When the Justice Department went to court in 2023 to block the merger between JetBlue and Spirit Airlines, officials said they were protecting consumers from higher fares and less competition. It sounded like a victory for travelers, and US District Court Judge William Young certainly spun it as so in his January 2024 decision. A scant two years later, Spirit’s bankruptcy, JetBlue’s current struggles, and Washington’s flirtation with a federal bailout tell a very different story.

At the time, I argued that blocking the deal would not preserve competition so much as hasten Spirit’s collapse and leave JetBlue weaker, ultimately just strengthening the Big Four carriers that already dominate the market. That is exactly what has happened: Spirit has landed in Chapter 11, and JetBlue’s new CEO has been forced to publicly reassure investors that the airline will not file for bankruptcy this year, while pointedly leaving the prospects for 2027 unmentioned. The merger is dead, Spirit is in restructuring, and consumers are staring at the prospect of fewer flights at higher prices.

Now comes Act II. With Spirit in bankruptcy, the Trump administration is weighing whether to invoke the Defense Production Act to support a rescue package that could include up to $500 million in government-backed financing and warrants to purchase as much as 90 percent of the company once it emerges from Chapter 11. In other words, after the Biden administration’s blocking of a private merger on competition grounds, Washington is now toying with becoming Spirit’s de facto owner, which at least one clever analyst has dubbed an “Amtrak of the skies.”

The original sin: killing JetBlue - Spirit

Spirit was already in trouble when JetBlue proposed the acquisition, with mounting losses, heavy debt, and a business model that had been squeezed by higher fuel costs and intense competition. The merger offered a plausible path to keep its aircraft flying under a stronger, better-financed brand that could integrate Spirit’s planes and routes into a larger network. By blocking that path, DOJ did not freeze the industry in a healthy equilibrium; it simply forced the weakest player to try to survive on its own in a market dominated by giants.

Travelers across the country know what a concentrated airline market looks like. Four carriers already control roughly 70 percent of the U.S. domestic market, and at many major hubs, one airline reigns supreme. Ultra-low-cost carriers like Spirit and Frontier do not just offer cheap seats; they also provide leverage for price-sensitive travelers and a check on how far the big incumbents can push fares. When one of these discount options disappears, the legacy carriers gain bargaining power, whether or not they ever sought a merger.

The irony here is that antitrust officials claimed they were preventing JetBlue from becoming too big a rival to the legacy carriers. In reality, killing the deal simply cleared the way for the incumbents to tighten their grip on an already-captured market with no effort on their part, as Spirit shrinks and JetBlue fights for survival. Regulators protected a logo, not a viable competitor.

What an “Amtrak of the skies” really means

With talk in Washington of the federal government taking a direct stake in Spirit, we can draw an even more troubling conclusion. If private airlines cannot survive in a competitive market because regulators block the transactions that might rescue them, the emerging answer seems to be “don’t rethink the antitrust; embrace a new era of ‘state capitalism’ and take direct ownership instead.”

The structure being floated is not subtle. Reports describe a deal in which the U.S. would lend Spirit roughly $500 million, in exchange for warrants that could be exercised to acquire up to 90 percent of the equity if the airline exits bankruptcy. This is not a simple liquidity backstop; it is a path to effective nationalization – with a robust side quest of moral hazard – putting taxpayers on the hook for a chronically fragile carrier whose troubles were intensified by earlier policy choices.

Calling this “Amtrak of the skies” is not just a clever line. Amtrak’s history is a case study in what happens when the state takes over a struggling transportation system: routes that are hard to kill because they are politically popular, chronic operating losses, and perpetual pressure for more subsidies instead of true restructuring. State-backed airlines abroad, such as Alitalia in Italy, have shown similar patterns, cycling through rescues, political interference, and bankruptcy while governments supply bridge loans to keep the flag carrier alive. Once politicians become responsible for an airline’s fate, it becomes extremely hard to close unprofitable routes, renegotiate labor deals, or shrink capacity to a sustainable level.

In such an environment, the discipline of entry and exit – the very mechanism that is supposed to make markets work – is blunted or even eliminated. Routes are added or preserved to please members of Congress, Il Parlamento, or whatever government body is responsible for appropriations, rather than passengers; inefficient operations are funded with taxpayer money instead of being restructured or shut down. Consumers end up paying twice: first in taxes, then in higher fares from insulated incumbents who know they will be rescued if things go wrong.

Spirit’s potential bailout would be especially perverse because of the sequence. Regulators blocked a merger that might have preserved capacity under a stronger private carrier, then used the resulting collapse as justification for turning Spirit into a quasi-public utility. That these would be the actions of two different administrations is hardly an argument in favor, as it would simply reveal deep systemic issues that impact policy no matter who is in charge. Instead of a compromise between markets and planning, which rarely works in the first place, it is a way of locking in the costs of both.

The institutional mistake, not the market

The lesson of the JetBlue – Spirit debacle is not that airlines are too important to be left to the market. It is that antitrust authorities in Washington need more humility about their ability to micromanage complex, high fixed-cost industries from the comforts of D.C. conference rooms.

Airline economics are unforgiving: aircraft are expensive, fuel costs are volatile, and labor both organized and powerful. In that environment, blocking a merger because it might raise fares on certain routes, while ignoring the very real possibility of bankruptcy and exit, is a recipe for unintended consequences. A firm that cannot realistically survive the next downturn is not a durable competitive force, no matter how many economists who are willing to ignore the benefits of economies of scale you can find to testify about short-run price effects.

Future regulators should approach similar cases with a few simple principles:

• Focus on viability, not just firm counts. A struggling carrier that is just one shock away from Chapter 11 is not the same thing as a healthy competitor, and keeping its brand alive at any cost is not the same thing as protecting competition.

• Weigh dynamic effects. Ask not only “what happens to fares if we let this merger go through?” but also “what happens if we block it and the weaker firm fails anyway – and the government then feels compelled to nationalize the aftermath?”

• Stop hiding industrial policy inside antitrust actions. If policymakers want to subsidize certain regions or routes, they should do so transparently by using straightforward tools, such as programs that pay airlines to serve small markets or voucher schemes that help travelers buy tickets, rather than blocking mergers and then turning failed firms into government-dominated carriers.

Right now, consumers are left with the bill. Spirit is in bankruptcy court; JetBlue is fighting to reassure investors and employees that it has a future. The Big Four carriers still dominate the skies, and passengers across the country face the prospect of fewer low-fare options than they might have had under a combined carrier. The Justice Department set out to protect competition; instead, they predictably made flying less competitive, more expensive, and opened the door to a potential new experiment in state ownership that will almost certainly make matters worse.

Like this kind of wonky autopsy on how Washington actually reshapes markets?

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Viktor Orbán’s electoral defeat is real, important, and deserved. But if the anti-authoritarian story ends with the fall of one man, the lesson will be wasted. Orbán was never just a Hungarian oddity, never merely a provincial strongman with a taste for grievance, media manipulation, and nationalist theater. He was a model, a proof of concept, and for admirers abroad a live demonstration that liberal institutions can be hollowed out from within while elections still occur on schedule.

That is why the question is not simply what happens to Orbán next. The better question is what political entrepreneurs everywhere learned from him. Orbán showed that democratic erosion need not arrive wearing jackboots. It can come draped in constitutional language, carried by parliamentary majorities, and marketed as the restoration of popular sovereignty against decadent elites.

The temptation after a defeat like this is to move immediately to a new villain. Pick the next tyrant. Find the next cartoon heavy. Declare the danger relocated. That instinct is understandable, but it is analytically sloppy. Personalizing structural problems flatters the audience while obscuring the mechanism. If a political order can generate one Orbán, it can generate another, even if the next one is smoother, younger, more articulate, and better dressed.

Orbán Was a Template

Orbán mattered well beyond Hungary because he functioned as a working template for twenty-first century illiberalism. He demonstrated that an ambitious leader does not need to abolish elections to weaken meaningful competition. He needs only to tilt the terrain: discipline public institutions, cultivate loyal media ecosystems, convert cultural anxiety into political capital, and depict every constraint on executive ambition as an attack by enemies of the nation.

That formula traveled. International admirers did not praise Orbán because they were experts on Hungarian administrative law. They praised him because he looked like a statesman who had found the cheat code: use democratic legitimacy to reduce the substance of liberal democracy, all while insisting that one is merely returning power to “the people.” Orbán’s symbolic value to the global right was therefore larger than Hungary itself.

This is also why his loss matters. A template loses mystique when it stops delivering victories. The aura of inevitability disappears. The story shifts from strongman invincibility to institutional exhaustion, voter fatigue, and the accumulated costs of governing through polarization. That is bad news for Orbán personally, but it is worse news for those abroad who used him as evidence that illiberal nationalism was not merely sustainable but ascendant.

The Machinery Behind the Man

The phrase “the Orbán system” should be taken literally. Systems matter more than personalities because systems outlast them. What made Orbán formidable was not charisma alone, nor even ideology alone, but the interaction of narrative, institutional leverage, partisan loyalty, and strategic conflict. He did not simply win arguments. He altered incentives.

That is the part too many critics miss. Strongmen are sustained not only by true believers but by officeholders, bureaucrats, media figures, donors, and ordinary citizens who conclude that accommodation is safer than resistance. The longer such a system persists, the more it trains people to anticipate power rather than challenge it. Fear matters, but so does adaptation. In time, opportunism begins to masquerade as realism.

Every durable illiberal system relies on a similar political technology. First, it identifies an internal enemy and an external menace. Then it fuses the two. Domestic critics become agents of foreign corruption; independent institutions become camouflage for elite domination; procedural restraints become betrayals of the nation’s authentic will. At that point, the leader no longer appears as a threat to constitutional order but as its necessary defender.

This is the real inheritance of Orbánism. It is less a fixed ideology than a governing style. It can wear Christian nationalism, civilizational rhetoric, anti-globalist populism, or ordinary law-and-order politics. The labels change. The operating logic does not.

Why Péter Magyar Is Still Worth Watching

Orbán’s defeat does not automatically resolve the deeper problem, because democratic backsliding can give way to democratic disappointment. Péter Magyar’s rise is newsworthy not just because he defeated a dominant incumbent, but because replacement politics often inherits some of the emotional grammar of the regime it displaces. Opposition figures succeed by channeling frustration, but frustration is not a governing philosophy.

That does not mean Magyar is simply Orbán in different packaging. It means transitions deserve scrutiny instead of romanticism. Voters often remove entrenched rulers because they are exhausted, economically frustrated, institutionally alienated, or morally disgusted. Those are excellent reasons to reject a ruling order. They are not, by themselves, a guarantee of liberal renewal.

This is where anti-Orbán commentary can become unserious. It is easy to cheer the defeat of an entrenched leader. It is harder to ask whether the incoming coalition or party can rebuild habits of restraint, restore trust in impersonal institutions, and govern without reproducing the same politics of existential emergency. The fall of an illiberal incumbent is a beginning, not a conclusion.

The Transatlantic Lesson

Orbán’s importance to American politics was never primarily diplomatic. It was theatrical and ideological. He became a kind of political exhibit for factions on the American right that wanted proof that national conservatism could move from think-piece aspiration to governing practice. Hungary, in that sense, served as a showroom for those who imagined a post-liberal future but preferred to describe it as democratic correction.

That symbolic role linked Orbán to Donald Trump, even where their political circumstances differed. Both men benefited from grievance as a mobilizing instrument. Both treated opponents not as rivals within a shared constitutional order but as hostile forces corrupting the nation from within. Both encouraged supporters to see institutional friction not as a normal feature of republican government but as evidence of conspiracy, sabotage, or illegitimate elite control.

To say this is not to claim that Hungary and the United States are identical. They are not. Institutional scale, constitutional design, federalism, media structure, civil society density, and party history all differ. But political actors borrow scripts across borders all the time. Orbán’s appeal abroad rested on the sense that he had converted diffuse cultural resentment into a coherent governing project. Others noticed.

Why Putin Still Matters

If Trump represents a democratic-world adaptation of strongman politics, Vladimir Putin represents the harder edge of the same anti-liberal impulse. Orbán was not Putin, and Hungary was not Russia. But Orbán’s critics were not imagining things when they placed him in a broader authoritarian continuum. The continuum matters because authoritarian politics often spreads less by formal alliance than by imitation, legitimation, and shared rhetorical habits.

Putinism offers the stark version: centralization, managed opposition, nationalist mythmaking, and the treatment of independent institutions as threats to state power. Orbánism functioned as a softer, electorally dressed variant that could travel in societies not yet willing to abandon the democratic script altogether. Where Putin embodied coercive authoritarian consolidation, Orbán embodied democratic corrosion.

That distinction matters because many citizens in liberal democracies would reject open dictatorship while still tolerating a politics that progressively empties liberal norms of content. They do not want tanks in the streets. They merely want the “right people” unconstrained by courts, media critics, universities, or bureaucratic procedure. That desire is how constitutional democracies begin making excuses for their own erosion.

Why Strongmen Keep Selling

The market for strongman politics is not created by propaganda alone. It is fed by genuine frustrations: stagnation, disorder, cultural dislocation, elite hypocrisy, administrative failure, and the maddening inability of normal democratic politics to act with speed or coherence. When institutions perform poorly, citizens become susceptible to anyone who promises energy, clarity, punishment, and direction.

This helps explain Orbán’s wider allure. He did not market himself as a destroyer of democracy. He marketed himself as the cure for drift. That is how strongman politics usually works in the twenty-first century. It does not denounce popular rule as such. It denounces pluralism, proceduralism, and institutional friction as luxuries that decadent societies can no longer afford.

The sales pitch is always morally flattering to supporters. You are not embracing domination, they are told. You are defending order. You are not rejecting liberty. You are preserving civilization. You are not silencing opponents. You are finally refusing to let the nation be ruled by people who hate it. Once those premises are accepted, extraordinary political measures begin to feel not dangerous but responsible.

The Liberal Error

Liberal critics often answer this challenge with moral denunciation alone. Some denunciation is warranted. But denunciation without institutional analysis becomes therapy for the already convinced. It names the villain, signals virtue, and leaves the operating mechanism intact. Worse, it sometimes reproduces the same personalization it claims to oppose, treating every democratic crisis as the product of one uniquely evil man rather than a recurring pattern of incentives and institutional weakness.

That pattern is harder to confront because it demands more than outrage. It requires asking why so many voters become willing to trade dispersed power for concentrated force, why elites accommodate obvious norm violations, and why institutions designed to check ambition so often hesitate until the damage is advanced. These are less emotionally satisfying questions than asking who the next tyrant is. They are also the only useful ones.[

A politics of restraint cannot survive on procedural piety alone. If liberal institutions want defenders, they must prove that dispersed power, open contestation, and constitutional friction are not just morally superior abstractions but practical safeguards against predation, favoritism, and arbitrary rule. Citizens tolerate messy systems when those systems still appear capable of correction. They stop tolerating them when mess begins to look indistinguishable from decay.

After Orbán

So what tyrant should come next? The truest answer is that the target should not be one man at all. The target should be the machinery that keeps making strongmen intelligible, attractive, and institutionally survivable. Orbán’s fall matters precisely because it reveals that even durable systems can lose legitimacy. But unless the underlying demand for illiberal politics is addressed, the supply will return.

That means watching Magyar without naïveté, criticizing Trump without parochialism, and understanding Putin not as a distant monster but as the hard endpoint of a broader anti-liberal temptation. These are not interchangeable figures. They occupy different regimes, different political cultures, and different levels of coercive severity. But together they map a family resemblance: power justified by emergency, dissent recast as treachery, and institutions treated as obstacles rather than safeguards.

Orbán lost. Good. But the more serious question is whether his defeat marks a repudiation of the style of politics he helped normalize, or merely a pause before that style finds a new spokesman, a new flag, and a new electorate willing to confuse domination with strength. The answer to that question will matter far more than the fate of one former prime minister in Budapest.

The comforting slogan

A recent post making the rounds declares that if America would “embrace capitalism and reject cronyism” in health care, agriculture, military contracting, insurance, media, technology, and banking, we would experience a renaissance unprecedented in human history.

It’s the kind of line that plays well on social media: capitalism good, cronyism bad, problem solved.

But there’s a deeper problem hiding under that contrast. Once you look closely at how modern capitalism actually works, the clean separation between “real capitalism” and “crony capitalism” starts to dissolve. The more you know about how law creates and structures markets, the harder it is to pretend that we can simply peel away cronyism and be left with some pristine, neutral capitalism underneath.

Capital is not a natural object

Start with an uncomfortable fact: capital is not a natural object lying around in the world, waiting for the state to either respect or ignore it. Capital is a legal status.

As Katharina Pistor argues in The Code of Capital, what makes an asset “capital” is not its physical form but the legal code wrapped around it. Land, corporate shares, mortgage-backed securities, intellectual property, even complex derivatives become capital because the legal system endows them with a specific bundle of attributes:

• Priority over competing claims

• Durability over time

• Universality against third parties

• Convertibility into other forms of value

Those attributes don’t come from nature. They come from contract law, property law, corporate law, trusts, bankruptcy codes, and the courts that interpret and enforce them.

In other words, “capitalism” as we live it is already a product of state-mediated legal engineering. The state decides which claims are recognized as property, how far they extend, how easily they can be enforced, and what happens when they collide with other claims.

That’s not an accidental add-on. It’s the operating system.

The state doesn’t just protect property; it defines it

This immediately complicates the popular story in which the state and the market are separate spheres, and the healthy version of capitalism is the one where the state merely “protects property rights” but otherwise stands aside.

Protect what property rights?

• Whether a piece of land can be encumbered by a mortgage and then sliced into tranches for investors is not given by nature; it is a legal choice.

• Whether an idea can be owned as a patent, for how long, and under what conditions is not given by nature; it is a legal choice.

• Whether a bank deposit is just a private IOU or a state-guaranteed claim backed by deposit insurance and lender-of-last-resort facilities is not given by nature; it is a legal choice.

Every one of those choices creates and transfers value. It determines who bears risk and who enjoys upside. It decides whose contracts are credible and whose are fragile.

State action here is not just “intervention” into a pre-existing market order. It is how the order is built in the first place.

Once you accept that, the line between capitalism and cronyism stops being “markets versus government” and becomes a question about how the government’s unavoidable role is structured, and who gets to shape it.

Why capture is an equilibrium, not an accident

If law is the code of capital, who writes the code?

The answer is: legislatures, regulators, judges, and—crucially—the lawyers and lobbyists who translate private interests into legal text.

That brings us to public choice. As James Buchanan and Gordon Tullock emphasized, once government has the power to hand out concentrated benefits—subsidies, tax breaks, regulatory privileges, exclusive licenses—organized interests will invest real resources in capturing those benefits.

Rent-seeking isn’t an aberration; it’s the predictable byproduct of two facts:

1. The state’s legal coding of assets and contracts creates enormous economic rents.

2. The groups most affected by those rents are better organized, better informed, and better funded than the diffuse public that bears the costs.

When a defense contractor lobbies for a procurement rule that only a handful of firms can realistically satisfy, or a bank lobby quietly adjusts the definition of “systemically important,” or a tech platform pushes for expansive IP protection and liability shields, that’s not some foreign substance invading an otherwise pure market. It is capital owners negotiating over the source code of capitalism itself.

From a public-choice perspective, cronyism is what you should expect when the state both:

• defines which assets count as capital and on what terms, and

• retains broad discretion to tweak those definitions in ways that can massively shift wealth.

The engine of crony capitalism is not “markets.” It’s discretion plus rents.

“Just say no to cronyism” is not a policy

This is why the Massie-style slogan—“embrace capitalism, reject cronyism”—is so unsatisfying.

If by “capitalism” we mean a system where private actors own capital and trade in markets under a general rule of law, then the question is not whether the state is involved. It’s involved all the way down, in the very definition of ownership, contract, and enforcement.

The real question is:

• How tightly constrained is the state’s power to single out particular firms, sectors, or constituencies for special treatment?

• How general are the rules that confer the key attributes of capital—priority, durability, universality, convertibility—and how easy is it to carve out exceptions?

You can yell “no cronyism” all day, but if your constitutional and statutory architecture leaves wide, unprincipled discretion intact, you’ve left the engine of rent-seeking running at full speed.

A more honest market liberalism

None of this means we should shrug at cronyism or accept it as inevitable. It does mean that a grown-up defense of markets has to move beyond treating “government” as an exogenous meddler and “cronyism” as a simple moral failing.

If we take both Pistor and public choice seriously, a serious market-liberal position has to start from at least three admissions:

1. Markets are institutional artifacts. They depend on dense, contestable legal coding that defines capital and contract.

2. That coding is politically produced. Legislators, regulators, and judges write it under constant pressure from organized interests.

3. Rent-seeking is endogenous. Whenever there are large, discretionary rents to be had—procurement, subsidies, barriers to entry—private actors will chase them.

From there, the question shifts from “how do we get rid of cronyism and have pure capitalism?” to “how do we constitutionally design the unavoidable state role so that:

• the rules are as general, predictable, and open-access as possible;

• discretion is narrowed and made transparent;

• and the total rent pool available through politics is reduced?”

That’s a very different agenda than simply insisting that the right people refrain from bad behavior.

What reform actually looks like

Concretely, if limiting cronyism is something you desire, you should think a lot about:

• How general our tax and regulatory rules are. The more narrow carve-outs and industry-specific credits we tolerate, the more we invite rent-seeking.

• How we structure emergency powers and bailouts. Discretionary rescue facilities for particular firms or sectors are cronyism magnets, even when initially justified by crisis.

• How easy it is to “opt out” through jurisdictional arbitrage. If the code of capital can be written by picking and choosing among jurisdictions and legal devices, those with the best lawyers will always tilt the playing field.

• How transparent procurement and licensing really are. Defense, health care, infrastructure, and financial regulation all involve vast procurement and licensing regimes where discretion and opacity go hand in hand with political money.

Notice what this list is not: it’s not a checklist of which industries to love or hate. It’s a set of institutional design questions about the relationship between law and capital.

You don’t fix that with a viral post. You fix it, if at all, with painstaking changes to how laws are written, how agencies exercise discretion, and how easy it is to convert political connections into legally protected rents.

The real Renaissance

Would we “experience a renaissance unprecedented in human history” if we could somehow have capitalism without cronyism?

If by that we mean a world where private actors freely invest, innovate, and trade under a stable, predictable rule of law, without having to buy favors in Washington to survive—that would indeed be a massive improvement over our present mix of markets and favoritism.

But getting there requires more institutional realism, not less.

It requires admitting that:

• Capitalism as we know it is already the product of state-made legal code, not its absence.

• Cronyism is not an invading virus but a failure mode of that code, driven by discretion and concentrated benefits.

• The relevant reform margin is not wishful thinking about “real capitalism” but hard questions about constitutional constraints, general rules, and the design of the state’s role in making markets.

That’s a much less satisfying slogan. But it has the virtue of being true.

One of the most common explanations for institutional failure is incompetence. Another is conspiracy.

Both explanations are emotionally satisfying. They also happen to be wrong most of the time.

A far more mundane explanation appears again and again in politics, public administration, corporate governance, and even academic institutions: organizations continue to deploy strategies that previously worked, even after the environment around them has changed.

Learning and Lock-In

Institutions, like individuals, learn from experience.

The difference is that institutional learning tends to be sticky. Strategies that succeed become embedded in norms, procedures, reputations, and career incentives. Leaders rise within organizations precisely because they mastered the tactics that worked under earlier conditions.

When a new crisis emerges, the natural response is therefore not innovation.

It is repetition. Run the playbook.

After all, the playbook worked last time. If it worked once, surely it will work again.

Institutions are nothing if not optimistic about their own past successes.

From inside the institution, this feels like prudence. Experience should count for something. Organizations that constantly reinvent themselves rarely survive long enough to build experience in the first place. From the outside, however, this same behavior often looks like paralysis.

The deeper issue is institutional lag. Environments change faster than leadership structures do. Authority tends to remain in the hands of actors who succeeded under the previous equilibrium. Adaptation therefore trails the conditions that require it.

Sometimes by years. Sometimes by decades.

Institutions as Strategic Systems

Economists have long understood that actors respond to incentives and constraints rather than abstract moral appeals. Even in situations as extreme as political violence, participants behave strategically. Earlier work in political economy has described terrorists and counterterrorist actors as agents operating within a constrained marketplace, maximizing utility under severe limitations rather than acting outside economic logic altogether.

That insight applies far more broadly than its original context.

Institutions are not monolithic entities guided by a single rational mind. They are collections of actors navigating incentives, reputational risks, and organizational constraints. Strategies that once produced success become institutional memory. Procedures are written around them. Careers are built on them. Entire professional identities form around defending them.

Under those conditions, repeating past strategies is not a sign of irrationality. It is exactly what rational actors inside the system are expected to do.

The problem arises when the environment changes faster than those incentives. Institutions then find themselves operating according to a map that describes a world that no longer exists.

Path Dependence and the Comfort of Familiar Tools

Once a strategy becomes embedded within an organization, abandoning it is surprisingly difficult.

The costs are not only operational but reputational. Imagine telling a room full of senior professionals that the very strategies responsible for their careers no longer work. This is not a recipe for calm reflection. It is a recipe for institutional defensiveness.

Path dependence follows naturally. Policies persist because they succeeded in the past. Decision-makers interpret new problems through the lens of previous victories. When the system encounters turbulence, the instinctive response is to apply more of the same medicine. If the cure worked once, surely the dosage just needs adjusting.

Or so the thinking goes.

The result is often a peculiar phenomenon: institutions that appear highly active yet strangely ineffective. Meetings multiply. Reports circulate. Committees form. Press conferences abound.

Activity is not the problem. Direction is.

The organization is running hard. It just happens to be running on yesterday’s map.

Institutional Lag in Real Time

You can observe this mechanism unfolding across modern democracies.

Many opposition parties, for example, still rely heavily on strategies that proved effective during earlier electoral cycles: disciplined messaging, procedural maneuvering, and the expectation that the next election will restore equilibrium. These strategies are not irrational. They succeeded before.

But when the surrounding environment has changed—when trust has eroded, coalitions have shifted, and institutional legitimacy itself has become contested—the old playbook may not produce the expected results. Yet abandoning that playbook is difficult. Party leadership tends to be dominated by actors whose careers were built during the previous equilibrium. Their instincts, understandably, favor the tools that once delivered victory.

Younger political actors often see things differently.

Having entered politics under altered conditions, they suspect that the underlying equilibrium has already shifted. The resulting internal conflict is frequently interpreted as ideological division. In reality it is often something simpler: a disagreement about time horizons. One faction believes the previous equilibrium still exists. The other suspects it quietly expired several election cycles ago.

Neither side can prove its position in advance. So the argument continues.

Meanwhile the public grows impatient.

Why Observers Reach for Conspiracies

To citizens watching from outside the institutional machinery, this lag can be infuriating.

Outcomes appear persistent. Problems remain unsolved. Leadership rotates but the system itself seems strangely immovable. At this point, many observers reach for darker explanations.

Perhaps the system is rigged. Perhaps elites secretly coordinate outcomes. Perhaps nothing will ever change because the system is designed not to change.

The appeal of these explanations is understandable. Humans prefer narratives with intentional villains. Structural explanations, by contrast, are unsatisfying. They lack drama. Worse still, they imply that replacing individuals may not fix the underlying problem.

But most institutional persistence does not require conspiracy. It only requires incentives.

Systems reproduce outcomes because the incentives sustaining those outcomes remain intact. The system behaves “as designed” not because someone secretly designed it that way, but because the existing constraints make the current equilibrium stable. It really doesn’t matter if and when the actors change. If the incentives stay the same, the outcome usually does too; either Edward Norton or Mark Ruffalo still give you a Hulk.

This is less sinister than conspiracy. It is also much harder to fix.

Reform is Hard, Bruh…

If institutional failure were simply a matter of bad leadership, reform would be easy.

Replace the leaders. Elect new ones. Hire different experts. Problem solved.

But structural equilibria do not yield so easily. Evidence alone rarely moves institutions out of stable equilibria. Moral outrage rarely does either. History is full of eloquent arguments and righteous anger that changed absolutely nothing.

Institutions respond instead to changes in incentives. Shift the constraints. Alter the payoffs. Redistribute the risks. Create credible expectations that the environment has changed.

Then—and only then—do strategies begin to evolve.

Until that happens, institutions will continue doing what they have always done. Repeating the tactics that once worked. Defending the playbook. Fighting the last battle.

A Small Dose of Realism

This is the uncomfortable implication many reform debates prefer to avoid.

The problem is rarely that institutions refuse to listen. The problem is that institutions are responding exactly as their incentive structures tell them to respond. In other words, the system is not malfunctioning.

It is functioning perfectly.

Just not in the way anyone hoped.

And that is why institutional reform is so difficult. You are not merely arguing with people. You are arguing with equilibria. Equilibria, unfortunately, do not care about speeches. They change only when the underlying structure changes.

Until then, the pattern repeats. Institutions keep fighting the last battle.

And the next one quietly begins without them.

News of the U.S.–Israeli strike that killed Iran’s Supreme Leader, Ali Khamenei, produced an almost immediate demand for judgment. Within hours, commentators sorted the event into familiar categories: decisive success, reckless escalation, overdue deterrence, catastrophic gamble. Modern political discourse rarely tolerates ambiguity. Major events must be interpreted quickly, because democratic politics rewards clarity even when reality does not.

Yet foreign policy decisions unfold across timelines very different from those that produce them. Military and political leaders act under conditions of perceived immediacy—incomplete intelligence, alliance pressures, domestic expectations, and the ever-present fear that inaction today may produce disaster tomorrow. In crisis time, uncertainty feels indistinguishable from urgency. Choices appear compressed, alternatives narrow, and delay itself begins to look like risk.

History operates differently. The consequences that ultimately define such decisions emerge slowly: through institutional adaptation, succession struggles, regional responses, and second-order effects no planner fully controls. Actions taken in hours or days are evaluated over decades. By the time outcomes become visible, the officials who authorized the decision are often gone, replaced by successors tasked not with choosing the intervention but managing its aftermath.

The killing of Khamenei therefore presents less a question of immediate moral or strategic verdict than a problem of temporal accountability. Iran’s supreme leader was eighty-six years old, presiding over a political system already approaching an inevitable succession moment. Whether the strike prevented future instability or merely reshaped an ongoing transition cannot be known now—and may not be knowable for years. What appears necessary in crisis often looks contingent in retrospect.

Democracies nevertheless feel compelled to judge immediately. Praise and condemnation arrive long before consequences mature. The result is a recurring mismatch between the time horizon of decision and the time horizon of evaluation—a structural tension at the heart of modern foreign policy.

The question raised by the Iran strike is therefore larger than the strike itself: how political systems should assess irreversible decisions whose true effects belong to the future rather than the present.

Crisis-Time Decision Logic vs Historical-Time Evaluation

When leaders authorize military action, they do so within a distinct temporal frame. Crisis time operates according to its own logic—compressed, urgent, dominated by the immediate threat of irreversible harm. Intelligence reports arrive incomplete. Allies demand reassurance. Domestic audiences expect resolve. Bureaucratic institutions generate momentum toward action. And beneath it all sits the gnawing fear that passivity today will be indistinguishable from negligence tomorrow.

Decision-makers do not experience this environment as calm deliberation over probabilities. They experience it as urgency made institutional. The question is rarely “should we act?” but “can we afford not to?” The very structure of crisis rewrites the calculus of risk. Delay becomes its own form of hazard. Inaction acquires moral weight. Uncertainty transforms into a reason for movement rather than restraint.

In this environment, the strike on Khamenei’s compound appears as one decision among a constrained set of alternatives, each carrying its own dangers. Allow Iran’s nuclear program to advance further? Risk appearing weak to regional adversaries? Leave Israeli security concerns unaddressed? Permit domestic critics to frame the administration as passive in the face of escalating threats? Each path carries visible costs; the costs of action remain hypothetical.

But historical time operates under different rules entirely. The consequences that ultimately define foreign policy decisions do not arrive on the schedule of crisis. They emerge through:

• Regional actors recalibrating strategies in response to new power distributions

• Iranian political institutions adapting to the vacuum left by decades of centralized leadership

• Successor administrations inheriting commitments they did not authorize

• Second-order effects—refugee flows, economic disruptions, alliance realignments—that no planner fully anticipated

• Domestic political systems reinterpreting the decision’s meaning as new information arrives

What appears unavoidable under crisis conditions frequently reveals itself as contingent when evaluated years later. The intelligence that seemed compelling proves incomplete. The threat that appeared imminent was perhaps containable through alternative means. The action that promised to resolve uncertainty instead produced new forms of instability.

This is not hindsight bias. It is the predictable result of evaluating decisions made under compressed timelines using evidence that only becomes available across extended periods. The officials who authorized the joint operation acted on the information and incentives available in late February 2026. History will judge them using information that accumulates over the next decade.

The temporal mismatch is structural, not accidental. Democratic political systems demand responsiveness to immediate threats. Historical evaluation demands patience for outcomes to mature. These two timelines rarely align.

The strike on Khamenei therefore illustrates not merely a strategic decision but a temporal one. Leaders acted within crisis time, but the meaning of that action now migrates into historical time, where evaluation proceeds according to entirely different standards.

The Illusion of Necessity

One of the more analytically troubling aspects of the Khamenei strike involves what it intervened in, not merely what it accomplished.

Iran’s Supreme Leader was eighty-six years old. He had held ultimate authority over Iranian political life since 1989, longer than many current voters have been alive. The question of succession was not hypothetical—it was inevitable. Iranian political elites had been maneuvering for position for years, aware that the transition would arrive regardless of external intervention. The Assembly of Experts, charged under Iranian law with selecting the next Supreme Leader, already faced the challenge of managing this process.

The strike did not prevent a succession crisis. It accelerated one.

Democracies frequently mistake acceleration for resolution because acceleration produces visible action, while patience produces only uncertainty.

This distinction matters analytically because acceleration and prevention are fundamentally different operations. Prevention removes a problem. Acceleration reshapes a transition already underway, altering its timing and character but not its underlying inevitability. The political and institutional dynamics that would have accompanied Khamenei’s death from natural causes—elite competition, factional realignment, uncertainty over institutional continuity—will now unfold under the shadow of foreign military action.

This raises uncomfortable questions:

• Did the strike solve a problem that required immediate resolution, or intervene in a process that was progressing toward resolution through internal dynamics?

• Does foreign intervention in a predictable succession make the resulting outcome more stable, or does it introduce new sources of instability by appearing to vindicate hardline narratives about Western hostility?

• If the goal was to create conditions for Iranian political reform, does leadership decapitation through military action make reform more or less likely than allowing internal succession pressures to run their course?

States frequently reinterpret optional actions as inevitable ones after the fact. Once irreversible decisions have been made, political systems generate narratives that render those decisions necessary in retrospect. The psychological and political incentives to do so are overwhelming—acknowledging that a major foreign policy action was optional rather than required opens space for criticism that officials acted recklessly or prematurely.

But necessity is a claim about alternatives. To say an action was necessary is to say no other course was viable. In the case of Khamenei, this claim is difficult to sustain. Iran’s succession was coming regardless. The choice was not whether to address succession but whether to force its timing through external military action.

That choice may prove correct. It may generate outcomes that justify the risks undertaken. But it was, structurally, a choice—not a compulsion imposed by circumstances beyond control.

Temporal Distribution of Responsibility

One of the most consequential features of modern foreign policy is how responsibility migrates across time.

Executives authorize military action in a compressed decision window, often hours or days. Military institutions execute the operation within a similarly brief timeframe—the initial U.S.-Israeli strikes reportedly involved nearly 900 individual targets hit within twelve hours. Political praise or condemnation follows almost immediately, structured around the binary logic of success versus failure.

But the consequences emerge across a vastly longer timeline. Iranian political institutions must now navigate a succession process under external pressure. Regional actors—Saudi Arabia, Turkey, Iraq—will recalibrate strategies based on the new distribution of power and perceived Western willingness to intervene directly. Refugee flows, economic disruptions, and proxy conflicts will unfold over years. Future U.S. administrations will inherit the strategic commitments and regional relationships shaped by this action, regardless of whether they would have authorized it themselves.

This creates a fundamental misalignment between decision and outcome. Those who bear the consequences are often:

• Successor administrations forced to manage commitments they did not choose

• Regional civilian populations affected by instability they did not cause

• Military personnel deployed to address follow-on crises

• Future voters who will evaluate candidates based on conditions created by decisions made before they could participate politically

Democratic accountability assumes that those who authorize decisions will face political consequences for their outcomes. But in foreign policy, the timeline of consequences frequently exceeds the timeline of political careers. Officials retire, administrations change, and public attention shifts to new crises before the full effects of prior decisions become apparent.

This temporal distribution of responsibility creates predictable distortions:

1. Frontloading benefits, backloading costs. Leaders have strong incentives to pursue actions that generate immediate political rewards (appearing strong, reassuring allies, demonstrating resolve) while deferring costs that emerge slowly (regional instability, long-term commitments, unintended escalation).

2. Asymmetric information. Decision-makers possess maximal information at the moment of choice—intelligence assessments, military capabilities, diplomatic context. Voters and future evaluators must judge the decision using incomplete information, often relying on selective disclosures and retrospective narratives.

3. Narrative consolidation. Once action is taken, political systems generate success stories to maintain coalition stability and justify resource commitments. Early declarations of victory serve institutional functions—reassuring allies, deterring adversaries, maintaining domestic support—but arrive before outcomes can be observed.

The result is a systematic disconnect between the incentives that produce foreign policy decisions and the accountability mechanisms that democratic systems rely upon to discipline those decisions. Presidents and prime ministers face electoral consequences based on public perceptions of success or failure, but those perceptions form long before outcomes mature.

This is not a problem that better institutional design can fully resolve. The temporal gap between action and consequence is inherent to foreign policy. What can be improved is democratic systems’ awareness of this gap and willingness to build accountability mechanisms that operate across longer timescales than election cycles.

Power Vacuums and Institutional Collapse

Temporal accountability becomes most difficult precisely at moments of political transition. Leadership removal produces immediate observable outcomes, while institutional adaptation unfolds slowly, often invisibly, across years.

The historical pattern is clear enough to warrant concern, even if specific predictions remain impossible.

Removing centralized leadership from authoritarian systems does not automatically produce stable transitions. It removes the institutional mechanism that previously coordinated elite behavior and suppressed internal competition. What follows depends less on the act of removal than on the underlying strength of institutions, the distribution of factional power, and the capacity of successor elites to establish new equilibria.

In Iran’s case, several trajectories appear plausible:

• Consolidation around a new leader. The Assembly of Experts moves quickly to install a successor—possibly Khamenei’s son Mojtaba, possibly a consensus candidate from the clerical establishment—who restores centralized authority and maintains continuity with prior policies.

• Managed reform. Moderate factions use the succession moment to negotiate reforms that reduce the Supreme Leader’s authority, shifting power toward elected institutions and creating space for political liberalization without full regime collapse.

• Fragmentation. Elite competition produces paralysis. The Revolutionary Guard, clerical establishment, and elected government pursue competing agendas. Iran enters a period of institutional uncertainty where no single actor can coordinate national policy effectively.

• Escalation. Hardline factions interpret the strike as vindication of their worldview, consolidate power, and pursue aggressive regional policies to demonstrate strength and regime continuity. Retaliatory strikes against U.S. bases and Israeli targets intensify rather than diminish.

None of these outcomes was determined by the strike itself. The action created conditions—removed a central coordinating figure, forced accelerated succession, provided narratives for competing factions—but the ultimate trajectory depends on Iranian institutional capacity and elite behavior in the coming months.

This uncertainty is precisely the point. Leadership decapitation does not solve the problem of authoritarian governance. It creates a different problem: managing the transition from centralized authority to whatever comes next. Sometimes that transition produces improvement. Sometimes it produces chaos. Sometimes it produces a more hostile version of the prior regime.

The relevant historical examples offer limited comfort:

• The removal of Saddam Hussein created conditions for sectarian conflict that lasted over a decade and produced ISIS

• The fall of Gaddafi left Libya without functioning central authority, creating space for civil war and regional proxy conflicts

• The collapse of authoritarian regimes in Egypt and Syria produced, respectively, a return to military rule and a devastating civil war

These cases do not predict Iran’s trajectory. Iran has stronger institutions, deeper administrative capacity, and a different factional structure than Iraq, Libya, or Syria possessed. But they illustrate the general principle: removing leadership creates opportunity for change, but change can take multiple forms.

The analytical lesson is not that intervention always fails. It is that intervention transfers the locus of uncertainty from “what happens if we don’t act” to “what happens after we act.” Both involve risk. The question is whether democratic systems have the patience and institutional capacity to manage the second kind of risk, which unfolds slowly and requires sustained attention across multiple political cycles.

Post Hoc Justification and the Psychology of Irreversibility

Within hours of confirmation of Khamenei’s death, political leaders across Washington and Jerusalem declared the operation a success. This response was predictable—not because outcomes were already visible, but because irreversible actions create psychological and political pressure to affirm their correctness immediately.

This is not cynicism. It is institutional logic.

Once major foreign policy decisions become irreversible, political systems face strong incentives to generate success narratives quickly. These narratives serve multiple functions:

1. Coalition maintenance. Military operations require buy-in from multiple actors—intelligence agencies, military branches, allied governments, legislative bodies. Early declarations of success help maintain that coalition by framing the action as validated and justified.

2. Domestic reassurance. Publics tolerate foreign policy risk more easily when leaders project confidence. Acknowledging profound uncertainty after irreversible action invites criticism and undermines support for follow-on commitments.

3. Bureaucratic legitimacy. Agencies that planned and executed the operation have institutional interests in framing it as successful. Their future budget allocations, strategic relevance, and internal morale depend partly on public perception of competence.

4. Deterrent signaling. Adversaries and allies alike observe how states characterize their own actions. Projecting confidence—even if privately officials harbor doubts—serves strategic communication functions that admissions of uncertainty would undermine.

Post hoc justification does not primarily persuade opponents; it stabilizes supporters who must continue operating within the consequences of the decision.

The result is a predictable temporal pattern: immediate congratulation, followed by cautious wait-and-see assessments as complications emerge, followed eventually by either vindication or revisionism depending on how events unfold.

But this pattern creates a problem for democratic accountability. Judgment arrives before evidence exists. Officials declare success when the only observable fact is that the target was killed and immediate retaliation remains limited. Whether the operation achieves its broader strategic objectives—regional stability, Iranian moderation, enhanced deterrence—cannot possibly be known yet.

Early celebration is therefore not an assessment of outcomes. It is a social and political act designed to shape expectations and maintain support during the period of maximum uncertainty. This is rational behavior for political leaders operating under democratic constraints. But it makes retrospective evaluation more difficult, because the initial framing becomes embedded in public memory and subsequent developments must overcome that anchoring effect.

Consider the counterfactual: if officials had responded to news of Khamenei’s death by saying “we have achieved the immediate military objective; whether this produces long-term strategic benefits remains to be seen,” that response would be analytically more honest. It would also be politically untenable. Publics demand confidence from leaders, especially after irreversible actions involving military force.

The practical result is that foreign policy debates often occur in reverse chronological order. Instead of deciding first and evaluating later, political systems affirm decisions immediately and only revisit that affirmation if subsequent events become impossible to reconcile with initial success narratives. By that point, officials have moved on, public attention has shifted, and accountability mechanisms have weakened.

This does not make early declarations of success dishonest. It makes them premature. The distinction matters for how democratic systems should approach foreign policy evaluation. If the goal is to improve decision-making over time, evaluation must occur on a timeline that allows consequences to materialize—not on the timeline that political incentives demand.

Democratic Guardrails Under Foreign Policy Shock

One of the least discussed consequences of major foreign policy actions is how they temporarily reorganize the internal balance of democratic institutions.

War and crisis compress deliberation. When events move quickly and threats appear immediate, the normal processes of legislative oversight, public debate, and bureaucratic review begin to look like obstacles rather than safeguards. Executives gain discretion. Dissent becomes risky. Intelligence assessments acquire outsized influence. And constitutional checks that function adequately during peacetime erode under the pressure of perceived emergency.

This is not unique to any particular administration or political system. It is a recurring pattern in how democracies respond to external threats. The urgency that justifies action also justifies bypassing the institutional friction designed to prevent hasty decisions.

The current situation illustrates the dynamic clearly:

• Congressional authorization for the strike, if it occurred at all, happened through expedited processes that minimized deliberative debate

• Intelligence assessments that justified the operation remain classified, preventing external evaluation of their quality or completeness

• Dissenting views within the bureaucracy, if they existed, were either overruled or never reached public discussion

• Media coverage focused overwhelmingly on operational success rather than strategic rationale, partly because operational details were immediately visible while strategic outcomes remain speculative

None of these features indicate malice or conspiracy. They reflect how institutions behave under conditions of perceived crisis. But they create conditions where mistakes become harder to prevent and easier to entrench.

The deeper problem is that foreign crises tend to be self-reinforcing. Once military action begins, any call for restraint or reconsideration gets reframed as undermining national security during a critical moment. This rhetorical move is extraordinarily powerful in democratic politics. It transforms substantive disagreement over strategy into questions about loyalty, resolve, and willingness to support the nation under threat.

The result is a temporary reorganization of constitutional balance. Executives expand discretion. Legislatures defer. Courts avoid interference in matters classified as national security. And civil society actors who raise concerns find themselves marginalized as unserious or unpatriotic.

This reorganization is usually temporary. As the immediate crisis recedes, normal institutional checks reassert themselves. But the decisions made during the period of compressed deliberation remain in place, shaping the strategic environment that future administrations must navigate.

Democracies rarely abandon guardrails permanently. Instead, crises normalize temporary exceptions that gradually redefine what counts as ordinary executive authority.

This creates a ratchet effect. Each crisis expands executive discretion slightly. Some of that expansion persists even after the crisis ends. Over time, the normal baseline of executive power in foreign affairs drifts toward greater autonomy and reduced oversight.

The Iran strike will likely follow this pattern. In six months, public attention will have shifted to other issues. In two years, the operation will be a settled fact, debated only among specialists. In five years, the consequences will be unfolding in ways that bear little resemblance to current expectations. And the institutional precedent—that executives can authorize strikes on foreign leaders with minimal deliberation during perceived crises—will be absorbed into the background assumptions of American foreign policy.

This is how democracies gradually lose their capacity for restraint. Not through dramatic ruptures, but through accumulated precedents established during moments when restraint appeared too risky to tolerate. Foreign policy shocks do not merely reshape external environments; they temporarily reorganize the temporal structure of democratic decision-making itself.

Conclusion: The Time Problem in Democratic Judgment

The killing of Ali Khamenei will be evaluated many times, by many actors, using many different standards. Immediate assessments focus on operational success: the target was eliminated, allied coordination functioned effectively, and initial retaliation remained limited. Future assessments will focus on strategic outcomes: whether the strike enhanced regional stability, how Iranian succession unfolded, and whether long-term U.S. interests were advanced or compromised.

These assessments will occur on different timelines and reach different conclusions. That divergence is not a failure of analysis. It is the predictable result of evaluating decisions whose consequences unfold slowly using political systems designed to respond quickly.

The central difficulty is not deciding under uncertainty—that is unavoidable in foreign policy. The difficulty is evaluating decisions whose consequences will only become visible long after the decision-makers are gone.

This temporal gap creates recurring problems for democratic accountability:

• Leaders face incentives to pursue actions that generate immediate political benefits while deferring costs to future administrations

• Voters must judge decisions based on incomplete information and provisional outcomes that may later be reversed

• Institutional checks designed to prevent hasty action erode precisely when they matter most

• Success narratives form before outcomes can be observed, creating anchoring effects that distort later evaluation

None of these problems can be fully solved. The mismatch between crisis-time decision-making and historical-time evaluation is structural. But democracies can improve how they manage this mismatch by:

1. Resisting the demand for immediate judgment. Foreign policy decisions should be evaluated provisionally in the short term and revisited as evidence accumulates. Early declarations of success should be treated skeptically, not because officials are dishonest but because outcomes have not yet materialized.

2. Strengthening institutional checks during crises. The moments when executive discretion feels most necessary are precisely when oversight matters most. Democracies that bypass deliberation during emergencies store up problems for later.

3. Distinguishing acceleration from prevention. Not every intervention prevents disaster. Some merely reshape transitions already underway. That distinction should inform both decision-making and evaluation.

4. Acknowledging irreversibility honestly. Once major actions are taken, political systems face pressure to vindicate them. Acknowledging uncertainty after irreversible decisions does not undermine support—it creates space for course corrections when early assumptions prove incorrect.

The Iran strike raises a question that extends far beyond Iran: how should political systems evaluate decisions whose consequences will unfold across timelines longer than electoral cycles, longer than individual careers, and longer than public attention spans?

That question has no clean answer. But asking it is the first step toward building foreign policy institutions capable of learning from experience rather than repeating mistakes dressed up as necessity.

Democracies cannot avoid acting under uncertainty. Nor can they postpone judgment indefinitely. But the temptation to render immediate verdicts on irreversible decisions remains one of the greatest sources of foreign policy error. The killing of Ali Khamenei will eventually be understood not through the clarity of the moment that produced it, but through the slow accumulation of consequences no participant could fully control.

The enduring question is therefore not whether leaders acted decisively, but whether democratic societies possess the patience to judge decisiveness only when history, rather than crisis, has rendered its verdict.

This essay is part of an ongoing series on temporal accountability in democratic governance.

Open Venmo and scroll the feed. It feels like you’ve picked up someone else’s itemized diary: rent splits, taco reimbursements, the occasional passive-aggressive 🙃. The dollar amounts are hidden, but the relationships are not.

The instinctive reaction is simple: why is any of this public?

Venmo’s says payments are “fun to share.” The more interesting answer is institutional.

Money Used To Mind Its Business

For most of modern banking, transactions were not supposed to become anyone’s content stream. Privacy wasn’t a boutique preference; it was part of the architecture. Banks sat between you and the world, clearing payments and absorbing the informational risk that came with knowing who paid whom.

That arrangement wasn’t sentimental. It was functional. Markets depend on the ability to transact without turning relationships and crises into public signals. Settlement stayed settlement because confidentiality lowered the social cost of exchange.

Venmo’s Problem: No One Trusts the Empty Room

Venmo was born without any of that inherited trust. No charter. No marble lobby. Just a scrappy app that only worked if enough of your friends were willing to route money through a social network owned by PayPal.

That’s a coordination problem, not a UX problem. A payment app is useless if the people you transact with don’t use it. Early on, any given person has almost no information:

· Will my friends actually adopt this?

· Is there real activity here, or am I walking into a ghost town?

· Will this thing still be around in two years?

Venmo’s problem wasn’t moving money. It was manufacturing confidence.

Traditional finance solves that with regulation, deposit insurance, and longevity as a repeated signal of reliability. Venmo had none of that. It needed another way to manufacture confidence.

So it reached for something platforms understand better than banks: visibility.

Visibility as a Substitute for Trust

Venmo’s public feed took what used to be a private confirmation — “the payment went through” — and turned it into a social signal: “look, people like you are using this all the time.”

· Each public payment is a little proof-of-life for the network.

· Each scrolling session is free marketing.

· Each “oh, she’s on Venmo too” interaction lowers adoption friction.

Venmo describes itself as a social network; people open the app to see what others are up to. Beneath that framing is an institutional shift: reputation is replaced by observable participation.

The innovation wasn’t faster money. It was visible money.

Defaults as Quiet Governance

Venmo emphasizes that users can adjust their privacy settings. Formally, that’s true. Economically, the power lies in the default.

Public-by-default means doing nothing produces visibility. Changing that requires attention, navigation, and effort. Behavioral economics has been clear for years: most people accept the default.

The older banking model embedded privacy in the structure itself. The platform model hands users a toggle and lets path dependence do the rest.

That shift — from “we’ll protect this” to “we’ll label the toggle” — is a small but telling change in how governance operates.

The Institutional Trade: Who Carries the Privacy Risk?

Once you see the trust problem, the rest of the design choice comes into focus. Venmo flips the old allocation of responsibility:

In the banking model, you don’t need to curate your financial exposure. The default architecture does it for you. In the platform model, the app hands you the controls — then quietly sets them to “broadcast,” and lets path dependence do the rest.

The FTC’s complaint against Venmo in 2018 was telling: regulators didn’t say “you can’t have a social feed,” they said you misled users about what was visible and buried key information behind confusing settings. The settlement forced better disclosures, not a return to privacy-by-default.

That is the institutional pivot in miniature: from “we’ll protect this” to “we’ll label the toggle.”

The Externalities Are Boringly Predictable

None of this requires a sinister plot, and you don’t need to invoke “surveillance capitalism” to see the consequences. If you publicly expose a large social graph of who pays whom, three things follow almost automatically:

· You make it easier to infer relationships and routines — roommates, partners, coworkers, habits.^[3]

· You create a trail that can be cheaply mined by anyone from scammers to hobbyist bots.

· You create a tempting subpoena target for law enforcement and regulators.

Mozilla flagged the “public by default” model and noted that, at one point, “everyone on the Internet” could see your payments unless you changed the settings. Researchers have used Venmo data to map social and consumption networks at scale. Scams piggyback on the visibility of who frequently sends money to whom. None of that is a bug in the code. It’s the structural byproduct of a feed that treats economic behavior as social content.

Again: this is not the dystopian novel version of privacy loss. It’s the boring, incremental version — the kind that’s harder to dramatize and easier to live with until, in hindsight, it becomes the default for an entire generation.

The Upside Is Real — That’s Why It Won

If this were just a clumsy privacy failure, it wouldn’t have lasted. It worked.

Public feeds helped Venmo explode to tens of millions of users and hundreds of millions in revenue, riding network effects that traditional banks can only envy. It made splitting dinner painless, normalized P2P repayments, and, for many people, made “send me a check” sound like a joke.

From a coordination perspective, the trade-off is straightforward:

· Lower transaction friction and faster adoption.

· Higher exposure and more inference risk.

Most users never explicitly agreed to that exchange in a fully reflective sense. They just showed up, found their friends already there, and adapted. Path dependence did the rest, and visibility accelerated adoption in a way regulatory reputation never could have.

That’s why the “why is this public?” question is so revealing. By the time you ask it, the equilibrium the feature was designed to create is already there. Your confusion is a lagging indicator.

Visibility as the New Trust Technology

The banking world built trust by keeping your financial life out of sight and backing that promise with regulation and institutional capital. Venmo and similar platforms build trust by making your participation easy to see — to yourself, your friends, and, by default, more people than you probably realize.

In that sense, the public feed isn’t just a quirky social extra bolted onto a payment app. It’s the core of a different governance model for money:

· Trust shifts from institutional opacity to social observability.

· Privacy shifts from being an embedded property of the system to a user-level chore.

Venmo’s real innovation wasn’t giving us one more way to move dollars around. It was teaching us, very quietly, to treat our economic lives the way we treat everything else on a platform: as something meant to be seen.

What the Published Piece Could Not Do

The Independent Institute article had to compress a multi-layered institutional story into a short policy essay: a general audience, limited space, and a statutory focus left little room to spell out the underlying mechanism design in detail. In particular, the piece sketched but did not fully formalize how emergency statutes like IEEPA, balance-of-payments tools like Section 122, and judicial review interact over time to shape executive incentives in trade policy.

Policy essays also tend to treat doctrinal questions—does IEEPA authorize tariffs, how far can Section 122 go—as discrete legal puzzles rather than as parts of an evolving system where actors respond to delayed feedback and shifting constraints. This note treats the same episode as a live example of temporally distributed accountability: how costs, corrections, and incentives are dispersed across time rather than resolved at a single decision point.

Mechanism Walkthrough

At the center of the tariff episode is a familiar executive incentive: presidents face strong pressure to “act” on economic grievances quickly, especially when trade policy can be framed as defending domestic workers or punishing foreign adversaries. Emergency and quasi-emergency statutes—IEEPA for national emergencies, Section 122 for balance-of-payments concerns—offer a comparatively low-friction channel to act unilaterally, especially when ordinary tariff legislation would require building and sustaining a congressional coalition.

Once this channel is available, the mechanism begins:

· Executive incentive → emergency statute use. When ordinary lawmaking is costly and slow, emergency or delegated authorities become the margin of adjustment for ambitious tariff initiatives. Recent uses of IEEPA and Section 122 illustrate how emergency statutes can be stretched to support trade measures that resemble general tax policy rather than crisis response.

· Emergency statute use → diffuse cost distribution. Tariffs impose concentrated costs on specific importers and exporters but diffuse, often opaque costs on consumers and downstream firms through higher prices and supply-chain disruptions. Because these costs are spread out and partially hidden in complex price and quantity adjustments, they are politically easier to sustain in the short run than an explicit tax increase passed by Congress.

· Diffuse cost distribution → delayed judicial correction. Litigation requires identifiable plaintiffs who can show standing, assemble a legal strategy, and bear the time and expense of challenging the policy. In the tariff episode, importers, states, and public-interest groups had to coordinate challenges across multiple theories—statutory interpretation of IEEPA and Section 122, nondelegation and major questions arguments, and separation-of-powers claims about Congress’s taxing authority.

· Delayed judicial correction → political accountability lag. By the time a case like Learning Resources v. Trump reaches the Supreme Court and results in a ruling that IEEPA tariffs are unconstitutional, the policy has already generated real economic and distributional effects. Voters observe the judicial correction as a discrete “event,” but the underlying costs and incentives that produced the tariffs were generated years earlier, under different political conditions and media narratives.

This sequence—executive incentive, emergency-channel activation, diffuse costs, delayed judicial review, and lagged political response—is what “temporally distributed accountability” looks like in a concrete legal setting. The Constitution’s allocation of tariff and taxing power to Congress remains formally intact, but the timing of when that allocation actually binds behavior is mediated by statutory design, litigation dynamics, and the political economy of diffuse versus concentrated costs.

Figure 1 summarizes the timing structure.

Why Courts Appear “Late”

From a news-cycle perspective, courts often look like they are “late” to the party: by the time the Supreme Court limits presidential tariff powers or rejects an expansive reading of IEEPA, the tariffs have already bitten. But as an institutional matter, courts are designed as lagged correction mechanisms: they do not initiate policy, they respond to disputes, and they rely on affected parties to bring justiciable cases.

That lag is not necessarily a failure; it is a feature of a system that separates initiation, implementation, and review across different bodies with different time horizons. Executives operate on election and news cycles; legislators on legislative calendars and coalition dynamics; courts on dockets, briefing schedules, and precedential constraints, with each step introducing delay but also additional information about a policy’s real-world effects.

In the tariff episode, the Court’s eventual conclusion that IEEPA tariffs exceeded statutory authority and encroached on Congress’s power to impose duties is best understood as a delayed reassertion of an existing constitutional allocation, not the creation of a new one. From a temporally distributed accountability perspective, the key question is not “Why did the Court take so long?” but “How did the statutory and political environment allow the executive to exploit that time window?”

This is exactly the kind of timing structure that Fairness Over Time-style analyses emphasize: outcomes are evaluated at one moment, but the path that produced them spans multiple periods, with different actors and constraints at each step. The tariff case provides a policy-domain counterpart to the way fairness metrics in algorithms can misalign with the longer-run dynamics of incentives, feedback, and institutional learning.

Research Note / Forward Link

The tariff episode illustrates how institutional systems repeatedly correct policy expansions only after their fiscal, distributive, and constitutional costs become visible enough to crystallize into litigation and judicial review. In the interim, executives can bank political credit for “toughness” on trade, even as the underlying measures are structurally fragile once subjected to full statutory and constitutional scrutiny.

The argument developed here did not originate as an abstract theoretical exercise. It emerged from attempting to understand why institutional corrections to policy expansion so often appear delayed or reactive, even when underlying constraints remain unchanged. The recent tariff litigation provided a particularly clear illustration of this recurring temporal pattern.

A more formal treatment of these dynamics, treating emergency authorities and judicial review as components of a temporally distributed accountability system, appears in ongoing work on time, institutions, and fairness in public policy. For readers interested in the broader framework, a draft of that project is available here: Fairness Over Time / temporally distributed accountability preprint.

It turns out that when you bargain away your liberalism for a chance at quick libertarian victories, you don’t get either for very long.

Now Peru has given us something different: Hernando de Soto.

Not a meme‑ready icon, not a YouTube ranter with a chainsaw, but an institutional reformer whose life’s work has been about giving the poor legal personhood and enforceable property rights. That doesn’t make him a messiah; it does make him a far less morally compromised “bandwagon” than the one so many allies just finished riding into a ditch.

Hope in institutions, not in heroes

The first thing to say about de Soto is that he doesn’t rescue the case for putting faith in politicians.
If anything, he’s a reminder of why we shouldn’t: even “our” guy can lose elections—as he did in Peru’s fragmented 2021 presidential race—or be sidelined by coalitions and state‑capacity limits.

The proper object of liberal hope has never been a singular leader, but a framework: rules over rulers, institutions over instincts, constraints over charisma. De Soto’s career has been about that framework—about bringing the poor into the law through the formalization of property and business rights developed in The Mystery of Capital, so they are no longer entirely dependent on the goodwill of mayors, party bosses, or police commanders.

If he succeeds, it won’t be because he is especially pure of heart.

It will be because he managed to convert an intellectual project about “dead capital” into registries, titles, and predictable enforcement that will still be there when he is gone.

Why de Soto feels different from Milei

The contrast with Javier Milei is not just about manners or ideology; it’s about structure.

· Milei is a theorist of shock and a practitioner of exception: sweeping deregulation and fiscal adjustment bundled into omnibus laws and emergency decrees, backed by a willingness to criminalize protest and restrict civic space.

· De Soto is a theorist of incorporation: documenting informal assets and claims, drafting hundreds of pieces of legislation to formalize property and business rights, and setting up agencies to register immovable property and enterprises.

Both talk about markets.

Only one is primarily trying to thicken the rule‑of‑law substrate under which markets can operate without a permanent state of exception.

That’s why de Soto is such a tempting “I told you so” moment for those of us who warned against libertarianism‑by‑strongman.

If we had been more patient, we could have had our Latin American liberal narrative centered on a property‑rights reformer instead of trying to explain away baton‑charges on protesters and presidential attempts to rule by decree.

How to hope without worship

So what does it look like to place hope rightly here?

· Cheer the institutional agenda, not the man.
The victory worth celebrating in Peru is not “de Soto in the palace,” but any concrete expansion of legal personhood, formal titles, and due process for people who previously lived entirely at the mercy of informal mafias and arbitrary bureaucrats.

· Watch the constraints, not the speeches.
If de Soto or any successor starts leaning on emergency powers, sidelining courts, or militarizing public order, they should lose liberal support just as fast as Milei should have.

· Treat this as an experiment, not a prophecy.
Classical liberals should be brutally honest: the de Soto agenda may fail or be watered down, as critics of his property‑rights program have long argued in other countries. The difference is that if it fails, it will fail within a framework we can still defend on principle.

A better bandwagon

There is a very human urge among intellectuals to have “a country” and “a leader” we can point to and say: that’s us; that’s our project made flesh.

The Milei episode showed how quickly that urge can lead smart people into excusing open illiberalism as a mere means to market ends.

De Soto offers a chance to re‑stage the conversation on healthier terrain.
Here is someone whose central promise is not to smash the system on our behalf, but to make the system legible, general, and fair enough that the poor can finally stand as legal equals. That’s still risky; it’s still politics. But it doesn’t require us to pretend that concentrated power is secretly freedom.

Hope for de Soto, then—but hope in the specific, limited sense liberals should always practice.

Hope that a serious institutional reformer might win enough battles to leave behind sturdier property rights, clearer personhood, and a little less room for the next strongman to play God.

Modern democracies face a strange and increasingly visible dilemma. Citizens increasingly demand institutions that respond faster when problems arise, yet the mechanisms that allow institutions to learn often depend on resisting immediate pressure. What looks like institutional failure may sometimes be the uncomfortable process of correction itself. Efforts to force faster responsiveness, however understandable, can unintentionally weaken the very constraints that make learning possible.

When Institutions Appear Unable to Learn

Public frustration with institutions is not irrational. Citizens often experience problems that seem to persist despite expert management, procedural safeguards, and repeated promises of reform. When outcomes fail to improve — or improve too slowly to be visible — it is reasonable to conclude that institutions have become insulated from accountability. Demands for faster responsiveness emerge not from hostility to democracy, but from a growing belief that correction itself has stalled.

In an environment of epistemic fragmentation, even genuine attempts at learning become difficult to recognize. Signals about reform are filtered through polarized media, partisan narratives, and uneven expertise, so citizens struggle to distinguish between failure, delay, and slow-moving correction. Under those conditions, skepticism about institutional learning is not simply cynicism; it is an understandable response to an opaque and noisy information environment.

The Temptation to Loosen Constraints

Yet pressure for faster correction can produce an unintended consequence. Institutions designed to learn over time typically rely on constraints that slow decision-making: independence from immediate political pressure, procedural safeguards, and rules that limit discretionary action. When public confidence weakens, these constraints increasingly appear not as protections but as obstacles. Efforts to restore accountability therefore often begin by loosening the very limits that allow institutions to evaluate outcomes, absorb feedback, and adjust course responsibly.

This does not imply that insulated institutions perform well by default, nor that independence guarantees sound policy; only that the capacity for correction depends on preserving conditions under which error can be recognized over time.

This pattern is visible in debates over central banks, courts, and regulatory agencies, where proposals for “democratization” frequently involve narrowing terms, weakening independence, or tightening electoral control. The underlying impulse is understandable: if institutions are not learning, bring them closer to immediate public pressure. But in doing so, societies risk dismantling the buffers that separate short-term moods from long-horizon evaluation.

How Learning Capacity Degrades

As constraints weaken, institutional decisions become more directly responsive to short-term pressures. Feedback grows noisier, policy horizons shorten, and outcomes become harder to evaluate before new demands for change arise. Adaptive learning begins to degrade. Opportunistic actors find systems easier to influence, while genuine correction becomes more difficult to distinguish from political reaction. What began as an effort to restore responsiveness can gradually erode the conditions that make institutional learning possible.

Research on populism and institutional capture suggests that when voters become impatient and institutions are weakly constrained, leaders face stronger incentives to seize control of the very bodies meant to oversee them. In such environments, capture is not an aberration but a predictable response to loosened guardrails. Over time, institutions shift from processing information to protecting incumbents, further degrading their capacity to learn.

A Self-Reinforcing Perception Loop

The result is a self-reinforcing dynamic. Citizens interpret persistent problems as evidence that institutions cannot correct course, prompting demands for greater immediacy and responsiveness. Yet as stabilizing constraints weaken, institutions lose the capacity to evaluate policy over time, making successful correction less likely. Performance deteriorates in ways that confirm the original perception of failure. Institutional distrust, initially rooted in understandable frustration, becomes progressively self-validating.

In this loop, populist pressure and institutional underperformance are not opposing forces but co-producers of decay. Leaders respond to distrust by weakening constraints; weakened constraints make capture easier; capture further undermines trust. Each side can accurately point to real dysfunction while contributing, often unintentionally, to its escalation.

The Liberal Tension: Responsiveness vs. Learning

Liberal institutions therefore operate under a persistent tension. To remain democratically legitimate, they must ultimately respond to public concerns. Yet to remain capable of learning, they must sometimes resist immediate demands long enough to evaluate outcomes and incorporate feedback over time. Constraints that slow decision-making — independence, procedure, and limited discretion — are not obstacles to accountability but conditions that make meaningful accountability possible. When this distinction becomes difficult to recognize, restraint begins to resemble betrayal.

Comparative work on democratic resilience shows that democracies survive not by avoiding shocks, but by maintaining institutions that can absorb and learn from them. Where horizontal constraints and rule-of-law protections are strong, electoral responsiveness and long-horizon learning reinforce each other; where these constraints are weak, the same electoral pressures can accelerate instability.

When Disagreement Becomes About Possibility

Much contemporary political conflict may therefore reflect not simply disagreement over policy, but disagreement over whether institutions remain capable of correction at all. When citizens lose confidence that systems can learn, pressures naturally arise to bypass constraint in favor of immediacy. Yet adaptive institutions rarely improve through acceleration alone. Their capacity to correct mistakes depends on preserving the very structures that make evaluation, revision, and delayed accountability possible.

This helps explain why debates over courts, central banks, public health agencies, and universities often feel existential rather than merely technical. For some, constraints signal captured, self-protective elites; for others, the same constraints represent fragile preconditions for any hope of impartial learning. Both interpretations contain elements of truth, yet they point toward radically different responses.

The Fragility of Learning Societies

Liberal societies do not fail simply because institutions make mistakes. Error is inevitable in complex systems. They fail when citizens and institutions alike lose confidence that mistakes can still be recognized and corrected over time. The challenge facing modern democracies may therefore be less about choosing the right policies than about preserving the conditions under which learning remains possible.

When constraint is mistaken for indifference and delay for dysfunction, societies risk dismantling the very mechanisms that allow them to correct their own course. Liberal institutions may endure only if we retain the ability to distinguish between failure itself and the difficult process of adaptation.

Angela McArdle likes to style herself a libertarian polemicist. But the story of her tenure atop the Libertarian National Committee (LNC) is less about polemics than about institutional incentives — a live demonstration of mechanism failure: adverse selection in leadership, moral hazard in candidate support, and a principal–agent breakdown between party leadership and the people it was supposed to represent.

This isn’t gossip, and it isn’t about personality. It’s an institutional autopsy. The interesting question isn’t who was right — it’s what the rules made almost inevitable.

From liberal party to factional vehicle

Start with the coalition that brought the current leadership to power. The Libertarian Party Mises Caucus openly embraces a paleolibertarian, fusionist orientation — more socially conservative, more comfortable with right-populist politics, and explicitly interested in working alongside Republicans rather than simply opposing them.

By 2022, the caucus had consolidated control of the LNC, displacing the party’s older classical-liberal and pragmatic wings. Several state affiliates responded with splits or disaffiliations, a conflict sketched in coverage of LP factional politics and critiques such as “Of Mices and Mises.”

The institutional question was never whether factions would fight — that’s normal politics. The real question was whether liberal governance mechanisms would constrain leadership behavior once power changed hands. What follows traces how that mechanism evolved: selection, incentives, and institutional drift. The answer, increasingly, appears to have been no.

The RFK Jr. fundraising arrangement as adverse selection

The joint fundraising deal with Robert F. Kennedy Jr. should be taught in a public-choice seminar.

In 2024 the LNC entered a fundraising structure that allowed donors to write unusually large checks routed through Libertarian Party infrastructure and then distributed to Kennedy-aligned entities. Kennedy was never the Libertarian nominee — he sought the nomination and lost — yet the committee reportedly raised roughly $5 million, most of which flowed toward Kennedy’s campaign and affiliates, with only a smaller share remaining within Libertarian structures.

Reporting from outlets including the Boston Globe, alongside analyses such as “Where We Are on RFK Money” at Third Party Watch, fueled internal criticism that the arrangement functioned less like a partnership and more like a conduit. Additional reporting and party investigations described payments to entities connected to leadership figures and their networks.

The institutional point is straightforward. Party rules assumed leadership would internalize party objectives and treat conflict-of-interest boundaries as real constraints. Instead, the mechanism selected for a leadership type comfortable using party infrastructure as a bridge between donors and outside projects.

In mechanism-design language: screening failed.

Moral hazard once power is secured

If adverse selection explains how leadership arrived, moral hazard explains what came next.

After Chase Oliver secured the Libertarian presidential nomination, leadership messaging often framed his candidacy less as the party’s centerpiece and more as a potential spoiler dynamic — an approach criticized by state affiliates and internal voices who argued it undermined unified support for the nominee.

At the same time, leadership pursued highly public outreach toward Donald Trump, including inviting him to address the Libertarian convention, even as the party’s own candidate struggled with institutional support and ballot-access challenges. Litigation filed by LNC secretary Caryn Ann Harlos and related internal disputes alleged failures in core responsibilities, including nominee certification and organizational neutrality.

This is textbook moral hazard. Once in office, leadership had the ability to quietly reallocate effort and signaling toward outside coalition goals while rank-and-file members — the nominal principals — lacked real-time information or enforcement power.

Principal–agent collapse

Put together, the pattern resembles a classic principal–agent breakdown.

In theory, Libertarian Party members and delegates serve as principals; leadership acts as their agent. In a healthy liberal institution, rules and transparency are designed to keep those incentives aligned.

But during this period, internal litigation and public complaints alleged resource misallocation, conflicting loyalties, and procedural maneuvers that appeared to prioritize factional or external interests over the party’s own nominee. In several instances, internal accountability mechanisms seemed to reverse direction — disciplining those attempting to reassert institutional alignment rather than the actors accused of undermining it.

Once the agent begins disciplining the principals, the mechanism is no longer functioning.

Paleolibertarian polemic vs. liberal institutionalism

The deeper issue here isn’t personality. It’s philosophy.

Paleolibertarian politics tends to merge libertarian rhetoric with culturally conservative, populist-right coalition building. Classical liberalism, by contrast, treats institutions themselves — rules, fiduciary duties, procedural neutrality — as intrinsic to a free order.

From that perspective, the central problem isn’t disagreement over policy. It’s what happens when institutional constraints are treated as negotiable tools rather than binding commitments.

The rhetoric may remain libertarian. The revealed incentives tell another story.

A broader pattern in minor parties

And this isn’t unique to the Libertarian Party.

Minor parties live in a perpetual tension between being ideological movements, ballot-access vehicles, and fundraising infrastructures. Those overlapping roles create predictable vulnerabilities. Without strong constraints, coalition entrepreneurs can repurpose institutions toward outside goals while preserving branding continuity.

What looks like ideological evolution is often just mechanism drift.

Lessons for liberals and minor parties

The lesson isn’t “choose better people.” Institutions cannot rely on moral luck.

Joint fundraising agreements with outside candidates should face strict transparency requirements and real member oversight. Financial relationships involving officers or close associates should trigger automatic disclosure and recusal. Mechanisms must be designed on the assumption that incentives will diverge — because eventually, they do.

More fundamentally, liberal institutions survive only when participants treat rules as constraints rather than suggestions. A party that views its nominee as optional, its bylaws as elastic, and its donor network as a bargaining chip with outside movements risks becoming something other than what it claims to be.

If there is a polemic worth writing here, it isn’t about personalities. It’s about mechanism design — and how quickly a nominally liberal institution can be repurposed once the guardrails stop working.

A crisis in search of evidence

Every election cycle, Americans are told that undocumented immigrants are voting in large numbers and that this hidden wave of “illegal ballots” threatens the legitimacy of our democracy. The rhetoric is familiar: warnings about “non‑citizens on the rolls,” allegations that elections are being “stolen,” demands for ever‑stricter identification rules. The strongest conservative effort to document election fraud unintentionally shows that undocumented voting is not an electoral threat but a statistical mirage.

If those stories were true at scale, the data would already show it. Prosecutions would stack up, audits would routinely uncover large numbers of ineligible voters, and the institutions most invested in documenting fraud would have overflowing files. Instead, when you look at the record carefully, you see something very different: a gigantic election system in which non‑citizen voting of any kind is extremely rare, and confirmed cases involving undocumented immigrants are almost nonexistent.

One of the clearest windows into this reality comes from an unlikely source: the Heritage Foundation, a conservative think tank that has spent years arguing that U.S. elections are vulnerable to fraud and pushing for tighter restrictions. This essay views the non-citizen voting debate as a form of institutional equilibrium, in which incentives drive behavior and the stories surrounding that behavior.

Not a study—and not a ceiling

Defenders of the fraud narrative respond in two ways. First, they emphasize (correctly) that Heritage’s database is not comprehensive: it records only those cases that were detected, formally handled, and then captured by staff. Second, they argue that the database therefore shows only the “bottom floor” of fraud, not the ceiling.

From a purely statistical perspective, that is right: you cannot treat Heritage’s tally as the upper bound on all non‑citizen voting. Detection is imperfect; some cases are never prosecuted; local reporters miss stories. There will always be incidents that never make it into any database.

But if you think in terms of incentives and behavior, the database is still incredibly informative. It is the product of a long‑running, highly motivated search by an institution that wants to find fraud. If there were truly a large amount of undocumented voting happening, this is exactly the kind of effort that should be able to document it.

Instead, what we see in Heritage’s own numbers is a pattern consistent with a very different world: one where non‑citizen and undocumented voting do occur, but at microscopic rates relative to the scale of American elections.

A game of incentives, not just rules

This is less a story about individual bad actors than about institutions responding rationally to asymmetric incentives. Why would the true rate be so low? The simplest answer is that the incentives point that way.

For a non‑citizen—especially an undocumented immigrant—the potential benefit of voting illegally is minuscule. One ballot among millions only infinitesimally changes the chance that a preferred candidate wins. The potential cost, however, is enormous: detection can mean fines, felony charges, loss of lawful status, and deportation. For most non‑citizens, risking deportation for a single ballot is not an abstract calculation; it is a frightening gamble.

At the same time, the institutional environment is not as porous as casual rhetoric suggests. Over the past two decades, states have added voter‑ID requirements, cross‑checks with citizenship databases, and more frequent audits. Even where those systems are imperfect, they raise the probability of detection enough that the expected cost of a fraudulent vote for a non‑citizen swamps the expected benefit.

On the enforcement side, officials face the opposite incentives. The marginal benefit of detecting one more fraudulent vote in terms of actual election outcomes is essentially zero; the odds that any single illegal ballot changes a result are tiny. But the political payoff from uncovering and publicizing even a handful of cases is large. Elected officials and advocacy groups can point to those cases to push legislation, mobilize donors, and energize base voters.

Put together, that mix of incentives leads to exactly the pattern we see:

Non‑citizens almost never attempt to vote illegally because the risk‑reward ratio is wildly unfavorable.

Politicians and advocacy organizations over‑invest in searching for and amplifying the rare cases they can find, because those cases are rhetorically valuable even when they are numerically insignificant.

Heritage’s database is the natural output of that environment: a small collection of highly salient stories, repeatedly cited as proof of a crisis, even though taken together they amount to a rounding error in the denominator of all ballots cast.

Institutional design for the world we actually have

None of this implies that election rules don’t matter or that we should ignore fraud. The state has a legitimate interest in keeping non‑citizens from voting in federal and most state elections, and sensible safeguards—clear eligibility rules, basic identity checks, and routine audits—are appropriate.

The real policy question is margin management. When the best available evidence, including from groups ideologically committed to finding fraud, shows that proven non‑citizen and undocumented voting are extraordinarily rare, what kinds of interventions are justified?

One approach is to treat even a tiny number of non‑citizen votes as justification for sweeping new requirements: documentary proof of citizenship to register, aggressive voter‑roll purges based on flawed databases, or national ID mandates. Those measures may marginally reduce an already microscopic risk, but they also raise the cost of participation for lawful voters and increase the risk of erroneous disenfranchisement.

Another approach—the one more consistent with both the data and the incentive story—is to tighten where errors actually occur, without building policy on imagined waves of undocumented voters. The American Immigration Council’s analysis points out that many of the non‑citizen voting cases in Heritage’s database originated in government error: officials wrongly encouraged non‑citizens to register or failed to check documentation properly. Better training for front‑line staff, clear communication about eligibility, and modest investments in record‑keeping do more to prevent these rare mistakes than sweeping new barriers aimed at a crisis that isn’t there.

In a constitutional political‑economy sense, that matters. The power to regulate elections and determine who counts as a legitimate voter is one of the most dangerous tools a state wields. It should be exercised with restraint, grounded in evidence rather than fear. When the evidence—especially the evidence painstakingly collected by those most eager to prove a problem—shows that a particular form of fraud is almost nonexistent, the burden of proof shifts to the would‑be restrictors.

The real lesson of Heritage’s numbers

The Heritage Foundation set out to build a flagship resource documenting election fraud in the United States. In some ways, it succeeded: the database is detailed, searchable, and politically influential.

Yet when you read it with a clear eye and a calculator, it ends up telling a very different story from the one its sponsors intended. Across decades of elections and more than a billion ballots, Heritage’s own data show only dozens of non‑citizen voting cases, including a bare handful involving undocumented immigrants. Other audits and investigations in key states reinforce the same conclusion: non‑citizen voting happens, but at rates so low that they cannot plausibly explain electoral outcomes.

For readers who care about how institutions behave under pressure, that pattern is not a reason for complacency. It is a reason for clarity. The system we have built—imperfect, decentralized, and often messy—has produced an equilibrium in which undocumented voting is the exception, not the rule. More broadly, this is what institutional equilibrium looks like when rare events generate high political returns—narratives persist even when the underlying rates remain negligible.

That should shape how we design the next round of rules. It should temper the calls for ever‑harsher restrictions that fall hardest on lawful voters.

I’m curious whether readers see incentive or institutional dynamics that point elsewhere; frameworks like this are strongest when tested against what others actually observe.

We are arguing more — and understanding each other less. Something strange has happened to public language over the last decade. Words that once felt stable now feel provisional. Definitions shift mid-conversation. People speak past each other with confidence, convinced they are using the same vocabulary when they plainly are not.

It would be easy to dismiss this as ordinary linguistic evolution. Language changes; it always has. New generations stretch old words, academics refine terms for analytical precision, and political movements try to name experiences that previously lacked clear vocabulary. None of that is new, and none of it is inherently alarming.

What feels different, however, is the speed — and the incentives. Definitions now seem to change on the timescale of headlines. Terms are reconfigured not slowly through shared usage, but rapidly through conflict. In highly polarized environments, redefining a concept often becomes cheaper than persuading people about it.

This matters because language is not merely expressive. It is infrastructure. Shared definitions function much like legal standards or accounting rules: they lower the cost of coordination. Contracts become possible because people broadly agree what words mean. Scientific claims can be debated because terms remain stable long enough for evidence to accumulate. Institutions operate because citizens and officials at least partially inhabit the same linguistic world.

When that infrastructure begins to wobble, the immediate effect is not philosophical confusion. It is rising transaction costs. Arguments linger longer because participants are debating vocabularies rather than claims. Policy conversations stall because entire debates collapse into fights over terminology. Trust declines, not necessarily because people are more dishonest, but because the shared frame of reference that makes disagreement productive becomes harder to find.

This is why the current moment feels less like ordinary partisanship and more like a descent into Babel. The problem is not that people disagree. The problem is that the underlying conditions for disagreement — shared meanings, shared procedures, and shared expectations about language — are becoming less stable.

And that raises a question that is more institutional than linguistic: how do societies continue to coordinate when words themselves are contested terrain?

Language as Infrastructure

We rarely think of language as infrastructure because, when it works, it disappears into the background. Like roads or power grids, its success lies in being unremarkable. People coordinate, transact, argue, and govern without constantly renegotiating the meaning of basic terms.

Economists sometimes describe certain goods as “coordination devices” — shared frameworks that reduce friction among actors who do not fully trust one another. Language plays a similar role. It allows strangers to sign contracts, citizens to interpret laws, and researchers to build cumulatively on one another’s work. The point is not that everyone agrees; the point is that disagreement occurs within a shared semantic architecture.

When that architecture is stable, disagreement can be productive. People can argue about evidence, outcomes, or values while assuming that key terms remain fixed enough for the conversation to progress. A policy debate, for example, might be fierce, but it still relies on participants roughly agreeing what counts as “risk,” “harm,” or “cost,” even if they weigh those things differently.

The moment definitions become unstable, however, the character of disagreement changes. Arguments shift from the empirical to the semantic. Participants start contesting what words are allowed to mean before they can even discuss what should be done. Coordination slows. Trust erodes. The conversation begins to feel less like debate and more like parallel monologues sharing the same air.

This is not simply a matter of annoyance or rhetorical style. There are real institutional consequences. Laws become harder to interpret consistently when their social meaning shifts rapidly. Policy becomes harder to evaluate when core concepts are constantly reframed. Academic conversations become brittle when key terms carry different moral or ideological weight depending on the audience.

In short, shared meaning functions as a public good. Everyone benefits from it, but no single actor bears responsibility for maintaining it. And like many public goods, it becomes fragile when incentives encourage short-term gains over long-term stability. The system drifts.

Definitional Drift — and Definitional Turpitude

Not all changes in meaning are the same. Language evolves constantly, and most of the time that evolution is healthy. New realities demand new vocabulary. Scholars refine concepts for precision. Communities adapt words to fit changing social experience. None of this is especially controversial.

But there is a difference between gradual evolution and something more strategic.

For lack of a better phrase — and because the phrase makes me laugh — I think of the latter as definitional turpitude. By this I mean the deliberate or semi-deliberate reshaping of established terms to serve immediate rhetorical or political goals, often without acknowledging that the definition itself is being renegotiated.

The distinction matters. Organic drift is slow and collective; definitional turpitude is fast and instrumental. Linguists have long described this as an “invisible hand” process in language change — emergent rather than centrally directed. One emerges from shared usage over time. The other treats language as a tactical resource.

In highly polarized environments, the incentives are obvious. Persuasion is hard. Redefinition is easier. If a term can be expanded, narrowed, or morally recharged, entire debates can be reframed without changing any underlying facts. The conversation shifts before anyone notices the ground has moved. So people redefine.

This is not merely a problem among activists or media personalities. Academic and intellectual spaces are susceptible for structural reasons. Novel framings are rewarded. Boundary-redrawing signals originality. The temptation to redefine concepts — sometimes quietly, sometimes openly — can become part of the incentive structure itself.

None of this requires bad faith. Most participants genuinely believe they are clarifying rather than reshaping. But the cumulative effect can still be destabilizing. When too many terms become contested simultaneously, conversation stops being about evidence and starts being about vocabulary. Participants disagree not only about conclusions, but about the meaning of the words used to reach them.

The result is a subtle but important shift: language ceases to be shared infrastructure and becomes a battleground in its own right. Any linguist worth reading will point out that semantic drift is normal — and they’re right. But institutional coordination runs on slower clocks than cultural change, and that mismatch is where trouble begins.

Why Hyperpartisan Systems Reward It

If definitional turpitude is becoming more common, the explanation is less moral than structural. Systems tend to produce the behaviors they reward, and highly polarized environments reward rhetorical efficiency more than slow persuasion.

In stable political or intellectual environments, convincing someone usually requires argument: evidence, reasoning, and a shared conceptual framework. But in hyperpartisan settings, those shared frameworks weaken. Audiences are already segmented. Trust across groups is low. The odds of persuading opponents decline sharply.

Under those conditions, changing the terms of debate can be more efficient than winning the debate itself.

Redefining a concept shifts the battlefield. It alters which arguments sound reasonable and which positions appear legitimate before any substantive claims are evaluated. From a purely strategic standpoint, this is often the cheaper move. Persuasion asks you to change minds; definitional shifts ask only that you change the frame.

Academic and intellectual ecosystems are not immune to this logic — if anything, they amplify it. Novelty is rewarded. Reframing an issue can be more publishable than refining an old argument. New terminology signals intellectual ambition and moral seriousness. Over time, even well-intentioned scholars can find themselves pulled toward conceptual innovation whether or not it improves clarity.

Again, none of this requires conspiracy or bad faith. The incentives do the work quietly. Individuals respond rationally to professional and political environments that prize reframing over continuity.

The cumulative effect, however, is cumulative instability. Each small shift may appear harmless on its own. Taken together, they raise the cost of communication across groups. People begin to suspect that words mean different things depending on who is speaking — and they are often right.

This is how public discourse drifts toward Babel: not through sudden collapse, but through a series of individually rational choices that collectively erode semantic stability.

The Coordination Cost

When shared definitions weaken, the immediate effect is not cultural decay or intellectual apocalypse. It is friction.

Coordination depends on predictable interpretation. Contracts rely on agreed meanings. Laws depend on relatively stable concepts. Scientific inquiry requires terms that hold still long enough for evidence to accumulate. Even ordinary political disagreement assumes that participants are arguing about the same object.

When definitions become unstable, that predictability declines. Actors must spend more time clarifying what they mean before they can even address whether a claim is true. Arguments stall at the level of vocabulary. Debates that should be empirical become semantic. Trust erodes, not necessarily because people are dishonest, but because the shared frame that makes disagreement intelligible becomes harder to locate.

The effect resembles an increase in transaction costs. Each exchange requires more interpretive labor. Each institutional decision carries greater risk of being reinterpreted under a shifting conceptual lens. Courts must work harder to stabilize statutory meaning. Policymakers must specify terms more exhaustively. Scholars must append caveats that would have been unnecessary a decade earlier.

None of this is dramatic in isolation. But it accumulates.

In low-trust environments, actors begin to assume that definitions are contingent on audience. That suspicion changes behavior. People hedge. They over-specify. They retreat into narrower communities where meanings feel more secure. Cross-domain communication — between academia and journalism, between law and politics, between communities that once shared partial vocabularies — becomes more fragile.

This is the point at which Babel ceases to be metaphorical. The problem is not that people disagree. It is that disagreement no longer reliably operates within a shared semantic structure. And when that structure weakens, institutional coordination becomes more expensive and more brittle.

The irony is that many of the individuals participating in definitional shifts are acting rationally within their immediate environment. But the aggregate outcome resembles a classic public-goods problem: short-term rhetorical advantage contributes to long-term semantic instability.

How Societies Actually Survive Babel

The good news is that societies have encountered versions of this problem before. Periods of intense polarization or rapid social change almost always involve semantic conflict. Words become contested because institutions, values, and identities are themselves in motion.

And yet societies rarely collapse into permanent incomprehension. Instead, they develop mechanisms that restore enough shared meaning for coordination to continue.

The first mechanism is institutional definition. Courts, regulatory bodies, professional organizations, and scientific communities stabilize vocabulary by giving terms operational meaning within specific contexts. Legal definitions, for example, do not require universal agreement; they require consistency for the purpose of governance. The same is true for professional standards and technical disciplines. These institutions act as anchors when everyday language becomes fluid.

The second mechanism is domain separation. Different communities develop partially distinct vocabularies suited to their own purposes. Scientific language does not need to mirror journalistic language, and policy language does not need to track activist discourse perfectly. What matters is that participants understand when they are crossing domains and adjust accordingly. Societies survive not by forcing a single universal lexicon, but by maintaining boundaries that preserve internal clarity.

Third, procedural trust often substitutes for semantic consensus. When people stop agreeing on meanings, they can still agree on methods. Peer review, precedent, transparent standards of evidence, and institutional process allow disagreement to persist without dissolving into chaos. In effect, procedures become the shared language when words themselves are contested.

Finally, societies rely on translators — individuals who can move between vocabularies and explain one domain to another. These figures rarely command universal agreement, but they reduce misunderstanding by making implicit assumptions visible. The role is less glamorous than it sounds; translation often involves clarifying what people think they already understand.

Together, these mechanisms do not restore perfect consensus. They do something more modest and more realistic: they maintain partial stability. Enough shared meaning exists in enough domains that coordination remains possible even amid deep disagreement.

That is the real lesson of Babel. Societies do not survive by eliminating difference. They survive by building structures that allow difference to coexist with cooperation.

The Real Risk

The risk, then, is not disagreement. Democracies are built to withstand disagreement. Intellectual life depends on it.

The risk is simultaneous erosion.

If institutional anchors weaken, domain boundaries blur, procedural trust collapses, and translators lose credibility all at once, the stabilizing mechanisms begin to fail together. At that point, semantic conflict no longer feels temporary or localized. It begins to feel systemic.

When courts are distrusted, legal definitions no longer reassure. When scientific procedures are politicized, methodological consensus no longer stabilizes debate. When journalism collapses into activism or activism masquerades as scholarship, domain separation falters. When translators are treated as traitors by every side, cross-domain communication deteriorates.

Under those conditions, rising coordination costs are not merely inconvenient. They become corrosive. Policy gridlock deepens. Institutional legitimacy declines. People retreat into narrower interpretive communities where meanings feel safe but increasingly insular.

That is what makes hyperpartisan Babel unsettling. It is not that words change. Words have always changed. It is that too many stabilizing mechanisms are under strain at once.

Babel Is Survivable

And yet — Babel is survivable.

Societies do not require unanimity to function. They require enough stable definitions in enough places to allow cooperation to continue. Shared language does not need to be universal; it needs to be sufficiently predictable within key institutional domains.

Language will continue to evolve. Academics will continue to refine and sometimes over-refine. Political actors will continue to reframe. None of that is likely to stop.

But if institutions take seriously their role as semantic anchors — if courts clarify rather than drift, if professional communities guard technical precision, if procedural standards remain visible and consistent — the coordination problem becomes manageable.

The goal is not to freeze language in amber. It is to prevent short-term rhetorical incentives from overwhelming long-term semantic stability.

Babel, in other words, is not primarily a linguistic crisis. It is a coordination challenge.

And coordination challenges are not solved by louder argument. They are solved by rebuilding the structures that make argument productive in the first place. Coordination returns — unevenly, but enough. That work is slower than outrage. But it is the only work that lasts.

Tariffs are almost always sold as a way to have it all. Politicians promise to protect domestic industries and jobs, keep foreign rivals in check, and still deliver low prices and rising prosperity at home. Recent debates in the United States, with claims that “foreigners pay our tariffs,” fit this pattern neatly. I’ve called this narrative out before in “Tariff Truths,” where I walked through how both Trump and Biden have leaned on duties while downplaying who actually pays for them.

But trade policy, like any other policy that touches scarcity, obeys constraints. In practice, governments face a tariff trilemma. They cannot simultaneously deliver, at high levels, all three of the following:

• Durable protection for politically favored domestic industries.

• Low prices and broad consumer prosperity.

• An open, rules‑based trading system that sustains long‑run productivity growth.

They can choose any two corners of this triangle, but the third will give way. The rhetoric around tariffs usually denies this, which is why the costs so often show up in places voters are not looking.

A free lunch that isn’t

The modern protectionist pitch goes something like this:

• Foreign producers are “cheating” or benefiting from unfair advantages.

• Imposing tariffs will level the playing field and bring back domestic jobs.

• The burden will mostly fall on foreign exporters or their governments, not on American consumers.

That is the story behind claims that new tariffs on imports are a painless way to raise revenue or discipline trade partners. It suggests that the United States can achieve strong protection for targeted industries and still enjoy low prices and stable growth, because someone else will foot the bill. Recent empirical work finds the opposite: Americans—importers and consumers—are bearing almost the entire cost of recent U.S. tariffs.

Experience—and basic economics—tell a different story. Tariffs are taxes on imports, and taxes on imports raise the domestic prices of those goods and the things made from them. They also invite retaliation, uncertainty, and lobbying for special treatment, all of which erode the openness and predictability of the trading system.

The trilemma framework simply makes this more visible: to the extent tariffs succeed in protecting favored sectors, they do so by sacrificing either consumer welfare or the health of the broader trade regime.

Who really pays?

The first place the trilemma shows up is in incidence. When tariffs are imposed on intermediate goods—steel, aluminum, semiconductors, or inputs to consumer products—domestic firms that rely on those imports see their costs go up. They respond by raising prices, cutting back production, or both. Consumers pay more for cars, appliances, and electronics. Exporters whose products use imported components become less competitive abroad.

Recent analysis of U.S. tariff rounds finds that domestic consumers and downstream firms have borne much of the burden. Even where tariffs increase output or employment in the protected sector, they do so by diluting real incomes elsewhere. Economists such as Donald Boudreaux have spent years pointing out that the real economic case against tariffs is not that they always cause recessions, but that they quietly make most people poorer to privilege a few.

This is the first edge of the trilemma:

• You can protect a domestic industry with tariffs, and you can pretend that foreign firms will pay the bill.

• In reality, if you hold protection high and try to keep the trade system broadly open, the adjustment will come through higher prices and reduced purchasing power at home.

You can keep the protection and avoid being honest about who pays, but you cannot avoid the payment.

Protection versus openness

The second edge of the trilemma concerns the trade regime itself. A relatively open, rules‑based system—with lower barriers, clear commitments, and predictable dispute resolution—creates the conditions for investment, specialization, and long‑run productivity growth. Firms build supply chains and export markets because they expect the rules of the game to be reasonably stable.

When governments start treating tariffs as a first resort, especially when they claim those tariffs are costless, they inject uncertainty into those expectations. Each protected sector becomes a precedent for another. Trading partners respond with retaliation, creative circumvention, and their own special protections.

From the trilemma perspective:

• If you want strong, durable protection for a wide range of industries, and you also want to reassure voters that prices will stay low, you will sacrifice openness and predictability.

• The trading system becomes more politicized and brittle, as each country carves out exceptions for its own favored constituencies.

In other words, a world of widespread, permanent protectionism is not a world of robust, rules‑based trade. It is a world of chronic skirmishes, “temporary” tariffs that never quite go away, and a gradual erosion of the institutional framework that supported postwar prosperity.

Prices, prosperity, and saying no

There is, however, one corner of the triangle that is compatible with openness and broad prosperity: keeping trade relatively free and accepting that not every industry can be sheltered forever.

Choosing low prices and an open, rules‑based system means accepting more competition and more visible change. Some industries will shrink or relocate; others will grow. Workers and capital will move toward more productive uses. The gains are spread across many people and many sectors, which is why they are less politically salient than the concentrated losses in a declining industry —a textbook case of concentrated benefits and diffused costs.

This is the least comfortable position for politicians who want to promise specific job counts or targeted protection. It requires saying, in effect:

• We can help workers adjust,

• We can encourage growth and innovation,

• But we cannot guarantee that today’s pattern of production will be frozen in place without making everyone poorer.

That is a hard sell in the short run. It is also the only configuration of the triangle that does not rely on wishful thinking.

Choosing corners honestly

The tariff trilemma does not tell us what to value; it tells us that values are in tension. I develop a related “fairness trilemma” in a different context—algorithmic governance—in my working paper, “The Fairness Trilemma: An Impossibility Theorem for Algorithmic Governance,” which formalizes this “pick any two” structure in a more general way.​ Protection for specific industries, low prices for consumers, and a stable, open trade regime are all good things. The point is simply that they cannot all be maximized at once.

A more honest trade debate would start by asking:

• Which two corners are we choosing in this case?

• How large are the costs at the third corner, and who bears them?

• Are there better ways to help workers than taxing their consumption and risking a trade war?

For free‑traders, this framing has an advantage. It shifts the conversation away from abstract claims that “trade is always good” for everyone, and toward a concrete question: if we use tariffs to privilege some producers, which consumers and future opportunities are we willing to sacrifice, and are we prepared to say so explicitly?

The alternative is the status quo: protectionist promises that pretend costs do not exist and then allow them to surface later as higher prices, slower growth, and a more fragile global order.

There is no tariff that can repeal scarcity. There is only a choice about where scarcity bites. The tariff trilemma is a reminder that if we want open markets and broad prosperity, we cannot also demand permanent shelter for every politically favored industry.

In a recent piece for The Bulwark, William Kristol celebrates the citizens of Minneapolis as exemplars of democratic resistance, arguing that “the people are leading” while elected Democrats timidly follow. His narrative frames civic action—protests outside hotels housing ICE agents, community surveillance networks tracking federal vehicles, physical confrontations with enforcement officers—as democratic leadership that Congress should emulate by defunding Immigration and Customs Enforcement. It’s a stirring call to action, and Kristol deserves credit for taking seriously both the Minneapolis community’s sustained resistance and the urgent need for democratic accountability in immigration enforcement.

But as an economist who studies institutional design and mechanism design, I find myself troubled by a different question: What does it mean when ordinary citizens must organize neighborhood watch networks, compile license plate databases, and physically interpose themselves between federal agents and their neighbors? Kristol sees democratic vitality. I see institutional failure.

The Minneapolis resistance isn’t leading us toward better policy. It’s a symptom of a system so fundamentally broken that it forces citizens into impossible choices between complicity and extralegal resistance. And the solution isn’t simply to defund ICE, as Kristol proposes—it’s to rebuild immigration enforcement from the ground up with proper institutional constraints, transparent processes, and accountability mechanisms that make such desperate resistance unnecessary.

The Mechanism Design Perspective

Mechanism design—the branch of economics concerned with designing rules and institutions that produce desired outcomes—offers a useful lens for understanding what’s gone wrong in Minneapolis. A well-designed enforcement mechanism should create incentive-compatible outcomes where following the rules produces better results than breaking them, both for enforcers and those subject to enforcement.

The current ICE operations in Minneapolis spectacularly fail this test. According to multiple reports, federal agents have been stopping vehicles without probable cause, detaining U.S. citizens, operating with masked faces that prevent identification, and conducting what residents describe as “zone enforcement” rather than targeted operations. Two U.S. citizens—Renée Good and Alex Pretti—were fatally shot by federal agents in January 2026, deaths that remain under investigation with the Trump administration actively obstructing cooperation with state investigators.

This isn’t enforcement. It’s extractive institutional design—a system optimized for removing people rather than sorting legitimate cases from illegitimate ones, for maximizing arrests rather than maximizing justice. The incentives are all wrong: agents are rewarded for numbers, not accuracy; for compliance, not legitimacy; for speed, not due process.

When institutions create these perverse incentives, rational actors respond predictably. Federal agents mask their faces because they fear accountability. Community members track license plates because official oversight has failed. Residents physically block vehicles because legal remedies are too slow or nonexistent. Each side escalates because the institutional structure offers no better path.

Kristol is right that this situation is intolerable. But his proposed solution—Democratic senators refusing to fund ICE—misdiagnosses the disease. The problem isn’t funding levels. It’s that we’ve built an enforcement apparatus with virtually no meaningful constraints on its operation.

The Institutional Vacuum

Here’s what’s missing from current immigration enforcement:

Transparent targeting criteria. ICE operations in Minneapolis have been described as zone enforcement rather than targeted enforcement of specific removal orders. DHS Secretary Kristi Noem’s explanation—”If we are executing an operation focused on a target, there may be individuals surrounding that individual whose identities we may need to validate”—is institution-free reasoning. Under this logic, any neighborhood becomes a valid enforcement zone, any person a potential target requiring “validation.”

Compare this to criminal law enforcement, where police need probable cause for stops and warrants for searches. These aren’t arbitrary restrictions—they’re institutional constraints that create accountability and limit abuse. Immigration enforcement operates in a parallel legal universe where such constraints barely exist.

Meaningful judicial oversight. The civil immigration enforcement system has always operated with less judicial scrutiny than criminal enforcement, justified by the legal distinction between removal and punishment. But the Minneapolis operations reveal how inadequate this framework has become. Federal agents are making split-second decisions about detention and identity verification—decisions that can lead to wrongful arrest of U.S. citizens—with no prior judicial authorization and minimal ex post review.

Senate Democrats have proposed requiring judicial warrants for immigration arrests, which Republicans dismiss as unworkable. But this objection reveals the problem: we’ve built an enforcement system that can’t function under the constitutional constraints we accept for every other form of law enforcement. That should terrify us.

Officer identification and accountability. Multiple reports describe ICE agents operating with masked faces, making it impossible for citizens to identify officers who may have violated their rights. This is Soviet-style enforcement—anonymous state power accountable to no one.

Senate Democrats have proposed limits on masking by federal agents. This shouldn’t be controversial. If you’re exercising state authority to detain, arrest, or use force against citizens and non-citizens alike, you should be identifiable. The fact that ICE agents resist this basic accountability mechanism tells us everything about the incentive structure they operate within.

Separation of immigration status from general law enforcement. The Obama administration attempted to shift resources toward the border and away from interior enforcement, recognizing that interior operations are far more disruptive to established communities. The Trump administration has reversed this entirely, creating an environment where any interaction with government—taking children to school, driving to medical appointments, appearing at court hearings—risks detention and removal.

This creates impossible tradeoffs for mixed-status families and entire communities. Do you call the police when you witness a crime, knowing you might encounter ICE? Do you take your child to the emergency room, risking detention on the way? These aren’t hypothetical questions in Minneapolis right now—they’re daily calculations that undermine trust in all government institutions, not just immigration enforcement.

Why Defunding Alone Won’t Work

Kristol’s solution is to deny new funding for ICE and Border Patrol, forcing drawdown of the massive five-year appropriation Republicans provided last year. There’s a certain satisfying logic to this: if an agency is operating lawlessly, stop funding it. But as an institutional reform strategy, it’s deeply inadequate.

First, the appropriation is already in place. As Kristol acknowledges, Republicans gave ICE $75 billion through 2029 in last year’s reconciliation bill. The Trump administration is using these resources to lease facilities, contract detention services, and build enforcement capacity that will persist long after the current political moment passes. Refusing additional funding may send a message, but it won’t stop current operations.

Second, funding restrictions without institutional reform simply create new perverse incentives. An underfunded enforcement agency doesn’t become more careful and discriminating—it becomes more brutal and efficient. When resources are scarce, corners get cut, oversight diminishes, and the pressure to produce results intensifies. We’ve seen this pattern repeatedly in criminal justice contexts: budget cuts lead to higher bail amounts, more plea bargaining, fewer public defenders, worse outcomes for defendants. There’s no reason to expect different results in immigration enforcement.

Third, and most fundamentally, defunding doesn’t address the underlying institutional vacuum. Even if Democrats somehow succeeded in zeroing out ICE’s budget—a political fantasy given current congressional arithmetic—what then? Do we simply have no immigration enforcement? Do we rebuild ICE under a different name? Do we shift responsibilities to other agencies that may be even less constrained?

The immigration enforcement debate has become trapped in a false binary: either robust enforcement without constraints (the Trump position) or no enforcement at all (increasingly the progressive position). Both options are institution-free thinking. We need enforcement that operates under rule of law, with transparent criteria, meaningful oversight, and genuine accountability. That requires building institutions, not just defunding agencies.

What Actual Institutional Reform Would Look Like

If we took mechanism design seriously, immigration enforcement reform would focus on creating incentive structures that reward accuracy, legitimacy, and due process rather than simply maximizing removals. Here are some concrete components:

Warrant requirements for non-border enforcement. Civil libertarians have long advocated for extending Fourth Amendment protections to immigration enforcement. The standard objection—that requiring warrants would make enforcement too slow—reveals how broken our current system is. Criminal law enforcement functions with warrant requirements. Civil regulatory enforcement functions with warrant requirements. Immigration enforcement can too, if we design the system properly.

Requiring judicial warrants for immigration arrests away from the border would create several beneficial effects. Judges would review targeting criteria, forcing ICE to articulate specific reasons for detention. The warrant process would create a paper trail for accountability. Officers would need to present evidence before detention rather than simply detaining first and sorting later. Most importantly, it would prevent the zone enforcement model that’s terrorizing Minneapolis, where agents stop anyone who “looks suspicious” and validate identities ex post.

Mandatory body cameras and officer identification. If you exercise state authority to detain or arrest, you should be identifiable and your actions should be recorded. This is standard in urban policing—imperfect but essential for accountability. Immigration enforcement should operate under at least the same constraints.

The resistance to body cameras reveals how far immigration enforcement has drifted from democratic norms. ICE argues that camera footage could endanger officers or reveal enforcement tactics. But police departments have managed these concerns through reasonable policies about footage review and release. ICE can too, unless the real objection is to accountability itself.

Separation of immigration enforcement from routine policing. One of the most corrosive effects of aggressive interior enforcement is the breakdown of trust between immigrant communities and local police. When any traffic stop might lead to ICE detention, entire communities become invisible to law enforcement. Crime goes unreported, witnesses disappear, victims don’t seek help.

The solution is clear institutional boundaries: local police should not be enforcing immigration law, and immigration enforcement should not be piggybacking on routine policing. This requires affirmatively prohibiting information sharing between local police and ICE (beyond serious criminal convictions), restricting ICE access to state databases, and creating clear protocols that prevent mission creep. Several jurisdictions have attempted these reforms with mixed success—but that’s because federal funding and policies actively undermine them.

Genuine oversight mechanisms with teeth. Immigration enforcement currently operates with minimal oversight. Congress holds occasional hearings. Inspectors general write reports that agencies ignore. Courts review removal orders, but only after detention and often after removal.

Effective oversight requires real-time monitoring with authority to halt operations. This could take several forms: civilian review boards with subpoena power, judicial magistrates who must approve major operations before they proceed, mandatory reporting requirements with automatic budget consequences for violations, independent ombudsmen with authority to investigate complaints and impose sanctions.

The key is creating accountability structures where those exercising enforcement authority face meaningful consequences for abuse. Right now, ICE agents who detain U.S. citizens face essentially no professional consequences. Agents who use excessive force aren’t disciplined. Supervisors who approve lawless operations aren’t sanctioned. We’ve created an incentive structure where abuse is costless—so we get abuse.

Narrowed enforcement priorities with mandatory sequencing. Not all immigration violations are equal. Someone who entered unlawfully twenty years ago, built a life, raised U.S. citizen children, and committed no serious crimes presents fundamentally different equities than someone who entered last month with an extensive criminal history.

A well-designed enforcement system would build these distinctions into formal priorities with mandatory sequencing. Serious criminal convictions first. Recent unlawful entries next. Long-term residents with U.S. citizen family members last, if at all. ICE nominally has such priorities, but they’re honored more in the breach—the Minneapolis operations have targeted anyone and everyone, often catching more U.S. citizens and green card holders than removable non-citizens.

Making these priorities mandatory and enforceable—with budget consequences for deviating from the sequence—would force ICE to make difficult tradeoffs and articulate its reasoning. It would also create clear metrics for evaluation: Are you focusing resources on high-priority cases? Are you distinguishing between categories? Are you respecting the sequencing?

The Public Choice Problem

There’s a deeper issue that Kristol’s analysis glosses over: immigration enforcement operates in a political economy where concentrated benefits and diffuse costs create pathological incentives.

The benefits of aggressive enforcement are concentrated and visible: politicians can claim they’re being “tough on immigration,” industry groups get increased appropriations for detention facilities and enforcement technology, law enforcement agencies expand their authority and budgets. The costs—family separation, community disruption, erosion of civil liberties, wrongful detention of citizens—are diffuse and often hidden, borne by populations with limited political power.

This is classic public choice theory: policies that impose concentrated costs on politically weak groups and provide concentrated benefits to politically strong groups tend to persist regardless of their aggregate social welfare effects. It’s why we get ever-increasing enforcement appropriations even as evidence accumulates that aggressive interior enforcement produces minimal benefits while imposing enormous costs on mixed-status families, local governments, and community institutions.

The Minneapolis resistance is attempting to rebalance this equation by making the costs of enforcement visible and imposing direct costs on enforcement agencies—but this is an unstable equilibrium. Eventually either enforcement will be scaled back (unlikely given current political incentives) or resistance will be criminalized and suppressed (already happening, with 158 arrests for impeding federal officers according to recent reports).

Breaking this cycle requires changing the underlying political economy. That means creating institutional constraints that operate automatically rather than depending on political will, building in accountability mechanisms that can’t be easily evaded, and most importantly, giving communities subject to enforcement a genuine voice in how it operates.

What Democrats Should Actually Be Demanding

If I were advising Senate Democrats on the DHS funding fight—and to be clear, no one is asking—here’s what I’d recommend they demand as conditions for any continuing resolution:

1. Mandatory judicial warrants for all interior arrests, with narrow exceptions for hot pursuit and border zones (defined as within 100 miles of international borders or ports of entry, not the current expansive definition).

2. Complete prohibition on masked enforcement, with mandatory visible badge numbers and body cameras for all agents engaged in arrests or detention.

3. Automatic exclusion of evidence and dismissal of removal proceedings for violations of these requirements, making the procedural protections meaningful rather than advisory.

4. Independent oversight board with real-time access to operations, subpoena authority, and power to halt operations that violate procedures—analogous to civilian police review boards but with stronger teeth.

5. Mandatory enforcement sequencing with severe criminal convictions first, recent entries second, long-term residents with family ties last or never, with budget clawbacks for deviations.

6. Absolute prohibition on information sharing between ICE and local police except for final criminal convictions for serious offenses, with severe penalties for violations.

7. Affirmative requirement that all enforcement operations minimize disruption to schools, medical facilities, and houses of worship, with bright-line rules about what’s prohibited.

8. Complete transparency in detention contracts and facility operations, with mandatory public reporting of all significant expenditures and all serious incidents.

These demands would fundamentally constrain ICE’s operations—which is precisely the point. An enforcement agency that can’t operate within these constraints shouldn’t exist. If ICE can’t function with warrant requirements, judicial oversight, officer accountability, and transparent priorities, that’s an argument for abolishing ICE, not for accepting lawless enforcement.

But notice: these demands don’t eliminate enforcement. They channel it through institutional structures that create accountability and protect rights. They make enforcement better—more targeted, more legitimate, more consistent with constitutional norms. A system designed around these constraints might actually do what we claim to want immigration enforcement to do: remove genuinely dangerous individuals while respecting the rights and dignity of everyone else.

Beyond Minneapolis: The Institutional Question

The broader question is whether we can have immigration enforcement that operates under rule of law in a democratic society. The Minneapolis experience suggests we currently can’t—or won’t.

But the failure is a choice, not an inevitability. We’ve designed immigration enforcement to operate outside normal constitutional constraints, with minimal oversight, weak accountability, and incentive structures that reward abuse. Then we act surprised when agents abuse their authority, communities resist, and the entire system descends into chaos.

Kristol is right to elevate the Minneapolis resistance as morally serious. These are citizens putting their bodies on the line to protect their neighbors from lawless government action. That’s civic virtue, and it deserves respect.

But we shouldn’t romanticize resistance as a substitute for functional institutions. The fact that ordinary citizens must organize neighborhood surveillance networks and physically block federal vehicles isn’t a sign of democratic vitality—it’s a sign that our enforcement institutions have failed so completely that extralegal resistance has become the only available check on power.

The solution is neither Kristol’s proposal to defund ICE nor the Trump administration’s commitment to enforcement without constraints. The solution is to build immigration enforcement institutions that actually work: institutions with transparent criteria, genuine oversight, meaningful accountability, and respect for constitutional limits. Institutions where following the rules produces better outcomes than breaking them, for everyone involved.

This is harder than defunding. It requires sustained legislative effort, difficult tradeoffs, and political courage to defend unpopular constraints on popular enforcement. But it’s the only path toward an immigration enforcement system that both works and deserves to work—one that doesn’t require citizens to choose between complicity and resistance.

The people of Minneapolis aren’t leading. They’re screaming. The question is whether anyone in Washington is willing to build the institutions that would make their desperate resistance unnecessary.

The death trap, briefly

In my previous piece on this subject, I called this paradigm the quiet death trap: a world where everyone insists they are “following policy” while people with opioid use disorder (OUD) march through a predictable sequence—custody without medication, forced withdrawal, release into chaos, then overdose. We’ve known for years that continuing or initiating MOUD in custody sharply reduces post‑release overdose and often reduces reincarceration, but those practices are still the exception rather than the rule.

If you start from moral intuitions, nothing about this is mysterious. People who just survived jail or prison deserve a real chance not to die. If you start from institutional incentives, the pattern looks less like a tragedy of ignorance and more like an equilibrium—a grim balance where doing the right thing is punished and doing the deadly thing is quietly rewarded.

The players in the punishment game

To see how that equilibrium forms, you don’t need a whiteboard full of equations, although I could certainly give you one. You just need to follow a small cast of characters and the pressures they face. Think of a typical person with OUD—let’s call him Marcus—moving through four sets of hands: courts and prosecutors, jails and prisons, recovery housing and treatment providers, and the state and county agencies that design the rules everyone else has to play by.

Each actor sees only a thin slice of Marcus’s life and only part of the harm. None of them wake up in the morning thinking “I want more people to die of overdose.” Yet each one faces intense, asymmetric pressure: they will be loudly blamed for some kinds of failure and barely noticed for others. Once you trace those asymmetries, “punishment as default” stops looking like a glitch and starts looking like the rational, if monstrous, outcome of the game they’re stuck in.

Courts and prosecutors: fear of the one bad story

Start with courts and prosecutors, who decide whether Marcus gets diverted to treatment or pushed through the standard criminal process. On paper, diversion looks like the humane and efficient choice: people with OUD get treatment instead of jail, the jail population falls, and future victimization may drop. In practice, the risk that dominates decision‑making is not the average outcome—it’s the nightmare headline.

If Marcus is diverted and later commits a high‑profile violent crime, the judge and prosecutor own that story. Their names are in the article, their faces in the news; op‑eds call them soft, legislators haul them into hearings. If Marcus is denied diversion, processed “by the book,” released after serving time without MOUD, and then quietly dies of an overdose in a motel room, that story barely exists as a story at all. The risk to Marcus is enormous; the risk to the court is effectively invisible.

So the sensible individual move is to underuse diversion. Say yes only when you’re certain, narrow eligibility, load programs with conditions that make it easy to terminate someone at the first sign of trouble. The rare visible crime weighs much more heavily in the internal calculus than the routine, invisible overdose after detention or harsh supervision. Over time, that bias toward avoiding the “one bad story” becomes standard practice.

Jails and prisons: paying for the wrong costs

Next, Marcus enters a jail or prison. Here the central question is simple: is MOUD the default, or is it an exception that requires special effort to access and maintain?

When MOUD is treated as optional or high‑friction, everything works against Marcus. Screening is perfunctory or inconsistent; people who were on methadone or buprenorphine in the community are tapered off or abruptly cut off upon entry; linkage to community care after release is spotty. Staff face operational costs—complex medication protocols, coordination with outside providers, diversion worries—without directly bearing the budgetary or political cost of what happens after someone walks out the gate.

From the correctional administrator’s perspective, MOUD is a line item: staff training, pharmacy contracts, secure storage, medication administration. Overdose deaths, emergency department visits, and future prison admissions show up in some other spreadsheet—hospital budgets, county coroners, state DOC population forecasts. In the payoff function the system implicitly writes, “cost of MOUD” is high and very salient, while “weight on post‑release overdose” is low and off‑stage. The predictable result is that custody without MOUD remains the default, even in jurisdictions that have formally authorized treatment.

Recovery housing: abstinence as a risk shield

Suppose Marcus survives release and looks for recovery housing or a residential treatment program. For someone with OUD, stable housing with some structure can be the difference between tenuous recovery and collapse. But here another set of incentives quietly pushes in the direction of exclusion.

Many housing providers operate under or internalize an abstinence‑only norm. They fear that allowing residents on methadone or buprenorphine will invite diversion, conflict with other residents, or trigger scrutiny from neighbors and funders. They directly experience any relapse or disruption that happens on their watch: a fight in the house, a positive urine screen, a neighbor complaint. They do not directly experience, or get measured on, the overdoses that occur after they discharge someone for medication use or for a minor rule violation.

So the safe move is to say no: no residents on MOUD, or only under cumbersome, stigmatizing conditions; quick termination for small violations; quiet pressure on people to taper off medications whether or not that’s clinically appropriate. The result is churn and instability—Marcus bounces between programs, couches, and shelters, each move eroding his fragile recovery while keeping each individual provider’s risk portfolio clean.

Funders and regulators: writing the rules of the game

Hovering above all of this are state and county funders and regulators. They don’t decide Marcus’s fate one case at a time; they write the scoring rules. They decide what gets reimbursed generously versus grudgingly, which performance metrics are tracked and rewarded, and how liability is assigned when something goes wrong.

When MOUD and supportive housing are under‑reimbursed, every jail administrator, treatment provider, and housing operator sees them as a private cost—a drain on their budget, their staff, their political capital. Overdose deaths and reincarceration, by contrast, are spread across budgets and agencies, or simply absorbed as background noise. Those outcomes may be expensive from a social perspective, but no single decision‑maker internalizes that cost. At the same time, media and political attention concentrate on visible failures: crimes by people who were diverted, housed, or kept on MOUD, not the deaths of those processed in the usual punitive way.

The upshot is a quiet but powerful message embedded in funding formulas and oversight: play it safe by saying no—no MOUD as default, no broad diversion, no MOUD‑inclusive housing networks.

What a punishment equilibrium looks like on the ground

Put those choices together and you get a “punishment equilibrium.” That’s just a fancy way of saying that each institution’s individually sensible move reinforces the others, so the whole system keeps snapping back to the same deadly pattern.

For Marcus, the path looks something like this: he’s arrested and, because a prosecutor worries about the one terrible headline, he’s denied diversion and held in jail. There, MOUD is not offered by default, or it’s made hard to access, so he goes through abrupt withdrawal in custody. When he’s released, his tolerance is low, his cravings are high, and his supervision conditions may be demanding and inflexible. He tries to get into housing, but providers either won’t accept him on medication or have already terminated him for a minor rule violation; he ends up in unstable housing or homeless.

Each of these decisions is locally defensible: the judge followed the risk assessment tool, the jail followed its medical protocol, the housing provider followed its abstinence policy. But taken together, they funnel most people with OUD through the highest‑risk corridor we know how to build—custody without MOUD, forced withdrawal, and unstable reentry—even though the system already has the capacity for a better path. That configuration, where punishment‑heavy choices are the default at each node, is what I mean by a punishment equilibrium.

Two quiet forces: money

The first force that holds this equilibrium in place is money, but not in the simplistic sense of “we don’t care enough to fund treatment.” It’s about who pays which costs and when.

In budget terms, MOUD programs and MOUD‑inclusive housing show up as explicit line items in the operating budgets of jails, prisons, and providers. They require hiring, training, and ongoing supervision. They may require physical changes to facilities and contracts with outside prescribers. By contrast, overdose deaths, emergency room visits, and reincarceration show up elsewhere—Medicaid claims, hospital uncompensated care, coroner reports, future prison bed projections.

When you under‑reimburse MOUD and supportive housing, you effectively turn them into a tax on the agencies that implement them. The social ledger might say “this is cheap, given the deaths and reincarceration avoided,” but the local ledger says “this is expensive and risky, and the savings go to someone else.” In the model language behind this series, the “cost of MOUD and housing” term in each actor’s payoff function is large and salient, while the weight they put on overdose outcomes is small. Under those conditions, the strategy profile where each actor under‑provides these services is not just possible; it’s stable.

Two quiet forces: blame

The second force is blame, which works like a kind of informal liability rule layered on top of the formal ones. Who gets blamed, and for what, shapes behavior at least as strongly as formal penalties.

Courts and housing providers are loudly blamed for visible failures—for the resident who commits a new crime while on diversion, for the person who overdoses in a house that allowed MOUD, for the parolee who makes the news. In legislative hearings and local news, those cases are read as evidence that someone was too lenient, too experimental, too willing to “take a chance.” The message to others is clear: if you stick your neck out, you may be uniquely punished for it.

Invisible failures look different. When someone dies of overdose after being processed “by the book”—denied diversion, cut off from medication in jail, discharged from abstinence‑only housing—there is rarely a hearing about that case, rarely an op‑ed about the judge who said no or the provider who enforced the abstinence rule. The family may grieve, advocates may take note, but the system does not treat those as institutional scandals.

Given that asymmetry, the individually safe move is to say no: no diversion, no MOUD as default, no MOUD‑taking residents. The more that “saying yes” concentrates visible risk on a few actors while spreading invisible harms across many, the more the punishment equilibrium becomes “stochastically stable”—in human language, the more it tends to re‑emerge after every shock, even if people sometimes try to move the system in a better direction.

The harm‑reduction equilibrium: a different path is possible

The bleakness of the punishment equilibrium might suggest that nothing else is feasible. But we have real‑world evidence that a very different regime is not only possible but effective. Call it a harm‑reduction equilibrium.

In this alternative configuration, diversion from jail to treatment is common and not treated as an exotic, special‑case tool. MOUD is the default in custody and at release—people come in on methadone or buprenorphine and stay on it, and those who meet clinical criteria can initiate in jail or prison. Recovery housing is explicitly MOUD‑inclusive by design, with structures and supports tailored to people on medication rather than against them. The cast of characters is the same, but the rules of the game differ: funding, metrics, and liability are aligned so that supporting treatment and stability is the safe move.

When Rhode Island implemented a comprehensive correctional MOUD program, it saw a large and clinically meaningful reduction in post‑incarceration overdose deaths and a measurable drop in overdose deaths at the state level overall. When Massachusetts mandated MOUD in county jails and expanded access in prisons, researchers documented higher post‑release MOUD engagement and lower risks of overdose, all‑cause mortality, and reincarceration among people who received treatment behind bars. The harm‑reduction equilibrium is not a utopian thought experiment; it is a configuration some places have already approximated.

Why better regimes don’t stick

If such a regime is feasible and better for nearly everyone, why doesn’t it spread and persist? Why isn’t Rhode Island’s model or Massachusetts’s jail reforms the new baseline everywhere?

Part of the answer is that in the current institutional environment, early adopters are exposed. The one generous judge who makes diversion the norm in her courtroom carries more headline risk than her colleagues while operating under the same blame rules. The one jail that makes MOUD the default shoulders higher up‑front costs, more operational complexity, and the risk that any future overdose involving a released participant will be pinned on that policy. The one housing network that leads on MOUD inclusion may find itself taking the highest‑needs residents, with little adjustment in reimbursement or regulatory support.

As long as the underlying money and blame structures remain unchanged, these first movers operate on a tilted playing field. They can improve outcomes in the short run, but they are constantly swimming against the current. Staff turnover, leadership changes, budget cuts, and political shocks—an election, a sensational crime, a budget crisis—each create an opportunity for the system to revert to the safer, more familiar configuration where saying no to people with OUD is rewarded and saying yes is punished. In the language of dynamic systems, the punishment equilibrium is the attractor: even if you push the system away from it, random disturbances and human error tend to pull it back.

Changing payoffs, not souls

If that story sounds fatalistic—if it makes you feel like the institutions are wired for punishment and always will be—that’s not where I want to leave you. The point of naming the punishment equilibrium is not to declare it inevitable; it’s to make clear where leverage really lies.

In the next post, I’ll turn to what it would mean to change the payoffs instead of changing the people: how modest shifts in funding, transparency, and default rules can make the harm‑reduction equilibrium the individually safe choice for judges, jail administrators, and housing providers rather than the risky one. That includes talking about the hard constraints that already exist: constitutional limits and disability‑rights law that quietly rule out some of the “cheap but deadly” strategies the system has leaned on for decades, like deliberate withdrawal of MOUD in custody or categorical exclusion of people on MOUD from publicly supported housing.

Those legal and institutional constraints are not a full solution, but they are part of a different game—one where Marcus’s survival is not a heroic exception but the ordinary result of ordinary decisions.

Modern power doesn’t usually die in a firefight; it dies when its explanations stop making sense. That’s the core insight in Jennifer Nemecek‘s recent essay, “When Legitimacy Breaks Before Power,” where she traces how institutions can remain formally intact long after the stories that once made them feel binding have worn through. What she’s describing is not just corruption or hypocrisy; it’s a deeper fracture between the language power uses about itself and the way it actually behaves, the moment when obedience shifts from “this is ours” to “this is theirs.”

The argument below is meant as a complement to her piece rather than a restatement of it. If Jennifer is giving us the field report from inside a fraying order, this is an attempt at the mechanism design: a sketch of how legitimacy, narrative, and what Timur Kuran famously called “preference falsification” interact to let systems look stable right up until the day they don’t. Her line—“Power does not collapse when challenged. It collapses when it can no longer be explained.”—is the thesis; what follows is one way of cashing out why that’s true for modern democracies, liberal hegemons, and any regime that depends more on authority than on raw coercion.

Power that can no longer explain itself doesn’t just look ugly; it looks stupid, arbitrary, and optional—and that’s when people quietly start walking away from it. That’s the nerve her line hits: the real inflection point isn’t resistance, it’s the collapse of the story that made obedience feel like common sense.

Modern states don’t run on brute force; they run on legitimacy—the sense that “this is just how things are done” and “these are, more or less, our rules.” You can see it in the long slide of trust metrics documented by places like Pew Research Center: U.S. public trust in government doing the right thing “most of the time” fell from around 60 percent after 9/11 to under 20 percent by the mid‑2010s, well before the current round of institutional drama. When that trust erodes, people don’t instantly revolt; they downgrade institutions from “ours” to “theirs,” from furnished home to Airbnb.

Legitimacy is what turns raw power into authority: the cop isn’t just a person with a gun; the judge isn’t just someone in a robe; the regulator isn’t just a bureaucrat with a pen. Once the story that connects those tools to a shared moral frame breaks, the same actions start to read as naked self‑dealing, and the audience’s posture shifts from consent to containment.

The usual myth is that regimes shatter when someone finally “stands up” to them. In practice, decay is slower and pettier: power stops even trying to make sense. You end up with governments that still claim the language of rule of law and public interest while openly gaming procedures, neutering checks, and treating basic constraints as technicalities to be lawyered around.

At that point, you don’t yet have tanks in the streets; you have something more corrosive: a ruling class that can’t be bothered to justify itself in terms that apply equally to friend and enemy. Law becomes “what our side can get away with,” foreign policy becomes “what we feel like,” and enforcement becomes “who we can scare,” and everyone can see it—even if saying so out loud is still costly.

The sociologists call this “preference falsification,” a term made famous by Timur Kuran: people nod along publicly while privately disbelieving, because they assume everyone else still buys the story. Nothing looks more stable than a system in which everyone is lying in the same direction. Then one person refuses to play along, and suddenly the room discovers it was full of heretics.

That’s why power seems to “collapse overnight” even when the rot has been decades in the making: what’s new is not dissent, but its visibility. The moment people realize that their skepticism is widely shared—that the emperor’s clothes are not just thin but imaginary—the cost of obedience spikes and the cost of honest speech falls, and a status order that looked immovable suddenly looks ridiculous.

The liberal international order always depended on a certain kind of story: that even the hegemon was bound, at least cosmetically, by rules it didn’t write on the fly. Once a hegemon’s internal institutions stop constraining its executive—once courts, legislatures, and “independent” agencies become extensions of one man’s will—you don’t just get more aggression; you get radical unpredictability.

Without a shared justificatory framework, other states can’t tell the difference between rule‑enforcement and whim. That’s not just “bad behavior,” it’s a breakdown of the conditions under which behavior can be judged at all: there is no longer a stable reference frame for what counts as overreach, restraint, or violation.

The academy has started to describe this as a chronic legitimacy crisis: not a clean break, but a long, grinding mismatch between what institutions claim to be and how they actually operate. Executives hollow out checks and balances piecemeal, usually through legal channels—constitutional rewrites, emergency powers, politicized appointments—leaving the form of democracy intact and the substance eaten away.

When Bessent told Congress he doesn’t have the authority to “bail out Bitcoin,” markets heard a headline; what they should have heard is a civics lesson. This essay is a thought exercise about an option that is politically tempting, conceptually sloppy, and—crucially—legally out of reach, even in the Bizarro‑world of Donald Trump.

The spectacle on the Hill

The exchange was made for television. Long‑time crypto‑skeptic Rep. Brad Sherman pressed Bessent with a 2008‑style hypothetical: could Treasury direct banks to buy Bitcoin, relax regulations to encourage them to hold it, or use public funds to prop up “Bitcoin or Trumpcoin,” as described in coverage of Bessent’s testimony by DL News. Bessent’s answer was simple: no—“I am Secretary of the Treasury. I do not have the authority to do that,” he told lawmakers, a line highlighted in Yahoo Finance’s writeup.

Bitcoin promptly sold off on the “no bailout” comment, slipping below 70,000 dollars in trading that outlets like Yahoo Finance described as a reaction to his remarks. It is a revealing moment for an asset that was born, at least in myth, as a rebuke to bank rescues.

What “bailing out crypto” would actually mean

“Bailout” is doing a lot of work in this discourse. In practice, people seem to mean at least three distinct interventions:

• Direct price support: the state buying Bitcoin or other tokens to hold up prices.

• Regulatory compulsion: ordering or nudging banks and intermediaries to accumulate crypto, for example by relaxing capital treatment.

• Plumbing support: emergency liquidity or guarantees for exchanges, stablecoin issuers, custodians, and other market utilities so they don’t fail in a crisis.

Back in 2008, the U.S. aimed its firepower squarely at the plumbing. Programs like TARP and the Federal Reserve’s emergency 13(3) facilities were designed to recapitalize banks and stabilize short‑term funding markets so that payments, credit, and basic intermediation did not collapse. That’s the distinction drawn in pieces such as CCN’s explainer on why banks got a TARP‑style bailout and Bitcoin won’t.

That project—keeping ATMs and payroll running—is very different from bailing out speculators in a volatile token that everyone understands can go to zero.

Legal constraints: the bailout machine has boundaries

The first reason a Trump‑era crypto bailout is so unlikely is mundane: the statutory authority isn’t there.

Treasury cannot simply decide to deploy taxpayer funds into whatever speculative asset is currently underwater. Its crisis tools are tied to specific programs authorized by Congress, to the Treasury market, and to the regulated banking system—not to the spot price of a bearer token trading on offshore exchanges, a point underscored in reporting such as this Yahoo Finance piece on “no bailout for Bitcoin”. The Federal Reserve’s emergency powers under section 13(3) are framed around lending to institutions against collateral in “unusual and exigent circumstances,” not around buying Bitcoin outright to make traders whole, as law‑and‑finance commentators note when contrasting 2008 bank support with crypto markets in CCN’s analysis.

On top of that sits the Supreme Court’s “major questions” doctrine. Legal scholars have already begun to frame recent crisis interventions as a cautionary tale about agencies discovering vast rescue powers in old statutes, as in the Syracuse Law Review essay, “Major Questions and Moral Hazards: A Tale of Two ‘Bailouts’.” A bespoke TARP‑for‑tokens facility, whose explicit goal is to support the price of a particular crypto asset, would be an engraved invitation for that doctrine.

Congress could, of course, pass a crypto‑bailout statute. The fact that nobody serious is pushing for one tells you almost everything about the politics.

Design choices: crypto lives outside the safety net

There is also a design‑choice argument: crypto grew up outside the public safety net on purpose. Bitcoin’s founding myth centers on the injustice of 2008 bank rescues; its genesis block famously references a U.K. bailout headline, a point often invoked in pieces like CryptoSlate’s reflection on “Bitcoin’s brutal irony”.

The U.S. safety net—deposit insurance, lender‑of‑last‑resort access, structured resolution—attaches to chartered banks and a few other regulated entities, not to free‑floating tokens. When you deposit dollars in an FDIC‑insured bank, you opt into a regime that may socialize losses in a crisis. When you wire money to a Cayman‑registered exchange to buy Bitcoin, you don’t.

Mainstream policy voices have been explicit about preserving that separation. A 2025 report from Brookings, “Protecting the American public from crypto risks and harms,” urges lawmakers to “maintain and reinforce the separation between crypto and traditional financial institutions” precisely to prevent banks and retirement systems from becoming over‑exposed, and even floats limits on the use of public funds to buy or hold cryptocurrencies. That is not a pre‑commitment to future rescues; it is an attempt to make “too big to fail” inapplicable to the token economy.

If crypto wants the upside of living outside the regulated system, it also gets the downside: when things blow up, there is no FDIC cavalry.

Systemic risk: banks versus blockchains

The strongest intellectual case for any bailout is systemic risk: the idea that letting an institution fail will drag down payments, credit, and the broader economy. In 2008, policymakers at least had a coherent story about large, interconnected banks taking down payroll and ATMs with them, the kind of story summarized in post‑mortems like CCN’s review of why banks were saved and Bitcoin is not.

Crypto’s systemic‑risk story is weaker. Official reports tend to highlight three main concerns:

• Consumer harms: frauds, hacks, and predatory schemes targeting retail investors.

• Spillovers via stablecoins: large dollar‑backed stablecoins holding big piles of Treasuries and bank deposits could, in theory, transmit stress into short‑term funding markets.

• Non‑financial externalities: energy use, illicit finance, ransomware, and so on.

Only the second looks like classic “too big to fail.” And even there, the natural response is not “bail out stablecoin holders,” but “regulate reserves, limit integration, and shore up the dollar plumbing,” the kind of approach laid out in the Brookings piece on crypto risks and reflected in the Financial Stability Oversight Council’s softened but still wary 2025 report.

That is exactly what regulators have been trying to do: graft bank‑like requirements onto any crypto entity that wants to be treated like a bank, while otherwise keeping the token universe at arm’s length.

Moral hazard and the Trump factor

Even if the legal authority existed and even if crypto posed more systemic risk than it currently does, there would still be the question of should.

Crypto has been sold to the public as a high‑volatility speculative asset with lottery‑ticket upside and wipe‑out downside, not as a low‑risk savings vehicle. Coverage like NPR’s “Trump promised a crypto revolution. So why is bitcoin crashing?” sketches exactly that speculative ethos around the current downturn. To then socialize the downside after a decade of privatized gains would be moral hazard on steroids. We saw intense backlash when regulators effectively protected uninsured depositors at crypto‑adjacent regional banks during the 2023 turmoil, and we’ve also seen how backstopping those depositors at Silicon Valley Bank created its own moral‑hazard problems, as I argued in “Bottle Rockets and Falling Skies: How SVB Crashed and Why It’s Not the End of the World” and as the Syracuse Law Review’s “Tale of Two ‘Bailouts’” also emphasizes.

What about Trump specifically? His second administration has done three notable things in this space:

• Established a “Strategic Bitcoin Reserve,” seeded with seized BTC and framed as “budget‑neutral,” alongside a broader “digital asset stockpile” of confiscated coins, as described in a White House fact sheet and Reuters’ coverage.

• Launched a pro‑crypto working group and filled key roles with industry‑friendly officials, explicitly to “make America the crypto capital of the world,” according to reporting from Politico and CNBC.

• Turned crypto into a culture‑war symbol: friend of Bitcoin, foe of CBDCs, champion of “financial freedom,” a posture summarized in overviews like CoinLedger’s guide to Trump and crypto and The Hill’s piece on crypto’s rise as a political force.

All of that is favoritism and symbolism, not a bailout. The political upside for Trump lies in aligning rhetorically with crypto and deregulating at the margins, not in writing checks to losing speculators. That’s why, even in this administration, Bessent has been so emphatic about what he cannot do, as in his “no authority to bail out Bitcoin” remarks covered by Yahoo Finance and Bitcoin Magazine.

The plumbing exception

There is one sliver of the story where something bailout‑like could appear: the plumbing.

If a large, politically connected stablecoin or crypto intermediary became deeply entangled with Treasury markets, then a run there could destabilize short‑term funding. Bessent himself has floated the idea of leaning on dollar stablecoins as buyers of U.S. debt, a theme discussed in coverage of his new plan to finance the government. In that scenario, the Fed and Treasury might intervene to backstop dollar funding or key intermediaries, with crypto along for the ride. From the outside, that would look like a crypto bailout; in substance, it would be the same thing Washington always does in a crunch: protect the plumbing rather than the punters.

Think of it as the difference between rescuing a bank that happens to have crypto‑heavy clients and rescuing the tokens themselves.

The irony: an anti‑bailout asset asking for a bailout

Bitcoin’s origin story is explicitly anti‑bailout; its culture still trades heavily on that mythology. Yet as it has been financialized—held by hedge funds, family offices, and, via wrappers, mainstream investors—it has drifted back into the same orbit of policy speculation as everything else. That is how you end up with markets trading on whether the administration might rescue an asset that was supposed to need no rescue, an irony captured in CryptoSlate’s piece on “Bitcoin’s brutal irony”.

If you take the cypherpunk ethic seriously, Bessent’s “I do not have that authority” should be reassuring. There will be no TARP for tokens. That is not a bug in the system; it is the constraint that keeps crypto from becoming yet another claimant on the public purse.

For the rest of us, the task is simpler: treat “bail out crypto” as the thought experiment it is, and focus on the real margins of policy—limiting spillovers, hardening the plumbing, and refusing to quietly import “too big to fail” into the token economy. Even in Trump’s Washington, that much reality still holds.

The House speaker of the United States has decided to explain the Bible to the bishop of Rome, and we are all expected to nod along as if this is a normal development in Christian theology rather than a live‑action Babylon Bee sketch. The good news is that Pope Leo XIV is right (oh, how it BURNS for me to admit this), Mike Johnson is wrong, and the actual Christian problem in American immigration policy is not a lack of walls, but a surplus of impunity—legal, bureaucratic, and theological.

When the Speaker Out‑Bibles the Pope

Johnson’s now‑infamous answer started when a reporter asked him about Leo’s criticism of U.S. immigration crackdowns; he responded with a genial smile and then launched into a theology lecture directed at the man Catholics call the Vicar of Christ. In that exchange, he assured the press that “sovereign borders are biblical and good and right” and that the state’s job is to “maintain the law,” not to get entangled in what he clearly sees as private virtues like mercy.

He has since expanded this into a full “Christian case for deportation,” complete with a “borders are biblical” riff and dark warnings that the pope and the “progressive Left” are twisting Scripture into a radical open‑borders agenda. The whole performance has been gleefully catalogued in pieces with headlines like “Mike Johnson Mansplains Religion to the Pope” and commentators accusing him of trying to “out‑Bible the Pope.“

Leo, by contrast, did something far less theatrical and far more threatening: he quoted Matthew 25’s “I was a stranger and you welcomed me,” asked for “deep reflection” on how migrants are treated, and called the mistreatment of immigrants a “grave crime.” He explicitly backed U.S. bishops who warned against “indiscriminate mass deportation” and “dehumanizing rhetoric,” framing these not as partisan issues but as questions of basic Christian faithfulness. When the pope says, in effect, “maybe don’t brutalize people,” and Washington hears “policy insurgency,” something is badly off.

Aquinas and the Stranger

If we are going to have a Bible fight, we might as well invite someone who actually did systematic theology. Enter Thomas Aquinas. In the Summa Theologiae, Aquinas famously insists that human law is law only insofar as it participates in natural law; when a statute departs from justice—when it systematically violates the claims of persons—it becomes a “perversion of law,” binding in fear but not in conscience.

For Aquinas, the “stranger” is not a spreadsheet category to place between “jobs” and “drugs.” Hospitality and care for the foreigner fall under misericordia—mercy—which he treats as a central component of charity, the virtue that orders our loves toward God and neighbor. The duty of mercy does not evaporate when someone picks up a gavel or a gun; the magistrate is not dispensed from the Gospel simply by being on payroll. The office does not launder cruelty into virtue.

Aquinas also understands that political communities have a right to self‑preservation and can regulate immigration prudently; his reading of Israel’s treatment of foreigners even emphasizes gradual incorporation. But for him, prudence sits beneath justice and charity, not above them. A polity can decide how to welcome; it cannot decide that welcoming is optional. On this point, Leo’s language about rights, duties, and the “grave crime” of mistreating migrants is far closer to Aquinas than Johnson’s neat separation of “state justice” and “private mercy.”

Leo XIV’s Quiet, Dangerous Orthodoxy

One of the more striking things about Leo XIV’s interventions on immigration is how un‑radical they are in Catholic terms. In interviews and addresses, he affirms that states have a right to regulate who enters and how—he talks about borders, procedures, and legitimate security concerns—but he refuses to treat migrants as raw material for national self‑assertion. His emphasis falls on two claims: that migrants possess “spiritual rights” that must be respected, and that nations will be judged on how they treat those who arrive vulnerable and dependent.

That is straight‑line Catholic social teaching: the universal destination of goods, the inherent dignity of the person, the priority of the poor. When Leo calls mistreatment of immigrants a “grave crime,” as he has done in remarks reported by Reuters, he is applying Matthew 25 at the level of peoples and institutions, not just individual consciences. The line between “you did it to me” and “you did it to them in my custody” is thinner than many Christian politicians want to admit.

Johnson’s response is to carve the Gospel up like a zoning map. In his comments, passages about welcoming the stranger are safely spiritualized, addressed to “individual believers,” while Romans 13 and assorted wall‑building texts are treated as the charter of the modern nation‑state. The result is a split personality Christianity: public order gets coercion and exclusion as its sacraments, while compassion is outsourced to churches and charities on the condition that they leave the policy architecture untouched. He is not misreading Leo here; he is rejecting the idea that mercy should ever become institutional design.

ICE, Plenary Power, and the American Gestapo

If this were just a matter of interpretive bravado, we could let the theologians fight it out over espresso in Rome. But the theology Johnson is defending has a body count and a line in the federal budget. In my own work—most recently in an SSRN piece, “ICE and the Plenary Power Problem: Extraconstitutional Authority and Interior Enforcement“—I argue that modern U.S. immigration enforcement, and Immigration and Customs Enforcement in particular, rests on a claim of near‑absolute “plenary power” over noncitizens. That doctrine places millions of people in a constitutional gray zone inside the country.

The structure is uglier than the euphemism suggests. Congress writes broad, often harsh statutes; the executive builds a sprawling interior‑enforcement machine with immense discretionary power; and politicians in both parties invoke “sovereignty” and “rule of law” to justify what happens in the shadows between statute and street. ICE operates in what I’ve called a “jurisdictional shadow”: embedded in American cities, but insulated from local democratic accountability, in ways that make abusive tactics and perverse incentives both likely and hard to correct.

In my essay bluntly titled “The American Gestapo Is a Budget Line,” I tried to make this concrete. Enforcement capacity—the number of agents, detention beds, and surveillance toys—grows because it is politically cheap: funding more “security” is easier than confronting the structure that rewards showy raids and high removal numbers over humane, targeted enforcement. As I put it there, and again in “Immigration and the New Color Bar,” we have decided to pay for a taste for exclusion with lower GDP, weaker communities, and a badly distorted sense of justice.

“Plenary power” is the Latin‑scented way of saying that when the federal government deals with noncitizens, especially at the intersection of borders and “national security,” normal constitutional restraints are loosened. When Johnson wraps this in biblical language—”borders are biblical,” “enforcing the law is righteous”—he is not just talking about fencing; he is offering theological cover to a legal regime built to keep one class of people just outside the circle of meaningful rights.

The Theology of Impunity

This is where Aquinas and Leo converge so uncomfortably for Johnson. Aquinas would see plenary power for what it is: a claim that some persons can be treated as means rather than ends in the name of public order. Once the law defines a neighbor as an “illegal,” the temptation is to treat whatever happens to them during “enforcement” as morally incidental—as long as the forms are signed and the box for “procedure followed” is checked.

Leo’s repeated insistence on migrants’ “spiritual rights,” and his willingness to call abuses at the border a “grave crime,” cuts directly across that habit of thought. In his language, sovereignty does not extend to redefining who counts as a neighbor. You may regulate entry; you may not rewrite the roster of the least of these. His call for “deep reflection” on immigration policy is not an invitation to convene a blue‑ribbon commission; it is a pointed question about whether our enforcement institutions have become occasions of structural sin.

Johnson’s theology, by contrast, is custom‑made for impunity. If mercy is not the state’s concern, then the moral evaluation of deportation policy stops at “was a law broken?” and “did the officer follow protocol?” If borders are “biblical” in a way that crowds out every other scriptural imperative, then any crack in the enforcement machine becomes a threat to godly order rather than an occasion for repentance and reform. The entire conversation shifts from “what is being done to these people in our name?” to “are we being tough enough?”

Aquinas will not let rulers off that easily. In his account, they sin not only by promulgating unjust laws but by tolerating unjust customs and institutions. If a practice predictably produces cruelty and disorders the souls of those who carry it out—if it trains officials to see certain bodies as less worthy of care—then the ruler who sustains that practice shares in its guilt, even when each individual act can be papered over with compliance reports and talking points.

The Economics of the New Color Bar

There is another irony that someone like Johnson, who likes to talk about “results,” ought to face: the moral panic driving his theology is built on economic assumptions that collapse on contact with the data. In “Immigration and the New Color Bar,” I argued that modern restrictionism functions like a race‑neutral version of the old color bar: a set of policies that constrict the labor force and slow growth in order to preserve a feeling of control for insiders.

Gary Becker taught us decades ago to treat discrimination as a “taste” that some actors are willing to pay for, and William H. Hutt showed how white unions in South Africa were happy to shrink industries to maintain their wage premia. In the same vein, contemporary immigration restriction is a national‑scale choice to accept slower GDP growth, demographic stagnation, and persistent skill shortages so that a political coalition can enjoy the psychic return of “keeping them out.”

When I surveyed the empirical literature for that piece, including work cited by the Dallas Fed, the pattern was clear enough: declining immigration is set to drag on U.S. growth, with only fleeting and modest gains for the workers restrictionists claim to protect. In Becker’s language, the country is paying more for the same output; in theological language, we are asking the “least of these” to underwrite our fears with their futures. Johnson’s “Christian” case for deportation, read in that light, looks less like moral seriousness and more like a sermon in praise of negative‑ROI sin.

A Thomistic Politics of Borders

So what would a more Thomistic politics of borders and enforcement look like? It would begin by rejecting the fake choice between “order” and “mercy.” For Aquinas, mercy is not justice’s sentimental opposite; it is justice’s perfection. A political community that refuses to see the humanity of those it punishes is not more just; it is less rational.

In practice, that implies at least three moves.

First, the state’s responsibility to maintain order includes an obligation to discipline its own agents. An ICE field office operating in a jurisdictional shadow with weak external checks is not an embodiment of Romans 13; it is an ongoing temptation to abuse—and therefore a failure of rulers to order the sword toward the common good. Building in independent investigations of deaths in custody, automatic public release of unedited body‑cam footage, and civil remedies that bite directly into agency budgets is not coddling lawbreakers; it is the bare minimum of Christian sobriety about power.

Second, the design of immigration law should reflect the reality of human lives rather than the convenience of enforcement metrics. Leo’s insistence that long‑settled migrants be treated with dignity recognizes that people sink roots—familial, economic, spiritual—into the places where they live. A regime that treats a father of U.S. citizens as a “case” to be closed with removal, twenty years after entry, is not simply enforcing rules; it is engaging in a kind of social vandalism that tears up communities for the sake of statistics.

Third, Christian politicians need to stop pretending that their hermeneutic is neutral. To read Scripture in a way that foregrounds Nehemiah’s wall and Romans 13 while relegating Matthew 25 to the realm of “personal spirituality” is a choice. It is a decision to treat certain texts as politically weighty and others as decorative. Aquinas—who never met a hierarchy of texts he didn’t want to organize—would at least insist on acknowledging when that ordering serves institutional agendas rather than simply falling from heaven.

The Stranger at the Hearing

The most honest test of Johnson’s theology is not a verse‑match with the pope; it is the fluorescent hearing room where a frightened mother listens as an interpreter explains that she is being deported to a country her U.S.‑born children have never seen. It is the funeral after a botched raid. It is the ICE detention facility that most voters could not locate on a map, whose conditions they prefer not to imagine.

In those moments, the question is not “are borders biblical?” but “what, exactly, are we doing to Christ’s ‘least of these’ under color of law?” Leo XIV has already given one answer by calling mistreatment of immigrants a “grave crime” and warning that nations will be judged on how they treat them. Aquinas, if you let him into the room, adds that rulers who willingly sustain institutions that reliably grind the vulnerable are not merely negligent; they are actively deforming the moral ecology of their people.

It is tempting, especially for those of us outside the Catholic Church, to treat papal statements as purely intra‑ecclesial affairs with little relevance to American constitutional structure. That is a mistake. The argument between Leo and Johnson is not about canon law; it is about whether mercy has any claim on the design of public institutions, or whether it must content itself with charity drives after the raids are over.

If you believe, as I do, that the Gospel has something to say about how we structure the agencies that carry guns in our name, then the choice on offer is not “biblical borders versus lawless compassion.” It is a choice between a politics that uses Scripture to sacralize impunity and a politics that treats immigrants—documented or not—as neighbors whose rights do not evaporate when someone says “sovereignty.”

On that choice, Aquinas, Leo XIV, and the available data all land in the same place: the pope is right, the speaker is wrong, and the real crisis at the border is not unauthorized entrants but an authorized theology of exclusion with a very stable funding stream.

In late 2024 and early 2025, Trump vowed that any BRICS country that “even thinks” about creating a rival currency or shifting away from the dollar will face 100 percent tariffs on its exports to the United States. The message on Truth Social was unambiguous: pledge allegiance to “the mighty U.S. Dollar,” or “say goodbye” to the U.S. market. Since then, the threat has metastasized into a standing promise of at least 10 percent tariffs on countries that “align” with BRICS.

You do not roll out that kind of language for a marginal issue. You roll it out when you think the foundation is cracking under your feet.

The problem is that the foundation—while far from perfect—simply is not cracking in the way Trump says it is. As of early 2026, the dollar still anchors roughly 58 percent of global foreign‑exchange reserves, about 54 percent of export invoicing, and nearly 88 percent of FX transactions. The euro is a distant second at around 20 percent of reserves, with the yen, pound, and renminbi scraping together single‑digit shares. Even the recent slippage in the dollar’s share—from the low 60s to the high‑50s range—looks a lot smaller once you adjust for valuation effects, something the IMF has quietly noted in its reserve data.

Dollar dominance is not costless, and it is not guaranteed forever. BRICS‑style de‑dollarization is one of several slow‑moving forces pushing the world toward something more multipolar. But if you were designing an order in which the greenback gradually lost pride of place, you probably wouldn’t start with a club of countries that do not trust one another’s statistics, much less one another’s central banks.

You also wouldn’t respond to their hedging by advertising to half the planet that the United States is now so anxious about currency competition that it is willing to tax their exports into submission.

From a classical liberal perspective, that is the more serious problem. The immediate question is not whether BRICS can “kill” the dollar. It is whether U.S. policymakers will panic their way into responses that make a slower erosion of trust more likely.

What BRICS Is Actually Doing

To understand why the panic is overblown, it helps to distinguish between the rhetoric and the plumbing.

On the rhetoric side, BRICS officials and sympathetic commentators talk about building an alternative Bretton Woods: a BRICS “unit” currency potentially backed by a basket of member currencies and commodities, a parallel network of institutions like the New Development Bank and Contingent Reserve Arrangement, and a concerted push to settle trade in local currencies rather than dollars. At the 2024 Kazan summit and again in 2025, leaders floated plans for a “BRICS Pay” messaging and payments system, meant to route around Western‑dominated infrastructure like SWIFT.

On the plumbing side, the reality looks far more incremental.

• Russia and China have shifted much of their bilateral trade into yuan to dodge sanctions and reduce dollar exposure.​

• India has experimented with rupee payments for Russian oil, with mixed uptake.​

• Brazil and China have set up local‑currency settlement arrangements to reduce dollar demand in their trade.​

• The New Development Bank does a rising share of its lending in non‑dollar currencies, explicitly in the name of reducing dollar dependence.​

As Peter C. Earle notes in his overview of BRICS 2025: Expansion, De‑Dollarization, and the Shift Toward a Multipolar World at The Daily Economy, these steps add up to more than symbolism: expanded membership, gold accumulation, and plumbing projects like BRICS Pay give the bloc more options than it had a decade ago. They nibble at the edges of a system that has taken the dollar’s centrality for granted.

But the key word there is “edges.” Even Earle’s generally sympathetic treatment acknowledges that much of the agenda remains aspirational, and that internal contradictions—economic, political, and strategic—keep BRICS a long way from offering a full‑spectrum alternative.​

BRICS intra‑bloc trade still makes up only about 15 percent of members’ total trade, and the New Development Bank’s balance sheet, in the tens of billions, is tiny next to the trillion‑plus firepower of institutions like the IMF. The idea of a full blown BRICS currency remains, for now, a talking point rather than a treaty.

In that sense, BRICS is better understood as a hedging vehicle inside an already dollar‑centric system, not as a replacement for it.

The Dollar’s Uncomfortable Advantages

Saying that BRICS is not an imminent threat is not the same as saying the dollar has no problems. It is saying that the bar for replacing—or even meaningfully displacing—the dollar is extraordinarily high.

Reserve currencies are held not just because their home economies are big, but because they offer a combination of:

• Deep, liquid financial markets.

• Convertibility and open capital accounts.

• Legal and institutional protections that give investors confidence.

On those fronts, the dollar retains three uncomfortable advantages.

First, the U.S. still offers the deepest, most liquid market for high‑quality sovereign debt in the form of Treasuries. Even with higher yields and rising debt‑to‑GDP, those securities remain the default safe asset for much of the world.​

Second, the legal and political environment—while clearly more volatile than it was twenty years ago—still looks predictable compared with authoritarian alternatives. Foreign investors may not love Congress, but they generally trust U.S. courts more than courts in Beijing or Moscow.

Third, the alternatives remain under‑developed. The euro is bogged down by fragmentation and unresolved questions about fiscal union. The renminbi is constrained by capital controls and a legal system where politics can trump contract law. A synthetic BRICS unit, if it ever comes into being, will have to overcome not just technical hurdles but deep, mutual suspicion among member governments.

That helps explain why, as Earle emphasizes in another widely shared piece—Dollar’s Decline Meets Rising Dedollarization: The Threat Comes from Within—“dollar weakness and de‑dollarization are not synonymous.” The Bloomberg Dollar Index can fall nearly nine percent, gold purchases by central banks can surge past 1,000 tons a year, and investors can rotate into higher‑yield emerging‑market currencies—without that necessarily adding up to a structural dethroning of the dollar.

True de‑dollarization, as he points out, “requires the sustained development of viable alternatives that can match the dollar’s liquidity, legal protections, and institutional depth—an outcome that remains distant, though not unimaginable over the long term.” That is the background against which Trump’s tariff theatrics should be judged.​

Trump’s “Tariff Shield” for the Dollar

Trump’s core proposition is simple: if BRICS countries want to play games with currency, they can “say hello to tariffs and goodbye to America.” In his telling, the threat of a 100‑percent levy is a blunt but necessary tool to protect U.S. workers, punish “anti‑American” coalitions, and defend dollar primacy.

If your model of global finance is a zero‑sum wrestling match, this kind of posture has a certain intuitive appeal. Punish defectors. Make an example of them. Remind smaller economies that access to the U.S. market is contingent on good behavior.

As a macro strategy, though, it is almost perfectly backward.

When economists at the Peterson Institute modeled a hypothetical 100‑percent tariff on imports from BRICS countries, they found that by 2029, U.S. GDP would be roughly $430 billion smaller than it otherwise would be, with inflation about 1.6 percentage points higher as higher import prices ripple through the economy. BRICS members would take substantial hits as well, but the tariffs are hardly a free lunch for American households or firms.​

More importantly for the de‑dollarization debate, those tariffs would reshape trade and financial flows in exactly the direction Trump says he fears. If shipping into the U.S. becomes politically precarious and permanently more expensive, then building out alternative markets and payment networks stops being a boutique project and becomes a strategic necessity.

Earle’s own BRICS survey makes that logic explicit. He warns that “the threat of substantial tariffs, such as the proposed 100 percent levy on imports from BRICS nations, could incentivize these countries to expedite efforts toward de‑dollarization and the development of alternative financial systems,” precisely so they can “insulate their economies from US economic policies and potential sanctions.” The more loudly Washington advertises its willingness to weaponize both tariffs and the dollar, the stronger the incentive becomes for governments—especially in the Global South—to reduce exposure on both fronts.​

In that sense, Trump’s threats are not a shield for the dollar. They are an open invitation for rivals and fence‑sitters to invest more heavily in end‑runs around the U.S.-centric system.

How to Actually Undermine Dollar Hegemony

If you were trying to script the gradual erosion of dollar dominance from the inside, you might lay out a sequence something like this:

1. Politicize your central bank, attacking its independence whenever it tightens policy in ways the White House dislikes.

2. Run persistent fiscal deficits and signal little appetite for reform, making long‑term debt dynamics look increasingly shaky.

3. Use sanctions and export controls so broadly that even friendly governments start to see the dollar as a vulnerability.

4. Turn access to the U.S. market into a discretionary favor, threatening sweeping tariffs over everything from steel imports to currency choices.

The uncomfortable reality is that American politics has been checking boxes on that list for years, and Trump’s BRICS crusade simply extends the pattern into a new theater.

In his de‑dollarization essay, Earle drives home the point in a way that should resonate with classical liberals: “The greatest threat to continued dollar dominance comes not from external challengers but within.” Persistent fiscal indiscipline, rising debt‑to‑GDP ratios, erratic trade and foreign‑policy shifts, and the politicization of monetary and financial institutions all “erode the confidence that anchors reserve currency status.”

Where Earle is right is in treating BRICS de‑dollarization as a symptom of a fraying monetary order rather than its cause. Where his analysis invites sharpening is in the political economy: the decisive variable is not what happens at BRICS summits in Kazan or Johannesburg, but what happens in Washington—at the Fed, in Congress, and in a White House that increasingly treats the dollar like a cudgel.

From that vantage point, obsessing over the technical details of BRICS Pay looks like a category error. The most powerful way to weaken the dollar is not to invent a rival currency basket in Shanghai. It is to convince markets that the U.S. has lost interest in being a predictable steward of the system it built.

Why Attacking the BRICS Arena Backfires

The classical liberal case for a dollar‑centric system is not that the U.S. “deserves” tribute. It is that a world organized around a single, reasonably stable, widely accepted unit of account makes trade cheaper, contracts clearer, and investment less risky—even when that unit is imperfect and occasionally abused.

In that frame, the sensible response to BRICS experiments is boring:

• Keep your fiscal house in better order than your rivals.

• Protect central‑bank independence, even when higher rates are politically painful.

• Use sanctions sparingly and predictably, anchored in law and alliances rather than impulse.

• Deepen trade and security ties so that holding dollars feels safe because the U.S. feels safe as a partner.

Trump’s approach flips this logic. By turning currency choice into a loyalty test—“use our money or face our tariffs”—he validates the core BRICS narrative that the dollar is less a neutral platform and more an instrument of domination. By portraying every local‑currency settlement or payment pilot as a kind of economic treason, he raises the political returns on building alternatives that might otherwise have remained marginal hedges.

Once you normalize the idea that the U.S. will slap large, across‑the‑board tariffs on trade over financial policy disagreements, you teach the rest of the world three lessons:

• Access to the U.S. market is a contingent privilege, not a predictable, rule‑governed framework.

• Domestic financial policies—even those that do not directly target the U.S.—are fair game for coercive leverage.

• Any country large enough to matter needs an exit strategy from a purely dollar‑centric system.

Seen from Brasília or Riyadh, that is not a reason to double down on the greenback. It is a flashing neon sign over the exit.

The Real Work of Preserving Dollar Primacy

Strip away the theatrics, and the project of preserving dollar primacy is an exercise in institutional maintenance.

It looks like letting an independent Federal Reserve say “no” to the White House when the political temptation is to demand easier money. It looks like doing the slow, unpopular work of putting the U.S. on a more sustainable fiscal path, so that Treasury bonds remain the world’s preferred collateral rather than a reluctant compromise.

It looks like calibrating sanctions so they remain a powerful, credible tool for punishing genuine aggression and corruption, instead of a reflexive response to every diplomatic slight. It looks like treating allies in Europe and Asia as partners in managing a shared monetary system, not as vassals to be threatened with tariffs whenever a president wants to look tough.

Above all, it looks like resisting the urge to turn every structural question into a television‑ready showdown. BRICS de‑dollarization is, for now, a marginal shift in how a specific set of countries handle some of their trade and reserves. It is worth tracking; it is worth debating; it is not worth detonating America’s reputation as a predictable hegemon over.

There is a legitimate conversation to be had about whether the world should, over time, move toward a more plural currency landscape—one where the dollar shares space with a stronger euro, a more open renminbi, and perhaps a handful of regional units. There is an equally serious debate about whether the U.S. would actually be healthier in the long run with slightly less “exorbitant privilege” and slightly more budgetary discipline.

But those are debates for legislatures, central‑bank boards, and long‑horizon investors—not for all‑caps threats on social media.

BRICS, as currently constituted, is not in a position to topple the dollar. The more plausible danger is that American policymakers will react to modest hedging abroad by behaving in ways that make a genuine exit from the dollar system look more attractive than it has any right to be.

A liberal monetary order is sustained by consent and credibility, not by daring smaller countries to “say hello to tariffs.” If the U.S. wants to keep the privileges that come with issuing the world’s balance sheet, it should spend less time shadow‑boxing with the BRICS mirage—and more time making sure the real threat to the dollar does not keep coming from within.

A little over a month ago, I argued that the “libertarian miracle” narrative around Javier Milei’s Argentina was premature at best and misleading at worst. The administration had delivered disinflation through shock austerity, but at a cost that included surging poverty, expanding police powers, and corruption scandals that made a mockery of Milei’s anti-caste rhetoric. More importantly, the project depended on a massive U.S. financial backstop from an ideologically aligned Trump administration—support that arrived just in time to stabilize the peso and tilt Argentina’s October 2025 midterm elections in Milei’s favor. My warning then was straightforward: external money and legislative validation would not fix the underlying problems; they would embolden Milei and normalize a governing model that pairs market reforms with civil-liberties restrictions and great-power patronage.

That prediction aged well. Milei’s party and its allies won decisively in the midterms, roughly doubling their representation in Congress and securing enough seats to sustain presidential vetoes and block impeachment. The electoral result was widely framed—by supporters and critics alike—as a referendum on austerity, deregulation, and Trump’s $20 billion swap line, which had been formalized days before the vote with explicit warnings from Trump that the money would vanish if Peronism won. Argentina repaid the swap in early January 2026—though quietly, using financing from an undisclosed multilateral lender—and the administration now points to that repayment as proof the whole episode was sound lending, not a bailout. Meanwhile, Argentina has exited recession, with GDP growth projected at 4–5% for 2025 and 3% for 2026, monthly inflation has dropped into the single digits, and the poverty rate has fallen from a peak above 52% to around 31–36% as real wages recover.

On paper, this looks like validation. Libertarian outlets now speak confidently of Milei “demonstrating the legitimacy of real-world libertarianism” and note that “things in Argentina got better, and the doomsayers went quiet.” Cato’s Free Society magazine ran a cover feature celebrating Milei’s 1,246 deregulations and framing the project as “Liberty Versus Power,” with the clear implication that liberty is winning. The problem is that the actual record tells a more ambiguous story—one in which macro stabilization has come alongside durable poverty, weakened institutions, and a security state that continues to expand, not contract. A follow-up is necessary because the midterm victory and Trump’s financial backing have not corrected these problems; they have entrenched them. What began as an emergency program justified by crisis has now been converted into a semi-permanent governing model, and the libertarians cheering it on owe a better account of what, exactly, they are willing to excuse.

The Macro Picture: Stabilization, Not Prosperity

Start with the numbers that defenders emphasize: inflation, growth, and poverty. Monthly inflation has indeed fallen dramatically, from peaks above 20% at the end of 2023 to below 2% by mid-2025, a disinflation path that even skeptics acknowledge is real. Argentina posted 3.3% year-on-year GDP growth in Q3 2025, ending six straight quarters of contraction, and forecasters now expect growth between 3–5% through 2026. The fiscal primary surplus is running above 1.6% of GDP, ahead of IMF targets. Poverty, which spiked to 52.9% in the first half of 2024 following Milei’s currency devaluation and subsidy cuts, has since declined to around 31.6% by official measures, with extreme poverty dropping from 18% to around 8%. Real wages in the private sector grew 10.4% between December 2023 and May 2025 as inflation eased faster than anticipated.

These are not invented numbers, and ignoring them would be dishonest. Milei’s program has delivered macro stabilization. The question is whether that stabilization constitutes success, and on what terms. The answer depends heavily on your baseline. If you compare mid-2025 Argentina to late-2023 Argentina—a country with triple-digit annual inflation, a collapsing currency, and fiscal chaos—then yes, things are measurably better on several dimensions. But if your standard is broad-based welfare improvement, the picture becomes far more ambiguous. Poverty has fallen from its 2024 peak, but it remains higher than when Milei took office, and well above historical norms; nearly a third of Argentines are still considered poor, and extreme poverty, though declining, affected millions more in 2024 than in 2023. The recent drop in poverty is driven largely by the mechanical effect of disinflation on official poverty measurements, which use a lag between income and consumption baskets; as UCA economists note, when monthly inflation falls, the one-month gap in the methodology flatters the numbers, and structural drivers—massive utility price hikes after subsidy elimination, for instance—remain underweighted in the official basket.

Growth is returning, but from an extraordinarily depressed base after a year-long recession induced by Milei’s own policies, and the recovery remains uneven across sectors and regions. Investment sentiment has improved, particularly after the removal of capital controls, but actual capital formation is still fragile, and the labor market showed a temporary pause in Q1 2025 that remains a “key point of attention” for forecasters. In other words, the economy is no longer in free fall, and some forward-looking indicators are positive, but calling this a “miracle” requires a selective memory about the pain endured to get here and a willingness to declare victory before broad prosperity has materialized. A fairer characterization is that Argentina has undergone a harsh stabilization, one that improved fiscal and inflation metrics at massive social cost, and is now experiencing a tentative, uneven recovery that may or may not prove durable. That is not nothing, but it is not the unambiguous success story libertarians are selling.

Trump’s Bailout and the Midterm Effect

The most significant political-economic event of 2025 was not any particular reform Milei enacted; it was the $20 billion currency swap line the Trump administration extended to Argentina in mid-October, days before the midterm elections. The deal was structured through the Exchange Stabilization Fund, an unusual mechanism that allowed the U.S. Treasury to backstop Argentina’s peso without Congressional approval, and it was accompanied by an additional $20 billion in private bank loans arranged with Washington’s implicit blessing. Trump made the political logic explicit: in a White House appearance with Milei, he warned Argentine voters that U.S. support would be withdrawn if Peronism won the midterms. Treasury Secretary Scott Bessent described the package as a way to “utilize economic leverage to support a friendly administration” and assured that taxpayers would face no losses.

The timing and framing were unambiguous. The swap provided dollar liquidity at precisely the moment Argentina’s central bank needed to stabilize the peso and replenish reserves ahead of the vote. Analysts across the political spectrum acknowledged that the deal was designed to halt a market rout and shore up confidence in the weeks before Argentines decided whether to reward or punish Milei’s program. The electoral result—a decisive victory for La Libertad Avanza, with enough seats to sustain vetoes and block impeachment—was widely characterized as a referendum on austerity and on U.S. backing. Post-election, Milei’s economy minister thanked Bessent and Trump for their “prompt response” to attacks aimed at undermining the government during the campaign.

Argentina repaid the $2.5 billion it drew from the swap in early January 2026, two months after activation, and defenders have since pointed to that repayment as evidence the episode was prudent central-bank cooperation, not a political bailout. But the details complicate that narrative. The repayment was financed by an undisclosed multilateral lender—not the IMF, but another institution that has not been publicly named—meaning Argentina did not actually generate the dollars from its own reserves or export earnings; it borrowed from one creditor to repay another. The swap line remains active under the original terms, and Bessent has signaled ongoing support for Milei going forward. The whole arrangement looks less like a technical liquidity facility and more like a geopolitical credit line extended to keep a friendly government in power, with U.S. taxpayers and Argentine citizens bearing the tail risks if things go wrong.

From a classical liberal perspective, this presents a significant problem. Libertarians have historically been skeptical of great-power patronage, foreign aid conditioned on regime loyalty, and the use of public money to prop up allied governments. The IMF, World Bank, and U.S. bilateral lending programs have all been criticized—rightly—for creating moral hazard, subsidizing bad governance, and entangling the United States in foreign political disputes that serve narrow geopolitical interests rather than the rule of law or market discipline. Yet when the beneficiary is ideologically aligned, much of that skepticism evaporates. The Trump-Milei swap is difficult to distinguish in structure from the kinds of politically motivated bailouts libertarians used to oppose across Latin America, except that this time the recipient shares the right enemies and the right rhetoric. If the concern is that external financial lifelines reward failing governance and undermine accountability, then the concern should apply here. If the worry is that tying U.S. economic leverage to the electoral fortunes of foreign leaders violates principles of non-intervention and sound money, then the Trump administration’s explicit linkage of the swap to Milei’s midterm performance should be disqualifying. That those objections have largely gone unvoiced in libertarian circles suggests that the principles were more contingent than advertised.

The Police State That Libertarians Ignore

If the macro story is one of painful stabilization with uneven results, the civil-liberties story is simpler and grimmer: Milei’s government has systematically expanded state power over protest, dissent, and public space, and that expansion has continued and deepened since the midterms rather than been rolled back. The anti-protest protocol introduced by Security Minister Patricia Bullrich within days of Milei taking office remains in force. The protocol criminalizes roadblocks, requires prior notification for demonstrations, and authorizes the use of force—including identification, arrest, and criminal charges—against protesters who obstruct traffic. Human Rights Watch has documented that the protocol “in practice, criminalizes any disturbance to traffic arising from a demonstration” and grants police broad powers to disperse and detain.

The protocol was applied violently in June 2024, when police fired rubber bullets, tear gas, and punches at demonstrators protesting the Ley de Bases reform bill outside Congress, arresting 33 people, the last of whom was not released until September. In March 2025, security forces beat elderly retirees protesting pension cuts in what observers described as “the most ferocious” repression to date, using batons, rubber bullets, and tear gas in scenes that became a symbol of the government’s contempt for vulnerable populations. Such interventions are not isolated incidents; they occur “systematically every Wednesday” when retirees gather, according to civil society documentation.

Beyond the protocol, the government has institutionalized new mechanisms for securitizing economic activity. In September 2024, the Security Ministry created the Unified Command for Productive Security through Ministerial Resolution No. 893/2024, which coordinates federal, provincial, and local security forces to intervene against protests that affect “strategic” sectors: ports, mining sites, hydrocarbon fields, and energy infrastructure. The resolution frames social mobilization near economically important locations as a security threat requiring special policing, effectively turning labor disputes and environmental protests into matters of national economic defense. The command operates as a parallel security structure, bypassing normal judicial and administrative accountability, and its mandate has expanded as the government ties fiscal sustainability and IMF benchmarks to uninterrupted production in export-oriented sectors.

Human Rights Watch’s 2025 World Report on Argentina described the first year of Milei’s administration as marked by “new human rights challenges,” including “obstacles to people’s ability to exercise the freedom of peaceful assembly” and a March 2025 resolution broadening the scope for security officers’ use of firearms. That resolution allows lethal force “in an overly broad set of circumstances” and undermines both administrative and judicial accountability for police abuse, according to the report. The watchdog group also noted cuts to social program funding and “hostile official rhetoric against journalists and LGBT people” as part of a broader pattern of institutional deterioration. Other human rights organizations have documented that the proportion of protests met with state repression roughly doubled in 2025, with frequent use of force against vulnerable groups, including journalists covering demonstrations.

This is not the behavior of a government committed to shrinking the state or protecting individual liberty. It is the behavior of a government that treats social conflict as a policing problem, that views dissent as a threat to economic order, and that has built legal and institutional infrastructure to suppress both. The anti-protest protocol, the Unified Command, and the expanded use-of-force rules are not emergency measures that will sunset when inflation stabilizes; they are durable features of the governing model, and they were in place before the midterm elections gave Milei a stronger legislative hand. The logical inference is that more congressional allies and more external financial support will entrench these mechanisms, not unwind them. Libertarians who celebrate Milei’s deregulation of business while ignoring or minimizing his regulation of assembly, speech, and protest are engaged in a selective accounting that abandons the civil-liberties half of the classical liberal tradition.

Cato’s Defense and the Legitimacy Problem

The flagship libertarian defense of Milei has come from the Cato Institute, which has published multiple pieces arguing that the Argentine experiment vindicates real-world libertarianism and exposes the bad faith of its critics. In a March 2025 blog post, Cato’s Scott Lincicome wrote: “Then, a funny thing happened as Milei worked to enact his slash-and-burn agenda: Things in Argentina got better, and the doomsayers went quiet.” Lincicome argued that critics who predicted disaster have largely failed to issue “mea culpas” and that their silence amounts to an implicit concession that Milei succeeded. Cato’s Free Society magazine ran a fall 2025 cover story titled “Liberty Versus Power in Milei’s Argentina,” celebrating the administration’s 1,246 deregulations and framing the project as a battle against entrenched Peronist interests. The piece acknowledged that Milei’s “libertarian renewal is far from finished and under attack,” but treated the opposition as the primary threat to liberty, not the government’s own security apparatus.

This framing is revealing. Cato’s case for Milei rests on two moves: first, defining success narrowly in terms of inflation, fiscal balances, and deregulation, while treating civil liberties, poverty, and institutional quality as secondary or transitory concerns; second, attributing any criticism to ideological hostility or unwillingness to admit error, rather than engaging with the substance of the critique. The result is a defense that concedes less than it should and papers over tensions that cannot be papered over.

Start with the definition of success. Lincicome is correct that inflation has fallen and that some economic indicators have improved. But “things got better” elides the question: better for whom, and at what cost? Poverty spiked to 52.9% in early 2024 and remains above pre-Milei levels. Real consumption for lower-income households fell sharply before recovering partially. The pension cuts, subsidy eliminations, and public-sector layoffs that stabilized the budget imposed concentrated harm on the most vulnerable, and while some of that harm has since eased as inflation decelerated, the distributional cost of the adjustment was enormous. Declaring that “things got better” when a third of the country is still poor and elderly retirees are being beaten in the streets for protesting pension cuts is a moral and analytical failure. It privileges macro aggregates over lived experience and treats the pain of adjustment as either necessary or irrelevant, rather than as a cost that must be weighed against the gains.

More fundamentally, Cato’s celebration of deregulation ignores the other half of Milei’s program: the regulation of dissent. The same government that has rolled back business licensing requirements and labor protections has also criminalized roadblocks, broadened police use of force, and created a parallel security command to police “strategic” economic sectors. The same president who cuts taxes and shrinks ministries also centralizes power through decree, bypasses judicial accountability, and relies on foreign patronage to stabilize his political position. If libertarianism is a philosophy that prizes both economic and civil liberty, and that is skeptical of concentrated state power regardless of its stated aims, then Milei’s Argentina presents a test case that Cato is failing. The Free Society framing—“Liberty Versus Power”—suggests that Milei represents liberty and the opposition represents power, but the actual record shows a government that wields significant coercive power in service of some liberties (commercial) while suppressing others (assembly, protest, speech). That is not a libertarian project; it is a selective one, and the selectivity runs in the direction of economic elites and against the poor, the elderly, and those who organize in opposition to austerity.

The second move—dismissing critics as silent or discredited—is equally problematic. Lincicome claims that “doomsayers went quiet” and that critics owe apologies. But the criticisms leveled a year ago have largely been borne out. The warnings about poverty surges, institutional deterioration, and police-state tactics were accurate, not alarmist. The concern that Trump’s bailout would tilt the midterms and embolden Milei was vindicated. The prediction that external money would entrench rather than correct the model’s flaws has proven correct. If Cato’s position is that falling inflation outweighs all of this, then it should say so explicitly and defend that tradeoff on the merits. Instead, it treats dissenting voices as either bad-faith or embarrassed into silence, which is a way of avoiding the argument rather than winning it.

There is a version of the libertarian case for Milei that would be more honest: “Yes, he is expanding police power and relying on U.S. patronage, and yes, the social costs have been severe, but Argentina was on the brink of hyperinflation and state collapse, and all realistic alternatives were worse. In a second-best world, we accept an illiberal libertarian because the alternative is Peronism.” That argument has internal coherence, and it could be debated on consequentialist grounds. But it would require admitting that Milei’s project is not a clean vindication of libertarianism, that it involves significant authoritarian elements, and that celebrating it comes with moral and strategic costs. Cato has not made that argument. Instead, it has presented Milei as a straightforward success, dismissed or minimized the civil-liberties record, and framed critics as dishonest. That is not serious engagement; it is cheerleading.

What Has Been Normalized

The core problem with the libertarian defense of Milei is not that it overestimates the economic gains—reasonable people can debate the weight of disinflation versus distributional harm—but that it systematically ignores or excuses the political and institutional costs. Milei’s legislative victory in October 2025 did not occur in a vacuum. It came after a year in which the government systematically restricted protest, criminalized dissent, and used foreign financial backing to stabilize its political position ahead of the vote. The midterm result has since been treated as a mandate, and the administration now has the legislative strength to deepen both its economic reforms and its security measures. What has been normalized is a governing model in which market liberalization and civil-liberties restriction proceed in tandem, justified by the language of emergency and crisis, and underwritten by great-power patronage.

This is not the classical liberal vision of limited government, rule of law, and decentralized power. It is a model in which the state shrinks in some domains (social spending, business regulation) and expands in others (policing, surveillance, control of public space), with the net effect being a concentration of authority in the executive and a weakening of the institutional checks that protect vulnerable populations. It is a model that depends on external validation and financial support from Washington, which introduces a dependency and a geopolitical dimension that should trouble anyone worried about Argentine sovereignty and accountability. And it is a model that treats economic stabilization as a sufficient condition for success, even when that stabilization comes at the cost of enduring poverty, institutional degradation, and normalized repression.

Libertarians who endorse this model, or who minimize its costs, are making a choice. They are choosing to prioritize certain kinds of liberty—commercial freedom, fiscal discipline, deregulation—over others—freedom of assembly, freedom from arbitrary detention, freedom to organize and protest. They are choosing to excuse authoritarian tactics when deployed by a president who shares their economic agenda, even though they would condemn those same tactics if deployed by a Peronist or a leftist. They are choosing to celebrate a project that relies on foreign money and great-power backing, even though that reliance undermines the very principles of self-governance and market discipline they claim to uphold. Those choices have consequences. They weaken the intellectual coherence of libertarianism as a philosophy, they alienate potential allies who care about both economic and civil liberty, and they set a precedent that will be cited the next time a right-wing populist promises to cut taxes while expanding police power.

Conclusion: What Success Would Require

If this reading is wrong—if the optimists are correct and Milei’s Argentina is on a path to broad prosperity and institutional recovery—then certain things should happen in the next 12 to 24 months. The anti-protest protocol should be repealed or substantially narrowed, restoring the right to demonstrate without prior authorization or threat of criminal sanction. The Unified Command for Productive Security should be dissolved, and policing should return to normal administrative and judicial oversight. The government should stop using rubber bullets, tear gas, and mass arrests against retirees, students, and other vulnerable groups exercising their constitutional rights. Poverty should continue to fall not just from its crisis peak but below pre-Milei levels, and real wages and consumption should recover across income deciles, not just for the formal private sector. Investment should materialize in sustained capital formation, not just improved sentiment, and growth should prove durable rather than a brief rebound from a deep recession. The reliance on U.S. financial backing should end, with Argentina generating its own reserves and servicing its debts without recourse to geopolitical credit lines. And the administration should demonstrate that it can govern through normal legislative processes, not just by decree and veto, with genuine political competition and accountability.

If those things happen, then the skeptics—myself included—will owe a reassessment. A freer, more prosperous Argentina, governed by liberal institutions rather than emergency decrees and police protocols, would be a development to celebrate, not to resent. But that is not the trajectory we are seeing. The midterm victory has entrenched Milei’s power, not moderated it. The U.S. bailout has been repaid with borrowed money, not eliminated. The security apparatus has expanded, not contracted. And the libertarian establishment has largely chosen to look the other way, celebrating the deregulation while ignoring or minimizing the coercion.

That choice speaks volumes. It suggests that for many self-described libertarians, the anti-state rhetoric is more conditional than it appears—that the real priority is economic liberalization, and that civil liberties, due process, and restraints on police power are negotiable when the cause is politically aligned. It suggests that the principles of limited government and individual rights are more fragile than advertised, willing to bend when the alternative is a left-wing government or a continuation of the status quo. And it suggests that the classical liberal tradition, which historically prized both economic and civil liberty and treated them as inseparable, has fractured into competing factions, one of which is now willing to excuse a police state as long as it comes with tax cuts.

If libertarianism is to have a future as a coherent political philosophy rather than a rhetorical tool for partisan ends, it will need to reckon with what it has normalized in Argentina. It will need to ask whether celebrating Milei was worth the cost of abandoning civil-liberties principles, whether the short-term macro gains justify the long-term institutional damage, and whether a movement that excuses authoritarianism when it is ideologically convenient can credibly claim to stand for liberty at all. Those questions are uncomfortable, and they do not have easy answers. But they are the right questions, and they are long overdue.