Today, John Cochrane examines the claim that AI stocks represent a financial bubble; Reuel Marc Gerecht and Ray Takeyh apply lessons from Syria to President Trump’s signaling of potential US involvement in Iran; and Patrick McLaughlin encourages Wisconsin to reform its regulations to increase affordability and preserve checks and balances.
Freedom Frequency
Are AI stocks in a bubble? At Freedom Frequency, Senior Fellow John Cochrane argues the honest answer is both yes—and no. Valuations are high, and history shows that waves of technological excitement often end with lower returns. But high prices alone don’t mean markets are irrational or that a dramatic crash is inevitable. From railroads to dot-coms, innovation has repeatedly driven heavy investment and rising prices long before the ultimate winners were clear. What distinguishes the AI boom is how markets process information. Heavy trading and volatility often reflect investors reacting to new data, not blind hype. In this rant, Cochrane explains why stocks can behave like money—valuable not just for returns but for trading on information. His advice: If you’re not playing that game, don’t pay for liquidity or try to bet against a “bubble.” And never forecast stock prices. Read more here.
US Foreign Policy in Iran
Writing at the opinion page of The Wall Street Journal, Hoover Middle East and the Islamic World Working Group contributor Reuel Marc Gerecht and coauthor Ray Takeyh urge the Trump administration to remember the fateful history of former President Barack Obama’s declaration that “the use of chemical weapons by Bashar al-Assad in Syria in 2013 would be a ‘red line’ [warranting US intervention].” As the authors note, the Assad regime crossed that line without any US military response. Turning to Iran, Gerecht and Takeyh say that “the importance of an American strike at this moment shouldn’t be underestimated.” While acknowledging potential risks of any American intervention, the authors conclude that the collapse of Iran’s repressive government “would be momentous and beneficial.” Read more here. [Subscription required.]
Regulation and Property Rights
Research Fellow Patrick McLaughlin and coauthor Kyle Koenen argue in a column at the Milwaukee Journal Sentinel that “Wisconsinites are paying more for government than they realize. And it's not just through higher taxes but through a growing web of costly regulations that quietly drive up the price of housing, energy, food and everyday goods.” McLaughlin and Koenen cite examples of bureaucracy-generated fees and regulations that have dramatic price impacts on consumers. “The weight of this red tape,” the authors argue, “acts like a hidden tax on economic growth—sapping productivity, deterring entrepreneurship, and slowing wage gains.” McLaughlin and Koenen propose “a systematic process to review, streamline, and remove outdated or duplicative rules,” modeled on successful efforts in Virginia, Ohio, and other states. Read more here. [Subscription may be required.]
Law & Policy
At his Volokh Conspiracy blog, Senior Fellow Eugene Volokh examines Google’s attempting to change the venue for a libel case involving its AI Overview product from state to federal court—but missing a key filing deadline to do so. As he writes, “Last year, Google was sued in Minnesota state court by a local solar panel installation company that claimed Google's AI Overviews hallucinated false and defamatory statements about the company.” Since “the Constitution gives federal courts jurisdiction over lawsuits ‘between Citizens of different States,’” Google sought to “remove” the dispute to federal court. But the tech firm asked for removal too late, and as Volokh examines in this post, its arguments for keeping the lawsuit in federal court were rejected last Friday by a federal judge—meaning the dispute will head back to Minnesota state court. Read more here.
State and Local Governance
In a column for Washington Monthly, Visiting Fellow Markos Kounalakis argues that recently sworn in mayor of New York City Zohran Mamdani has “a moral obligation to confront the authoritarian rot that has taken hold in his country of birth,” Uganda. Kounalakis notes that Mamdani’s office provides him with a uniquely global platform for a local elected official, and that while Uganda is not at the top of the “prevailing activist scorecards,” it features “rigged elections” and “brutal crackdowns on dissent.” Kounalakis says that Mamdani has so far been silent on these issues in “the place where his own story began.” As he concludes, “It is incumbent on Mayor Mamdani to use his unique voice.” Read more here.
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