of the ongoing decline in fertility end up treading on the grounds of “family policy” when discussing remedies (or, if one believes there are too many people on Earth, incentives) to fertility decline. Commonly debated items include subsidized childcare, income tax credits, housing reform, divorce laws, welfare policy, and the possible trade-offs of “quantity” and “quality” when investing in children. What is rarely, if ever, included is the role of monetary policy.

Fertility decisions are primarily based on lifelong considerations. Because monetary policy mostly affects the short-run, even large unexpected monetary expansions or contractions are unlikely to matter much for such long-run fertility decisions. In extreme cases, an unexpected monetary expansion can cause a real wealth reduction that affects timing. If extreme enough, the delay may push older possible parents out of their prime years for having children. In other extreme cases (think hyperinflation) we can expect some effects. But both examples are extreme cases.

Available estimates of the role of monetary policy on fertility in non-extreme cases show something, but it is a small something (although not negligible). Thus, the role of monetary policy seems properly sidelined in countries like the United States.

A recent book by Jeffrey Degner* argues that these results understate the true damage. In Inflation and the Family, Degner argues that monetary institutions (which could include state-issued monies as well as competitively issued ones under a free banking regime) end up shaping people’s time preferences. Our habits (greater indebtedness, increased inequality, and greater moral hazard) are influenced by the economic environment. “Time preferences” refers to how people value present consumption relative to future consumption or, more broadly, how willing they are to defer gratification. Related habits include the age at first marriage, the number of children, and the spacing between children, among other factors. Ultimately, he argues that political control of the money supply gives politicians incentives to overissue money, fueling an “inflation culture” which depresses fertility.

There is much to say about such an argument. Economists, in general, are reluctant to argue in terms of “preference changes.” One of the fathers of family economics, Nobel laureate Gary Becker, famously argued that we should take preferences as given and never invoke preference changes to explain social or economic change. Not because such changes never occur, but because it is a facile argument. “Preference change” can be used to explain too much, and it’s difficult to falsify. 

Being somewhat of a Becker devotee, I tend to admonish my students the same Becker did. At the same time, there is always a little voice in my head that makes me somewhat reluctant to say that preference changes should never be used. After all, dictatorial regimes invest significant resources in propaganda precisely to reshape people’s preferences so that they acquiesce. So it cannot be fundamentally wrong to argue about preference changes, but we should set the standard required to make a convincing case extremely high.

Degner’s case has parts that respect Becker’s admonition but also parts that violate it in order to take the more difficult road. In the parts where the admonition is respected, the case is fully convincing. In the parts where it is not, Degner does not quite make that case, but he does make a convincing case that the issue deserves more attention.

For example, with respect to instances of following Becker’s admonition, Degner points out that we measure inflation for the poor very poorly, which likely explains why we understate the damages of inflation. The consumer price index (CPI), when one looks at how it is constructed, tends to resemble the inflation experience of households in the top income quartile of the population. Attempts to create “group-specific” inflation measures generally find higher rates of inflation at the bottom than at the top of the distribution. Degner argues that this is due in part to how money enters the economy — loose monetary policy actually fuels inequality. Since inequality has been shown to have some connection to fertility, monetary policy may affect fertility through its contributions to inequality. This well-anchored claim indicates the “usual” assessments understate the role and importance of monetary policy.

Straying from Becker’s advice about positing shifting preferences, Degner invokes the idea of an “inflation culture.” In this framework, monetary policy does not merely influence prices; it also shapes the incentives and behavioral responses (like indebtedness, low savings rates) that arise under an inflationary monetary regime and ultimately influence household decisions, including family formation. The intriguing link merits further investigation, and in Degner’s treatment it largely serves as an invitation for future research rather than as a fully developed empirical demonstration.

Indeed, Degner highlights earlier efforts at making the “inflation culture” argument – including one by Joseph Schumpeter in Capitalism, Socialism, and Democracyas well as potential avenues to connect economics with biology, psychology and sociology to explain preference formation. But in this, Degner only hints at future research, and in fact omits some obvious empirical arguments in his favor.  

Take, for example, the habits of people in former Soviet bloc countries, notably in East Germany. Despite now having lived under a liberal democracy with relatively stable monetary policy and open markets — and for many having grown up in that environment — East Germans still exhibit a much stronger aversion to inflation than people in West Germany. This is despite a literature showing that, before Soviet division, there were few socio-economic discontinuities at the border between what later became East and West Germany.

That last criticism notwithstanding, Inflation and the Family makes for a worthy addition to one’s library. What it does well is genuinely valuable, and even where it is less fully developed, the book provides a useful starting point for future inquiry. All in all, it is a valuable contribution.

*This review was commissioned and completed before Jeffery Degner joined the AIER staff.

As a seventeen-year-old high school student in Trier, Germany, Karl Marx wrote a religious essay to fulfill a graduation requirement. Titled “The Union of the Faithful with Christ,” it explained the human need for the divine as an “unsatisfied longing for truth and light.” A loving relationship with God not only filled that longing but also brought virtue as a benefit.

“Then every repulsive aspect is submerged,” Marx continued, “everything earthly suppressed, everything crude extinguished, and virtue is more enlightened as it becomes milder and more humane.”

Although the essay feels somewhat more analytical than heartfelt, along with Marx’s other work, it was easily good enough to graduate. He finished eighth in a class of 32, ready for college.

Parents naturally fret when children leave home. What if they fall in with a bad crowd or adopt destructive ideas? Pity Marx’s parents, Heinrich and Henriette; young Karl was an edge case of this. Within two years of his family turning out at 4 a.m. to see him off to university aboard a river steamer, Marx was living a life notably short on virtue, mildness, or humanity. In fact, a tsunami of egotism and wrath toward God had consumed him. Those who have had their own battles with self-absorption and anger can relate.

Between 1835 and 1841, Marx studied at the University of Bonn and the University of Berlin, during which time he was jailed for drunkenness and disturbing the peace, was accused of carrying weapons, and reportedly fought a duel.

His parents, who were financing this mischief, worried, with Heinrich carrying on a correspondence with Karl that degenerated into conflict. Believing his son’s heart was “enlivened and governed by a spirit that is not given to all men,” in 1837, he frankly asked Karl whether that spirit was “of a heavenly or a Faustian nature.”

“Do you think,” he wrote, “that you will ever be capable of feeling a truly human, a domestic happiness?”

Karl wrote back a long, solipsistic reply which signaled that a momentous battle inside him had been decided. He described an illness that seemed to be partly physical and partly spiritual. It had led him out of Berlin into the countryside to recuperate. For several days he was unable to think at all.

“I ran like a madman around the garden beside the dirty waters of the Spree,” Karl wrote.

Literary Ambition and Swallowing Fury

In 1838, the very next year, Heinrich died. He was 61. Karl didn’t attend the funeral. Any substantive relationship with his family ended at that point. 

What brought on Karl’s remarkable college transformation? Perhaps a Marxist would say he was overcome by rational objectivity. But as the biographer Werner Blumenberg notes, in the end Marx was less an objective scientist than (quoting Marx’s friend and collaborator Friedrich Engels) “a revolutionary politician.” His intellectual work was designed to serve political ends. Beneath the claims of objective rationality lay a tortured, artistic soul. 

Marx’s first college ambitions, in fact, had been literary. At Bonn, he was active in a poetry group. Today his verse serves as a window into the emotional storm that drove him. 

In “Invocation of One in Despair” (1836-37), Marx describes wanting to avenge himself on  a god whom he claimed had “snatched from me my all.” In “The Pale Maiden” (1837) he quotes the titular character as saying “Thus Heaven I’ve forfeited, I know it full well. My soul, once true to God, Is chosen for Hell.” And the later poem “The Fiddler” (1841) reads like a bizarro version of the Charlie Daniels’ song “The Devil Went Down to Georgia.” Marx describes a violin player turning against God, who had lent him his art: “Till heart’s bewitched, till senses reel, With Satan I have struck my deal. He chalks the signs, beats time for me, I play the death march fast and free.” 

In 1837, when an editor rejected his poems for publication, Marx had written his father that he “swallowed it with fury.” That was when his primary ambitions pivoted to philosophy and history. Exhaustion from this intense study seems to be what led to the illness that drove him out of Berlin to run like a madman beside the river.  

It also arguably drove the work that would make Marx famous. 

The Gospel of Marx

Marxist philosophy is a reimagined New Testament, with Marx in the role of Christ. After all, Jesus had first spoken of a kingdom in which the last would be first, and vice versa. Marxism even has its own perverted eschatology, with violent socialist revolutions paving the way to a utopian state of communism that supposedly marks the end of history.

Creating this system of thought came at a cost. Marx’s drive and intellect could have secured a much more comfortable life for his family, who lived in profound poverty. Four of his children died before reaching adolescence. His wife, Jenny, who had been raised in wealth, had to beg a neighbor for money just to bury one of them. Marx himself died in 1883 at age 64, with eleven people attending his funeral — many of his growing number of disciples, one imagines, were too busy promoting his work to the world.

Jesus said you could know a tree by its fruits, and those of Marx did not fully ripen until the twentieth century. At one point, over a third of humanity lived under Marxist governments. Utopias they were not.

Fortunately, today the ratio has declined to less than one-twentieth, if you exclude China, which remains nominally socialist but with a significantly different economic model.

Instead of rewriting the Gospels, Marx’s life might have been better spent trying to live them out, cultivating something he had written about in his high school essay: “…a heart full of love for humankind, open to everything noble, everything great, not out of ambition but for the sake of Christ.”

At seventeen, Karl knew the words of a better way to live, even if he had not yet learned the tune. The dreams of youth are sometimes lost with tragic results.

The March 2026 AIER Business Conditions Monthly (BCM) points to a mixed, still uneven economic outlook. Forward-looking data improved from the prior month, though not convincingly; measures of current activity were somewhat firmer; and lagging indicators remained the strongest of the three categories. At the same time, at least one data point in the coincident group appears unusually large relative to the surrounding series, so the month’s results should be read with some caution.

LEADING INDICATOR (50)

The Leading Indicator came in at 50, with six of 12 components improving, none unchanged, and six deteriorating. Positive movement was spread across several demand-sensitive and forward-looking series. US Average Weekly Hours All Employees Manufacturing SA rose 0.2 percent. US Initial Jobless Claims SA fell 5.1 percent and counted as a positive after inversion. Conference Board US Leading Index Manufacturers’ New Orders Consumer Goods and Materials increased 0.7 percent. Conference Board US Manufacturers New Orders Nondefense Capital Goods Ex Aircraft advanced 4.1 percent, US New Privately Owned Housing Units Started by Structure Total SAAR rose 4.9 percent, and Adjusted Retail and Food Services Sales Total SA increased 1.8 percent.

Those gains were offset by weakness elsewhere. University of Michigan Consumer Expectations Index fell 8.7 percent, while Conference Board US Leading Index Stock Prices 500 Common Stocks declined 3.4 percent. Inventory to Sales Ratio Total Business eased 0.8 percent, United States Heavy Trucks Sales SAAR dropped 2.4 percent, and Debit Balances in Customers Securities Margin Accounts decreased 2.6 percent. The 1-Year to 10-Year US Treasury Yield Spread widened 43.0 percent, but because that measure is one of the inverted series, it was scored negatively.

On balance, the leading data suggest an economy that is not uniformly weakening, but still lacks broad-based thrust. Strength in orders, housing, and retail activity was offset by softness in sentiment, equities, and selected financial indicators.

ROUGHLY COINCIDENT INDICATOR (58)

The Roughly Coincident Indicator registered 58, with three of six components improving, one essentially unchanged, and two declining.

The strongest contributions came from Conference Board Coincident Manufacturing and Trade Sales, up 1.5 percent, and Conference Board Consumer Confidence Present Situation SA, up 4.5 percent. US Employees on Nonfarm Payrolls Total SA also posted a large increase in the file and scored positively. Conference Board Coincident Personal Income Less Transfer Payments was effectively unchanged, rising just 0.05 percent. Offsetting those gains, US Industrial Production SA declined 0.5 percent, and US Labor Force Participation Rate SA edged down 0.2 percent.

The roughly coincident data were somewhat better than the leading group in March, but the picture remains uneven. Current activity measures show some resilience, though the unusually large payroll increase in the workbook may reflect a reporting or data-entry issue and may overstate the apparent strength of the group.

LAGGING INDICATOR (83)

The Lagging Indicator stood at 83, with five of six components improving and one declining.

Most lagging series moved in a direction associated with continued underlying firmness. US CPI Urban Consumers Less Food and Energy YoY NSA increased 5.6 percent. US Commercial Paper Placed Top 30 Day Yield rose 1.5 percent. Conference Board US Lagging Commercial and Industrial Loans advanced 0.7 percent, and US Manufacturing and Trade Inventories Total SA rose 0.9 percent. Conference Board US Lagging Avg Duration of Unemployment fell 1.6 percent and was scored positively because it is inverted. The only declining component was Census Bureau US Private Construction Spending Nonresidential SA, which slipped 0.1 percent.

Overall, the lagging data continue to depict an economy still carrying momentum from prior conditions. Even so, because lagging indicators tend to confirm rather than anticipate turning points, their relative strength does not fully offset the more divided message coming from the leading and coincident indicators. 

DISCUSSION (April/May 2026)

April’s inflation data suggest that the Iran conflict is pushing headline prices higher, but the broader inflation picture remains more contained than the top-line figures imply. Headline CPI rose 0.64 percent in April following March’s 0.87 percent increase, while headline PCE climbed 0.66 percent in March, driven largely by gasoline prices, which surged more than 20 percent amid the conflict. Beneath the surface, however, core inflation remained comparatively restrained: core CPI rose 0.38 percent, though much of that reflected a temporary jump in rents tied to delayed Bureau of Labor Statistics housing surveys following last fall’s government shutdown. Excluding that shelter distortion, core inflation would have been materially softer, while core PCE — the Fed’s preferred gauge — slowed to 0.29 percent as weaker goods inflation offset firmer service categories such as health care and air transportation. Producer prices point to mounting supply chain pressures rather than overheating demand, with headline PPI jumping 1.4 percent in April as higher fuel, freight, and manufacturing input costs rippled through the economy and firms increasingly moved to protect margins. Still, some PPI components feeding into core PCE, including weaker portfolio management fees tied to March’s equity selloff, are likely to restrain near-term inflation readings.

Labor market data continue to point to an economy that is cooling gradually rather than deteriorating outright, with hiring holding up better than expected even as broader measures of labor demand soften beneath the surface. Nonfarm payrolls rose a stronger-than-expected 115,000 in April, above both consensus expectations and estimates of roughly 50,000 jobs needed to stabilize unemployment, though hiring slowed from March’s upwardly revised 185,000 pace. Private-sector hiring accounted for the gains, while government payrolls continued to edge lower. Most notably, trade, transportation, and utilities emerged as the largest source of job creation, adding 60,000 jobs and overtaking health care as the dominant contributor to employment growth — a development consistent with recent improvements in freight activity, purchasing managers’ surveys, and regional manufacturing data that suggest an emerging recovery in portions of the industrial economy. At the same time, job gains elsewhere were less convincing: manufacturing slipped back into contraction, professional and business services cooled, and information and financial activities shed jobs, likely reflecting a combination of cyclical moderation and structural adjustments tied to automation and artificial intelligence. Wage growth remained subdued at 0.2 percent in April, helping to contain labor-cost pressures, though a modest increase in the workweek pushed weekly earnings higher and supported household income.

Beneath the stronger headline payroll figures, however, several indicators suggest labor-market conditions continue to soften incrementally. The unemployment rate edged up to 4.34 percent in April from 4.26 percent, even as labor-force participation declined, with household-survey employment falling and the number of unemployed rising — a reminder that the pace of job creation required to stabilize unemployment may be materially higher than Federal Reserve assumptions imply. March JOLTS data reinforced the view of slower but still-stable labor demand: job openings declined modestly to 6.87 million, layoffs increased slightly, and the vacancy-to-unemployment ratio remained below pre-pandemic norms, signaling reduced tightness and limited inflationary pressure from labor markets. Yet workers showed somewhat greater confidence than expected, with the quits rate ticking up to 2.0 percent. Weekly jobless claims likewise continue to portray a labor market marked more by stability than stress. Initial claims remained historically low through May, consistently below year-earlier levels, while continuing claims stayed contained and the insured unemployment rate held steady at 1.2 percent. Even as AI-driven restructuring increasingly reshapes hiring patterns — particularly in technology and white-collar occupations — layoffs remain concentrated rather than systemic, suggesting employers are adjusting staffing cautiously rather than retrenching broadly. Taken together, the data point to a labor market that remains resilient in the near term but is gradually losing momentum, supporting expectations that the Federal Reserve will remain on hold for now before potentially easing policy later in the year if unemployment continues to drift higher.

Business activity data continue to point to an economy in expansion, though momentum is becoming increasingly uneven as firms contend with rising costs, softer demand in some areas, and cautious hiring. The ISM Services PMI eased modestly to 53.6 in April from 54.0 — still consistent with moderate economic growth — but underlying details softened meaningfully. New orders fell sharply to 53.5 from 60.6, likely reflecting the fading of earlier pull-forward demand ahead of expected price increases, while employment remained in contraction for a second straight month despite an improvement from March. At the same time, price pressures remained intense and broad-based, with the services prices index holding at 70.7 — among the highest readings since 2022 — as firms increasingly cited diesel, gasoline, fuel surcharges, and tariff-sensitive materials as sources of cost pressure. Manufacturing also remained in expansion territory, with the ISM Manufacturing PMI unchanged at 52.7, though the composition of activity was less encouraging. New orders improved modestly, but export demand weakened, production failed to accelerate materially, and factory employment slipped further into contraction. Supplier deliveries slowed, likely reflecting Iran-war-related disruptions and tighter logistics conditions, while the manufacturing prices-paid index surged to 84.6 — its highest level in four years — underscoring mounting pipeline inflation. Taken together, the April ISM reports suggest growth continues but is increasingly constrained by rising input costs, softer demand, and more selective hiring, reinforcing expectations that the Federal Reserve will remain on hold in the near term.

Against a backdrop of still-expanding but increasingly cost-constrained business activity, sentiment data point to growing caution among both firms and households. Small-business optimism remained subdued in April, with the NFIB Small Business Optimism Index edging up only marginally to 95.9 as elevated uncertainty and weakening sales expectations offset modest improvements in profitability and hiring plans. The share of owners expecting stronger real sales over the next quarter fell to its lowest level in a year, underscoring concern that rising prices — particularly for fuel and other inputs — may increasingly weigh on customer demand, while modest improvements in profits appear to be giving some firms room to absorb higher costs through margin compression rather than fully passing them through to consumers. Capital spending and hiring intentions improved slightly but remained historically subdued, reflecting caution around future demand even as labor quality continues to rank among firms’ most persistent challenges. Consumers, meanwhile, grew notably more pessimistic in May, with the University of Michigan sentiment index falling to a record low of 44.8 as elevated gasoline prices and uncertainty surrounding the Iran conflict intensified concerns about the cost of living. Inflation expectations moved sharply higher, with households expecting prices to rise 4.8 percent over the next year and 3.9 percent annually over the next five to ten years, suggesting growing concern that inflation pressures may spread beyond fuel. Measures of current conditions, future expectations, and household finances all deteriorated to record or near-record lows, even as labor-market expectations remained comparatively resilient — helping explain why spending has thus far held up better than confidence. Taken together, the data suggest an economy in which sentiment is weakening faster than underlying activity, with both businesses and households becoming increasingly cautious even as growth continues to hold up in the near term.

Consumer spending data, meanwhile, suggest that households continue to absorb higher costs without materially retrenching, though the composition of spending increasingly reflects pressure from elevated fuel and food prices. Nominal retail sales rose 0.5 percent in April, but with more than 40 percent of the increase driven by higher gasoline expenditures, while retail sales excluding gas rose a more modest 0.3 percent. Even so, underlying demand remained firmer than anticipated: control-group retail sales — a key GDP input — increased a solid 0.5 percent, while restaurants, grocery stores, and online retailers led gains, suggesting consumers continue to spend despite rising cost pressures. Elevated tax refunds and household wealth effects appear to be cushioning activity for now, helping prevent a more meaningful pullback in discretionary spending. Big-ticket purchases, however, show clearer signs of moderation. Light vehicle sales cooled to a 15.92 million annualized pace in April, reflecting affordability pressures from higher gasoline costs, though sales remained above the first-quarter average and growing interest in fuel-efficient and electric vehicles points to some underlying resilience. Housing activity also remained subdued, with existing home sales rising only marginally as elevated mortgage rates, stretched affordability, and rising inventories weighed on demand, while home price appreciation slowed to just 0.9 percent year over year. Consumer spending looks likely to remain resilient in the near term, though higher energy costs are increasingly reshaping spending patterns and weighing on interest-sensitive purchases.

Even as consumer confidence weakens and spending patterns become more selective, business investment and production data suggest firms entered the second quarter on firmer footing than sentiment alone would imply. Industrial production rose a stronger-than-expected 0.7 percent in April following a revised March decline, driven primarily by durable goods output, with motor vehicle production surging 5.3 percent and accounting for roughly one-third of the headline gain. Manufacturing output increased 0.6 percent, business equipment production rose 1.5 percent, and stronger activity in transportation equipment, metals, minerals, agricultural equipment, and electronics pointed to relatively healthy capital spending and industrial demand despite higher energy costs and elevated uncertainty. Softer output in consumer goods excluding autos and energy, alongside declines in mining activity and oil-and-gas drilling, suggests more price-sensitive sectors remain cautious. Productivity data reinforce the picture of a business sector continuing to adapt rather than retrench: nonfarm productivity rose at a 0.8 percent annualized pace in the first quarter, lifting year-over-year growth to 2.9 percent — the strongest reading in two years and consistent with the possibility that technology investment and early AI adoption are beginning to appear in aggregate data. Output growth continued to outpace hours worked, while unit labor costs rose just 2.3 percent annualized, sharply below the prior quarter and easing to 1.2 percent year over year, reinforcing evidence that labor markets are not generating broad inflationary pressure. US firms appear willing to invest and expand production selectively, while stronger productivity growth is helping offset labor costs and cushion the economy against rising input prices and softer consumer sentiment.

The broader policy and financial backdrop points to an economy that continues to expand but faces growing constraints from tighter monetary conditions, elevated inflation risks, and mounting fiscal concerns. Credit availability remains broadly supportive, with the Federal Reserve’s latest Senior Loan Officer Opinion Survey showing only modest tightening in business lending standards, largely stable consumer credit conditions, and some easing in commercial real estate lending terms. Demand for credit, however, has softened in several consumer categories, suggesting borrowing appetite, rather than supply, may increasingly limit activity. The Federal Reserve has recently shifted further in a hawkish direction. Minutes from the April FOMC meeting showed diminishing support for eventual rate cuts, growing discomfort with maintaining an easing bias, and a majority of policymakers indicating further tightening could become appropriate if inflation remains persistently above target. By mid-May 2026, market implied policy rates showed rate market participants placing a 60 percent chance on a one-quarter increase in the Fed Funds rate by December 2026. Energy-related inflation from the Iran conflict, tariffs, supply disruptions, and resilient labor-market conditions have reinforced the Fed’s caution, leaving policymakers in no hurry to ease.

Financial markets have increasingly aligned with this higher-for-longer outlook, though concerns now extend beyond inflation alone. Treasury yields surged in May, with the 30-year yield briefly exceeding 5.2 percent — its highest level since 2007 — as investors reassessed both inflation persistence and the sustainability of US fiscal dynamics. Mounting deficits, rising debt-service costs, and heavier Treasury issuance are increasingly pushing investors to demand greater compensation for holding long-term debt, particularly as higher rates themselves threaten to worsen fiscal pressures. The unusual leadership of the long end of the curve in the recent selloff suggests markets are increasingly pricing fiscal risk alongside monetary restraint. Taken together, the policy outlook points to a Federal Reserve likely to remain on hold for an extended period, balancing elevated inflation risks against the possibility that tighter financial conditions and rising borrowing costs eventually weigh more heavily on growth.

In May 2026, the US economy confronts a difficult but not wholly unfavorable balancing act: robust enough to continue expanding, yet increasingly pressured by higher energy costs, tighter financial conditions, and record levels of policy uncertainty. Headline inflation has been pushed higher by the Iran conflict and energy prices, yet underlying inflation pressures remain more contained than surface-level readings admit; labor markets, consumer spending, and business activity continue to expand despite growing indications of moderation. Households and firms appear to be absorbing higher costs for now — supported by accumulated wealth, stable credit availability, productivity gains, and selective business investment — though confidence has deteriorated notably, and more interest-sensitive sectors such as housing, autos, and portions of discretionary spending are beginning to soften. At the same time, rising long-term Treasury yields, mounting fiscal concerns, and increasingly cautious Federal Reserve rhetoric suggest financial conditions may become a more meaningful headwind in coming quarters, particularly if elevated energy prices persist or inflation broadens beyond fuel and supply-chain-related categories.The near-term growth path remains one of slower but continued expansion rather than outright contraction, with the US economy appearing more vulnerable to policy missteps or external shocks than to an immediate cyclical downturn.

LEADING INDICATOR

ROUGHLY COINCIDENT INDICATORS

LAGGING INDICATORS

CAPITAL MARKETS PERFORMANCE

As the Iran campaign grinds into its third month, with unpredictable reactions and uncontrollable consequences pushing the conflict toward open‑ended escalation — a prolonged war — the contrast with January’s swift capture of Venezuelan leader Nicolás Maduro could not be starker. 

Yet the two interventions are by the same military and the same commander-in-chief. What explains the difference?

The contrast between the two campaigns points to a deeper issue. War has long been understood as having uncertain outcomes. As Carl von Clausewitz observed, any war unfolds in a “fog” where much remains unknown and therefore cannot be controlled. Yet military campaigns are still planned as rational and deliberate undertakings, utilizing strategies and tactics to manage or overcome this uncertainty and bring about the intended outcome: victory on the battlefield.

Friedrich Hayek offers a fundamental and revealing critique of the planning mindset that permeates the military and its campaigns. His work on knowledge in society as not given to a single mind, but dispersed across individuals, puts the very framework of top-down planning in question. War, as the coercive imposition of one centralized rule over another, suffers from this limitation.

Although Hayek developed this insight in the context of markets, it applies equally to war. Military campaigns seek to impose a single will, yet their success depends on navigating and overcoming the dispersed knowledge embedded in the societies they confront — and therefore the varied and unpredictable responses on the battlefield and beyond. Because the goal is to overtake and establish control over the enemy, war becomes a central planning problem.

Hayek’s insight is that much of what matters is knowledge of the “particular circumstances of time and place.” This knowledge is largely tacit, what Michael Polanyi described as knowing more than we can tell. Because it is practical and experience-based, it cannot be centralized or fully communicated.

The reason the knowledge gap is not merely a complication but a fundamental barrier lies in the nature of feedback. Hayek observed that markets correct poor planning through price signals, which generate decentralized, immediate responses that reveal planners’ errors.

War lacks an equivalent mechanism. As James Scott argued, by the time the knowledge gap becomes apparent, the intervention has already altered the society in which it is embedded. New, irreversible facts are created on the ground. In Iran, each month of campaigning generates reactions that no prior intelligence service could have anticipated, and each reaction reshapes the terrain for what comes next. The planner is initially ignorant, lacking the full knowledge necessary to make rational decisions, and it is the very act of planning that exacerbates this ignorance.

Even taking uncertainty into account does not solve it. Donald Rumsfeld’s distinction between “known and unknown unknowns” acknowledges uncertainty, but does not dispel it. However, Hayek’s point explains that the issue is not simply that some data are missing, but rather that the necessary knowledge found in the cultural, historical, and social spheres is not of the kind that can be compiled, centralized, or incorporated into a plan.

The swift resolution of the Venezuelan conflict and Iran’s prolonged involvement illustrate this well. Maduro represented a center of concentrated power — one man in a specific and well-defined position — and his removal required knowledge that intelligence could approximate. Iran, by contrast, is different: the task is broader and less well defined. Success hinges not only on military might, but also on the responses of a society deeply rooted in distinct cultural, historical, and religious dynamics. Although there is opposition to the regime, would it rise in support of a foreign intervention, remain passive and silent, or even side with the state in resisting it? Even the most sophisticated intelligence cannot reliably predict such outcomes, because the relevant knowledge is dispersed among millions of individuals.

The danger is not that war is irrational, but that it is treated as if it can be made rational and predictable. This illusion not only justifies action without sufficient knowledge but also underlies the belief that societies can be reconstructed from the top down after conflict. War is not only a matter of military might and technology, but also of human response.

Hayek’s insight thus invites skepticism toward the idea of rational war. Outcomes depend on dispersed and tacit knowledge that no planner can fully access or control. War is therefore not only uncertain, as Clausewitz argued, but constrained by deeper epistemological limits.

Planning cannot overcome this limitation. As President Eisenhower put it, “Plans are worthless, but planning is everything.”

A recent Wall Street Journal article reignited a familiar generational feud between Millennials and Baby Boomers. Drawing on a report by AEI economist Scott Winship, the paper asked which generation had it better — and what unpacking that debate tells us about the health of our modern economy.

Predictably, Millennials and Boomers spun into a frenzy. Millennials cite soaring housing prices, student debt, and federal deficits as forces holding them back. Boomers counter by invoking 1970s stagflation, when skyrocketing inflation and sluggish growth robbed an entire generation of economic opportunity. Both make solid arguments. But in their fury to out-grieve one another, both sides miss the point.

The real question isn’t who had it worse. It’s how we can create the conditions for every generation to have it better. 

The Good News Nobody Wants to Hear

Scott Winship and his coauthor find that when you measure the middle class by purchasing power rather than by relative standing, it hasn’t hollowed out. Just the opposite. The upper-middle class expanded from 10 percent of American families in 1979 to 31 percent by 2024. The share of families too poor to reach middle-class living standards fell from 54 percent to 35 percent over the same period. Despite Millennial groans, the American middle has never been wider.

It’s not only Millennials who reap the benefits of greater economic abundance. The Economist reached a similar verdict about Gen Z, concluding that they are “unprecedentedly rich.” The typical 25-year-old Gen Zer earns an annual household income of over $40,000 — more than 50 percent above what Boomers earned at the same age, after adjusting for taxes, transfers, and inflation. Youth unemployment across the rich world recently hit the lowest point since 1991.

Even the housing and student debt objection doesn’t hold up as cleanly as advertised. In 2022, Americans under 25 spent roughly 43 percent of post-tax income on housing and education combined — slightly below the historical average for that age group from 1989 to 2019.

The Bad News Everybody Hears

Despite these gains, younger Americans face forces that older generations largely didn’t. The median home now costs more than five times the median household income, a ratio that would have seemed dystopian to the generation that bought at two or three times their salary. This explains why the age of first-time homebuyers is now edging above 40, an all-time high.

This imbalance in homeownership is deciding who gets to build wealth through the most reliable vehicle of the American Dream. Baby Boomers hold roughly half of all US wealth, or about $78 trillion, despite representing less than a quarter of the population. In an era before restrictive zoning, Boomers really did have an open door to wealth-building at an earlier age.

A Budget Mismatch

An even starker picture, though, comes from the federal balance sheet. Penn Wharton’s Budget Model recently traced the fiscal footprint of each major demographic group, including the share of federal outlays they receive. Retirees collect $2.7 trillion, or 62 cents of every dollar distributed. Working-age adults (many of them Millennials) get 28 cents. Children and young adults under 26 share 10 cents. On a per-capita basis, the gap is even more pronounced, and the retiree share is projected to only widen as the population ages.

It’s no surprise that older Americans receive an outsized portion of the federal spending pie, as they represent a large and active voting bloc. But what is puzzling is how many in this older demographic assert generational disadvantage, even as they collect a disproportionate share of federal benefits, mostly driven by Social Security and Medicare.

A Pointless Debate?

The generational debate tends to collapse into zero-sum thinking, as if the only remedy is to take from one age group and give to another. That thinking isn’t only unproductive. It’s wrong.

As I’ve argued before, the constraints squeezing younger generations are mostly self-inflicted policy failures, not the inevitable fate of demographic transition. Restrictive zoning and broken permitting systems limit housing supply precisely when young people face their sharpest cost-of-living pressures.

Worse still, the economic damage wrought by uncontrolled federal spending will fall on all generations. U.S. public debt recently crossed 100 percent of GDP for the first time since World War II. Unlike in 1946, there’s no demographic tailwind or peacetime dividend to grow our way out. Penn Wharton projects debt exceeding 190 percent of GDP by 2050. At that point, the generational debate will be long forgotten — replaced by the shared burden of a fiscal reckoning that will impact us all.

Instead of training their sights on each other, Boomers and Millennials — all generations, for that matter — should champion market-based policies that expand opportunity for everyone. Winship’s data put things in a useful perspective: even Americans at the bottom of the income distribution ended up 55 percent richer than their forebears, despite ranking lower in relative terms.

That’s the story worth telling, and one we must continue writing. 

To Make America Healthy Again, we must first shake up the one-size-fits-all factory model that dominates K-12 education. These years shape children during the most formative period of their lives, laying the groundwork for physical health, mental resilience, and lifelong success. Without a strong foundation built on movement, play, and individual attention, we cannot expect the next generation to thrive. 

The roots of today’s system reach back to the Prussian model of compulsory schooling that the United States imported in the early 1800s. After suffering military defeats, Prussian leaders created the structure to ensure they would never lose another war.  

Schools were engineered to produce obedient soldiers and compliant factory workers, not curious thinkers or healthy citizens. That same rigid structure, devoid of any humanist ideals, still defines American public education two centuries later. 

The Fall of Recess and the Rise of Obesity

Nearly 50 million children, as a rolling average, spend 13 years inside this government-run system. Each day, they sit for seven hours with almost no chance to move or play. Research has demonstrated that some ADHD diagnoses could be caused by adult expectations for children to engage in sedentary activity for long periods.  

Nowhere is the mismatch more obvious than in the dramatic decline of recess. Since the mid-2000s, up to 40 percent of school districts nationwide have dramatically reduced or entirely eliminated recess. Recess time has fallen by 60 minutes since 2001, on average. The driving force behind these cuts was an intense focus on standardized test scores. But science demonstrates that obsession is likely to be counterproductive.  

Research — including the federal government’s own — consistently shows that recess improves attention spans, reduces disruptive behavior, and boosts academic performance. Far from a distraction, unstructured play actually helps children absorb and retain what they learn. 

Students in countries like Denmark, Finland, Japan, and the United Kingdom regularly get breaks after every 45 or 50 minutes of instruction. 

The death of recess has become such a serious concern that the American Academy of Pediatrics released updated guidance on the subject this month – the first revision in 13 years. The new recommendations call for at least 20 minutes of recess and multiple daily breaks, scientifically proven to support both learning and development. 

One in five American children is now obese. This reality makes President Trump’s push to revive the Presidential Physical Fitness Test especially timely. The program encourages schools to treat physical fitness as a core part of education rather than an afterthought. 

I saw this approach in action during a visit to The Academy at the Parc, a microschool nestled in nature in Sebring, Florida. The campus follows a Waldorf-inspired curriculum that emphasizes hands-on projects, regular movement, and fresh meals prepared daily on site. Many families there rely on Florida’s school-choice scholarships to make attendance possible. The difference in energy and focus among the students is unmistakable. 

A similar model thrives at Alpha School in Austin, Texas. Students receive targeted instruction for only a couple of hours each day and devote the rest of their time to hands-on projects and collaborative activities. The results speak for themselves: these children score in the top one percent nationally on academic assessments while staying active and engaged. 

For traditional schools, the problems run deeper than structure and schedule. Public schools are not just failing to educate the minds of children, they’re also having negative impacts on their bodies. The meals served in those same schools often also undermine both physical health and academic achievement.

Medical Overreach in Public Schools

Authoritarians have long viewed compulsory schooling as the ideal vehicle for imposing medical decisions on families without genuine consent. Compulsory vaccination schedules for school attendance, even with limited exemptions for religious and medical reasons, are an especially controversial experiment in school-based social engineering. Those requirements are under review in states that prioritize parental authority and school choice.

During the COVID-19 pandemic, officials in the District of Columbia attempted to require the experimental 2022 vaccine as a condition of enrollment, from Head Start to high school. The data proving students were not at risk from COVID-19 didn’t sway officials. They backed down only when the policy was found to disproportionately exclude minority students, who were less likely to have been vaccinated. Teachers’ unions also prioritized political goals over the wellbeing of students in engineering school closures.

Beyond the sticky questions of vaccinations, an arguably more insidious overprescription crisis in schools has escalated since the advent of No Child Left Behind. Unable to change the educational environment, teachers and school counselors have medicalized childhood impulsivity and increasingly used powerful psychostimulant drugs to alter children until they can conform. Classroom teachers, not pediatricians or even school nurses, are the most likely to suggest an “attention deficit” diagnosis. A growing body of anecdotal evidence suggests children diagnosed with ADHD frequently discontinue medication when they leave traditional schooling and enroll in microschools. 

School vs the The Brain

The one-size-fits-none school calendar virtually guarantees kids will lose much-needed sleep. Early-morning starts are dangerously disconnected from teenage circadian rhythms, and a primary cause of chronic sleep deprivation. Research links sleep disruption generally, and early school start times in particular, to poorer concentration, elevated anxiety and depression, and greater risk of obesity. Nearly all of those are also associated with energy drinks, which many students now rely on. Schools that push their start times later report better attendance, superior academic performance, better physical health, and even fewer car crashes. But ninety percent of public high schools still start before 8:30, contrary to the recommendations of the CDC and the American Academy of Pediatrics.

When discussing the mental burden of public school adolescents, we shouldn’t neglect the ideological and political pressures of the modern classroom. Students report that distress about climate change, national immigration raids, and other distant issues create anxiety and distraction. The school social environment itself can be a source of mental health or behavioral challenges: teen suicides tend to mirror the school calendar, pointing to stress, bullying, and other pressures inside conventional schools. At the other end of that spectrum, assigning administrators to mediate student problems may also reduce opportunities to build psychological resilience. 

The factory school system no longer fits the needs of American families or the health of American children. We must expand school choice, prioritize learning, restore recess, improve nutrition, strengthen physical education, reduce overmedication, build resilience, and protect sleep and play.  

School choice provides the most direct path forward. When families can select microschools or homeschooling programs, children gain far more time for hands-on learning and genuine physical activity. With education freedom, every child has the chance to succeed. No child has to be stuck in a school that’s ignoring best practices. Only by breaking free from the outdated Prussian model can we raise a generation that is both well-educated and truly healthy.

While watching this just-released, kid-targeted film on May Day — a day which socialists since 1886 have celebrated as “International Workers Day” — I knew already from promotional material that it would “flip the script” on George Orwell’s 1945 satirical allegorical novella. The approach was soft-pedaled by the movie’s distributor, Angel Studios (founded by Mormons in 2014), a Utah-based firm specializing in faith-based, Christian-themed content. Perhaps Angel Studios hopes parents will take the revised theme on sheer faith.

This movie recklessly inverts Orwell’s original theme even beyond the public relations billing. Like his more famous, later work — the novel 1984 (which appeared in 1948) — Animal Farm is anti-authoritarian. It vilifies not capitalists, but communists. This movie effectively reverses Orwell’s moral framework and vilifies not communists (or even collectivists) but capitalists.

When the animals arrive on the farm, they first sense fun upon seeing signage that reads “Laughterhouse,” but they soon realize the full sign reads “Slaughterhouse.” The antagonist is not the cruel and corrupt Napoleon, but a greedy billionaire and a corporation intent on shutting down the farm. It is a clever but not-too-subtle hint — carried throughout the film — that these animals, like workers, will not merely be corralled but exploited. Filmmaker Andy Serkis appears to view this as a good and peaceful message for kids.

Not only is the original (anti-communist) theme of Animal Farm clear to anyone who bothers to read it, but Orwell himself was clearer still in his 1947 preface to the Ukrainian version, that “its various episodes are taken from the actual history of the Russian Revolution.” Orwell also knew, of course, that the 1917 revolt in Russia was not of workers against capitalists but of Bolsheviks and disgruntled (because unpaid) soldiers against the royalist-Czarist regime. Although Bolsheviks were inspired by Marxism and Marx was anti-capitalist, it didn’t follow that the Bolshevik Revolution was an overturning of capitalism. Russia in 1917 was more feudal-agrarian than it was capitalist-industrial.

Other accounts of Animal Farm are clear about its meaning. Per Britannica, it’s a “political fable based on the events of Russia’s Bolshevik revolution of 1917 and the betrayal of the cause by Joseph Stalin. The book concerns a group of barnyard animals who overthrow and chase off their exploitative human masters and set up an egalitarian society of their own, based on the founding principle “All animals are equal.” Eventually, the animals’ intelligent and power-loving leaders, the pigs, subvert the revolution. Concluding that “all animals are equal, but some animals are more equal than others,’ the pigs form a dictatorship even more oppressive and heartless than that of their former human masters.”

In his essay for the Times of London in 2023 — “Animal Farm is Still Horribly Relevant Today” — A.N. Wilson described the novella as an “incomparable masterpiece” that still “resonates today” and “not just as a terrible indictment of left-wing idealism and Communist tyranny” — as it illustrates “exactly what Lenin, and then Stalin, did to the population of the USSR” at the beginning of the last century — but because like many people still today, the characters exhibit “a pathetic weakness to believe political mantras.” Again, it’s an obvious indictment of socialism, not capitalism.

Orwell (a lifelong Englishman, born Eric Arthur Blair in 1903) said he was apolitical in his youth, then saw poverty and became a democratic socialist. This committed him to being anti-fascist, but he was also candid enough to criticize non-democratic, oppressive forms of socialism. His mistake was to believe that mere voting could soften socialism’s blows. In the 1930s German voters elected the National Socialist German Workers Party (Nazis) and soon got years of tyranny. Conveniently, Orwell blamed that not on the democratic or socialist part of the mix but the nationalist part. In 1998 (and a few times thereafter), Venezuelan voters elected democratic socialists and before long, also got tyranny. They still suffer it. What would Orwell say about that? Probably something close to what’s now said by the Democratic Socialists of America: Venezuela isn’t “genuine” socialism. As New York City mayor and democratic socialist Zohran Mamdani has said, an ideal, “genuine” socialism remains the goal, such that America must “replace the frigidity of rugged individualism with the warmth of collectivism.” Orwell warned of the “excesses” of collectivism, but being socialist surely undermined his message. 

Returning to Orwell’s preface to the 1947 Ukrainian edition of Animal Farm, we learn that he did, in fact, initially envision the novella as a parable about the evils of capitalism. He recalls that the “details of the story did not come to me for some time, until one day (I was then living in a small village) I saw a little boy, perhaps ten years old, driving a huge cart-horse along a narrow path, whipping it whenever it tried to turn. It struck me that if only such animals became aware of their strength, we should have no power over them, and that men exploit animals in much the same way as the rich exploit the proletariat.” How then did Animal Farm become instead a parable not about capitalist “exploitation” but about socialism gone awry? As mentioned, Orwell says the novella’s episodes were taken from the Russian Revolution and its disastrous aftermath. “Up to 1930, I did not look upon myself as a Socialist,” he recounts, as he had “no clearly defined political views.” He says he “became pro-Socialist more out of disgust with the way the poorer section of the industrial workers were oppressed and neglected than out of any theoretical admiration for a planned society.”

In 1936, Orwell raced to Spain to fight in its civil war — against the fascist regime and on the side of Trotskyites, who opposed Stalin for his “impure” (brutal) form of socialism. Then Orwell heard about Stalin’s gruesome, murderous purges of top military officials in 1936-38. “To experience all this was a valuable object lesson,” he recalled (in the 1947 preface), for “it taught me how easily totalitarian propaganda can control the opinion of enlightened people in democratic countries. I saw innocent people being thrown into prison merely because they were suspected of unorthodoxy.” “I understood, more clearly than ever, the negative influence of the Soviet myth upon the Western Socialist movement.” Notice how he refused to critique socialism per se. He insisted that its authoritarian versions should not be counted as genuine versions. Socialists have made this unsubstantiated assertion repeatedly since 1917. For some odd reason, Orwell didn’t consider such brazen, defensive, apologetic whitewashing as part of what he labeled “totalitarian propaganda to control opinion.”

It may be said that Orwell’s two main books weren’t really warnings about the dangers of socialism but rather attempts to salvage its terrible reputation, which he somehow presumed was unearned. In the 1930s, per Orwell, “it was of the utmost importance to me that people in western Europe should see the Soviet regime for what it really was. Since 1930 I had seen little evidence that the U.S.S.R. was progressing towards anything that one could truly call Socialism. On the contrary, I was struck by clear signs of its transformation into a hierarchical society, in which the rulers have no more reason to give up their power than any other ruling class.” Nevertheless, he recalled, “even if I had the power, I would not wish to interfere in Soviet domestic affairs” and “would not condemn Stalin and his associates merely for their barbaric and undemocratic methods. It is quite possible that, even with the best intentions, they could not have acted otherwise under the conditions prevailing there.”

The above passage is quite an ugly admission by Orwell. He “would not condemn barbaric and undemocratic methods” — even as a supposed democratic socialist — nor would he condemn socialism as necessitating such methods, especially given Marx’s distinctive expectation that revolution would launch with a mass expropriation of private property and a “dictatorship of the proletariat.” These were two crucial aspects of the original idea of socialism and they were actually instituted by Lenin and Stalin — socialism by revolution and bullets, not evolution and ballots. Orwell insisted that “nothing has contributed so much to the corruption of the original idea of Socialism as the belief that Russia is a Socialist country and that every act of its rulers must be excused, if not imitated.” But Orwell did excuse those acts. He told us he “would not condemn barbaric and undemocratic” acts. 

It’s fair to conclude that Orwell’s self-admitted motivation for writing his two anti-authoritarian books in 1945 and 1948 was a worry that socialism wouldn’t advance in his native Britain, where he lived from 1928 onward, as long as Stalin’s Soviet Union was seen as the role model. Again, from the 1947 preface, we find him declaring that “for the past ten years (1938-47) I have been convinced that the destruction of the Soviet myth was essential if we wanted a revival of the Socialist movement.” What is the “Soviet myth”? That the “Union of Soviet Socialist Republics” (USSR) was real socialism

How does Andy Serkis, the producer of the new animated film, explain his desecration of the classic satire? In a recent episode of the Reason Interview, “What Orwell Understood About Tyranny,” libertarian host Nick Gillespie praises him and lightly questions but doesn’t criticize him for bizarrely transforming the bad guys from socialists into capitalists. Serkis says it’s an innocent “adaptation” of the original story and claims he got approval from the Orwell Estate. Serkis insists that his version’s theme isn’t different from the original novella but merely “broader,” as it’s about the “corrupting nature of power.” What does he mean by “power?” As is common among socialists — Orwell included — Serkis improperly conflates opposites: economic power (the power to produce) and political power (the power to coerce). In effect, Henry Ford and Joseph Stalin are both deemed dangerous because “powerful.” If you can so easily conflate opposites, you can also easily invert story plots and characters, switch the good guys and bad guys. Serkis does both. On his account, capitalism is no less “dangerous” than socialism. Why then prefer the latter over the former? Each is supposedly constrained by democracy, by a majority vote of whoever for whatever. Anything goes. In fact, history teaches that unlimited democracy, devoid of any real protection of genuine rights (especially property rights), degrades capitalism’s inherent safety, security, and prosperity, while it also enables the rise and spread of socialism. Of course, that’s the aim of “democratic socialists.” Democracy for them is a way to get socialism, not confine it. They know the cocktail is both possible and dangerous.

For those interested in accuracy and fidelity to the original source material of Animal Farm, the only visual alternatives to the current film are the British-American animated version of 1954 and the live-action film from 1999, using the puppetry of the late, great Jim Henson.

When my eldest daughter, now 23, was five years old, she delivered her first “out of the mouths of babes” moment. When walking into our local supermarket shortly before Memorial Day, displays were predictably decked in red-white-and-blue bunting. She asked me why, and I replied, “It’s because Memorial Day is next weekend.” She then retorted, “Oh! Is that the day we celebrate the wars?!” 

Her question stopped me in my tracks. Pausing to gather my best dad-on-the spot response, I explained, “No, sweetie. We don’t celebrate wars. It’s supposed to be a sad day. We need to remember how awful war is and to think about and pray for our friends and family that have been hurt or killed in wars.” 

In an instant, my young daughter revealed the message delivered to American children: War is too far removed to lament. Rather, the full appreciation of the sacrifices associated with military conflicts is held at a great distance. Whether those sacrifices were made willingly or unwillingly, lamenting them is largely absent from this culture’s consciousness. Our children know it, and if we’re honest, so do the rest of us.

This essay isn’t intended to rail against Memorial Day sales, consumerism, barbecues, and furniture discounts that have come to define the extended weekend. Rather, it reflects on how this culture lost its ability to mourn the losses of war since the original “Decoration Day.”

The Origins of Memorial Day

The origin of the holiday revolves around the close of the Civil War, so the controversy over its origins comes as no surprise. The earliest grave decoration appeared in October 1864, when three women of Boalsburg, Pennsylvania, decorated the graves of the fallen. Whether Union soldiers’ graves were exclusively commemorated remains unclear. Another account from Charleston, South Carolina, explicitly honored northern casualties alone on May 1 of the same year. 

Two springs later, the secretary of the Ladies Memorial Association of Columbus, Georgia, Mary Ann Williams wrote a letter to the editor calling for officials to “set apart a certain day to be observed…and be handed down through time as a religious custom of the country, to wreathe the graves of our martyred dead with flowers.” 

Two weeks later, both Columbus, Georgia, and Columbus, Mississippi, held events one day apart, and the latter was immortalized in the Francis Miles Finch poem The Blue and the Gray

With sectional rivalries still at a fever pitch during the Reconstruction era, General Orders No. 11 was issued by General John A. Logan. He was reportedly inspired by his wife, Mary, after she witnessed the practice of grave decoration in Virginia. She remarked to her husband that it was “not too late for the Union men of the nation to follow the example of the people of the South in perpetuating the memory of their friends.” In response, Logan ordered military personnel to set aside May 30, 1868, as a national day of Decoration. While not yet a national holiday, it served as an informal day of remembrance for the armed services and others who sought to honor the war dead. With the shadow of the Civil War still hanging over the country, the solemnity of the occasion would not have been lost.

In the decades following, greater emphasis was placed on the day. It wasn’t until May 11, 1950, that Congress passed a joint resolution, requesting that President Truman “issue a proclamation calling upon the people of the United States to observe each Memorial Day as a day of prayer for permanent peace and designating a period during each such day when the people of the United States might unite in such supplication.” Finally, the date was officially moved from May 30 to the last Monday of the month in 1971, while the nation was still in the throes of the Vietnam War.

War as an ‘Economic Good’

The call to prayer for “permanent peace” has given way to the post–World War II era of near-constant foreign conflict. The inescapable irony is that, during this age of frequent military engagement and deployment, the lived experience of war is more distant from American culture than at any point in recent memory. So much so that the costs of war are often described in terms of “pain” at the gas pump, rather than the bodies, hearts, and minds of Americans on extended deployment and in harm’s way. To be sure, supply shocks and higher living costs are real burdens felt by ordinary Americans in the midst of unnecessary conflict. But they pale in comparison to the losses borne by those in active war zones.

This distancing reflects a cultural transformation with deep and complex roots. Still, two plausible contributors are worth considering.

First, the economics of war finance since World War II has, at least temporarily, insulated the public from the costs of war. Military expenditures have been funded less through direct taxation or the mass sale of war bonds and more through deficit spending. The Federal Reserve and its commercial bank partners continue to absorb much of this debt. As a result, the costs are largely obscured from public view and are felt only later, when policymakers can deflect blame for the resulting loss of purchasing power onto familiar scapegoats.

Second, many Americans still operate under the assumption that war is “good for the economy.” They point to the federal government as a demand-driver in the GDP calculation, and to new technologies and industries that emerge from the military-industrial complex. Military contractors have cleverly spread the benefits of their subcontractors throughout the fifty states. For instance, the F-35 fighter jet has significant employment attached to it in 45 states. Moreover, the “Camo Economy” involved vast economic benefits to subcontractors, rather than to the Pentagon directly. In 2019, contractors in Afghanistan outnumbered military personnel by more than 50 percent and “an estimated 8,000 US contractors died, in addition to around 7,000 US troops.” Some honest commenters who claim that war benefits the overall economy at least acknowledge that without massive military expenditures “taxes would have been lower, inflation would have been lower, there would have been higher consumption and investment and certainly lower budget deficits.”

Through these two channels, inflation-financed warmaking and government-driven excess expenditures, the costs of war appear to be far removed, and even, dare we say it, beneficial. 

‘The Great Severance’

This cultural insulation brings me back to my daughter’s early impressions of Memorial Day. If the true costs of war are cast far from us in terms of economic pain, and even painted as economically beneficial, then it is no wonder that a child might think that in America, we celebrate war. This powerfully illustrates what Catherine Pakaluk has called, albeit in another context, “the great severance.”

Wherever we see economic policies that shield people from the social, cultural, and economic consequences of policymakers’ choices, the true human toll remains hidden from view, although only temporarily. But sometimes, even a child’s eyes can see straight through the ruse.