On Friday, the Supreme Court issued its 6-3 opinion in the Learning Resources, Inc. v. Trump, and if you’ve spent any time reading or watching the news in the past few days, you’ve probably seen some version of “the Court struck down Trump’s tariffs.” 

While true, the analysis also strips out almost everything that matters. Here’s what the decision actually does (and does not) mean:

1) This is not a ruling against tariffs. It’s a ruling against one way of imposing them.

First and foremost, it’s important to understand that the Court very clearly did not say that all Presidentially imposed tariffs are unconstitutional, period. It also did not say anything about the justifications that the President gave for imposing the tariffs: lowering trade deficits or curtailing fentanyl smuggling. What the Court did say is that the International Emergency Economic Powers Act (IEEPA) does not, in and of itself, give the President the authority to impose tariffs. All other tariff powers remain intact. This report from the Congressional Research Service provides a useful overview of each of these powers and their limits.

While these powers could, in theory, replace many of the tariffs that President Trump originally imposed under IEEPA, they cannot replace all of the tariffs, and they each require additional hurdles or have specified limits. 

Section 122, which the President has already used, only allows tariffs up to 15 percent to address “balance-of-payment deficits.” Some have time limits, while others require reports, investigations, and consultations with foreign governments. 

Importantly, though, none allow the President to impose tariffs because he didn’t like how he was talked to by a fellow head of state.

2) The case turned on seven words

The International Emergency Economic Powers Act of 1977 authorizes the President to “regulate… importation… during a declared national emergency.” The entire case turned on these seven words and whether they included the power to impose tariffs. Six justices of the Court said “no.” Justice Roberts, writing the majority’s opinion, held that tariffs are fundamentally a taxing power, not a foreign affairs power, and that they differed in kind, not just degree, from the trade tools that IEEPA explicitly authorizes.

The Court also pointed out that no President had ever used IEEPA to impose tariffs before. While this is not in and of itself a winning argument (there is, after all, a first time for everything), it is still meaningful. Whenever an administration claims new power from a decades-old statute, the major questions doctrine throws up a red flag.

3) The Major Questions Doctrine is here to stay

This ruling is the latest, and possibly the most consequential, application of the major questions doctrine to date. Briefly, this relatively new doctrine contends that any time “an agency seeks to decide an issue of major national significance, its action must be supported by clear congressional authorization,” (emphasis original). 

In their 2001 opinion in Whitman v. American Trucking Associations, Inc., the Court said, “Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions — it does not, one might say, hide elephants in mouseholes.”

Justice Gorsuch, in a concurring opinion, put this clearly, writing, “the President claims, Congress passed that power on to him in IEEPA, permitting him to impose tariffs on nearly any goods he wishes, in any amount he wishes, based on emergencies he himself has declared. He insists, as well, that his emergency declarations are unreviewable. A ruling for him here, the President acknowledges, would afford future Presidents the same latitude he asserts for himself. So another President might impose tariffs on gas-powered automobiles to respond to climate change. Or, really, on virtually any imports for any emergency any President might perceive. And all of these emergency declarations would be unreviewable. Just ask yourself: What President would willingly give up that kind of power?”

It is for this reason, the Court’s majority held, that Congress must clearly give the power to the President. The President cannot simply assert that he has Article I powers.

4) The Dissent Deserves a Fair Hearing

Justice Kavanaugh, writing in dissent, accepts the validity of the major questions doctrine, but questions whether it applies in this particular case. He cites Justice Gorsuch’s four “telling clues” from West Virginia v. EPA (which can be found on pages 746–748) and argues on pages 35–44 of the Court’s opinion that at least three of them do not apply. 

For example, he argues that in 1976, Congress and the Court understood that the phrase “adjust the imports” found in Section 232 of the Trade Expansion Act allowed the use of fees to do so despite this word not appearing in the Act. Since IEEPA was passed one year later in 1977, Justice Kavanaugh argues that the phrase “regulate… imports” also authorizes the imposition of fees, of which tariffs are but one option. Indeed, as he writes, “Any citizens or Members of Congress in 1977 who somehow thought that the ‘regulate… importation’ language in IEEPA excluded tariffs would have had their heads in the sand.”

The majority had responses to this, primarily pointing out the difference in the scale of what President Trump was doing versus what Presidents Ford or Nixon had done. Likewise, reasonable people can debate whether tariffs are a “tax” or a “fee” (hint: they’re a tax) and the semantic/legal differences therein. But as Kavanaugh points out, this is in direct opposition to the Court’s previous stance that the major questions doctrine is not a “magic words” test, whereby the Court is essentially requiring that Congress use very specific words to allow very specific actions by agencies, including the President. 

5) Refunds Are a Possibility

In addition to the above, Justice Kavanaugh is also the only Justice to bring up the issue of refunds in the Court’s ruling, and he does so only four times. He notes that “The United States may be required to refund billions of dollars to importers who paid the IEEPA tariffs, even though some importers may have already passed on costs to consumers or others,” and that “Refunds of billions of dollars would have significant consequences for the US Treasury.” In a sense, he’s saying that American importers write the tariff check but pass on at least some of the tariff burden to American consumers in the form of higher prices. If the refund process happens, the refunds will all go to the American importers, not the end consumers. This process, as he acknowledges, will be “a mess.”

Indeed, we’re already seeing tariff refund cases submitted. FedEx has filed with the US Court of International Trade, and there are reasons to believe that they will not be alone. Will companies seeking refunds all be required to file individual lawsuits, and if so, in which court? Or will they be allowed to file a class-action lawsuit?

6) This Is Exactly What Checks and Balances Look Like

The easy, attention-grabbing headline that this is a win for free traders or a setback for economic nationalists is tempting, but misleading. The more important insight from this, whether you agree with the majority or the dissent, is that this is exactly how the system is supposed to work.

The White House pushed the boundaries of a statute beyond what its text and history would allow. Private parties challenged that action in court. The judicial branch reviewed it and overturned the White House.

Justice Gorsuch, on page 46, summarizes it nicely: “For those who think it important for the Nation to impose more tariffs, I understand that today’s decision will be disappointing. All I can offer them is that most major decisions affecting the rights and responsibilities of the American people (including the duty to pay taxes and tariffs) are funneled through the legislative process for a reason… In all, the legislative process helps ensure each of us has a stake in the laws that govern us and in the Nation’s future. For some today, the weight of those virtues is apparent. For others, it may not seem so obvious. But if history is any guide, the tables will turn and the day will come when those disappointed by today’s result will appreciate the legislative process for the bulwark of liberty it is.”

The question before the Court was never “are tariffs good or bad?” The question was whether one person should be allowed to impose or alter tariffs against any nation at any time and for any reason he alone determines is an “emergency,” with no Congressional approval or judicial review. And the answer to that question, for now at least, is “no.”

That said, let’s not confuse this legal victory for an economic one. The President has already implemented new tariffs under Section 122, has promised that other countries won’t be celebrating for long, and has assured his supporters that he will “Keep Calm and Tariff On.” This Administration was not surprised last May when the International Trade Court ruled against it, and has long promised that they have alternative plans ready to go if needed.

Still, this ruling is a victory for dispersed power, constitutional limits, and legislative accountability. And we should celebrate it as such.

Every few years, the century bond returns — not exactly with a bang, but with a new, shiny calculation involved. 

As reported by the FT and Bloomberg last month, Google’s parent company has been busy tapping the bond market for everything from 3-year to 50-year bonds in several major markets (US, Switzerland, UK). Now it’s trying for the ultimate prize: a century bond.

Century bonds are exactly what they sound like: a bond, often issued by a government or a long-lived institution like a university, that runs for a hundred years, often at interest rates somewhat above prevailing market rates or reference rates. For the issuer, they make a ton of sense, generationally and actuarially: They receive funds for investments right now, lock in financing costs for a long time, and face no financing rollover risk. 

It’s more of a puzzle why buyers show up for these issuances, especially since the market participants have very recent examples of being seriously burned. As a bondholder of extremely long-dated bonds, you’re always living in financial terror, waiting for rates to rise and inflict multiplied damage on the market value of your investment. Since bond prices move inversely with interest rates, the effects are more pronounced the further into the future — the longer-dated — the bond is. The loss of market value on a hundred-year bond when interest rates increase is far greater than on a ten- or two-year bond. When it does, this “dangers of duration,” as FT journalist Robin Wigglesworth has called it, completely undermines your finances for decades on end.

The last two times century bonds popped out of academic obscurity, they got a well-deserved bad rap. In the 1990s, several large companies tried them — and locked in steep and expensive rates in the five-percent region while interest rates kept falling toward zero for decades. In the late 2010s, with ZIRP dominating the world’s financial markets and trillions of mostly government debt traded at negative yield, we started seeing new players dusting off this old idea, since money now was just so cheap to be had: Universities like UPenn, Virginia, Oxford, and Rutgers took in funds for a hundred years in the two to four percent range. Then the opportunistic governments (including Ireland, Belgium, Mexico, Argentina) also successfully placed century bonds at eye-poppingly low rates. The most extreme participant was Austria, whose perfectly timed century bonds — of 2.1 percent in 2017, and then 0.85 percent and even zero percent right on the cusp of the ‘rona inflation — saved its taxpayers a fortune. 

Logic alone dictates that if you sell debt due in 2120 for zero percent or 0.85 percent a year, and then CPI (and thus your incomes and tax revenues) rise to upward of 10 percent for a few years, you’re doing great. Indeed, bond math logic made that exercise even more painful, with some of these placements trading at cents on the euro a few years after issuance, vaporizing bondholders’ money. 

Enter Big Tech: The AI Investment Needs Meet Underwater Pension Systems

With Alphabet/Google’s placements in November, and now its Swiss franc and sterling placements, it’s the first time a big tech company has dared to come back to this perilous market since the 1990s. 

What’s so odd about this hunger for long duration is that in the 2010s and during the pre-inflation pandemic years, at least bond investors collectively were starved for yield, ready to do anything to eke out a few extra basis points of return. In 2026, there are still positive yields to be had. The mystery, then, is not why Google issued but why investors rushed in. 

The $20-billion USD placement finalized at treasury yields+95 bps, while the GBP bond of £5.5, about $7.5 billion, placed at 120 basis points above gilts; the £1 billion century bond was ten times oversubscribed, according to Reuters, and carries a coupon of 6.125 percent until 2126. With the fairly recent history of century bond investors burning obscene amounts of money on mistaken duration bets, the question remains: Why were these long-maturity debt placements massively oversubscribed, at rate spreads of only about a hundred basis points above safe assets? 

Three candidate explanations. 

First, defined-benefit pension funds are extremely hungry for long-dated debt. Reinsurers and life insurance providers, too. They have long-dated liabilities that rise and fall in (net present) value with interest rates; owning equally long-dated assets compensates somewhat for that. “Strong demand from UK pension funds and insurers has made the sterling market a go-to venue for issuers seeking longer-dated funding,” reported Tasos Vossos for Bloomberg.

Second, the large embedded rate-leverage is kind of capital efficient. Bond funds don’t buy individual issuances in isolation, but compose a portfolio with a combined desired outcome, constantly micromanaging exposure and duration vis-à-vis a benchmark index. Remarked Marcus Ashworth in an opinion piece, 

Buyers of these types of security are looking to dynamically balance the risk of an entire portfolio rather than caring about annual coupon weights. Ultra-long debt allows portfolio managers to barbell their duration needs by buying more 10-year liquid debt rather than illiquid 20- to 50-year maturities.

Which is, perversely, why riding that zero-percent Austrian century bond all the way to the basement between 2020 and 2025 could have been beneficial to certain bond portfolios that paired it with other investments. When rates fall, these bonds soar, letting market participants ride the convexity game in a broad macro rate (and now also FX) game. Under functional monetary regimes with price predictability, long-dated debt is both efficient and common — think about the perpetual British Consol, the financial instrument that made the British Empire.

Plus, there’s a ton of capital-intensive bond market efficiency involved in going way out on maturity. Explains quant researcher Navnor Bawa discussing the news on his Substack: 

A one percent decline in long-term rates generates approximately 40-50 percent capital appreciation on century bonds versus 15-20 percent on 30-year debt  —  making it the most capital-efficient duration exposure available for institutions positioning for lower long-term rates.

Third, this time is different and bond investors have inflation fatigue. Many might just believe that what happened during the pandemic was a once-in-a-generation one-off event and that central bankers will do better going forward. If inflation settles back near its more usual two to three percent, or indeed rates fall back toward zero in an easy/easier monetary policy regime, locking in long real duration today at slightly higher rates might look clever rather than reckless.

This might all work out great for the issuers, and bondholders will celebrate their contribution to the AI revolution… for a few years until we have the next bout of runaway inflation prints. Most likely, the investors in these oversubscribed bonds are setting themselves up for financial troubles, by the sudden jolt of interest rates jumping higher or the slow, gradual erosion of fiat purchasing power.

The spread over sovereign credit says something about the balance sheet strength and the optimism surrounding AI-related big tech investments, certainly with behemoths like Google. Funding operations at these rates show either incredible creditworthiness — with Google and the current wave of AI optimism, at least believable — or devastating mispricing. 

Investors got the memo about AI capacity building needs, loud and clear. With collective bond market amnesia, that was about the only meaningful bit they took away. 

While framed as a book about economic development theory and the history of colonialism, William Easterly’s latest tome is actually something grander and more ambitious: a deeply researched 300-year chronicle of political and moral theory in the Western world. The questions that colonizers, settlers, natives, and revolutionaries wrestle with in Easterly’s 448-page history aren’t just about plantations and trading posts – they’re the most important questions we have about morality and justice. They’re particularly timely in an era when classical liberal values are under greater challenge than at any time since the Cold War.

We begin in the eighteenth century with a grounding in the work of Adam Smith, a justly legendary intellectual figure getting even more attention than usual this year because his most famous work, The Wealth of Nations, is celebrating its 250th anniversary alongside the United States. Smith is, for Easterly, a kind of godfather of the liberal tradition of individual rights that the rest of the figures in the book are measured against. Smith stood for trade as a civilized and civilizing force and emphasized the need for voluntary, mutually beneficial relationships. He was not in favor of the takeover of the rest of the world (or just “the Rest” in Easterly’s styling) by white men in the supposedly enlightened West. 

The first section contrasts Smith with the French aristocrat Nicolas de Condorcet, who — despite his modern reputation as a champion of free trade and individual rights — endorsed what Easterly calls the Development Right of Conquest. Under this view, a civilized nation or race may rule another’s land if it claims it can put it to a higher and more productive use.

This might mean ruling a newly discovered tribe to advance its development toward a higher civilization. If the tribe resisted — as was often the case — the more “developed” people could kill or displace the “savages” and seize the land themselves. Either way, the supposedly superior group — typically Western European — decided which path was best for both.

This is the great divide that defined the next few centuries of global territorial expansion and settlement. European thinkers who believed in peaceful coexistence and voluntary trade relations were the inheritors of Smith, and those who believed their superior wisdom entitled them to plan the moral and economic advance of foreign peoples were the intellectual descendants of Condorcet. Easterly, a professor of economics at New York University, emphasizes many times how lopsided this family tree was on the latter’s side. 

Both sides, of course, believed they were in the right. Few, if any, colonizers – no matter how rapacious in action – admit to plundering new lands and people solely for their own benefit. Even those who were literal enslavers of their fellow man created elaborate theories about how they were actually acting in the interests of the non-white people they encountered.  

The essential difference that Easterly emphasizes is that some were willing to let others decide their own interests, while most overrode foreign preferences with cultural chauvinism and civilizational theory. The classical liberals in his account were hardly “woke” by modern standards, but they replaced the question “Are these non-European people worthy of self-government?” with the more searching one: “Are we fit to rule them by force?”

The advance of liberal ideas was fitful and slow. Just like the progress toward representative democracy and constitutional government within Europe itself, the recognition that non-white people might want and be entitled to the same rights as their white counterparts faced many disappointing setbacks. Easterly does a great job, however, of setting the scene for the greatest victory of them all – the abolition of slavery in the modern world. First, peacefully, in the British Empire under the political leadership of men like William Wilberforce, and then, amid catastrophic bloodshed, in the United States.  

Many histories of the world after 1865 have treated the end of slavery (in most countries, at least) as the beginning of a new enlightened age. Whatever came later in the various colonial empires, however imperfect, was certainly vastly superior to an era in which kidnapping and intergenerational forced labor were a major commercial enterprise.  

While the line between enslavement and mere colonial paternalism might seem bright and obvious, Easterly doesn’t let the triumph of slavery ending in the nineteenth century get the West off the hook for continuing oppression and injustice around the world. The policies of Caribbean sugar planters before emancipation had more in common with, for example, twentieth-century colonial administrators in sub-Saharan Africa than most historians care to admit. Underlying both is the same, only marginally reformed, assumption that white skin and technological advancement entitle one to treat other races as children and supplicants for their supposed long-term benefit. In the post-slavery colonies, even when plans for advancement were undertaken for ostensibly beneficial purposes, the opinions of the people supposedly benefiting were neither solicited nor heeded.  

Violent Saviors tries to remedy some of that historic injustice in telling their story, but also in citing some of the rare first-person sources that were recorded from those subjected to “civilization” via musket barrels and bayonets. Many students of US history will be familiar with some of the figures Easterly quotes at length, like the formerly enslaved abolitionist who became one of the most famous people in nineteenth-century America, Frederick Douglass. Far fewer will have read anything about Mohegan Indian and Christian convert Samson Occam (1723–1792), once a student at the missionary school that eventually became Dartmouth College, or the British ex-slave Quobna Ottobah Cugoano (1757–1791), who was at first an advocate for, and later an opponent of, a quixotic eighteenth-century plan to re-settle the free black residents of London in a kind of proto-Liberia colony in Sierra Leone.    

The author also gets a historian’s revenge on multiple generations of supposedly well-intentioned military, political, religious, and philanthropic leaders whose high status contrasted embarrassingly with their inability to successfully implement any of their grand plans for the advancement of the “dusky races.”  

Easterly has famously written at length about the contradictions and failures of modern economic development policy in books like The White Man’s Burden and The Tyranny of Experts. He now reaches back multiple centuries to deliver withering takedowns of figures ranging from French aristocrats Pierre Samuel du Pont de Nemours (1739–1817) and Pierre-Paul Lemercier de La Rivière (1719–1801) to Treaty of Versailles architect Woodrow Wilson (1856–1924) and Lyndon B. Johnson–era National Security Advisor Walt Whitman Rostow (1916–2003).

He offers a more inspiring, if much shorter, list of theorists and experts who pointed the way in the right direction. Beginning with Adam Smith (1723–1790), we also encounter (mostly) good actors like the anti-slavery Anglican Bishop William Warburton (1698–1779) and Swiss political theorist Benjamin Constant (1767–1830). Easterly devotes significant attention to better-known writers such as John Stuart Mill (1806–1873) and Isaiah Berlin (1909–1997), while also crediting the beloved figures of twentieth-century free-market economics: Ludwig von Mises, Friedrich Hayek, and Milton and Rose Friedman, among others. 

In recent years, the so-called neoliberal view of economics and the rules-based international order has been significantly challenged by a resurgence of populist economic thought emphasizing national solidarity — as defined by a handful of executive policymakers — over the equality of all individuals and positive-sum economic exchange.

President Donald Trump’s use of tariff authority — for purposes ranging from explicit industrial protectionism to the attempted conquest of Greenland — has dramatically set back decades of post–World War II progress in free trade. Violent Saviors, with its inspiring narrative of mercantilist authoritarianism giving way to a world where equality and cooperation are the norm, reminds us why so many fought so hard for these ideals in the first place.

While framed as a book about economic development theory and the history of colonialism, William Easterly’s latest tome is actually something grander and more ambitious: a deeply researched 300-year chronicle of political and moral theory in the Western world. The questions that colonizers, settlers, natives, and revolutionaries wrestle with in Easterly’s 448-page history aren’t just about plantations and trading posts – they’re the most important questions we have about morality and justice. They’re particularly timely in an era when classical liberal values are under greater challenge than at any time since the Cold War.

We begin in the eighteenth century with a grounding in the work of Adam Smith, a justly legendary intellectual figure getting even more attention than usual this year because his most famous work, The Wealth of Nations, is celebrating its 250th anniversary alongside the United States. Smith is, for Easterly, a kind of godfather of the liberal tradition of individual rights that the rest of the figures in the book are measured against. Smith stood for trade as a civilized and civilizing force and emphasized the need for voluntary, mutually beneficial relationships. He was not in favor of the takeover of the rest of the world (or just “the Rest” in Easterly’s styling) by white men in the supposedly enlightened West. 

The first section contrasts Smith with the French aristocrat Nicolas de Condorcet, who — despite his modern reputation as a champion of free trade and individual rights — endorsed what Easterly calls the Development Right of Conquest. Under this view, a civilized nation or race may rule another’s land if it claims it can put it to a higher and more productive use.

This might mean ruling a newly discovered tribe to advance its development toward a higher civilization. If the tribe resisted — as was often the case — the more “developed” people could kill or displace the “savages” and seize the land themselves. Either way, the supposedly superior group — typically Western European — decided which path was best for both.

This is the great divide that defined the next few centuries of global territorial expansion and settlement. European thinkers who believed in peaceful coexistence and voluntary trade relations were the inheritors of Smith, and those who believed their superior wisdom entitled them to plan the moral and economic advance of foreign peoples were the intellectual descendants of Condorcet. Easterly, a professor of economics at New York University, emphasizes many times how lopsided this family tree was on the latter’s side. 

Both sides, of course, believed they were in the right. Few, if any, colonizers – no matter how rapacious in action – admit to plundering new lands and people solely for their own benefit. Even those who were literal enslavers of their fellow man created elaborate theories about how they were actually acting in the interests of the non-white people they encountered.  

The essential difference that Easterly emphasizes is that some were willing to let others decide their own interests, while most overrode foreign preferences with cultural chauvinism and civilizational theory. The classical liberals in his account were hardly “woke” by modern standards, but they replaced the question “Are these non-European people worthy of self-government?” with the more searching one: “Are we fit to rule them by force?”

The advance of liberal ideas was fitful and slow. Just like the progress toward representative democracy and constitutional government within Europe itself, the recognition that non-white people might want and be entitled to the same rights as their white counterparts faced many disappointing setbacks. Easterly does a great job, however, of setting the scene for the greatest victory of them all – the abolition of slavery in the modern world. First, peacefully, in the British Empire under the political leadership of men like William Wilberforce, and then, amid catastrophic bloodshed, in the United States.  

Many histories of the world after 1865 have treated the end of slavery (in most countries, at least) as the beginning of a new enlightened age. Whatever came later in the various colonial empires, however imperfect, was certainly vastly superior to an era in which kidnapping and intergenerational forced labor were a major commercial enterprise.  

While the line between enslavement and mere colonial paternalism might seem bright and obvious, Easterly doesn’t let the triumph of slavery ending in the nineteenth century get the West off the hook for continuing oppression and injustice around the world. The policies of Caribbean sugar planters before emancipation had more in common with, for example, twentieth-century colonial administrators in sub-Saharan Africa than most historians care to admit. Underlying both is the same, only marginally reformed, assumption that white skin and technological advancement entitle one to treat other races as children and supplicants for their supposed long-term benefit. In the post-slavery colonies, even when plans for advancement were undertaken for ostensibly beneficial purposes, the opinions of the people supposedly benefiting were neither solicited nor heeded.  

Violent Saviors tries to remedy some of that historic injustice in telling their story, but also in citing some of the rare first-person sources that were recorded from those subjected to “civilization” via musket barrels and bayonets. Many students of US history will be familiar with some of the figures Easterly quotes at length, like the formerly enslaved abolitionist who became one of the most famous people in nineteenth-century America, Frederick Douglass. Far fewer will have read anything about Mohegan Indian and Christian convert Samson Occam (1723–1792), once a student at the missionary school that eventually became Dartmouth College, or the British ex-slave Quobna Ottobah Cugoano (1757–1791), who was at first an advocate for, and later an opponent of, a quixotic eighteenth-century plan to re-settle the free black residents of London in a kind of proto-Liberia colony in Sierra Leone.    

The author also gets a historian’s revenge on multiple generations of supposedly well-intentioned military, political, religious, and philanthropic leaders whose high status contrasted embarrassingly with their inability to successfully implement any of their grand plans for the advancement of the “dusky races.”  

Easterly has famously written at length about the contradictions and failures of modern economic development policy in books like The White Man’s Burden and The Tyranny of Experts. He now reaches back multiple centuries to deliver withering takedowns of figures ranging from French aristocrats Pierre Samuel du Pont de Nemours (1739–1817) and Pierre-Paul Lemercier de La Rivière (1719–1801) to Treaty of Versailles architect Woodrow Wilson (1856–1924) and Lyndon B. Johnson–era National Security Advisor Walt Whitman Rostow (1916–2003).

He offers a more inspiring, if much shorter, list of theorists and experts who pointed the way in the right direction. Beginning with Adam Smith (1723–1790), we also encounter (mostly) good actors like the anti-slavery Anglican Bishop William Warburton (1698–1779) and Swiss political theorist Benjamin Constant (1767–1830). Easterly devotes significant attention to better-known writers such as John Stuart Mill (1806–1873) and Isaiah Berlin (1909–1997), while also crediting the beloved figures of twentieth-century free-market economics: Ludwig von Mises, Friedrich Hayek, and Milton and Rose Friedman, among others. 

In recent years, the so-called neoliberal view of economics and the rules-based international order has been significantly challenged by a resurgence of populist economic thought emphasizing national solidarity — as defined by a handful of executive policymakers — over the equality of all individuals and positive-sum economic exchange.

President Donald Trump’s use of tariff authority — for purposes ranging from explicit industrial protectionism to the attempted conquest of Greenland — has dramatically set back decades of post–World War II progress in free trade. Violent Saviors, with its inspiring narrative of mercantilist authoritarianism giving way to a world where equality and cooperation are the norm, reminds us why so many fought so hard for these ideals in the first place.

On July 8, 2024, a guest essay by Stephen Smith on elevator policy was published in The New York Times. Though this may seem like a rather dry topic at first glance, Smith’s essay quickly dispelled that notion. The piece immediately went viral and has sparked a considerable amount of commentary from across the political spectrum. 

In the essay, Smith summarized the findings of a lengthy report on elevators that he had authored in May of that year for a think tank, the Center for Building in North America, which he founded in 2022. Prompted by a personal struggle with a lack of elevator access, Smith conducted a comprehensive review of the global elevator industry with the goal of answering a very specific question: Why are there so few elevators in North America compared to the rest of the world? 

“Despite being the birthplace of the modern passenger elevator, the United States has fallen far behind its peers,” he writes in the report. 

While the US has more than 1.03 million elevators — one of the highest totals in the world — it has fewer elevators per capita than any other high-income country for which data can be found, and Canada’s position on a per capita basis is similar. 

“…Part of this absence is due to the dominance of freestanding single-family houses in North America,” Smith acknowledges, “but even apartments in the United States are less likely to have elevators than those in much of Europe and Asia.” He points out, for example, that while New York City and Switzerland have similar populations, and a greater percentage of New Yorkers than Swiss live in apartment buildings, New York only has half the number of passenger elevators. 

“No matter how you slice the numbers,” he says, “America has fallen behind on elevators.” 

Smith’s findings all pointed to cost as the major factor. In Canada and the US, he says, new elevator installations cost at least three times as much as in Western Europe — roughly $150,000 compared to $50,000. What is driving this cost differential? Smith spends the majority of the report outlining three main culprits: mandatory minimum cabin sizes, labor issues with elevator installers, and technical codes and standards, which are harmonized for practically the whole world except the US and Canada. 

He writes: 

The North American approach is one of extremes. American and Canadian elevators have the largest cabins, the strongest doors, the most redundant communication systems, the best paid workers, and the most diversity of codes on the one hand. And in exchange, Americans and Canadians have the highest prices, the most limited access, the most uncompetitive market for parts, and the most restricted labor markets.

‘One of the Most Powerful Construction Unions in North America’ 

Smith’s comments on the labor point have attracted particular attention, because the inefficiencies are so glaring. As he wrote in The New York Times: 

Architects have dreamed of modular construction for decades, where entire rooms are built in factories and then shipped on flatbed trucks to sites, for lower costs and greater precision. But we can’t even put elevators together in factories in America, because the elevator union’s contract forbids even basic forms of preassembly and prefabrication that have become standard in elevators in the rest of the world. The union and manufacturers bicker over which holes can be drilled in a factory and which must be drilled (or redrilled) on site. Manufacturers even let elevator and escalator mechanics take some components apart and put them back together on site to preserve work for union members, since it’s easier than making separate, less-assembled versions just for the US. 

National Review economics editor Dominic Pino has noted, along with City Journal contributor Connor Harris, that this is a textbook example of what’s known as featherbedding, a practice in labor relations where unions obtain “make work” rules so that more union workers can be employed. 

The main elevator union in Canada and the US is the International Union of Elevator Constructors (IUEC), which Smith points out is “one of the most powerful construction unions in North America.” A 2011 comment from its General President, Dana Brigham, is revealing. 

“We can’t afford to sit back and see our trade dumbed down through factory prefabrication and preassembly to a point where all our members will have to do on the job is simply uncrate the elevator, set it, and plug it in,” Brigham said. Responding to this quote, Pino quips: “Heaven forbid elevators be easy to install.” 

It’s no wonder that featherbedding has a bad reputation. As Leonard Read observed in 1960, these practices are “as obviously absurd to the layman as they are disgusting to the economist.” 

In modern jargon, the economist’s disgust is often expressed by characterizing these practices as a kind of rent-seeking. Indeed, Alec Stapp, co-founder of the Institute for Progress, recently cited the elevator union rules that Smith uncovered as a good example of this concept. 

The notion of rent-seeking comes from the public choice school of economics, specifically the work of economists Gordon Tullock and Anne Krueger. Developed in the ‘60s and ‘70s, rent-seeking refers to any practice where you are trying to increase your wealth by changing the rules of the game, as compared to profit-seeking, which is trying to increase your wealth by being more productive. 

Common examples of rent-seeking include lobbying for tariffs or subsidies — or, in this case, union featherbedding. Profit-seeking, on the other hand, would include activities such as research and development aimed at creating new products to sell to customers. 

The word “rent” in this context refers to the old economic definition of rent, which is about the excess returns yielded by a factor of production, and not the colloquial definition of a payment made for the use of property.

Elevators Are Just the Tip of the Iceberg 

The other two factors that Smith discusses — minimum cabin sizes and technical codes and standards — are a classic case of government regulations making things considerably more expensive than they need to be (and regulation, particularly licensing, no doubt contributes to the labor issues as well). 

Now, if the mandated wastefulness that we find in the elevator industry were unique, it would still be cause for alarm, but the absurd truth is that regulations like this are everywhere. 

“When most people go through their daily lives, they don’t think about the ways in which government regulations are making their lives more difficult,” writes economist Scott Sumner, reflecting on Smith’s elevator story. “In almost every case I come across with systematic inefficiency, the root cause is counterproductive regulations.” 

It feels like every few months, a story like this comes along that grips the public’s attention. Calls for reform are heard, a public outcry fills the airwaves, maybe legislation is introduced. But it rarely occurs to people that these stories form a pattern. As such, we’ve fallen into this routine where our news feeds periodically become dominated with the latest absurd regulation story, and then at best we play whack-a-mole with legislation designed to address the Current Thing. 

Perhaps, if we can focus on the bigger picture, we should consider trying a different approach. Maybe there will come a point where we realize that news-driven piecemeal deregulation isn’t particularly effective, and more fundamental changes, such as blanket limits on government intervention in the economy, must be considered.

On February 11, the Congressional Budget Office (CBO) published its annual Budget and Economic Outlook report, covering 2026 to 2036. Among the projections, the report found that Social Security’s Old-Age and Survivors Insurance will be unable to pay full benefits in 2032 (a year earlier than projected in last year’s report). This is due to the higher projected cost-of-living adjustments and lower projected revenues. To put that in perspective, Social Security will be unable to pay full benefits before the program turns 100. 

Social Security is in desperate need of reform, but doing so is easier said than done. Perhaps the worst cultural consequence of Social Security is that this unsustainable program is pitting generations of Americans against one another. The young support benefit cuts while the old support higher payroll taxes. Successful reform means balancing the interests between these generational divides to prevent political backlashes, which may jeopardize future reforms. 

What Social Security Is and Is Not 

In 2007, AIER published “What You Need to Know About Social Security.” This Economic Education Bulletin outlines Social Security’s history, some myths and realities about the program, as well as options for reform and what individuals planning for retirement could do in the meantime. Many of the bulletin’s lessons are still applicable. 

Chief among them is the nature of the program. Social Security is not a system of individual retirement accounts. Nor is it a defined benefit pension program. It is a pay-as-you-go structure, where payroll taxes collected from working Americans go to fund benefit payments for the elderly. Despite being sold to Americans as an earned benefit, the true nature of the program is much closer to a Ponzi scheme than many care to admit. 

This means that the program relies upon working Americans to pay into the system outnumbering retirees. That number has dwindled, and it currently sits at 2.7 workers per Social Security recipient, an unsustainable ratio. Minor adjustments are not a feasible solution. The program needs structural reform. 

Possible Reforms  

Properly reforming Social Security requires a structural transition to a system based on ownership, savings, and investment. Universal Savings Accounts (USAs) can help anchor the transition if they are paired with policies that address the generational divide over the program. 

One such proposal made by the AIER Bulletin, as well as others, is a transition to a flat benefit. While this would drastically improve the program’s solvency, it risks immense political backlash. Current retirees and those near-retirement are planning on specific levels of benefits. Changing those overnight will likely result in voters 50 and over (one of the largest and fastest-growing voting blocs) punishing politicians who supported reforms by supporting challengers in primary and general elections. Furthermore, that punishment at the polls will make incumbents reluctant to offer other reforms in the future.  

To mitigate this political risk, policymakers can consider cohort differentiation. This would mean that current retirees and near-retirees receive all accrued benefits, financed transparently through general revenues, while the youngest cohorts transition out of the traditional program entirely and have access to USAs, which provide them with control over their finances and the portability to take those savings with them regardless of career or location changes. 

Additionally, Social Security’s Old Age Insurance could be separate from Disability Insurance and Survivors’ Insurance. The combined OASDI framework encourages benefit creep, especially as old-age insurance costs increase. Stand-alone programs can help prevent the re-expansion of the old-age system through cross-subsidization. 

The AIER Bulletin also notes that, while total privatization of retirement savings would be ideal, offering a smaller, flat benefit could encourage people to save more. Furthermore, the bulletin recommends encouraging saving through tax policies that incentivize savings over consumption (such as a decrease in reliance on income taxes). Additionally, policymakers can make it easier for Americans to save by replacing the myriad savings vehicles in the tax code with a broader universal savings account system without restrictions on how that money is used. 

There is also the possibility of devolving the program to state governments and having states manage these funds like defined benefit pensions. This would enable benefits to be connected to earnings. One such drawback, however, is state management of defined benefit pension plans is mixed at best. A defined benefit system at the federal level may exacerbate the knowledge and incentive problems that occur at the state level. 

Finally, long-term success will be determined by the institutional constraints in place. These include hard cohort cutoffs and a supermajority requirement for benefit expansions. Without such constraints, we will likely see a reversion to what we have now, with the same empty promises that the system would be fully self-funded, only to saddle Americans with massive tax obligations. 

Institutional Reform — or Generational Reckoning

Social Security reform is no longer a choice; it is the only way to avoid a very unfortunate future. Ignoring that reality will mean higher taxes on working Americans and benefit cuts to retirees. Enacting sustainable policy solutions can help avoid disaster without leaving Americans, young and old, destitute. The best hedge against the failures of the status quo, however, is to take control of one’s plans for the future instead of expecting the government to manage the future for us.

January saw Americans grow markedly more pessimistic about the economy. The Conference Board reported that its Consumer Confidence Index fell almost ten points in one month, reaching its lowest level since 2014. Consumers reported worsening views of current market conditions, as well as a sharp reduction in expectations regarding job prospects and income for the upcoming months. 

Upon initial review, this pessimism appears hard to square with recent headlines. Employers seem to be adding jobs; measured output has not fallen; consumers in the aggregate are still spending more in nominal terms than they were last year. This has led commentators to label this drop in confidence merely a perception problem. 

Market participants, however, do not react to abstract aggregates. They are responding to what they are directly experiencing: rising prices, tighter budgets, and uncertainty about future opportunities and job prospects. This is not the result of some vague uneasiness. Rather, it captures concrete concerns that broad economic averages often smooth over. 

Yes, the index regarding current conditions fell, and fell sharply. According to the Conference Board, the share of respondents who said jobs are “plentiful” fell to 23.9 percent, while the share saying jobs are “hard to get” rose to 20.8 percent. These data do not come from individuals attempting to judge macroeconomic trends. Rather, they were evaluations of lived labor-market constraints. Even if employment totals remain positive in the aggregate, such a tallying cannot capture changes in perceived difficulty in finding or changing jobs. People do not consult nationwide aggregates when considering whether it is easy or difficult to find jobs. Almost no one searches for “a US job,” but for specific jobs in specific locations requiring specific skill sets.

A teacher searches for openings in a particular district. A laid-off marketing analyst seeks firms hiring in his specialty. The welder wants fabrication work within driving distance. No individual experiences the labor market in aggregates, but through concrete localized opportunities. An economy can add jobs on paper while many struggle to find positions suited to their skills and geography. This reality does not make their pessimism purely emotional. 

Perhaps the more striking deterioration was in expectations. Consumers’ outlook for income, business conditions, and employment over the coming six months deteriorated to levels typically associated with an impending recession. More specifically, the Expectations Index dropped to 65.1, well below the 80 that often signals an upcoming downturn. Only about 15 percent of respondents expect business conditions to improve. These expectations will obviously shape household decisions about major purchases, savings, and career moves. 

Moreover, the decline was not contained to certain socio-economic demographics. Reuters reports that sentiments fell across income and age groups, including higher-income households that typically are a little more optimistic than other groups during moderate economic stress. This hints that the collapse is not merely the result of lower-income hardship but a more generalized perception that economic conditions are less favorable. 

This is further illustrated by the qualitative responses in the survey. Consumers cited high prices — namely, necessities like groceries and gasoline — as persistent concerns. As noted by Peter Earle, consumer goods like coffee, eggs, and chicken are still priced well above pre-COVID levels. Even a three-percent reduction in gasoline prices in the last year is outweighed by the 21 percent increase since 2019. 

Mentions in survey responses of trade policy, tariffs, and political uncertainty rose as well, as did labor-market insecurity and health-related costs. Manufacturing employment continues to fall in this tariff era, shedding roughly 70,000 jobs after tariffs were raised from about 2.4 percent to around 10 percent. Even if these jobs are offset by job gains in some other sector elsewhere, displaced workers still have reason to be less confident about their own prospects. 

These concerns reflect specific and notable pressures on households’ budgets and long-term planning. 

Here enters one of the major issues of the aggregates. Measures like GDP, average wages, and employment totals merely summarize overall activity, obviously. What they fail to capture are economic realities like distribution and sustainability — and whether growth positively impacts a household’s ability to plan for the future. Nominal consumption can rise as real purchasing power stagnates; employment can grow as job mobility declines. Aggregate output can increase while economic freedom and flexibility decrease. When we understand this, then divergences between consumer confidence and aggregate economic indicators become more intelligible. 

Even assuming aggregate statistics are well-suited to measure motion in an economy (a point not necessarily granted, but simply set aside for the sake of this article), they cannot measure coordination or economic viability. They tell us how much supposed economic activity is occurring, but not whether such activity reflects consumer preferences, actual economic realities, or even economic resilience. Consumer confidence, while also an aggregate of sorts, seeks to provide a general judgment about opportunity, security, and constraint. When assessments of conditions and expectations simultaneously deteriorate, that hints at a more fundamental issue than mood swings by consumers. 

To be clear, consumer confidence is not a comprehensive measure of economic health. Survey responses reflect personal experience and expectations, which can be incomplete or mistaken, but still have relevant impact because individuals act upon those attitudes. But the primary trap here is the treatment of low confidence as simply irrational pessimism. When consumers consistently report anxiety about the job market, income, and future conditions, they are not necessarily misunderstanding the economy. Instead, they may be pointing to specific structural pressures aggregates cannot detect. Rising costs, reduced labor mobility, and policy uncertainty all weigh heavily on confidence while remaining somewhat invisible to headline economic data. 

So, we return to the central question: when consumer confidence collapses amid positive economic aggregates, which one is lying? Perhaps neither, but they are both needed if we wish to understand the state of the economy. Aggregate statistics are intended to measure total activity. So be it. But total activity is not the end-all, be-all of economic health. Consumer confidence seeks to reveal whether such activity is translating into security, flexibility, and confidence about the future. 

If economic growth increasingly takes the form of superficial statistical expansion rather than authentic improvements in economic coordination, then falling confidence is not a puzzle, nor something to ignore. It is, instead, a warning that the economy is possibly wasting resources in the name of increasing numbers. This, of course, completely inverts the entire purpose of the economy — the proper coordination of scarce resources in accordance with people’s needs.