US President Donald Trump has proposed supplying Ukraine with ongoing military aid in exchange for access to its abundant reserves of rare earth minerals — elements critical to high-tech industries and defense applications. This proposal aligns with Trump’s long-standing perspective on leveraging foreign natural resources to offset US military expenditures. Notably, in 2011, he criticized the US strategy in Iraq, suggesting that seizing oil assets could have reimbursed the United States for its military involvement.

Such payments-in-kind are not without precedent. Historically, nations have engaged in similar deals, particularly involving oil. For instance, during the 1980s, the United States entered into agreements with Middle Eastern countries, exchanging military support for favorable oil terms. In the current context, Ukraine’s President Volodymyr Zelensky has expressed openness to this proposal, viewing it as a means to secure necessary defense aid while providing the US with valuable resources. Challenges persist, however, as many of Ukraine’s mineral deposits are located in conflict zones, complicating extraction efforts.

If undertaken, the arrangement is suggestive of a broader shift in the global economic landscape; one in which commodities and strategic resources are increasingly central to international trade and finance. The emerging order has been dubbed Bretton Woods III, in which nations seek alternatives to traditional fiat-based monetary systems by accumulating tangible assets and restructuring global trade dynamics. Unlike the original Bretton Woods system (1944–1971), which was based on fixed exchange rates and a gold-linked dollar, Bretton Woods II (since 1971) has been characterized by fiat money and floating exchange rates. Bretton Woods III, however, envisions a system of quasi-pegged exchange rates in which commodities play a more pivotal role as economies intervene in foreign exchange markets to manage their currencies and maintain competitive advantages in trade.

Bretton Woods III

In the modern international financial order, emerging markets (particularly in Asia and the Middle East) accumulate large reserves of US dollars and reinvest them into US assets, particularly Treasury securities. Envisioned by Zoltan Pozsar, Bretton Woods III is a global order emerging as a byproduct of both persistent trade imbalances and the widespread decimation of fiat currencies. For decades, nations including China, Japan, and oil-exporters have maintained undervalued currencies to sustain export-driven growth. In so doing, those economies have become net lenders to the United States, effectively financing fiscal deficits and enabling prolonged periods of low interest rates. 

China provides a prime example of an economy that actively manages its currency, the renminbi (RMB), by intervening in foreign exchange markets to maintain a competitive edge in global trade. The People’s Bank of China (PBOC) frequently adjusts the yuan’s exchange rate through a combination of currency pegs, capital controls, and foreign reserve management, ensuring that Chinese exports remain attractive by preventing excessive currency appreciation.

The implications of the new global economic regime, even if partly realized, are profound. On one hand, the former system supported global financial stability by ensuring demand for US debt. By doing that it has allowed the US to run sustained current account deficits for improbably long periods without fiscal strain. The tradeoff of doing so, however, has been the emergence of structural imbalances, with emerging markets becoming dependent on US monetary policy as the US has grown dependent upon foreign financing. The mutual reliance has given rise to a major risk: the potential for a rapid, disorderly unwinding or even sudden collapse of the linkage. If foreign creditors were to lose confidence in US debt sustainability or shift away from the dollar in favor of alternative reserve assets, exchange rate volatility, capital flight, and rapidly ascending borrowing costs are likely reactions with broad repercussions for global trade and financial markets. Geopolitical tensions and rapid dedollarization movements by major economies, such as the BRICS bloc, could accelerate such an unraveling, resulting in a fragmented global monetary order where multiple reserve currencies compete for dominance.

Another likely outcome of the Bretton Woods III order is the growing role of commodities as a store of value and medium of exchange in global trade: a growing preference for outside versus inside money. As resource-rich economies and emerging markets seek alternatives to excessive dollar dependence, gold, oil, and industrial metals will increasingly play a role in reserve diversification and trade settlement. Cryptocurrencies will as well. This shift has already begun as seen in efforts by the expanded BRICS bloc to settle cross-border transactions in commodity-backed currencies or through bilateral trade agreements denominated in non-dollar assets. Central banks in China, Russia, and the Middle East have been ramping up gold purchases, driving the price to all-time highs while signaling a shift toward tangible, asset-backed reserves over the US dollar and Treasury securities. 

If that trend accelerates, it could lead to a regional- or alliance-based, multipolar monetary system with commodities (including but not limited to gold) playing a stabilizing role. Among the many implications of Bretton Woods III are a severe weakening of the exorbitant privilege of the US dollar as the world’s dominant reserve currency. 

Lines Are Already Being Drawn

If this international structure ultimately takes shape, the Trump administration’s proposed deal — trading weapons to Ukraine in exchange for rare earth metals — may eventually register as an early milestone of a broader shift toward commodities-backed transactions, away from fully financialized global trade. The European Union (EU) has a €900 million agreement with Rwanda aimed at obtaining critical raw materials like cobalt and lithium essential for technological industries. That deal has faced criticism due to Rwanda’s alleged involvement in the conflict in the Democratic Republic of the Congo (DRC), where on the other side China has solidified its influence through substantial investments in the DRC’s mining sector. The Chinese have thus far committed $7 billion to infrastructure projects in exchange for access to the country’s abundant copper and cobalt reserves. In another instance, Turkey and Azerbaijan have strengthened their bilateral relations by trading natural gas and strategic metals, enhancing their economic and geopolitical ties. A definitive shift towards resource-based diplomacy is afoot where nations increasingly shirk paper and securities in favor of natural assets for forging alliances and advancing strategic interests.

Implications

A shift toward a real asset-based financial order may, after some period of time, significantly alter global power structures by elevating resource-rich nations while diminishing the influence of traditional financial centers. Countries endowed with vast reserves of oil, rare earth metals, or major, reliable agricultural production could see their geopolitical leverage increase as physical assets increasingly become a foundation for economic stability. A resultant shift might be the hoarding of critical resources, as nations seek to control strategic materials in favor of exchange. In extreme cases, that development could escalate into resource-driven conflicts, as states maneuver to secure deposits of high-value materials. Moreover, bilateral and barter-based trade agreements could become more prevalent, with nations exchanging commodities directly for infrastructure, military aid, or technological expertise rather than using dollar-based financial markets. (During the Cold War, payments-in-kind between collectivist nations were common; sugar for oil between Cuba and the Soviet Union, for example.) Such a realignment could weaken traditional financial hubs like New York and London, reducing their dominance in global capital flows. 

Fully realized, the Bretton Woods III paradigm could reshape the hierarchy of global powers, elevating smaller nations that possess disproportionately large resource reserves — such as Mongolia, which produces 99 percent of the world’s supply of terbium, or Namibia, the fourth largest supplier of uranium on Earth — provided their institutions are stable enough to capitalize on newfound wealth. Conversely, countries that have historically maintained economic dominance through finance and technology, but lack natural resources or the will to procure them could become more middling powers until or unless they secure stable commodity supply chains. Storage space and low shipping rates would become a new manifestation of capital adequacy. A commodity-driven system could also redirect innovation, shifting investment away from speculative technology and finance toward energy optimization, materials science, and supply chain resilience. Financial crises could evolve to take new forms, driven not by credit expansion but via supply chain collapses, extreme weather disruptions, or geopolitical embargoes that trigger instability cascades. 

An emerging order where tangible assets — not abstract financial instruments — come to define national economic security and influence is not a foregone conclusion. Decades of technological infrastructure, operational practice, and human capital have built global financial markets, and they won’t be swept away overnight. But fiscal and monetary excesses, combined with the shifting importance of once-overlooked resources, are ushering in Bretton Woods III in fits and starts. The latest phase of slow but steady dedollarization may have arrived in the form of an American president invoicing shipments of military weapons not for money, but for mining contracts leading to crates full of rapidly oxidizing, chalky, white metals.

Flower Mound, Texas, is about thirty miles northwest of Dallas. It straddles two counties: Denton, in which Trump won 56 percent of the vote, and Tarrant, which was evenly split between Trump and Harris in 2024. Folks are mostly friendly, and the area has been designated a “top US suburb” by some of the organizations that do that sort of designating.

It is also the location of Hive Bakery, owned and operated by local resident Haley Popp. And Ms. Popp has become famous.

Not because she is a renowned baker — though that’s true; she even appeared on Food Network — but because of something she didn’t bake. Ms. Popp became locally famous, even notorious, for refusing to bake a “Congratulations, Donald Trump!” cake for some customers.

But perhaps we should start at the beginning.

Ms. Popp is a “progressive” (her word), and a minor celebrity in the food world. In October, to recognize the Vice Presidential debate, she created and advertised a “Tim Walz Cookie,” with the Democrat VP candidate’s face surrounded by blue sugar icing atop each confection.  (In fairness, there is a self-mocking vibe to the store, as in this “FU Anti-Valentine’s Cookie”, so it’s hard to take very seriously.)

Amazingly, but also unsurprisingly, Ms. Popp received protests, criticism, and some vague threats. Ms. Popp, who for a Progressive understands capitalism well, responded: 

Here’s the thing. I don’t give a f– if you don’t want to buy a cake from me because I put out Tim Walz cookies. I couldn’t care less what your opinion of me is, nor do I think twice about your unsolicited advice on how I should run my business. You don’t like me? Don’t come here. You don’t like that I post political s–t? Unfollow. You are irrelevant.

The lady makes cookies, cakes, bread. You want to buy some, do it. If not, don’t. If she makes more, or less, profit because of what she offers for sale, that’s on her. Nothing to see here, folks!

Except…there is something to see. Consider two events from the mid-2010s wokeness frenzy:

Event 1: A pizza restaurant in Indiana was threatened and boycotted in March 2015 because an employee gave an honest answer to a question: would you sell pizza to cater a same-sex marriage? The answer was that the restaurant would sell pizza to anyone, but would prefer not to provide specialized, contracted catering services to that wedding. The implication was that heterosexual weddings were fine, but same-sex weddings were not, in terms of what the restaurant would cater.

There was an amazingly strong response to an employee’s answer to a hypothetical question. A sample of the Twitter response (since deleted): “Who’s going to Walkerton with me to burn down Memories Pizza.” This video response is typical of the sarcasm and anger that was focused on the staff, despite no one actually asking the restaurant to cater weddings. The restaurant had to close, to protect its employees, and when it reopened it struggled, closing permanently in 2018.

Event 2: Today’s, a jewelry store and fabricator in Mount Pearl in Newfoundland, Canada, has a reputation for being able to make lovely custom rings to the customers’ specifications. The store accepted an offer from a lesbian couple, Nicole White and Pam Renouf, to create their design for wedding rings, also in March 2015, exactly the same time that the Indiana pizza restaurant was being attacked for refusing service.

The couple paid a deposit, received the rings, and were delighted. They paid the remainder of the contracted cost, and prepared to get married the following year. They recommended Today’s to friends. One of the friends, on visiting the store, saw a sign: “The sanctity of marriage is under attack. Let’s keep marriage between a man and a woman.” The friend took a photo, and shared it widely, including sending it to the couple who had made the original purchase.

The couple, though happy with their rings and the service they had received, were outraged that the jeweler had hidden his views about same-sex marriage. The owner, Esau Jordan, explained in an interview that he posted various signs throughout the year, and it was only by accident that (apparently) this sign had been posted when White and Renouf’s friend had visited the store. The couple demanded a refund, even though they had no complaint and the rings were in no way faulty or deficient. At first, owner Jordan refused, but he was subjected to so many threats and so much personal abuse that he ultimately relented, refunding the money and taking back the rings.

Darned If You Do…Anything

Interestingly, there appeared to be uniform support in mainstream media — remember, both of these events happened in March, 2015 — for criticizing both Memories Pizza and Today’s Jewelers.

• Memories Pizza was targeted because staff — in response to a hypothetical question — declined to provide a privately contracted service for a same-sex wedding.
• Today’s Jeweler non-hypothetically provided both favorable service and a quality product, fulfilling the terms of a contract for rings used in a same-sex wedding, but later posted a critique.

Both of these responses outraged observers. But if a business owner cannot use a religious objection to deny a service, but also can’t keep quiet about a religious objection in providing a service, what is being punished? Remember, the pizza store had to close, and the jeweler had to refund a substantial payment for a product it could not resell. It would seem that the answer is that it is simply unacceptable to run a business while dissenting from the orthodoxy that dominates mainstream media. 

Why don’t people just accept the wisdom of Haley Popp: either buy / sell, or don’t. But I don’t care what you think, and there is no reason for you to care what I think. It’s a commercial transaction, not a political endorsement.

Our fundamental freedom of association must include both the choice with whom to associate, and also with whom not to associate. This discrimination on the part of a private person is among our core civil liberties, both in politics and in economic contracts.

We suspend some of that right to discriminate under the well-established common law doctrine of “implied contract,” an offer associated with being ‘open for business.’ If I advertise prices for goods or services, I have some obligation to honor the offer when someone takes me up on it. If I open a pizza restaurant with prices, sizes, and toppings listed on a board, I am obliged to provide those pizzas, with those toppings, at those prices. I have some latitude to refuse service for cause, if the person is drunk, obstreperous, too loud, or too smelly. And of course I might run out of a topping, or my oven could break, preventing me from making good on the implied offer.

When, on the other hand, my services involve an actual, direct contract with written terms, I have no obligation to enter into such agreements, and my refusal can generally be for any reason, or for no reason at all. When you ask if I want to sign a specific contract to cater your wedding, I have made no implied offer to cater, and I am free to say no. If I agree, however, and provide the contracted service, you have no basis for demanding a refund, unless there was a violation of the terms of the specific contract we signed.

So, the pizza restaurant should have been protected against being obligated to cater a same-sex wedding, or in fact any wedding or any other event, for any reason. Many residents of Flower Mound assert their universal right to refuse to do business with to the owners of Memories Pizza, while punishing the owners for exercising that right themselves. But if people are obliged to do business, and do so well, how can they later be punished, as in the case of Today’s Jewelers?

Now, it may be too much to expect full consistency from people. I understand that. Haley Popp’s view that if you don’t like her cookies, then don’t buy them, is a good start. I’m willing to bet that Ms. Popp herself has participated in boycotts. After the election, several Trump fans requested that Ms. Popp make elaborate cakes for their “inauguration parties,” and celebrations of Trump winning the election. Ms. Popp had refused, but last week she came around.

It’s hard to know whether the real reason was that she was tired of crank calls, threats, and social media abuse, or whether it was worth making large custom cakes because they pay well. But in any case, Ms. Popp announced, “Okay, I’ll make your stupid cakes.”

Prosperity flourishes when businesses serve customers, not ideologies—and when customers choose, not coerce. Perhaps we’d all do better to prioritize peaceful exchange and good service, rather than political lockstep.

Shortly after the new year, the world watched the Los Angeles area burn in devastating wildfires across the region. From the Palisades Fire in the west to Eaton Fire in the east and numerous smaller fires in between, the whole city was gripped in stress and uncertainty. Even as firefighters battled blazes, new fires broke out north of the city. Though the most recent wave of fires has passed, the region has long been—and remains—at risk for devastating fires.

I was born and raised in Los Angeles, where wildfires have always been a part of life. I can remember ash falling all over my town from a nearby fire when I was in high school. I wasn’t too far from the 2017 Skirball fire that burned along the 405 freeway, spawning viral images. The first time I visited the giant Sequoias a few hours outside the city, the sky was filled with smoke from a massive blaze in the mountains that burned over 170,000 acres. I still live here, and despite how ‘normal’ wildfires are, the last spate of them has been more widespread and unnerving than anything I’ve seen.

Social media posts from distant observers have understandably focused on the potential causes and numerous failures and instances of negligence and mismanagement from the government and its various agencies and officials. But the experience for many people who live here has been different. When you’re unsure of whether your home will burn to the ground, there isn’t much time to fixate on the details of why or how the emergency arose. On the first night of the Palisades Fire, I juggled packing up my most precious belongings — family heirlooms, photos, and home videos — with helping my mother prepare to evacuate her own house as a different fire burned near her. 

In a less publicized example of government ineptitude, public notification systems have left much to be desired. They were glitchy, missing key information, or difficult to access, especially for people with limited cell service or internet. At the height of the Palisades Fire, the county accidentally sent out evacuation notices to the entire region not once but twice, causing millions of people even more stress and panic than they were already experiencing. 

Amid the chaos, a firefighter I know recommended an app that tracks fires, reports information related to them, and sends users notifications with important updates. Watch Duty is a free app (with a paid option) that, according to its founder, entrepreneur and engineer John Clark Mills, arose as a direct response to the shortcomings of government wildfire responses in the state. 

“I’ve been through this a couple times, and I am bombarded with nonsense alerts, alerts that don’t say anything or no alerts at all, frankly,” he told the Hollywood Reporter in a recent interview. In a separate interview, he recalled a fire that came within a quarter mile of his ranch in northern California. He said he received no official alerts and only realized what was happening when he saw helicopters flying overhead.

This kind of failure can be a matter of literal life and death. “Nearly every wildfire fatality occurs within the first hour yet official notifications are often delayed, sparse, or non-existent,” Watch Duty’s website notes.

Frustrated with the difficulties of getting accurate, clear information, Mills sought to understand the ins and outs of wildfire responses. He connected with firefighters and took wildfire training courses. He also attempted to work with local politicians, who he says “had no interest in working with” him. 

“I just realized that no one was going to fix this, no one was going to figure it out, and there’s lots of people like me who were trying to figure out what is going on,” he told the Reporter.

In 2021, he created Watch Duty, which has been a lifeline for Los Angeles residents, including me, during this latest round of devastating fires. It is a no-nonsense, well-built app (while their website calls it a “service, not an app,” it is downloadable in the app store). It is centered around a map with flame icons to mark current fires and provides up-to-date, accurate information and reporting based on firsthand monitoring of radio communications. It also provides evacuation updates, shelter locations, air quality data, wind patterns, the containment status of each fire, and external links to press conferences and local news reports. Where the government’s systems are unreliable and unwieldy, Watch Duty is efficient, easy to use, and accurate.

Four weeks ago, I stood on my balcony watching the sky glow orange as the Palisades Fire crept up from the other side of the mountains toward my home. The app was integral in helping me decide whether or not to leave, and I wasn’t alone. Downloads skyrocketed as the fires raged and people desperately sought accurate information. In one night, Watch Duty garnered 600,000 downloads, rising to the top of Apple’s app store. My whole family and everyone I know in Los Angeles is now relying on its services. Even some government agencies are using it, according to Watch Duty.

Watch Duty is run by a small team of paid employees with a broader collection of volunteers. Many of their reporters are also active and retired firefighters and first responders who have direct experience with wildfires and are careful not to sensationalize their reports. 

Though Mills didn’t start the app as a business or to turn a profit — it’s designated a nonprofit —  people are willing to pay for it voluntarily. It’s funded largely by private individuals and companies. Watch Duty recently reported that over 80 percent of its annual budget now comes from paid memberships. In other words, people who recognize and appreciate the service the app offers are willing to pay their hard-earned money for additional features and to support the project. Though it has received funds from some government-subsidized companies (including Google) and partners with some public parks agencies, it is a non-government service. 

Even so, Mills’ activist intentions don’t necessarily align with free market economics. “This is my life and my community. I owe it to my community to not be a disaster capitalist,” he said while commenting on the app’s minimal collection of personal data. He has also vowed not to sell it and very clearly didn’t start it to make money. Regardless, his project is providing something essential in any economic system: compassionate action in service of helping others. 

As many people already know, chaotic and insufficient disaster responses from government are not unique to California. From hurricanes and blizzards to tornadoes and floods, many people find themselves on their own in some of the most stressful and traumatizing times of their lives. It is unsurprising, then, that an app like Watch Duty is growing in popularity: according to their website, they now operate in 22 states.

While the ineptitude of government is unlikely to change, people’s understanding of this reality is changing — and so is the firefighting marketplace. The media highlighted instances of residents in the Pacific Palisades, an extremely wealthy area of Los Angeles, hiring private firefighting services to protect their homes amid the fires (a trend left-wing commentators predictably condemned despite the small number of homeowners who have done so). Some homeowners are also installing private fire hydrants, a cheaper alternative to an entire private firefighting team. Demand for these private hydrants has skyrocketed amid this recent wave of fires. Equipped with hoses and other accessories, the hydrants provide another layer of protection. While they may not replace professional expertise, they allow individuals to take proactive steps to protect their property.

Further, insurance companies (and even government agencies) contract with private fire services to protect homes, which is not a new practice (the history of firefighting is notably rich with examples of fire insurance companies hiring their own firefighting services). Both fire prevention and firefighting companies are working with insurance companies to achieve this, though prevention services are reportedly more common. These business relationships are driven by the economic reality that fire insurance companies are responsible for payouts to policyholders when their homes are damaged or destroyed. This creates an incentive for them to preempt potential harm and minimize their losses. Government agencies have no such contractual obligation to taxpayers, so it is unsurprising that public responses were inadequate. In light of this, private firefighting services are a predictable development and market response.

Whether through the use of private fire hydrants or private fire prevention and firefighting services, individuals and private businesses alike are increasingly seeking more effective alternatives. Watch Duty is a prime example of what is possible when people stop relying on government and take matters into their own hands and communities.

The Broadband Equity, Access, and Deployment Program (BEAD) allocated $42 billion to extend broadband access to all homes nationwide. Nearly three years after passage, 16 states still lacked funding approval. In its first three years, the program connected precisely zero homes to the internet. 

The expressed objective of BEAD is to bridge the so-called digital divide — the lower levels of access and affordability for some rural residents, minority groups, and lower-income earners. Yet, the private sector is doing quite well at bridging this so-called divide. While the federal government dithered on allotting the $42 billion of BEAD funding, the percentage of Americans using the internet rose from 80 percent in 2021 to 83 percent in 2023 — an additional 13 million users. High-income household use has remained virtually unchanged for a decade — at 87 percent — while usage in low-income households earning less than $25,000 steadily rose to 75 percent by 2023. Even in rural areas, 72 percent already have fixed broadband coverage.  

Even the remaining gap overstates the extent of the problems with access and affordability. Less than 10 percent of the overall population lacks internet service. Of the 24 million households with no internet, more than half (58 percent) either have no interest in being online or no need to be online. Lack of availability accounts for just 4 percent of those without home internet. In other words, fewer than 1 million households (fewer than 1 in 100) nationwide are offline solely due to lack of availability.  

The per-household cost of the federal “solution” to this diminishing problem is steep. The $42 billion price-tag is sufficient to provide 12 years’ worth of Starlink service — $44,000 — for each impacted household. Even if we presume all the 24 million households currently without access will benefit from increased access and affordability, this comes to $1750 per household.  

Meanwhile, the cost per taxpayer of BEAD is simply added to our massive federal credit card balance, a marginal negative impact so distant it is barely discernible. But that’s the ugly truth of dispersed costs and concentrated benefits. A handful of broadband infrastructure companies stand to benefit immensely from these widely dispersed costs. Taxpayers foot 75 percent of the cost of capital investments from which these favored companies will generate revenue for decades to come.  

The private sector already has developed an alternative to high-capital expenditures for building our expensive infrastructure serving only sparse numbers of people in rural areas: Starlink.  

Starlink covers the entirety of the lower 48 states at a cost of just $120 per month for unlimited residential use. Typical download speed easily exceeds the FCC’s 25 Mbps threshold for “unserved” and often exceeds the FCC’s 100 Mbps threshold for “underserved.”  

Ironically, Biden claims this program is “not unlike what Roosevelt did with electricity.” At the founding of the Rural Electrification Administration in 1935, only one in ten farms had access to electricity. Incidentally, the number of US farms peaked in that year and agriculture comprised 21 percent of our workforce, lack of access to electricity posed a real impediment to growth. Contrast that with today when most families even in remote parts of the nation already utilize the internet — and fewer than 1 million are deprived due to lack of availability. Furthermore, in 1935, no practical substitute to hard, physical infrastructure — cables, poles, transistors, and power plants — existed, where today internet access via satellite link and portable equipment can substitute for physical broadband cables. Lastly, the funds provided by FDR’s administration were loans rather than pure giveaways of taxpayer money to favored companies. The differences in need, benefit, and mechanism between this wasteful broadband program and the rural electrification program are stark. 

It’s also no surprise deployment of these $42 billion in federal funds has been slow or even nonexistent. BEAD funding comes with various attached requirements, including mitigating climate change, hiring those with criminal records, conforming to a prevailing wage scheme, and hiring and training local residents. In addition, the rules specify that recipients of the subsidies provide services at “reasonable prices” for “middle class families.” Failing to provide an actual price cap skirted the legislation’s ban on outright regulation of broadband rates. But this workaround acted as an even worse form of price control — one in which bureaucrats decide retroactively whether a price is “reasonable.”

Reliance on government funding will discourage private sector investment in broadband infrastructure, as companies might wait for government subsidies rather than investing their own capital. This could slow down overall broadband expansion and innovation in the long term, affecting consumer access and service quality. Rather than focus on investing in infrastructure where returns on capital will prove most profitable, companies instead must predict the geographies and market segments most likely to receive government subsidies. Reliance on federal or state broadband coverage maps can misallocate capital to areas where investments are less efficiently employed. A company spending its own capital on infrastructure would be a costly mistake if taxpayers will provide those resources instead (or provide them to a competitor). The promise of BEAD funds will likely deter private investment in areas where this funding is anticipated. 

The marketplace shows an uncanny ability to improve affordability. For instance, across parts of South Florida, Breezeline was the only residential broadband provider.

Household costs topped $150 per month. This changed rapidly in 2024 as Verizon expanded home internet service to many neighborhoods, offering similar access at less than half their competitor’s price. Breezeline’s onerous pricing provided an incentive for Verizon to invest heavily in an alternative. Profit is a motivator for private investment, benefiting both shareholders and the public.

Why not simply allow the market to work? Rural residents with no access to broadband can use Starlink. Over time, private companies may decide that broadband infrastructure development in these areas is worth the capital investment. They are in a far better position to make this determination than bureaucrats doling out borrowed taxpayer resources. The track record of BEAD’s inefficiencies and delays caused by lack of intergovernmental coordination and funding compliance requirements should spell its end.

It’s time to repeal this especially wasteful component of the 2021 infrastructure law. 

ESG pushback within the United States is affecting business matters in a substantial way. In January, a Texas federal judge ruled that American Airlines was in violation of federal law after the airline invested 401(k) plans with asset managers favoring ESG initiatives over financial benefit. The court concluded that American Airlines breached its fiduciary duty, and it is safe to assume that other ESG-friendly firms will soon face similar lawsuits for any poor performance associated with ESG investing. 

ESG isn’t the only acronym losing its elevated status in corporate America; DEI programs are also facing a watershed moment. President Trump’s Executive Order 14171, titled Ending Illegal Discrimination and Restoring Merit-Based Opportunity, emphasizes that “individual merit, aptitude, hard work, and determination” and not “how people were born” should determine whether or not someone is hired. Trump’s EO on DEI could have been done in his first term, so its emergence now is notable, and reinforces the notion that politics is downstream from culture. Indeed, a vibe shift has seemingly occurred in the marketplace and therefore what government mandates (or backs away from) is also evolving. 

Even at the World Economic Forum in Davos, it’s been reported that ESG and DEI talk is diffused, thanks in part to AI matters stealing the spotlight and Trump’s reelection ruffling the feathers of Europe’s elite class. Anti-woke advocates, however, shouldn’t assume that the business environment will dramatically transform in the coming years. ESG and DEI are an embedded part of how some industries now operate. In fact, before ESG talks gained real traction in the early 2000s or the “racial reckoning” eruption of 2020, firms were already vested in matters connected to both these realms. Moreover, the priority that has been placed on studies related to sustainability and workplace diversity in business education programs has pre-programmed those who are now in managerial and C-suite positions to champion for stakeholder concerns rather than shareholder returns.

So, with this in mind, and given that there are several worthwhile articles already available which trace the history (along with the merits and demerits) of ESG and DEI, it might be worth looking at this matter through a different lens. And a business school concept, with its own catchy acronym, may be what’s needed to provide a more nuanced point of view regarding the supposed decline of ESG and DEI.

Applying the PLC

Product Life Cycle theory, referred to as the PLC, is often taught to business students to convey the limits of commercialization and how strategies related to distribution, communication, and pricing will inevitably need to change over time. The PLC concept originated in a 1950 Harvard Business Review article titled “Pricing Policies for New Products,” however, it wasn’t until the publication of Theodore Levitt’s Exploit the Product Life Cycle (1965) that the PLC gained true notoriety.

The application of the PLC has expanded over time to encompass more than just a focus on products and sales, and insight derived from dominant marketing theorists such as Raymond Vernon (1966), William Cox Jr. (1967), and Michael Porter (1980) have advanced the understanding of the PLC framework. 

Essentially, the PLC posits that new products follow an S-shaped curve in relation to four stages: market development, growth, maturity, and decline. And this model can also be applied to the adoption process of new services, new ideas, and new programs (like ESG and DEI) within a marketplace.

According to the PLC, a product’s ‘life’ stage changes in accordance with perceived value and market demand, and the ‘newness’ level of a product will impact how it is marketed over time. By conceptualizing the PLC, firms can engage in proactive decision-making regarding their marketing strategies. During the first stage, known as ‘market development,’ focus is placed on generating awareness of and interest for what is being offered. But, when an influx in sales is assured, and competition from new entrants arises, promotional strategies shift from focusing on the product itself to leveraging branding mechanisms and differentiation tactics. ‘Why buy’ becomes ‘why buy from me.’

ESG and DEI have had a long and storied history regarding market development, but the establishment of formalized standards, policies, and rating systems, along with the attraction for practitioners and education programs represents the evolution of ESG and DEI and their growth trajectory. 

The duration of the ‘growth’ stage, as well as the next stage of the PLC, ‘maturity,’ largely depends on the interests of the market and the level of brand equity an organization has acquired. Similar or substitute products are typically readily available during the maturity phase,  so marketing tactics tend to focus on reinforcing the value proposition of what is being offered. Depending on market interests and technological advancements, the maturity stage can move quickly, like it did for Discman, or slowly like it has for dishwashers (due in part to the sluggish impact of regulatory compliance), which is why marketers must always be vigilant and prepared.

Defying the PLC

The final stage of the PLC, ‘decline,’ occurs when the interests of consumers and/or the resources of producers are largely redirected to new offerings. And, to some extent, this is what we are witnessing with ESG and DEI today. Businesses are going back to the basics in how they allocate their resources and organize operations. It is important to note, however, that what has been started is unlikely to go away completely. The Discman may be a thing of the past, but the portable music industry lives on in various forms. And what an industry previously invested its efforts in is unlikely to be fully put to bed as a sunk cost, even when standards and expectations change.

Sometimes, in fact, a resurgence can be rather profitable. The market is volatile and often unpredictable; CD players may someday trend again just like record players are today. The vinyl revival is one that few saw coming and, therefore, offers an important lesson. The PLC is not perfect, and the decline stage is not definite. Firms can sometimes resurface that which has fallen out of favor by means of repackaging or repositioning. And new consumer bases and younger generations can be rather receptive to things from the past — and not just in relation to products (socialism’s appeal amongst America’s youth has been a concerning matter for quite some time).  

Marketing campaigns promoting social justice may be dwindling, and managerial practices related to DEI training may seem to be shrinking, but ESG and DEI will never truly be obsolete. DEI is already being repositioned with a focus on inclusion and belonging, downplaying the emphasis on diversity and equity, and this form of rebranding will make it even more difficult to argue against. Programs and activities promoting engagement and ‘community building’ will be featured to a greater degree and Chief Diversity Officers will be reclassified as Chief Belonging Officers or Chief Engagement Officers. DEI Offices will be renamed to titles like ‘Office of Inclusion,’ or will be merged with programs related to outreach and service initiatives, or multicultural engagement and education. 

As for ESG ratings already baked into financial risk assessments and adopted as industry metrics for best practices, such standards will remain in some form or other. In August 2023, the Wharton School of the University of Pennsylvania featured commentary titled “ESG: Changing the Conversation, Maintaining the Message,” and conveyed that although BlackRock CEO Larry Fink has shied away from using the term ESG, it didn’t mean his firm was backing off “its commitment to include environmental, social, and corporate governance (ESG) issues in its investment decisions.” 

Recently, BlackRock has withdrawn from the Net Zero Asset Managers initiative (NAZM) which may signal that its commitment is waning as Wall Street aims to lower its environmental activism overall, but it doesn’t mean a complete about-face. BlackRock has reiterated its plan to “continue to assess material climate-related risks.” And such news is likely of great interest to Wharton grads who are partaking in ESG coursework. UPenn recently launched two majors for its MBA program, SOGO: Social and Governance Factors for Business and ESGB: Environmental, Social and Governance Factors for Business, plus an undergraduate concentration focusing on ESG. UPenn is just one of several elite institutions, both within the US and abroad, featuring degree programs which promote ESG, global sustainability, and corporate social performance.

Without a doubt, ESG practitioners and DEI proponents will aim to preserve any positions of power they have attained by means of education and experience — and for that they can’t be blamed. The incentives for such programs were strong and so even if the acronyms go away, the interest levels of select individuals and organizations are likely to stay. Yes, the pendulum for ESG and DEI has swung, but not all the way. It would be wise to remember that today’s decline can become tomorrow’s trend if situations and circumstances along with market interest shift once again.

President Trump’s executive order directing the formation of an American sovereign wealth fund (SWF) was greeted, like so much else, with approval from his closest supporters and muted grumbling from his detractors…even though most Americans are not familiar with the concept. 

Sovereign wealth funds are government-run national investment programs typically used by small countries which are highly reliant on commodities to smooth out price fluctuations and diversify their economies. In other cases, they serve as a vehicle for intergenerational savings, preserving national wealth for future citizens. But within the context of purchasing TikTok, the purpose of Trump’s move is to create an SWF that functions as a US government investment vehicle. 

Setting aside that sovereign wealth funds are typically used to invest budget surpluses — something the US government hasn’t had in decades — the more pressing issue is that a government-directed investment is inherently prone to poor choices and political misallocation, and moreover a distraction from the more urgent need to reduce debt and eliminate waste.

During the COVID-19 pandemic, the US government undertook significant efforts to procure ventilators to address anticipated shortages in healthcare facilities. In total, the federal government ordered approximately 198,890 ventilators at a cost of just over $2.9 billion. But the procurement process faced challenges. For instance, in September 2019, the Department of Health and Human Services (HHS) ordered 10,000 ventilators from Royal Philips NV at $3,280 each, with deliveries scheduled for mid-2020. As the pandemic progressed, Philips secured a new deal with the government, this time charging approximately $15,000 per ventilator, raising concerns about inflated pricing during an emergency.

In the midst of these difficulties, the idea surfaced that the US should have its own ventilator production facilities to avoid reliance on foreign manufacturers and expedite emergency responses. To address the shortage, the federal government invoked the Defense Production Act, prompting companies like General Motors and Ford to collaborate with existing ventilator manufacturers to ramp up production. Ford, in partnership with GE Healthcare, leveraged the design of Airon Corp.’s FDA-cleared ventilator to mass-produce units in Michigan.

Despite these efforts to increase supply, many procurement deals still resulted in financial losses. An investigation by the New York City Comptroller revealed that the city lost $1.86 million in a failed attempt to purchase ventilators during the pandemic. The city had prepaid $8.26 million for 130 ventilators that were never delivered, highlighting the risks associated with expedited procurement (especially by non-experts) during emergencies.

Furthermore, a report by the USAID Office of the Inspector General found that the decision to donate ventilators abroad was not supported by the agency’s COVID-19 response strategy, raising further questions about the allocation of resources during the pandemic.

In the aftermath of the COVID-19 pandemic, some government-procured ventilators were sold for scrap at significantly reduced prices. For instance, in April 2020, then-Mayor Bill de Blasio commissioned 3,000 ventilators for $12 million. These devices were later sold to a scrap metal dealer for less than $25,000, translating to approximately $8.33 per ventilator. The sale was part of a larger auction where New York City disposed of nearly $225 million worth of surplus COVID-19 medical equipment and safety gear for just $500,000.

But the story gets worse. 

Despite the substantial investment in ventilators during the COVID-19 pandemic, subsequent analyses revealed that patients placed on mechanical ventilation often experienced worse outcomes. Studies indicated that the mortality rate among COVID-19 patients requiring mechanical ventilation was notably high, with some reports suggesting rates as elevated as 90 percent in certain settings. This high mortality is partly attributed to complications such as ventilator-associated pneumonia (VAP), which occurs in approximately 8 to 28 percent of mechanically ventilated patients. VAP can lead to prolonged hospital stays and increased mortality.

Additionally, mechanical ventilation can cause ventilator-induced lung injury (VILI), where overdistension of lung tissues leads to further damage. This overdistension can exacerbate lung injury, leading to a decline in lung function the longer a patient remains on the ventilator. 

The government mishandled COVID-19 ventilator procurement — as it has other emergency responses — by overspending, misallocating resources, and later selling malinvested equipment for scrap, all in the pursuit of a treatment that, it seems, led to bad outcomes for the afflicted. This strongly suggests that government-run investment efforts, such as a sovereign wealth fund, would fare even worse. 

In emergencies, missteps can sometimes be attributed to the need for rapid decision-making under uncertainty. Investments in financial markets, technology, or other industries, however, require consistent long-term expertise, discipline, and market responsiveness — qualities that government bureaucracies inherently lack. Private investors have profound knowledge advantages, profit incentives, and engage in purposeful, risk-based decision-making. Government officials, by contrast, face the classic disadvantages of central planning, receive no personal financial accountability for poor performance, and tend to operate with political motivations that prioritize optics and short-term considerations over prudent managerial finance.

Examples abound. Between 1999 and 2002, the UK Treasury sold approximately 395 tonnes of gold at an average price of $275 per ounce. Gold prices subsequently soared to over $1,000 per ounce within a few years. Not long after that, in 2009 the US Department of Energy approved a $535 million loan guarantee to Solyndra, a solar panel manufacturer. Despite substantial support, Solyndra filed for bankruptcy in 2011, ceasing operations and laying off 1,100 employees. American taxpayers bore the loss.

Similarly, the California High-Speed Rail project was originally estimated to cost $33 billion for a 500-mile system connecting Los Angeles to San Francisco. However, as of 2024, projections indicate that the cost has escalated to over $106 billion, with significant delays and only partial construction completed. 

The Car Allowance Rebate System (CARS), commonly known as “Cash for Clunkers”, was a $3 billion federal program intended to stimulate the automotive industry and promote the purchase of fuel-efficient vehicles. Under this initiative, consumers received rebates of $3,500 to $4,500 for trading in older, less fuel-efficient cars for new models.

Research from the National Bureau of Economic Research (NBER) indicated that the surge in vehicle purchases was short-lived, with a notable decline in sales following the program’s conclusion, suggesting a muted overall impact on auto purchases. Further studies, such as one from Texas A&M University, found that the program inadvertently reduced overall consumer spending on new vehicles. By incentivizing the purchase of more fuel-efficient but often less-expensive cars, the program led to an estimated $3 billion decrease in industry revenue, counteracting its primary goal of economic stimulation. Additionally, the mandated destruction of approximately 677,000 used vehicles under the program reduced the availability of affordable used cars, depriving low-income consumers who rely on the secondary auto market of inventory. 

A sovereign wealth fund would not, whatever the intentions of its government administrators, be guided purely by market signals but rather by political interests. That virtually ensures poor investment choices, investments in politically favored industries, and/or wasteful subsidies tending to yield subpar returns. 

Government officials will not have the same rigorous concern for opportunity costs that drives private investors and for-profit managers, as bureaucratic decision-making is often guided by political priorities and budget cycles rather than the disciplined allocation of capital to its most productive use. The Knowledge Problem is real — and ignoring it is expensive. 

The short-lived call to dole out COVID recovery funds via a reanimation of the Great Depression-era Reconstruction Finance Corporation was nothing if not an appeal for the return of institutionalized cronyism. Most monies didn’t flow directly to political insiders, and billions more flowed into grift, fraud, and waste.

The spectacle of exposing and eliminating waste at the US Agency for International Development (USAID) on one hand while simultaneously launching a federal investment program is incongruous at best. Unlike the private sector, where poor performance leads to fund withdrawals and business failure, government entities are insulated from direct consequences and often double down on bad investments rather than admitting failure. The United States is currently $36.4 trillion in debt, with interest on that debt costing $1.03 trillion per year and unfunded liabilities currently estimated at $226 trillion. 

If a government cannot efficiently manage the logistics of purchasing, building, and distributing ventilators — a relatively straightforward industrial operation — entrusting it with large-scale, long-term financial investments on the order of trillions of dollars does not seem terribly wise.

On January 23, Javier Milei delivered his latest speech on challenges to Western Civilization at the World Economic Forum in Davos. It was long, detailed, bold, and compelling.

One part of the speech, however, lacked the clarity and coherence of the rest. I am referring to his discussion of the theory of market failure. His argument against it rested on the assertion that it is often employed to advance anti-market agendas and is a contradiction in terms.

It is indeed true that the theory of market failure is often disingenuously invoked by those who are looking for cover for government interventionism. But the ends to which things are used often tell us little about their inherent goodness or wisdom. Few good or wise things have never served as a tool for some bad or foolish actor.

As for being a mere contradiction in terms, nothing could be further from the truth. In reality, the theory of market failure is a powerful tool for understanding the appropriate limits of government and persuading others why these limits are not arbitrary.  

Building on work that goes back to Adam Smith’s Wealth of Nations, Vilfredo Pareto worked out a formal proof of the first welfare theorem of economics in 1909. This was the first step in demonstrating why the free market economy automatically takes us where we want to go if a number of assumptions are satisfied.

In 1920, Arthur Pigou investigated what happens when those assumptions are not met, as well as what might be done to bring the market system back to best promoting the common good. This launched the body of knowledge we now call the theory of market failure. Milei’s assertion that market failure is a contradiction in terms appears to be oblivious to this work.

To better appreciate the power of the theory of market failure, divide all human activity into two realms: one in which it occurs in completely voluntary fashion and one in which it does not. In 1954, Kenneth Arrow, Gerard Debreu, and in a separate paper, Lionel McKenzie, rigorously identified the assumptions that had to be met to presume that the voluntary realm (the free market society) will best promote the common good. 

Unfortunately, sometimes these assumptions aren’t met. For example, a particular market might not be competitive (monopoly), consumption might be non-excludable (national defense), or there might be costs imposed on society that are not borne by either the buyer or seller in a transaction (pollution). In cases like these we cannot say with confidence that voluntary transactions and fully delegated property rights are enough to squeeze the most social welfare possible out of the resources we have.

One particularly compelling rationale for government is that it exists to house power needed to improve performance in this second realm. Societies that refuse to do this are fun to dream about, but in the real world societies are in competition with one another and those that can increase their efficiency by addressing market failures are more likely to conquer than be conquered.

Think about every function of government that virtually everyone agrees is legitimate; things needed even for a purely nightwatchman state described by Robert Nozick. These functions apply power in a way that ensures that socially beneficial things happen that would not otherwise happen in a world of purely voluntary transactions.

In my view, Milei has it backwards. The theory of market failure is not inimical to the free market society. Instead, it produces a bright and objective line that divides the legitimate realm for the exercise of government power from everything else: the private realm. But it does not follow from the above that all demonstrable market failure problems warrant the use of government power to address them. 

There are several reasons why this is true. The most well-known is the idea of government failure, which happens when the cost of using government to address a market failure exceeds the benefits of doing so. There are also situations in which the liberty that must be sacrificed to address the problem is simply too high a price to pay. For many, a good example of this would be having conscription during peacetime. What this means is that the demonstration that something is subject to a genuine market failure problem is a necessary, not a sufficient, condition for justifying the use of government power.  

This is a more powerful distinction than it first appears. It reverses our instinctive presumption that we need something like the government to be in control of most things. Because of the theory of market failure, the tables are turned on those eager to exercise government power. No longer must we demonstrate why we should leave something to the free market. The onus is on those who wish to employ government power to explain why what is before them is a genuine market failure. The theory of market failure provides objective criteria for evaluating whether such a case has been made adequately. And even then, they have only satisfied a necessary condition for the exercise of government power. 

In any true democracy, voters can change anything. It follows that any free market democracy that wants to stay that way should take care to ensure that as many current and future voters as possible know enough economics to understand why the exercise of government power outside of the realm of market failure befits a government that is working to build a utopia rather than a government that is working to protect the liberty of its citizens.

The Philadelphia Eagles and Kansas City Chiefs will face off Sunday at Caesar’s Superdome in New Orleans to vie for the Lombardi Trophy. Super Bowl LIX will see a lot of money change hands, through everything from prop bets between friends to pizza sales and post-game merch. 

One guy who won’t be getting paid this weekend is Super Bowl halftime performer Kendrick Lamar, a rapper from Compton, California. He’ll be performing at the Super Bowl for the second time (having appeared as a guest artist in 2022 with Dr. Dre, 50 Cent, Eminim, Snoop Dogg, and Mary J. Blige) and he’ll make the same amount of money as headliner as he did for that guest performance at Superbowl LVI: $0. That’s right — zero dollars.

Why $0? 

Every year, at least some people are surprised to learn artists don’t get paid for performing at the Super Bowl halftime show. This makes sense. We’re used to seeing stars like Taylor Swift, Kanye West, Beyoncé, Madonna, Lady Gaga, and, yes, Drake, command millions for their performances. So why would artists agree to perform such a highly watched show for nothing?

Basic economics offers us an answer. In his seminal text Human Action, Ludwig von Mises pointed out that the purpose of action is “to substitute a more satisfactory state of affairs for a less satisfactory [one].” 

So the very fact that Lamar is choosing to perform suggests he sees some benefit. Perhaps it was always his dream to perform as the headliner at the Super Bowl. Perhaps he is one of those rare humans who really doesn’t care about money.

Conversely, perhaps Lamar cares very much about money, and believes his appearance will generate a great deal of future wealth. The NFL isn’t paying Lamar to perform, but it’s not difficult to see how Lamar stands to benefit materially from his Super Bowl stage time.

For starters, the NFL covers all production costs, so Lamar won’t have to cover the estimated $10-$20 million he’d otherwise invest in staging a show of this size. But also, history shows that artists experience a huge boost in popularity after performing at the Super Bowl, which for many artists can be a career-defining moment. As Katy Perry’s manager, Cobb Jensen, put it in 2015: “It took [Katy] from being a star to the stratosphere.”

This should come as little surprise. When you perform before a hundred million people — 120.25 million people watched the Chiefs defeat the 49ers last year, according to Sports Media Watch — the brand exposure is massive. Lamar can expect invitations to appear on TV, millions of new followers on social media, and other future opportunities. 

Value might be subjective, but it’s undeniable that many see immense value in getting their brand in front of a global audience, which is why companies are lining up to pay $8 million for a 30-second commercial during Super Bowl LIX. If Lamar performs for 15 minutes, he’s looking at nearly a quarter of a billion dollars of advertising value. 

This exposure has many benefits, including cold, hard cash. 

History shows that artists see a spike in record sales after a Super Bowl appearance. I’ve noted that Maroon 5’s sales surged by 488 percent after the band’s 2019 performance. Missy Elliott saw a 282-percent increase in 2015, while Bruno Mars experienced a 164-percent jump in 2014. In 2013, Beyoncé’s sales rose by 230 percent, and Destiny’s Child’s sales skyrocketed by 600 percent.

Artists receive royalties on record sales, so surging sales can result in a very big payday. Lamar’s performing without a direct payment (even a “low” payment), but that doesn’t indicate an unfair exchange.

The Benefits of Trade

Economists disagree on all sorts of issues and ideas, but one core principle is generally accepted: an exchange only exists because both sides believe it makes them better off. The Nobel Prize-winning economist Milton Friedman noted the only caveats to the gains from trade are that the exchange is “bi-laterally voluntary and informed.”

That mutual benefit is why free trade is widely considered one of the greatest forces of wealth creation and poverty reduction in human history. The agreement between the NFL and artists is unconventional, but it’s a mutually beneficial deal. Nobody is being exploited. On the contrary, both the NFL and Kendrick Lamar stand to benefit from the transaction.

Could unpaid internships, below-minimum wages, payday loans, and other fully voluntary transactions also be mutually beneficial, even if they aren’t terms (like a $0 payday) we’d choose for ourselves? Can individuals freely choosing nontraditional contracts really be more harmful than being forbidden to make them? Or should that be left up to the participants to decide?

Keep Lamar in mind when lawmakers pass legislation (or executive orders) to prohibit voluntary exchange.

With the biggest sporting event of the year approaching, so too does an opportune time to review the prices associated with enjoying that experience — whether in the stadium or among the comforts of home. Like last year, this article will break down costs associated with attending the game in person (ticket prices, travel, and accommodations) as well as the cost of hosting a Super Bowl party at home from food and drinks to energy costs. Those prices are all the more meaningful when viewed in historical context, so changes over the past year and since the pandemic are offered to highlight not only the impact of inflation but shifts in the demand for high-end experiences. One of the unseen costs of inflation is the erosion of traditions and cultural celebrations. We can understand the personal finance implications with some Super Bowl fandom data points. 

Attending Super Bowl LIX in Person

As Sunday, February 11 approaches, airlines have responded to increased demand by adding flights to New Orleans, leading to elevated airfares. Southwest Airlines has introduced 31 additional flights connecting the championship team cities of Kansas City and Philadelphia to New Orleans, with one-way fares ranging from $384 to $798. Delta Air Lines has added seven extra flights, expanding their typical capacity by 1,300 seats. Those prices vary, with the most basic economy fares from Kansas City starting at $201 and from Philadelphia at $500. Return trips are approaching $980 for return flights on Monday, February 10th. 

Despite these additions, the surge in demand has resulted in higher ticket prices compared to typical rates. For instance, flights from Kansas City to New Orleans on Super Bowl Sunday are priced between $300 and nearly $700. Peak demand pricing is a dynamic pricing strategy where the cost of a good or service increases during periods of high demand to balance supply constraints and maximize efficiency. It’s commercially viable because the demand is highly inelastic, with consumers provably willing to pay significantly more even as supply expands.

Travelers should also anticipate increased hotel rates, with some accommodations near the stadium costing between $2,000 to $3,000 for a three-night stay. Overall, attending the Super Bowl, including airfare, lodging, and game tickets, could total between $5,000 and $8,000 per person. 

As Super Bowl LIX approaches in New Orleans, both hotel and Airbnb prices have seen significant increases compared to typical rates. Two-star hotels are nearing $1,000 per night, while four- and five-star accommodations often exceed $4,000 per night, typically with a three-night minimum stay requirement. Short-term rentals, such as those on Airbnb, are also experiencing heightened demand, with average nightly rates between $670 and $690 during Super Bowl weekend, substantially higher than the usual sub-$400 per night in New Orleans.  In contrast, last year’s Super Bowl in Las Vegas saw hotel rates averaging $747 per night, indicating that current prices in New Orleans are slightly lower on average.  However, the limited availability of accommodations in New Orleans compared to Las Vegas has contributed to the surge in prices this year. 

Ticket prices, most interestingly, have decreased notably compared with last year. Currently, the average ticket price is approximately $6,552, down from $9,136 for Super Bowl LVIII. Factors contributing to this decline include the Kansas City Chiefs’ frequent recent appearances, leading to fan fatigue, and the larger capacity of New Orleans’ Caesars Superdome, which accommodates around 74,000 spectators. Despite the drop in ticket prices, premium experiences remain available. For instance, luxury suites are offered for up to $2 million, featuring gourmet catering and exclusive amenities. Additionally, official ticket packages through providers like On Location include verified tickets, premium hospitality, and exclusive experiences. Fans of means have a range of options to enhance their Super Bowl experience.

Attending Super Bowl LIX in New Orleans entails various expenses beyond airfare, lodging, and ticket prices. Concession prices within the Caesars Superdome have seen a notable increase, with specialty cocktails like the “Loaded Spicy Bloody Mary” and “Voodoo Magic” priced at $60 each. Gourmet food options, such as Tomahawk steaks and Fried Oyster Po’Boys, are also available at premium prices. Luxury suites, offering exclusive amenities and catering, can cost up to $2 million. In comparison, during last year’s Super Bowl at Las Vegas’ Allegiant Stadium, similar luxury suites were priced around $3 million, indicating a decrease in suite costs this year. Overall, while certain premium offerings have become more accessible, attendees should still anticipate elevated prices for food, beverages, and exclusive experiences during the event.

Watching from Your Living Room

Food and drinks for ten people this year will run an estimated $139, up ten cents from last year, according to Wells Fargo. Over the past five years, the average price of a large cheese pizza in the United States has experienced a notable increase. In 2019, prices varied by region, with some areas reporting averages between $15 and $20. By 2024, the national average had risen to $18.33, reflecting a broader trend of rising food costs. Factors contributing to this increase include higher ingredient prices, labor costs, and general inflation. Despite these rising costs, pizza remains a popular choice for events like the Super Bowl, with many consumers seeking out deals and promotions to enjoy this staple affordably.

Over the past year, the price of beer in the United States has seen a modest increase. According to a report from The Associated Press, beer and wine prices have risen by approximately 2 percent compared to the previous year.

Looking back over the past decade, the cost of beer at NFL games has experienced a more significant rise. Data indicates that in 2023, the average price of a beer at an NFL game was $8.81, marking a 25 percent increase over the past ten years. This increase is slower than the overall rate of inflation during the same period.

As the Super Bowl approaches, these price trends are particularly relevant for consumers planning their game-day festivities. While the recent annual increase in beer prices is relatively modest, the cumulative rise over the past decade may influence purchasing decisions for those hosting or attending Super Bowl parties.

Tracking the Changes

Price indices, like all measurement approaches, require tradeoffs. Tracking prices through an index provides a single, aggregate measure of inflation by weighting goods according to their share in overall consumption, which makes it easier to assess broad trends over various periodicities (monthly, annually, etc). That method, however, obscures the price movements of individual goods, meaning that sharp increases or decreases in specific items may be lost within the overall average, masking their real impact on consumers.

For reference, below are the five- and one-year percentage changes in major food (and other relevant) prices. For comparison, the values from last year are available. When considering these five year percent changes in price–eggs, for example, up 170 percent–bear in mind that the US CPI Food-at-Home index shows a 27.6 percent increase from December 2019 (241.750) to December 2024 (308.380) and the headline US CPI suggests a 22.8 percent increase (256.97 in December 2023 to 315.61 in December 2024) over the period. Comparing the five-year changes in individual food prices with either the food-at-home or headline CPI index reveals the subpar representativeness of the official indices.

One year changes in individual goods versus the broader indices show a similar, but smaller, gap. The percent change for the CPI Food-at-Home index from December 2023 to December 2024 is approximately 1.8 percent, while the headline CPI rose roughly 2.9 percent. Over the 12 months displayed, there was in fact some price deflation in goods likely to factor into Super Bowl celebrations: potato chips, chicken legs, and across various grades of gasoline. 

If by chance your game-day tradition consists of a breakfast-like meal of omelets, roast beef, orange juice, and coffee, you may consider switching over to a more accommodatingly affordable (and unusual) celebration featuring chicken legs, chocolate chip cookies, and grapefruit. Inflation probably didn’t ruin your Super Bowl party this year, but sluggish disinflation and price spikes in key items made it more expensive than anyone would prefer.