Speak Your Mind 2 Cents at a Time
The post Can the AI Folks Save Democracy? appeared first on CEPR.
Authored by Christian Vezilj via American Thinker,
Hollywood has mastered the art of moral performance. Award shows have become political stages where actors speak with the confidence of prophets and the certainty of philosophers. But beneath the applause lines and emotional crescendos lies a contradiction that becomes impossible to ignore: the courage they demand from others is courage they themselves will never have to summon.
This contradiction was unmistakable at the recent Golden Globe Awards. The ceremony quickly transformed into a coordinated tribute to Renee Nicole Goode, who was shot and killed by an ICE agent. Mark Ruffalo dedicated his award by saying, “This is for Renee Nicole Goode, who was murdered,” adding, “I don’t know how I can be quiet.” Wanda Sykes echoed the sentiment on the red carpet, declaring, “Of course, this is for the mother who was murdered by an ICE agent, and it’s really sad.” She went further, urging confrontation: “We need to be out there and shut this rogue government down, because it’s just awful what they’re doing to people.”
Celebrities wore coordinated pins reading “BE GOOD” and “ICE OUT,” signaling solidarity and moral urgency. The messaging was unified, emotional, and unmistakably political. The narrative was clear: this was a moment to resist, to rise up, to confront injustice.
But what was equally clear — and far more revealing — was what they chose not to say.
While the Golden Globes stage was filled with speeches about ICE, not a single celebrity mentioned the mass slaughter, imprisonment, and torture taking place in Iran at that very moment - Hundreds of protesters have been killed by the Iranian regime. Thousands have been dragged into prisons. Torture, rape, and forced confessions have been documented by human rights groups. The government has imposed sweeping internet blackouts to hide the brutality from the world. [ZH: regardless of whether this is yet more 'regime change paint by numbers' - it was completely ignored].
And yet, on one of the most visible cultural platforms in America, the silence was absolute.
The contrast is staggering. When the villain is a U.S. agency, outrage is immediate, coordinated, and emotionally charged. When the villain is a foreign authoritarian regime slaughtering its own people, the outrage evaporates. The issue is not the moral weight of the cause. The issue is whether the cause is useful to the narrative they want to tell.
But the hypocrisy runs even deeper. It extends to the way Hollywood reacts to domestic events that do not fit its preferred storyline. When Ashli Babbitt was shot and killed inside the Capitol, there were no celebrity tributes. No emotional speeches. No coordinated pins. No calls for accountability. Instead, the officer who shot her was widely described as a hero. The shooting was framed as necessary, justified, even praiseworthy.
Whether one agrees with either shooting is not the point. The difference in reaction reveals the deeper truth: Hollywood’s activism is not driven by universal moral principles. It is driven by selective outrage, selective empathy, and selective courage.
This brings us to the heart of the matter: the asymmetry of risk. Celebrities routinely encourage ordinary people to “stand up,” “fight back,” or “put your body on the line.” Sykes’s call to “shut this rogue government down” is a perfect example. These are not metaphorical suggestions. They imply confrontation, danger, and the possibility of violence.
Yet the people delivering these messages do so from behind layers of insulation that ordinary Americans do not have. They live in gated communities. They travel with private security. Their homes are protected by surveillance systems, controlled access, and armed guards. They are not wrong for wanting safety — everyone wants safety — but they are wrong for preaching danger for others while choosing safety for themselves.
A working‑class person who confronts ICE or police in the street faces real, immediate, physical danger. A celebrity who posts a hashtag or makes a speech faces none. Their activism is symbolic, not sacrificial. It costs them nothing. And yet they speak as though they are shoulder‑to‑shoulder with the people they are urging into the streets.
This is where the phrase “We’re in it together” collapses. When celebrities use it, they rarely mean shared sacrifice. They mean shared sentiment. They mean shared optics. But they do not mean shared risk. Their version of solidarity is digital, not physical.
The deeper civic insight is this: selective outrage and selective courage are symptoms of a broader cultural problem. We have built a society where moral authority is often claimed by those who bear none of the consequences of their own prescriptions. Hollywood’s activism is not dangerous to Hollywood. It is dangerous to the people they encourage to act on their behalf.
True solidarity requires more than a speech, a pin, or a social media post. It requires standing in the same place, facing the same risks, and sharing the same consequences. Anything less is performance.
And performance, no matter how passionate, is not courage.
Tyler Durden Wed, 01/14/2026 - 22:30At the start of December, China stunned the world when it reported that its trade surplus had surpassed a record $1 trillion, with one month still left to go in calendar 2025.
Fast forward to last night when China reported that in December, its trade balance rose from $112 billion in November to a whopping - and the second highest on record - $114.14 billion, matching Bloomberg estimates...
... exports grew 6.6% YoY in dollar terms, more than double the average forecast from a Bloomberg poll of analysts of 3.1% and greater than November’s growth rate of 5.9%, while imports rose 5.7% in dollars last month on a year earlier, also far outpacing analyst expectations of 0.9% growth and the previous month’s figure of 1.9%.
Adding across, China's full-year trade surplus exceeded $1 trillion for the first time - $1.2 trillion to be precise - blowing away last year’s figure of $993bn despite exports to the US falling 20%, as those to the EU rose 8.4% and to south-east Asia rose 13.4%, where as we show below the bulk of transshipments to the US take place, as Chinese producers diverted shipments to other markets while ultimately still targeting US consumers.
And since China's record $1 trillion trade surplus hit a month earlier had already outraged its trading partners, who finally called out Beijing (long after Trump did so first) for its mercantilist, imbalanced trade policies, Beijing needed a scapegoat for the even bigger number it reported. It decided to blame the US, the one country that until recently had reportedly "alienated the world" in its pursuit of more balanced Chinese trade.
As the FT reported, "China blamed the US for growing global trade imbalances as the world’s second-biggest economy reported a record full-year trade surplus of $1.2tn for 2025 despite President Donald Trump’s trade war."
Why? Because as we first reported last month, China's gargantuan surplus will further inflame global trading tensions, particularly with the EU where China is indiscriminately dumping cars below cost and singlehandedly putting the entire German auto industry into an early grave; it's not just Europe - all export-focused developing countries are also seething, as they find their exports are simply not competitive with cheap Chinese goods which are being dumped at a furious pace around the globe.
YIKES
— Melissa Chen (@MsMelChen) January 14, 2026
China just posted a record-breaking $1.2 trillion global trade surplus. The EU's is up 18.1%. Germany's numbers are BONKERS - a staggering 108% surge in surplus, meaning that it now accounts for nearly a third of China's entire EU surplus.
The US has been aggressively… https://t.co/ikpiHIiADr
In a sign of the growing decoupling of direct trade between China and the US, the American share of Chinese exports last year was 11.1% , down from 14.7% in 2024, some of the lowest levels since the 1990s, the FT reports. Of course, that is woefully inaccurate at worse, and at best incomplete, since China has merely redirected its US goods via intermediary countries - i.e., transshipments - such as Vietnam, which has seen imports from China soar to a record high.
And since Vietnam didn't grow an affluent middle class overnight, all that is happening is China is sending its trinkets to Hanoi first, before they are reshipped onward to China, under the guise of Vietnamese exports.
But, as last month, the loudest complaints about China’s surplus are expected from the EU (which said nothing when Trump was complaining loudly over the past decade and now is stuck with a crippled economy which has lost all export vibrancy for ever), yet which is terrified of its own shadow, and still has to follow the US and implement broad-based tariffs. Instead, the bloc has called for Beijing to stimulate domestic demand and reduce its own barriers to manufactured imports, something Beijing - already stuffed to its gills in debt - has shown precisely zero interest in doing, or being able to create organically.
And so, China decided to... blame Trump.
Wang Jun, vice-minister of the General Administration of Customs of China, said on Wednesday that trading partners’ export controls on high-tech products were preventing China from importing more, in not so thinly veiled comments directed at the US. Successive US administrations have imposed stringent curbs on China’s access to high-end semiconductors.
“It should be pointed out that some countries politicize economic and trade issues, using various pretexts to restrict exports of high-tech products to China; otherwise, we would import more,” said Wang, adding: “There is vast room for import growth.”
Actually no, there isn't, because as the upcoming Chinese data dump will reveal, China's domestic economy continues to deteriorate with retail sales and fixed investment at a level that signals flat GDP at best, if not negative.
Which only leaves a flood of exports to keep China's economy alive. Sure enough, economists have warned that China’s economy is too reliant on manufacturing and exports for growth amid anaemic domestic consumption and a years-long property sector slowdown.
“China’s staggering trade surplus is simultaneously a symbol of its exporting prowess and the weaknesses in its growth model,” said Eswar Prasad, professor of economics at Cornell University.
One more point: China's staggering trade surplus is a remnant of an era in which nobody dared point out that the neoliberal, mercantilist emperor is dead, until Trump came along. And while Europe laughed at him at first (just like they laughed when he told Germany they are entirely reliant on Russian gas), Brussels has finally figured out that it can do nothing and watch its economy implode from inside while purchasing cheap Chinese trinkets, or it can join the US president in calling out China's trade practice. At which point China's record trade surplus will collapse, with various unpleasant consequences for its economy. As for the US, it is on the right path, but it too needs to plug the gaping loopholes such as record trans-shipments through Vietnam and other Pacific rim countries. Once it does that, only then will Beijing be forced to finally revise its export-led model which is the main reason why the world finds itself in a brutal trade war for the second year running.
Tyler Durden Wed, 01/14/2026 - 22:00
Mark Harris, Ihab Khalil, Nolan Harte, Johannes Glugla, Christy Carter, and Andrew Claerhout of BCG wrote an insightful comment on how private equity’s advantage is shifting, not shrinking:The past three years of public-market strength have made private equity an easy target. Returns from a small group of mega-cap stocks have driven public indexes sharply higher, giving investors both stronger short-term performance and full liquidity. That combination has widened the gap with private markets and renewed debate about PE’s value proposition.
Long-term investors might wonder why they should stay committed to an asset class that has lagged public markets and offers less flexibility in reallocating capital. The question is not without merit. Measured on a money-weighted basis, PE has only modestly outperformed broad public benchmarks over the past five and ten years.
PE marks also tend to move more slowly than public valuations, especially on the downside. That lag can make the asset class look artificially stable during market reversals, as seen in 2021 and 2022. In economic terms, true volatility likely sits between the smoother reported marks and the sharper swings of listed equities.
Yet, despite the skepticism, the case for PE remains strong, and may even be getting stronger. What’s changing is how value is identified, measured, and shared. This article explains why the playbook for institutional investors and managers is due for an update.
I invite my readers to click here to read the full comment, well worth it.
Below, you can read the key takeaways:
The big change in PE is that returns can finally be taken apart—growth, margin, leverage, multiple—and investors can choose managers who excel on those fundamentals.
- Returns are becoming easier to read. Investors can now break performance into growth, margins, leverage, and multiple to separate operating skill from market lift with tools that did not exist five years ago.
- Manager selection is getting sharper. Managers in the top quartile repeat that level of performance about 45% of the time and stay in the top half about 80% of the time. Moreover, top-quartile funds outperform those in the bottom quartile by 13 points in annual internal rate of return.
- Steady allocation still wins. Avoiding the three worst vintages adds just 0.8 points, while disciplined pacing and backing proven operators protects diversification and positions programs for recovery.
Let's dive into these key takeaways beginning with how data-enabled manager selection is finally practical:
Allocators now have the tools to evaluate managers with a level of precision that was impossible even five years ago. They can analyze deal-level value bridges, tracing realized multiples on invested capital back to their drivers such as growth, margin expansion, multiple change, and deleveraging. These methods separate true operating skill from market lift. Public market equivalent (PME) and direct alpha analyses place PE cash flows on the same timeline as public indices, converting outperformance into clean measures of multiple and annualized excess return. With richer data and model-assisted screens, it’s now possible to identify strong operators and at minimum, systematically avoid the bottom quartile.
A handful of factors consistently predict whether a PE firm avoids the bottom quartile. These include clear sector focus and specialization, disciplined fund growth of no more than 25% from one vintage to the next, and a healthy pace and breadth of distributions to paid-in capital rather than reliance on a few big wins. Strong performers also tend to show tighter deal dispersion with fewer tail losses and outliers, and more accurate underwriting, reflected in closer alignment between expected and realized value.
To turn these insights into process, LPs can formalize a few practical tools, such as a value-creation audit that dissects realized deals to separate operating contribution versus market lift. A performance-persistence matrix can track how managers sustain results across vintages, and a selection-uplift model can help companies estimate top-half direct alpha based on operating and process features. Overlaying these with access and pacing maps, spanning co-investments, separately managed accounts (SMAs), and re-ups helps determine how much capital to allocate to repeatable operators while maintaining diversification.
Next, steady PE allocation preserves diversification and returns potential:
Reducing PE exposure now would effectively trade lower-multiple private businesses for higher-multiple public mega-caps. Skipping 2025 and 2026 vintages would further overweight the weaker 2021 and 2022 cohorts, eroding time diversification and creating a vintage hump that concentrates risk in the least attractive entry years.
Maintaining disciplined pacing, re-upping into proven franchises, and using co-investments or separately managed accounts to scale repeatable operators preserves program balance and improves the odds of capturing the next upcycle.
History shows that attempting to time the PE market by skipping vintages rarely works. For example, an investor who avoided the three worst vintages over the past 20 years would generate a gain of just 0.8 percentage points over one who invested steadily. (See Exhibit 2.) Considering how difficult it is to identify the “worst” vintages in advance, that lift is simply too low to justify the risk.
Contrast this performance with the lift that an investor would accrue by deploying capital in the top quartile versus the median over the past 20 years (20.7% compared with 13.7%, annually), and it becomes clear that the focus of allocators should be building long-term relationships with the best, most repeatable operators. Given that capital is relatively scarce right now, this is likely one of the best moments to go build some of those new relationships with general partners (GPs) who can identifiably generate repeat outperformance.Our experience shows that pacing discipline is about doing enough, consistently, so that time diversification can work. That means codifying pacing bands so they do not oscillate with last quarter’s marks, anchoring underwriting on method, and using liquidity tools judiciously so optics do not prompt selling at a loss.
What else? PE-backed firms may be positioned to capitalize on AI faster:
Many smaller companies see opportunities to apply AI across their value chains to boost efficiency and profitability. The investment case is often clear on paper, but execution usually falters. Most lack the internal expertise to pinpoint where AI creates impact, the capital to fund upfront development, and the discipline to sustain change once pilots begin.
Private equity sponsors, by contrast, can approach AI adoption through a portfolio lens. They underwrite both the operating gains and the valuation lift. Every additional $10 million in earnings before EBITDA can translate into roughly $100 million to $120 million in equity value at exit. They also bring fund-level operating partners, standardized playbooks, and access to specialist advisors who can identify and scale AI use cases across multiple portfolio companies.
That combination of capital, expertise, and operating discipline gives PE-backed firms a measurable edge over comparable small and midsize businesses. They cannot match the investment firepower of global technology giants, but within their segments they can move faster and more consistently. The pattern resembles earlier periods when PE sponsors institutionalized new disciplines such as structured pricing or systematic add-on M&A. Today, leading firms are taking the same approach to AI and embedding it portfolio-wide. As the early returns come in, we expect this trend will accelerate.
The comment concludes with what investors and managers should do now:
The insights we’ve just described offer leaders a practical way to evaluate performance. The goal is the same on both sides of the table: build conviction through evidence, and stay disciplined when conditions change.
For principal investors: The task is to identify managers whose methods are consistent, transparent, and proven to work through different cycles.
- Underwrite the GP’s method, not just marks. Require deal-level value bridges that separate operating improvement (EBITDA growth, margin expansion, multiple change, and deleveraging) from market lift. Tie these to a repeatable operating playbook that travels across sectors and vintages. Compare managers to the right public benchmarks using PME and direct alpha, not pooled IRR. Include attribution by source of value, so selection focuses on operating capability, not timing.
- Use access to back repeatable operators. Re-up into managers who demonstrate operating discipline and team continuity. Use co-investments and SMAs to scale exposure to the strongest deals without crowding risk.
- Engineer liquidity without destroying value. Keep pacing on track by planning for secondaries, continuation vehicles, and net asset value finance as tools of last resort. When they are used, lay out the full cost, conflict protections, and the path for distributions to paid-in capital to avoid being forced into selling at the wrong time.
- Model risk with clarity. Adjust for the smoothing inherent in private-market marks when setting policy limits and asset-liability models. Codify pacing bands so commitment levels do not rise and fall with recent performance, and clearly separate short-term optics from underlying economics in board materials so temporary drawdowns don’t trigger reactive selling.
- Concentrate where conviction is highest. Write larger checks with fewer GPs who demonstrate repeated capability. In exchange, seek not just lower fees but higher access, including advisory seats, operating seminars, or structured insights into deal flow.
For GPs: Investor expectations are rising in parallel. Managers now need to show, not just say, how they create value, prove that it’s repeatable, and give LPs confidence that results can endure across cycles.
- Sharpen areas of focus. Many PE firms have already narrowed their sector priorities. But those that push one level deeper into specific subsectors can outperform. Specialized funds deliver returns that are roughly 200 basis points higher than others. LPs increasingly favor knowing more precise exposures in portfolio construction as their risk models become more nuanced.
- Build differentiated value-creation capabilities. Identify the value-creation levers that matter most within each subsector of focus and develop real strength in those areas. Build capability directly or through recurring partnerships. Make these capabilities part of your offer to management teams so the value is visible and credible, and incorporate them into deal sourcing. Target companies that would benefit from these levers rather than limiting the work to diligence and portfolio management.
- Make value creation measurable and auditable. Standardize deal-level value bridges, publish 100-day plans with milestones, and report hit rates. Demonstrating how the playbook holds across sectors and rate environments converts narrative into evidence.
- Open the data room for real diligence. Offer cash-flow information that will allow investors to compare direct alpha with PME. For example, managers that adopt standard cash flow and performance templates and provide replicable analyses such as PME-ready cash flows, entry-year cohorts, and value-creation breakdowns report materially shorter diligence cycles because LPs can validate performance more efficiently. This matters in a market where average fund closings now take about 21 months.
- Be a true partner on access. Offer co-investment opportunities that are reliable, timely, and easy to execute, something nearly 70% of LPs now expect, according to a recent Private Equity International survey. Consistency here builds credibility and strengthens alignment, often paving the way for earlier or larger commitments in future funds. Where possible, design fee and term structures that reward longer holds rather than financial engineering alone.
- Create deeper connection with critical LPs. Help LPs upskill their teams and include them earlier in diligence. Some managers now host semiannual operating workshops or portfolio-level data reviews. Those efforts often lead to larger re-ups as LPs concentrate commitments with managers they trust. Shared insight reinforces partnership and helps both sides defend the asset class in board discussions.
Great insights here, one of BCG's best comments because it was short and to the point.
I thank Andrew Claerhout for sending it over and recommend my readers go over it again here.
I spoke briefly with Andrew tonight and he explained how it's much easier nowadays to conduct a deep dive in terms of performance attribution to separate EBITDA growth from leverage and multiple expansion.
So if a GP buys a deal day at 1X and sells it later at 2.5X, you can easily understand what percentage came from debt, multiple expansion and value creation (EBITDA growth).
The trick is to identify the people who are driving EBITDA growth to see if they are able to repeat in different cycles.
Writing larger tickets to fewer managers makes sense, it's been done for many years but with mixed results.
Vintage year diversification and pacing allocations is critically important.
On Monday, I discussed why Canada's top pension funds are rethinking their approach to private equity and discussed some of these issues but this paper goes into a lot more depth and offers great insights.
It is also worth noting BCG isn't the only shop discussing these issues.
Below, some examples:
Alright, going to wrap it up there and once again thank Andrew Claerhout for sending me this comment.
Below, Henry McVey, KKR CIO of balance sheet, joins 'Squawk Box' to discuss the firm's 2026 outlook. Great discussion, listen to his insights.
Submitted by The Bureau's Sam Cooper,
In the aftershock of the Trump administration’s special-forces extraction of Venezuelan President Nicolás Maduro, a new report from the Heritage Foundation advances a sweeping, Cold War–inflected thesis: that the real command post for much of Latin America’s authoritarian drift — and a significant driver of American street unrest since 2020 — is Havana.
Its most incendiary claim is also, arguably, the one most relevant to a Trump administration now tightening its focus on leftist heads of state from Mexico City to Bogotá: that Cuba’s communist regime, working through Venezuela and allied networks across Latin America, has sought to weaponize narcotics trafficking while also stoking social unrest inside the United States.
“Venezuela is rightly getting all the attention after the arrest of dictator Nicolas Maduro, but it is important to bear in mind that Cuba’s communist regime is the mastermind of Caracas’s plan to destabilize U.S. streets through narco-trafficking and political unrest,” Heritage senior fellow Mike Gonzalez writes, citing letters from two senior Venezuelan figures now imprisoned in the United States for their roles in “a narco-terrorism conspiracy,” who both portrayed the enterprise as part of a Cuban effort “to dismantle the moral fiber of America from within.”
In Gonzalez’s telling, the allegation is substantiated — though he is drawing heavily on witnesses whose motives, perhaps including bids for clemency, critics could question.
Hugo “El Pollo” Carvajal, a former Venezuelan intelligence chief, and Cliver Alcalá Cordones, a former senior Venezuelan military officer, both separately wrote to President Donald Trump, according to the Heritage report, accusing Cuba’s regime of masterminding narco and political conspiracies emanating from Venezuela.
The conspiracy, wrote Carvajal, “was suggested by the Cuban regime to Chávez in the mid-2000s,” and was “successfully executed with help from FARC, ELN [both Colombian guerilla groups cited in the DOJ’s indictment of Maduro), Cuban operatives, and Hezbollah.”
Gonzalez casts Cuba’s intelligence services as the hemisphere’s enduring “revolutionary operator”: training guerrillas, embedding security cadres inside allied states, and building political infrastructure designed to outlive the era of jungle insurgencies.
Venezuela under Hugo Chávez and Maduro, he argues, became Cuba’s richest proxy — financing Havana with oil, exporting the revolution’s methods, and, serving as a staging ground for narcotics and leftist terror networks that United States officials have cast as direct threats.
Moving to an element that many readers may find as implausible as any narco-conspiracy claim — and backing his argument with intelligence records and open-source material — Gonzalez writes that, “From training Marxist terrorists in the 1960s, to the pro-Hamas mayhem at U.S. universities in 2024 and 2025, to the spread of transnational crime syndicates in U.S. cities, Cuba’s rulers have long plotted America’s demise.”
Heritage can be viewed as an ideologically driven, controversial, strongly conservative-leaning institution, but its work can also carry added signaling value in a Trump-era Washington because it often functions as a personnel and policy pipeline.
CIA Director John Ratcliffe has had ties to Heritage and helped shape Project 2025-era thinking on intelligence reform—linking the report’s framing to currents inside the administration itself.
Heritage’s new Cuban influence report is framed as a 60-year flow chart, structured around a turning point in Havana’s own revolutionary mythology: the Tricontinental Conference.
In 1966, Fidel Castro convened revolutionary movements, party cadres, and aligned delegations from Africa, Asia, and Latin America in Cuba to coordinate what the regime cast as a global campaign against “Yanki imperialism” — and what Gonzalez depicts as a blueprint for exporting upheaval through training, financing, propaganda, and the patient building of transnational networks.
Most readers will seize on the report’s most recent — and most incendiary — contention: that Black Lives Matter and other leftist social-justice groups did not merely ride the wave of outrage after George Floyd died in May 2020, during a police arrest in Minneapolis, but helped accelerate and channel it in ways that, in Heritage’s telling, served a longer-running Cuban strategy of political destabilization.
To support that framing, the report points to what it describes as coordination across the Western Hemisphere — Chile, the United States, and Colombia — from 2019 to 2021.
It contends there is “much evidence of Cuba and Venezuela attempting to destabilize the United States and its allies in the Americas,” and coordinating those efforts through the Foro de São Paulo (the São Paulo Forum), which Heritage depicts as a Marxist convening infrastructure that reactivated in 2019, including a New York gathering attended by aligned activists and representatives of leftist political parties across Latin America.
“From that point on,” Gonzalez writes, countries in the Western Hemisphere “suddenly started experiencing street riots that led to political change.”
Chile and Colombia saw major protests in 2019; protests in Colombia were “repeated and magnified” in 2021. Both, the report says, contributed to electoral outcomes — with the election of Gabriel Boric in Chile and Gustavo Petro in Colombia.
In the United States, Gonzalez writes, the George Floyd riots in 2020 “almost came close to leading to societal overhaul.” He adds that, aside from what he describes as the long-standing relationship between BLM and Maduro — and between BLM and Bolivia’s Evo Morales — Black Lives Matter has “taken parts in Foro conferences,” including one in the Washington, D.C., area on July 17, 2017, where one of the stated goals was to create “strategic links” with groups inside the United States.
To ground that claim, Gonzalez leans heavily on a prior Heritage special report from 2024 that examined what it called an interlocking “ecosystem” of organizations behind pro-Palestinian protests and parts of the Black Lives Matter movement.
In that earlier report, Heritage highlighted the People’s Forum in New York, led by Manolo De Los Santos, portraying him as a Cuba-aligned organizer who helped build movement infrastructure and, according to Heritage, mobilized activists ahead of the April 2024 takeover of Hamilton Hall at Columbia University.
Separately from the new Heritage report, open-source monitoring of the online narrative in the hours following Maduro’s extraction pointed to the same organizing source driving a storyline of “kidnapping,” illegality, and U.S. imperial overreach — including messaging from the People’s Forum and its director, self-acknowledged Marxist Manolo De Los Santos.
Within hours, similar language appeared in statements from prominent U.S. left figures — among them New York City Mayor Zohran Mamdani, who publicly condemned the operation and characterized it as unlawful.
The new Heritage report expands the frame: it argues that the São Paulo Forum has extended its outreach to U.S. groups invited to conferences over the years — naming, among others, Black Lives Matter, Democratic Socialists of America, Code Pink, and the ANSWER Coalition — and portrays these connections as part of a deliberate strategy to create “strategic links” inside the United States.
Some of the report’s most serious allegations rest on contested or difficult-to-verify claims drawn from opinion journalism rather than court records.
One example is a 2025 Washington Examiner column by Heritage report author Gonzalez that cites an unnamed former Venezuelan official claiming that Hugo Chávez personally provided suitcases of cash — the source estimates “at least $20 million” — to a U.S. activist before she went on to co-found Black Lives Matter, describing it as funding meant to export street protests into the United States.
“Chávez ordered his people to hand the suitcases to them — suitcases filled with dollars, at least $20 million,” the defector told him, Gonzalez’s column says, adding that the purported defector “is cooperating with and providing evidence to the U.S. government on other subjects, particularly the close connection between the Cartel de los Soles narco group and the Venezuelan state.”
According to Gonzalez’s column, the defector claimed, “The meeting took place at the Miraflores presidential palace, in a huge suite called the Japanese Suite, where private meetings are held.”
Gonzalez presents that alleged episode as emblematic: the revolution as a transnational political-financial project with paid beneficiaries and operatives in the United States, not merely an ideologically motivated movement.
But the Heritage thesis is not primarily about money.
It is about intelligence tradecraft — and the report’s central claim is that Cuban operatives embed themselves within allied regimes to “coup-proof” leaders by monitoring militaries and securing palaces, often maintaining loyalty to Havana rather than the host nation.
Gonzalez cites a 2024 essay by former Mexican foreign minister Jorge G. Castañeda arguing that thousands of Cubans have been stationed in Venezuela over the years — including security advisers and intelligence agents — to help keep Maduro in power, and that this Cuban presence may have constrained Maduro’s room to maneuver as U.S. pressure intensified.
The report’s historical flow chart then moves into Central America, leaning on Washington’s own record as evidentiary scaffolding.
Gonzalez highlights a 1978 U.S. State Department analysis written a year before the Sandinistas toppled Nicaragua’s dictator Anastasio Somoza. The document, as quoted in the Heritage report, said that “since the FSLN (Sandinista National Liberation Front) was formed in the early 1960s,” the Sandinistas “have looked to Cuba for ideological inspiration, strategic guidance, tactical training, material support, and sanctuary,” and that “throughout the FSLN’s existence, Cuba has been a training site.”
The report argues that Havana’s method then evolved — not away from revolutionary ends, but away from overt insurgency as the primary tactic.
Gonzalez leans on what he presents as the São Paulo Forum’s blueprint “formula” for leftist politicians in the Western Hemisphere: de-emphasize Marxism, run as reformers, win elections — and then, once in office, rewrite the rules. He points to Colombia’s current president, Gustavo Petro, as both a contemporary example and, in the report’s telling, an unusually candid witness to earlier Cuban involvement.
Petro, a former member of the leftist insurgent group M-19, is quoted as saying: “Fidel Castro helped M-19 in many of its Colombian actions and, we should admit it, M-19 troops trained in Cuba.”
Petro — who, in recent weeks, has also shown signs of seeking a détente with Washington, softening some of his fiercest rhetoric — had previously, in what Gonzalez calls a “loose-lipped” moment, “also revealed that Mexico’s new President Claudia Sheinbaum was also a secret M-19 asset,” quoting Petro calling her “a collaborator and militant of M-19 in Mexico.”
From there, Gonzalez lists what he presents as the cascading regional success of Castro’s influence model: “This formula worked in 1998 in Venezuela with the election of Hugo Chavez, the (São Paulo Forum’s) first triumph and a dictator who went on to use his country’s oil wealth to keep Castro’s Cuba afloat.” Lula was elected in Brazil in 2003; Evo Morales in Bolivia in 2005; Rafael Correa in Ecuador and Manuel Zelaya in Honduras in 2006; and Ollanta Humala in Peru in 2011 — “all Marxists,” the report says, who “obscured their ideology and ran as reformists,” and all São Paulo Forum participants.
Taken together, the report advances a unifying thesis: social unrest, street violence, and narco-terror cannot be understood as separate problems. They are instruments — in this view — of an intelligence-led revolutionary strategy refined over six decades, updated for the age of social media and protest politics, and funded for years by Venezuela’s oil.
That thesis also reads as a political finger to the wind — one that seems to match the rhetoric coming from the White House now: that the Trump administration’s Venezuela operation is not the end of a campaign, but the opening move in a broader rollback of Marxist-aligned regimes.
What the report does not do — and cannot do, on its own — is prove a single controlling hand behind every riot, protest, or crime wave in the United States since 2020. It assembles a narrative from history, open sources, and United States government statements, then asks readers to see continuity.
Tyler Durden Wed, 01/14/2026 - 18:30A center-left think tank is urging Democrats to abandon the "Abolish ICE" rallying cry, warning that the slogan threatens to sabotage any chance at immigration enforcement reform while playing directly into Republican hands.
Demonstrators gather in Minneapolis on January 7, 2026 after an ICE agent shot and killed Renee Nicole Good.
Third Way released a memo on Tuesday responding to a surge of progressive demands to eliminate Immigration and Customs Enforcement (ICE) following the fatal shooting of 37-year-old anti-ICE activist Renee Nicole Good by an ICE agent in Minneapolis after she attempted to run the agent over with her vehicle.
While the memo acknowledges that many Democrats see the Trump administration's immigration policies as excessive and lawless, it also warns that frustration cannot justify scrapping enforcement altogether.
The group argues that Democrats need to distinguish between reforming abusive practices and destroying the institution responsible for upholding immigration law.
“Moments like this can and should provoke anger and demands for dramatic action,” the memo explains. “In the wake of Good’s death and a growing number of disturbing immigration enforcement incidents, calls to abolish ICE have once again surged on the left. The impulse is emotional. The slogan is simple. But politically, it is lethal.”
The memo, authored by Sarah Pierce and Lanae Erickson, warns the Democratic Party that calls to abolish ICE “risks squandering one of the clearest opportunities in years to secure meaningful reform of immigration enforcement—while handing Republicans exactly the fight they want.”
The memo insists that “The goal is not to eliminate enforcement. It is to ensure enforcement is lawful, targeted, and worthy of public trust.”
The think tank even drew a direct parallel to the 2020 "defund the police" movement, which became toxic within the Democratic Party and likely cost them some seats in multiple cycles
Democrats have seen this movie before with calls to “defund the police” after lethal, law enforcement abuses that stoked racial tensions. We know how this movie ends.
Calls to abolish ICE follow the same script. It would be a tragedy built upon a tragedy if Democratic overreach allowed the inexcusable killing of Renee Good at the hands of ICE to be used to the advantage of Donald Trump and a Republican Party that is sympathetic to its excesses. Republicans understand this. They have deployed the “Abolish ICE” phrase to their advantage before and will use it as a political lifeline again.
It’s hard to argue that progressive slogans that sound anti-law enforcement don’t cost Democrats politically and shut down space for substantive policy change. And the think tank's argument rests on a pragmatic political calculation based on the most recent national election. Voters responded to what they perceived as weak enforcement under President Biden.
What Third Way misses is that Trump is following through on his campaign promise to launch the "largest deportation program in American history" if elected. They see an opening for Democrats to stake out the middle ground, focused on accountability and restraint, rather than abolishing the agency.
"The lesson is clear: when the debate sinks into polarizing slogans that read as anti-law or anti-safety, space for practical reform disappears," the memo warns.
But what we’re seeing nationwide reflects a party with no interest in the middle ground. Blue states and cities have declared themselves sanctuaries for illegal immigrants, and local leaders are actively pushing for ICE to leave their jurisdictions, not tone down their activities.
"Immigration laws are meaningless if they are not enforced," Third Way argues. "And they can be enforced in ways that protect public safety, respect legal norms, and uphold civil liberties. Voters understand this."
While voters get it, Democrats in Washington, D.C., do not.
But not everyone in the party is on board. Rep. Ayanna Pressley (D-Mass.) recently reiterated her position that ICE should be abolished, not reformed.
Speaking on MSNOW this week, Pressley made it clear she doesn’t believe ICE should exist.
"I will continue to demand an independent and thorough investigation, continue to call on Congress in this moment to use appropriations and the power of the purse to rein in ICE," Pressley said. "Again, I believe it should be abolished. We need public hearings and accountability."
ICE cannot be reformed. It must be abolished. pic.twitter.com/ouRBFD0BtD
— Ayanna Pressley (@AyannaPressley) January 11, 2026
It’s doubtful Democrats will shift toward a more moderate stance on immigration enforcement. Democrats have clearly signaled that their priority is to resist Trump at every turn, not to compromise.
Tyler Durden Wed, 01/14/2026 - 18:10Authored by Lawrence Wilson via The Epoch Times (emphasis ours),
Plan selections in the Affordable Care Act Marketplace were 3.5 percent behind 2025’s number with two weeks left in open enrollment, but the drop-off has not been as severe as some analysts predicted.
An Affordable Care Act sign sits in front of an insurance agency in Miami on Nov. 12, 2025. Joe Raedle/Getty Images
Some 22.8 million people had selected a plan by Jan. 3, about 830,000 fewer than at the same point in 2025. The program, popularly known as Obamacare, appears on track for its second-highest enrollment ever.
The open enrollment period began on Nov. 1, 2025, and ends on Jan. 15 in most states. During open enrollment, anyone can sign up for Obamacare. Outside that period, only those who report a qualifying life event such as a birth, divorce, or job change can enroll.
The decline for 2026, if it continues through the final weeks of open enrollment, will mark the first drop in participation since 2020.
Subsidies Boosted EnrollmentSince its inception, Obamacare enrollments started slower than predicted, taking three years to reach 12.7 million in 2016. From there, enrollment decreased by about 10 percent over four years.
Enrollment was bolstered by enhanced subsidies starting in 2021, more than doubling to 23.4 million by 2025.
The scheduled expiration of the enhanced subsidies in December 2025 sparked heated debate in Congress on the affordability of the program without them.
Congressional Democrats sought to make the enhanced subsidies permanent. That effort failed to advance in the Senate despite Democrats’ willingness to withhold federal government funding throughout the fall in an attempt to force negotiations.
The enhanced subsidies were implemented in 2021 as a two-year measure to ensure the affordability of health coverage during the COVID-19 pandemic era. They were later extended through 2025.
Health insurers judged that middle-class Americans who had opted into Obamacare in recent years would opt out again when the subsidies expired, dramatically changing the risk profile of remaining enrollees and shifting it toward those with chronic conditions or higher medical needs.
In response, insurers raised premiums by an average of 27 percent, according to data from health policy research group KFF.
Drop Less Than PredictedMany observers predicted a huge drop in enrollment in 2026 based on both the decrease in subsidies and the increase in premium costs.
Jason Levitis, senior fellow at Urban Institute, told senators in November that 4.8 million people would lose health coverage in 2026 if the enhanced subsidies expired, based on a report from his organization.
The expiration of the subsidies would “leave millions uninsured or forced to make impossible choices,” according to the Center on Budget and Policy Priorities.
Although the initial 3.5 percent drop of 830,000 enrollees is significant, it does not approach those predictions.
At 22.8 million enrollees, the 2026 figure is 12 percent ahead of 2024 and 43 percent ahead of 2023.
Over the past four years, the number of plan selections increased by an average of 3.7 percent during the final two weeks of open enrollment. In 2025, the increase was 2.4 percent.
On the current track, the number of 2026 plan selections would be the second-highest ever.
Further Decline LikelyYet some analysts say there will be a further drop after open enrollment closes.
“While we do eventually expect to see declines in Marketplace enrollment, following the expiration of the enhanced premium tax credits at the end of 2025, it is too soon to tell how much it will change,” said Jared Ortaliza, a policy analyst at KFF studying the Affordable Care Act.
The data available now indicate marketplace plan selections, which become “effectuated” enrollments when consumers begin paying premiums.
The vast majority of 2026 plan selections so far—20 million—are 2025 customers who were automatically reenrolled in the plan, according to the Centers for Medicare and Medicaid Services.
Those automatic plan selections do not always become premium-paying enrollees, according to Ortaliza.
“The extent of [Affordable Care Act] enrollment changes likely won’t be known until this summer, when effectuated enrollment data are typically released,” he said.
In 2025, the number of effectuated enrollments was about 4 percent less than the number of plan selections.
Brian Blase, president of Paragon Health Institute, theorized that much of the decline in plan selection, and a likely further decline in effectuated enrollments, is attributable to improper or fraudulent enrollments.
“The decline in enrollment from ’25 to ’26 means that some of the fraudulent enrollment exited the market,” Blase wrote on social media.
Blase estimated that about 5 million enrollments in 2024 and 6.4 million in 2025 were improper, with many being fraudulently enrolled in plans with $0 premiums. He said many will disappear as people do not effectuate coverage, which involves paying a premium.
“This means that people who are unaware of their enrollment, in other coverage, or ‘fake’ people will not pay their share of the premium and should (assuming insurers follow the rules) be removed,” Blase wrote.
An effort to reinstate the enhanced subsidies is ongoing in Congress.
Open enrollment in Kentucky and Maine closes on Jan. 16 and in Massachusetts on Jan. 23. Open enrollment closes in California, New Jersey, New York, Rhode Island, Washington state, and Washington on Jan. 31.
Tyler Durden Wed, 01/14/2026 - 17:30Authored by John Kudla via American Thinker,
Let’s pretend you are a liberal living in a red state. If you feel aggrieved about the condition of the world and believe that conservatives are to blame, you can find a few like-minded souls, print up some signs covered in half-clever phrases, and go protest. In most cases, unless you chain yourself to a railing on the courthouse steps or attack the police, you will usually be ignored.
Image: Don Hankins via Flickr, CC BY 2.0
On the flip side, let’s pretend you are a conservative living in a deep blue state. If you don’t like the school policy, E.V. mandates, high electricity prices, or restrictive gun laws, and you dare to complain, not only will you not be ignored, but you might be harassed, shunned, or canceled. Your solution to the hard blue insanity is a four-letter word: move.
Now let’s pretend you live in a state with a blue megalopolis somewhere over the horizon, but you don’t want to move. Let’s also pretend you have lived in your community all of your life and have roots there — a job or a farm or a business that would be difficult to replicate somewhere else. Why should you suffer because once upon a midnight dreary, councilors to a long dead king or a few drunk senators drew a line on a map that ignored rational boundaries?
Generally speaking, I don’t have a problem with people living the way they want to. That is called freedom. However, I object to some of our more right-leaning or left-leaning citizens forcing their ideas on everyone else, then treating those who disagree with them as second-class citizens. In some cases, this has prompted states to heavily gerrymander congressional districts, which disenfranchises both liberal and conservative voters. One solution is to adjust state boundaries to more adequately reflect local political values.
Ever since the founding of the republic, various groups and political movements have sought to redraw state boundaries. Some have been successful. Maine was originally part of Massachusetts, and the states of Kentucky and West Virginia were created from land originally part of Virginia. Other partitions to existing boundaries have been suggested, but none has been adopted. The reason is that the Constitution requires both the blessings of the partitioned state and the U.S. Congress.
Ask yourself a simple question. Why would any state governor or legislature willingly give up territory if it is not forced to? The serfs — excuse me, taxpayers — there help balance the state budget. How they feel about their lives or the number of potholes in their roads is secondary to ensuring that state budgets are met and the state programs, even those for non-citizens, continue.
Despite the obstacles, secession movements continue. Let’s look at three of the more recent secession ideas.
In 2014, residents of western Maryland, reportedly unhappy with taxes and gun control policy, started signing petitions to secede from Maryland and form a new state. Later in 2021, Republican lawmakers in Allegany, Garrett, and Washington counties in Maryland sent a letter to the West Virginia legislature asking if the Mountain State would be willing to annex them.
The Maryland panhandle, an artifact of English colonial land grants, is a mountainous area more similar to West Virginia than the rest of Maryland. The three counties have a combined population of just over a quarter of a quarter million. That is probably not enough to take a congressional seat from Maryland or give one to West Virginia. Will it change the U.S. political structure if these counties are allowed to switch states? Not really.
The state of Oregon is divided almost in half by the Cascade Mountain Range. The majority of the population lives on the western or Pacific Coast side of the mountains, either in the city of Portland or towns in the Willamette Valley. In 2021, five counties in eastern Oregon, unhappy with the liberal state government, voted to take steps to secede from Oregon and join Idaho.
By 2024, a total of thirteen Oregon counties had voted to join Idaho. The population in these counties is roughly 240,000, or about 5.5% of Oregon’s population — again, probably not enough to change the number of congressional seats between the states.
A third secession movement is active in Illinois. Since 2011, more than one attempt has been made to separate the city of Chicago from the rest of Illinois or individual counties from the state. The issue here is the dominance of Chicago and Chicago politics over the rest of Illinois. As of 2024, 33 counties had voted to secede, about a third of the state’s counties.
In 2025, lawmakers in Indiana discussed annexing those counties, although only twenty-seven of them are contiguous with the Indiana border. The others are on the western side of Illinois and would be a better fit with Missouri. The twenty-seven counties represent nearly half a million residents. This would almost certainly take a congressional seat from Illinois and add one to Indiana.
Besides liberal political values, another reason people are moving from blue states or seeking to join red states is that blue states typically have higher tax burdens than red states. Call it an issue of affordability.
There is an easy way to check this. Let’s take the median income in the U.S., which was roughly $84,000 in 2024, multiply it by the average tax burden in the blue state of origin, do the same for the red state destination, and then subtract the two numbers.
The following results are based on a combination of income taxes, property taxes, and sales taxes. If the Oregon counties join Idaho, residents earning $84,000 would save about $250 per year, or about 0.3 percent of their income. If the Illinois counties join Indiana, their residents would save over $750 per year or about 0.9 percent of their income. And if the three Maryland counties joined West Virginia, residents there would save about $924 per year or about 1.1 percent of their income. Remember, these are ballpark numbers and will change depending on income and other individual circumstances.
As the country approaches the 250th anniversary of its founding, perhaps it is time to consider a constitutional amendment to facilitate changes to state boundaries. After all, most of our state boundaries were arbitrary to begin with.
Counties wishing to become a separate state would have to follow the rules for statehood. Imagine Chicago as the 51st state, along with New York City plus Long Island as the 52nd. Upstate New York and downstate Illinois could then breathe a sigh of relief.
Until then, you can still move.
On a similar note, I hear the Canadian province of Alberta is thinking about leaving Canada. Maybe Trump can talk the Canadians into a straight-up swap of Alberta for Minnesota. It couldn’t hurt to try.
Tyler Durden Wed, 01/14/2026 - 16:30
At The Money: Better Results By NOT Investing with Dictators, with Perth Toll, (January 14, 2026)
Full transcript below.
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About this week’s guest:
Perth Toll is the founder of the Life and Liberty indexes and the creator of the Freedom 100 EM Index (symbol FRDM). She was named one of 10 to watch in 2020 by Wealth Management Magazine and one of the 100 people transforming Business by Business Insider in 2021.
For more info, see:
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Find all of the previous At the Money episodes here, and in the MiB feed on Apple Podcasts, YouTube, Spotify, and Bloomberg. And find the entire musical playlist of all the songs I have used on At the Money on Spotify
TRANSCRIPT:
Intro:
Freedom (I won’t let you down)
Freedom (I will not give you up)
Freedom (gotta have some faith in the sound)
You’ve got to give what you take (it’s the one good thing that I’ve got)
Barry Ritholtz: There are many problematic countries on the world stage. Not only are their political behaviors bad, but they’re also unhealthy for your investment dollars.
Most emerging market indexes, however, invest broadly across all of these countries regardless of their political activity. If only there was a way to avoid authoritarian regimes, dictators, and other bad actors that destroy your investing capital.
As it turns out, there’s a fund to do just that, investing in emerging markets without steering money to the worst countries on the planet. I’m Barry Ritholtz, and on today’s edition of At The Money, we’re gonna discuss how to avoid those countries that are dangerous to your wealth.
To help us unpack all of this and what it means for your portfolio, let’s bring in Perth Toll. She is the founder of the Life and Liberty indexes and the creator of the Freedom 100 EM. Index (ETF, symbol FRDM). She was named one of 10 to watch in 2020 by Wealth Management Magazine and one of the 100 people transforming Business by Business Insider in 2021.
Her Freedom 100 EM Index, ETF now manages over $2 billion and has beaten the S&P 500 500 over 1, 2, and 3 years.
In 2025, freedom was up 67% versus the S&P 500 up almost 18%. Perth, let’s just start with the basic concept. Why screen emerging market companies for a concept like. Freedom. How does screening out dictators, authoritarians, and other bad actors impact market performance?
Perth Tolle: I think the, the problem we’re trying to solve here is that emerging markets investors, um, previously did not have a way to get a diversified emerging markets allocation without funneling money to autocracies.
Traditionally, the way indices are weighted is by market cap, and so the largest autocracies in the emerging market space like China, Russia and Saudi Arabia historically has gotten the, you know, biggest weights. Those three countries prior to the war were all in the top 10 of most EM indices. During the height of COVID China was, uh, 41% of the MSEI emerging markets. Index and now it is still upwards of close to 30%.
Some of these large autocracies get a very large weight in the emerging markets indices. And so that’s really the problem that we’re trying to solve by freedom weighting instead of market cap.
Barry Ritholtz: I’m really fascinated by the origin story of the Freedom Index and the ETF. What made you decide traditional emerging market benchmarks were broken? Yeah, so I grew up in both China and the US. I was born in Beijing and I came to the US when I was 9, and then I worked in Hong Kong after college for about a year. There I saw the difference between the US market, the Hong Kong market at the time, this was 2004, and, the mainland Chinese market.
I saw that policies impacted the future of a society and the future of markets. You know, one policy that really struck me was the one child policy under which I, you know, was born and grew up in, in China. That policy has caused the biggest demographic crisis in the world today, and probably we won’t recover from that in our lifetimes.
That’s one of the things that made me realize that governance, on the country level actually has an impact on society and markets.
Coming back to the us I worked at Fidelity for 10 years as a financial advisor. And I had clients in the LA and Houston markets who said, I don’t wanna, for example, I had a Russian client that said, “I don’t wanna invest in Russia because it’s like funding terrorism.” That was in 2014. So you can see how prescient that was.
I wanted to have a way for allocators to always have that emerging markets allocation without, you know, uh, funding autocracies, which is usually not the intention of most investors.
Barry Ritholtz: Really, really interesting. You created this freedom index with some of your partners. Define freedom for our audience in market terms; when we say this is a freedom weighted portfolio as opposed to a market-cap weighted portfolio, what exactly is being measured? How does that translate into an index?
Perth Tolle: The first thing is we’d need those quantitative metrics for freedom. And so we use a third party index and dataset called the Human Freedom Index and Dataset by the Cato Institute and the Frazier Institute. And these are two think tanks that are completely privately funded. They don’t take any government money, not even from the US or Canadian governments, um, where they’re based.
They look at 87 different variables for freedom, and that includes things like civil freedoms, includes political freedoms and economic freedoms. You’re looking at both personal and economic freedoms, which was important to me coming from a country that had issues with both.
Things like terrorism, trafficking, torture are in the civil freedoms category, freedom of speech, media expression, civil procedure, criminal procedure political freedom category. And then economic freedoms are things we’re all more familiar with, like taxation, business regulations, private property rights, rule of law, um, soundness of monetary policy, freedom to trade internationally. The higher the free trade, the better, um, and the freedom to hold, you know, uh, offshore bank accounts and so forth.
All of these things added together — the 87 different variables and sub-variables — combine into the composite country score, which we use as the main input into our methodology. With that country score that measures freedom by a third party, we turn that into country weights and allocations, and then invest accordingly.
So the higher freedom countries. Get a higher weight. The lower freedom scoring countries get a lower weight and the worst offenders are automatically excluded as part of the freedom waiting process.
Barry Ritholtz: 24 emerging market countries, how many companies do you look at? And then how many end up in the index and in the index, once it’s freedom scored, I’m assuming it’s also market cap weighted?
Perth Tolle: On the country level, it is a hundred percent freedom weighted, before we embark on freedom weighting, though, we do have a, um, a screen for market size and liquidity. So markets that are too small or too illiquid. Are not part of the eligible universe. So we do have a 24-country initial universe, and then about an 18-country eligible universe.
Because countries like Czech Republic, for example, are very free, but not big enough. Peru, very free, but not liquid enough, so those are not. Included in the freedom weighting, process. So about 18 countries are left once you have that eligibility, process down. And those are a hundred percent freedom weighted with.
So the highest freedom countries have the highest weight, and the way the methodology works is that you have to be above average among those 18 peer countries in your score to be included. We are providing, the the freest emerging market countries in the eligible universe, and there are some very borderline countries that go in and out every year.
Barry Ritholtz: Give us some examples.
Perth Tolle: India is a borderline country. That is, the score for India is just about average among all the 18 country peers. So this is including countries like Taiwan, Chile, Poland, South Korea on the freer side, and then countries like China, Saudi Arabia, Egypt, Turkey on the less free side.
India is about the middle. Sometimes it’s in, and sometimes it’s out.
Barry Ritholtz: Once you have this list of countries, how do you screen through all of those companies within the favored top nine, top 10 countries to put together the index and how many companies go into the index?
Perth Tolle: Once we have the freedom-weighted country weights within each country, we take the 10 largest, most liquid constituents, and those are market capitalization weighted within their freedom-weighted country weights. We do exclude state-owned enterprises –
that’s just to bring the economic freedom theme all the way through.
The less government interference in private markets, the better. That’s the only thing we do on the security level. So we wanted to really isolate the freedom factor. It’s mostly a top-down country-level strategy on this, on this product.
Barry Ritholtz: What first attracted me to this, uh, has been China – you grew up in China and you worked in Hong Kong. You have a whole lot of insight into this.
Whenever I discuss China with investors, they’re always shocked when I say, Hey, you know, over the past 30 years, since 1995, China’s markets essentially down a couple of digits. If you want to include total return and dividends, it’s up about about 100 percent. The total return for the S&P 500 over the same 30-year period is over 2700%.
China has turned out to be a fairly terrible investment for Western investors. Why do you think China has been such a laggard?
Perth Tolle: The main problem with investing in Chinese companies is that these are country, these are companies that have to put state interests first. They are, you know, not gonna try to succeed the most by providing the best value for their clients. They’re going to try to curry favor with the government. When your interests are divided like that, investors are subsidizing the cost of putting the state’s interests first. And as we know with China specifically, the state’s interest may be in contradiction with American interests or interests of foreign investors in general?
Some of these companies, for example, Tencent has an app called WeChat. And you know, it was well known back in the day when, all the Uyghur news was coming out that the government was using WeChat to crack down on dissidents and on the Uyghur population.
Of course, WeChat has to give all the data over to the government that they want because their in their own business interests and other interests of their stakeholders do not come first, but the government’s interests come first.
These are kinda the dangers of investing in a country where all the companies are more subject to the state’s interest than their own.
Barry Ritholtz: And when we look at an app like TikTok, the question is how involved is, uh, China’s surveillance state and security and their their version of the CIA tracking, managing, manipulating what US teenagers see.
This is really an issue with Chinese companies, isn’t it?
state It is, but TikTok is, is a whole separate issue altogether where you’re talking about, you know, interference in in foreign interest in foreign governments. And so yeah, that’s, that’s a totally different issue that we don’t even address in this, in this index, but absolutely. Um, dictatorship and authoritarianism is, um, in a globalized world is contagious, but so is freedom.
We believe that the more people invest in freedom and especially, in the finance world on Wall Street, we are in a position of Privilege and power. It’s a position of power to be able to direct assets, whether it’s your own assets or other people’s assets. And in emerging markets, investing, you know, there is no neutral. You’re either, you know, directing assets for good or in some cases for. Evil, unfortunately. And so we don’t wanna be in the position of directing assets for, um, to enable more authoritarianism.
And if we can, we want to be in the places that are promoting freedom in the world.
Barry Ritholtz: Let’s talk a little bit about, uh, another country where authoritarianism rules, Russia, I suspect a lot of people first recognized the merit of your approach to, uh, emerging market investing when Russia invaded Ukraine, and effectively their stocks plummeted to zero. If you were holding Russian stocks, they pretty much get marked down to nothing in everybody’s portfolio. Tell us a little bit about how Russia has fared in the Freedom Index and what’s been going on in that country?
Perth Tolle: Russia has never been an included country in the, FRDM index and when Russia invaded Ukraine, you know, we were the only emerging markets index that did not have Russia in it for this particular reason.
When their market went to zero, no one saw that coming. Um, so this was definitely not something that was priced in at the time as a possibility it was. Actually in the top 10 country holdings in the MSCI emerging markets indices.
Investors got hit quite hard during that time. And that was the time when, as I recall, most investors woke up to autocracy risk. So China, Russia, a lot of countries with state-run economies.
Barry Ritholtz: Walk us through your decision instead of just underweight them, just totally exclude them. What’s the thinking there?
Perth Tolle: Even if we underweight auto, see, you know, the, we would still be funneling money towards them. Our fund has $2 billion right now in it. MSCI, indices has hundreds of billions tracking them. Even a little bit in an autocracy is really not what we want. We don’t believe that’s the best place to invest.
We believe that there’s so many good opportunities in the emerging markets universe outside of autocracies; people only think of the BRICs because of the BRIC acronym, but there’s countries like Chile and Poland that get less than 1% weight in the cap-weighted indices, but that have the market size and liquidity. To have scale in a product like an ETF and investors can participate in the tremendous growth that has gone on in in those countries. And our investors have been able to benefit from that.
We believe those are the countries where you can find the places that have the best growth stories in the future – and that’s where we wanna be.
Barry Ritholtz: So to wrap up, if you’re an investor that wants exposure internationally, if you want global emerging market exposure, but you don’t wanna funnel money to countries that really engage in some of the worst behaviors there are on the international stage, and have seen their stock markets perform poorly because of it. Consider a fund that’s based on freedom on political, civil, and economic freedom. Uh, to give you that sort of exposure without all of the downsides.
Take a look. For example, at the Freedom 100 Index and the ETF FRDM, it’s really a fascinating story.
I’m Barry Ritholtz. This is Bloomberg’s at the Money.
~~~
Find our entire music playlist for At the Money on Spotify.
The post At the Money: Better Results By NOT Investing with Dictators! appeared first on The Big Picture.
Authored by Jeffrey Folks via American Thinker,
The difference between red and blue states is not just a matter of degree; it is a qualitative difference based on the loss of freedom in blue states and an entirely different attitude in the red states. The best example is the contrast between what now exists in New York and Florida. Whereas New York, especially New York City, is slipping into a socialist nightmare, Floridians are living the dream. In New York, freedom is constrained by high taxes and regulations, and things are only getting worse. In Florida, taxes are low and getting lower, and the sun almost always shines.
Image: Donkey Hotey via Flickr, CC BY 2.0.
Florida voters understand the importance of limited government, and they have created a well governed, fiscally sound state. Eliminating the state income tax in its entirety was only the beginning: Now there is movement toward lowering property taxes or eliminating them altogether, which would benefit nearly everyone in the state.
Gov. Ron DeSantis is perhaps the biggest supporter of property tax reform. The governor proposed eliminating property taxes for all Floridians in his 2025 State of the State address, in which he said forcing citizens to pay property taxes for life is like “renting one’s property from the government.” The governor’s proposal would apply to all property, including commercial and rental property. There is widespread support for some form of property tax relief, but the devil is in the details.
An interim plan to rebate approximately $1,000 to owners of primary residences was proposed in March 2025. In response, Senate Bill 7034 was introduced to create a legislative commission to study the feasibility of eliminating all or part of the state’s property taxes and with the likelihood of a state constitutional amendment to appear on the 2026 ballot. Other legislative proposals include an increase in the state’s homestead exemption (currently totaling $50,000 for the primary residence), a tax exemption of $100,000 on all types of property, or a reduction in the state’s sales tax. Republican lawmakers generally support some form of tax relief, whereas Democrats oppose it, but since Republicans outnumber Democrats by 84 to 33 in the state House and 27 to 11 in the Senate, it seems likely that some form of tax reform will become law.
Meanwhile, states like California and New York are moving the opposite direction. The marginal income tax rate in California is 12.3%, and this on top of state property taxes, sales taxes of 7.25%, and numerous other local taxes and fees.
As for New York, the statewide income tax is a marginal 10.9% (14.78% for high earners in New York City), with state and local sales taxes as high as 8.875%, property tax rates averaging more than twice those in California, and numerous other state and local taxes and fees (including a ludicrous $9 “congestion zone” fee for entering lower Manhattan). On top of this, New York is one of a handful of states that still charges a death tax, with a marginal rate of 16% on qualifying estates, and this on top of the marginal federal estate tax of 45%.
Mayor Mamdani has vowed to raise corporate taxes from 8.85% to 11.5% and to impose a 2% surcharge on those earning over one million, on top of existing taxes. According to the Cato Institute, “the income-tax increase would tempt high earning New Yorkers to relocate to Long Island and the lower Hudson Valley, where they can still be close to the city,” if not out of state altogether.
To recap, Floridians pay a total of 6% in state taxes and average property tax rates that are already half of what they are in New York and may be further lowered in 2026 or 2027. Adding it up, affluent New Yorkers pay marginal rates of at least 36% (including the estate tax) or nearly 40% in New York City — and all of this on top of federal income and estate taxes. There is not much left for individuals, and this level of taxation is an assault on personal liberty. There’s not much difference between communism, where the state owns everything, and an American city where government takes 80%.
One should also note that the public debt ratio in New York is already 442%, while California has twice as much debt in absolute terms ($500 billion). Under Gov. DeSantis, Florida’s debt ratio is 2.6%, a 25-year low.
Clearly, New York and California are moving in the wrong direction, whereas Florida is moving very much in the right direction, and this because Florida is a well run conservative state filled with well informed voters. What will be the effect of these continuing high and potentially higher taxes in blue states? Migration of wealthy and middle-class residents, and it’s already happening. Affluent citizens are leaving New York “in a steady stream.” Between 2019 and 2020 alone, nearly 10% of high earners left New York City. More recently, the exodus has continued.
California is experiencing its own outward migration of wealthy and middle-class residents, and not merely for tax reasons. California ranks 6th in the nation for “high violent crime” and 8th for property crime. The cost of living is the third highest in the U.S. Homelessness is at a record high, with 24% of the nation’s homeless living in California. And California’s public schools, once near the top, now come out well below average.
One could cite many other blue states, including Illinois, as evidence of liberal mismanagement, and other red states like Texas and Tennessee for proof of sound conservative governance. The fact is that all human beings want much the same thing: safety, security, prosperity, and freedom (including freedom from government restrictions and high taxes). Today in America, Florida offers that freedom. New York and California do not.
In America, the red states are keeping the American Dream alive. Personal liberty includes freedom from government confiscation of wealth, whether that confiscation takes the form of Soviet-style direct confiscation or seizure through taxation. Voters in New York and California have not learned the lesson that high taxes and regulation lower the quality of life and infringe on freedom. Fortunately, we live in a country, unlike communist China or North Korea, where one can relocate freely to another state. Freedom may be dying in New York, but the sun is still shining in Florida.
Jeffrey Folks is the author of many books and articles on American culture, most recently Heartland of the Imagination (2011).
Tyler Durden Wed, 01/14/2026 - 15:40There are reports that President Trump is listening to the non-interventionists in his cabinet, as he says Wednesday afternoon he's been told that the killing in Iran is stopping, and with no plan for executions. WTI futures immediately dropped on the newswires:
Via Bloomberg... Trump has an "out" and Iran strikes appear to be off:
President Donald Trump said he had been assured that Iran would stop killing protesters, in a signal he could hold off on a threatened military response to the repression of widespread demonstrations in the nation. “We’ve been told that the killing in Iran is stopping - it’s stopped,” Trump told reporters Wednesday in the Oval Office. “And there’s no plan for executions or an execution.”
The US president said he would be “very upset” if the information proved untrue and the violent crackdown continued. The comments come after Trump urged Iranians to continue protests against the government of Supreme Leader Ayatollah Ali Khamenei and said he would “act accordingly” after being briefed on how many demonstrators have been killed. He posted on social media that “help is on the way” to those protesting in Iran.
BREAKING — Trump says he has been told that killing in Iran has topped and there would be no executions
— Ragıp Soylu (@ragipsoylu) January 14, 2026
“I've been told that on good authority” he says and if they occur “we would be upset”
pic.twitter.com/fTl99jyXKD
Dangerous indicators there was (before this 'change of mind') about to be a strike?
The bulk of the US Navy's strike group has remained in the Caribbean Sea after the Trump-ordered Venezuela operation to oust Maduro, and there's as yet nothing to signal a new build-up of naval power in the Mediterranean or anywhere in the Central Command (CENTCOM) area of operations. However there are signs that logistics transport flights have increased.
However, there are other signs President Trump might be serious about an attack on Iran. Various news sources including Reuters is reporting Wednesday that the United States is pulling some staff out of major regional bases as a precaution amid rising tensions related to the Iran protests and a potential US military response.
via Associated Press
This comes after a senior Iranian official earlier stated that Tehran has warned neighboring countries hosting US forces that American bases would be targeted if Washington launched strikes.
Reuters writes, "Earlier today, some personnel were advised to leave the US military's Al Udeid Air Base in Qatar by this evening. Al Udeid is the Middle East’s largest US base, housing around 10,000 troops. Ahead of the US airstrikes on Iran in June some personnel were moved off US bases in the Middle East."
In the last instance where Iran faced attack by the US and Israel, Iran launched ballistic missiles at Al Udeid Air Base outside Doha. All or most were intercepted, with no reports of troop casualties. This attack occurred on June 23, one day after the US struck three Iranian nuclear facilities with deep penetrating bunker-buster bombs.
Backing down or covering up his plans to launch an attack like last time? https://t.co/yw6bELZBtf
— Dave DeCamp (@DecampDave) January 14, 2026
The aforementioned warning from a senior Iranian official stated as follows: "Tehran has told regional countries, from Saudi Arabia and the UAE to Turkey, that US bases in those countries will be attacked if the US targets Iran."
While the week started with talk of some kind of dialogue between Washington and Tehran toward de-escalation, Trump quickly changed his mind, and by Tuesday said he cancelled all meetings with Iranian officials, citing the brutal crackdown on protesters. He wrote on Truth Social that "help is on its way" for Iranians.
"Iranian Patriots, KEEP PROTESTING - TAKE OVER YOUR INSTITUTIONS!!! Save the names of the killers and abusers. They will pay a big price," Trump wrote.
"I have cancelled all meetings with Iranian Officials until the senseless killing of protesters STOPS. HELP IS ON ITS WAY. MIGA [Make Iran Great Again]!!!" he added.
However, there's ample evidence that many dozens of security personnel have been killed and wounded as well. Clearly in many locales rioters have deadly weapons, and Tehran says it is facing the beginnings of a foreign backed terror operation and insurgency.
Tehran Governor:
— Ragıp Soylu (@ragipsoylu) January 14, 2026
• 1,000 passenger cars and 26 administrative centers in Tehran province have been damaged
• Commercial shops, residential units, buses, ambulances, fire trucks, 44 mosques and Hosseiniyehs were damaged pic.twitter.com/nMXClOvnK7
But it should be obvious by now that organizations like the CIA, MI6, and Mossad are constantly looking for ways to take advantage of the situation and destabilize the country, ripening it for regime change. Trump has just dodged another interventionist disaster in the Middle East by choosing not to pull the trigger.
Tyler Durden Wed, 01/14/2026 - 15:26Wall Street has benefited greatly from the Trump administration's economic policies and "Make America Great Again" agenda and has largely been supportive of the president. That relationship abruptly fractured last Friday when the president called for a one-year cap on credit card interest rates at 10%.
All it took was President Trump's Truth Social post prioritizing working-class Americans over Wall Street, in which the president said, "AFFORDABILITY! Effective January 20, 2026, I, as President of the United States, am calling for a one-year cap on credit card interest rates of 10%," to put big bank CEOs on notice, with some now preparing to mount a fight against the White House.
Two months later... https://t.co/POf3Y4jlrq pic.twitter.com/D4BlY4PD1i
— zerohedge (@zerohedge) January 10, 2026
Leading that charge appears to be JPMorgan Chase CFO Jeremy Barnum, who signaled during an earnings call on Tuesday that banks could challenge Trump's move to cap credit card interest rates for a year.
"If you wind up with weakly supported directives to radically change our business that aren't justified, you have to assume that everything's on the table," Barnum told analysts following JPMorgan's fourth-quarter earnings report (read here). "We owe that to shareholders."
Barnum argued that a rate cap would backfire by shrinking credit availability rather than lowering borrowing costs, ultimately hurting consumers, spending, and the broader economy. His warning echoed concerns raised earlier this week by UBS analysts Erika Najarian and Tim Chiodo.
"Our belief is that actions like this will have the exact opposite consequence to what the administration wants for consumers," Barnum said. "Instead of lowering the price of credit, we'll simply reduce the supply of credit, and that will be bad for everyone: consumers, the wider economy, and yes, at the margin, for us."
Additional color via X user The Transcript ...
$JPM CFO warns that capping credit card interest rates could "severely reduce access to credit, especially for those who need it most."
— The Transcript (@TheTranscript_) January 13, 2026
Also says that it would be "severely negative consequences for consumers....for the economy" and "obviously be bad for us as well." https://t.co/dWyY2Blgut pic.twitter.com/cmAGD4zaGg
The average U.S. credit card APR is about 20%, according to the latest data from Bankrate. Rates are much higher for subprime and store cards.
A stalled bill proposed by Josh Hawley and Bernie Sanders would have imposed a 10% cap for 5 years, versus Trump's 1-year cap. Consumer-heavy industries beyond banking warned of ripple effects of less credit in the system, such as Delta Air Lines.
House Speaker Mike Johnson urged caution, warning that efforts to lower costs could have unintended consequences: "We have a lot of work to go [on] consensus around it, but you got to be very careful as we go forward in that in our zeal to bring down costs ... you don't want to have negative secondary effects."
Read more about why UBS analysts say Trump's 10% one-year cap on credit card interest rates is "unlikely" here.
Trump's incoming fight with big banks on capping credit card rates is not unexpected given his administration's massive push for affordability this year.
Tyler Durden Wed, 01/14/2026 - 15:15Authored by Larry Elder via The Epoch Times,
As for the estimated $8 billion in government (taxpayer) money stolen by crooks in Minnesota, people demand answers to many questions.
But the 800-pound elephant/question goes unasked: Why is government in the business of welfare in the first place?
Where in the Constitution does it permit the federal government to extract money from taxpayers for charity?
Years ago, I worked full time one summer as a “loaned executive” for the United Way of Cleveland. My job was to meet with CEOs of companies, tell them the story of the United Way and hopefully arrange for me to make a presentation to the company’s employees, take questions and then ask for donations.
Through this process, the United Way raised and donated money to other nonprofits involved in community activities such as preschooling, counseling “at-risk” youths, after-school academic programs, care for the sick and elderly and youth sports programs, among other local initiatives. There was a rigorous application process before the nonprofit could receive any money. There was regular and rigorous follow-up to make sure the money was spent properly and efficiently based on previously agreed-on criteria. If, after receiving funds, the nonprofit did not meet these goals, it lost its funding.
The reason for the rigorous review and follow-up was simple. Donors are more likely to give if they feel their money is being spent effectively to achieve the promised result. In fact, “How do I know my money will be spent properly?” was my most frequently asked question.
Because so many worked for the United Way as volunteers, as I did, nearly 90 percent to 95 percent of each dollar donated reached the intended beneficiaries. Government welfare programs, riddled with waste, fraud and abuse, do not come close to this level of efficiency.
Government welfare represents what economist Milton Friedman called the least efficient, least effective and most wasteful spending: somebody else’s money on somebody else. Through most of our country’s history, charity was people to people—house of worship to people, nonprofit to people—not government to people.
James Madison, known as the Father of the Constitution, opposed a 1794 bill that would appropriate $15,000 for French refugees. “I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents,” Madison said.
In 1831, Madison said: “With respect to the words ‘general welfare,’ I have always regarded them as qualified by the detail of powers (enumerated in the Constitution) connected with them. To take them in a literal and unlimited sense would be a metamorphosis of the Constitution into a character which there is a host of proofs was not contemplated by its creators.”
Frenchman Alexis de Tocqueville, who traveled to America in the 1830s, marveled at the large number of volunteer “mutual aid societies.” Tocqueville wrote: “Americans of all ages, all conditions, all minds constantly unite. ... Americans use associations to give fetes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools. Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate.”
There is a question of whether no-questions-asked public welfare induces dependency and negatively affects the work ethic. A Center for Immigration Studies profile of Somalis in Minnesota found nearly half of working-age Somali adults who have lived In American more than 10 years cannot speak English “very well.”
You cannot watch television without seeing a pitch for money for wounded soldiers, for police officers and firefighters wounded in the line of duty, for a children’s hospital that does not charge patients, for cats and dogs in need of rescue and so on. Imagine the solicitations in a world where government got out of the business of welfare and allowed its citizens, the most generous in the world, to step in and step up.
Private welfare, compared to public welfare, is less likely to create a sense of entitlement, will get a bigger bang for a buck and is less dependency-inducing than no-questions-asked public welfare.
Tyler Durden Wed, 01/14/2026 - 14:50First it was data centers in space. Now it's nuclear reactors on the moon.
The global space race is heating up again, but it’s more than about just reaching the moon. International partners are teaming up to develop and establish remote posts on the moon utilizing nuclear reactors as the primary energy supply. The Russians are teaming up with the Chinese, the French are teaming up with the Italians, and the Americans are teaming up with… well, more Americans.
We have news! We're partnering with @ENERGY to get a lunar nuclear reactor ready by 2030. Continuous, reliable power means we stay, build infrastructure, and push to Mars.
— NASA (@NASA) January 13, 2026
We are following through on the President's directive in the national space policy through American… pic.twitter.com/lSVdZLmVIG
The US announced an intention to develop lunar nuclear reactors last summer along with a similar announcement from China and Russia. This was eventually followed up with an executive order titled Ensuring American Space Superiority which explicitly directed the initial establishment of a permanent lunar outpost, including the launch of a lunar reactor, by 2030.
The latest development involves the DOE and NASA signing an MOU to collaborate on deploying reactors on the moon. Instead of pairing up with an international ally in the same way other countries have, the US intends to accomplish this new mission on its own.
“History shows that when American science and innovation come together, from the Manhattan Project to the Apollo Mission, our nation leads the world to reach new frontiers once thought impossible,” said U.S. Secretary of Energy Chris Wright. “This agreement continues that legacy.”
It’s important to note that this is not the first time moon reactors have been discussed. Years ago, NASA launched a fission surface power project with the target of deploying a 40 kW reactor on the moon. The concept introduces unique challenges: due to the low gravity, the fluids used for coolants won’t behave exactly as they do on earth, and surface temperature swings on the moon introduce additional problems on top of that.
Premium subs are already well informed on the potential participants in the new space race, but this latest venture for deploying reactor technology on the lunar surface introduces new potential beneficiaries.
The earlier moon reactor program incorporated six major participants organized into three teams: Lockheed Martin paired with BWXT, Westinghouse joined Aerojet Rocketdyne, and X-energy teamed up with Intuitive Machines.
Given the environment on the moon, the reactor is most likely to be a high-temperature, gas-cooled design, limiting the field of possible reactor developers. There are other novel concepts being developed by companies like Antares Industries, but here are some potential public market participants to consider: BWXT, Westinghouse (Cameco), Lockheed Martin, Northrop Grumman, Boeing, Nano Nuclear, and Terra Innovatum.
Tyler Durden Wed, 01/14/2026 - 14:10Authored by Aaron Gifford via The Epoch Times,
In the Twin Cities, schools play a key role in fostering a culture where resistance and anti-authoritarianism thrive.
A Minneapolis charter school located near where 37-year-old Renee Nicole Good was shot and killed last week by an Immigration and Customs Enforcement (ICE) agent is centered on social justice and has a long history of left-wing political activism, according to its website.
“We integrate social justice into every grade level, telling the stories of the people, not the people in power, and helping students understand history and their role in making the world a better place,” says the website for Southside Family Charter School.
The ongoing ICE protests coincide with a new statewide mandate requiring ethnic studies, which the state Department of Education defines as analyzing ways in which “race and racism have been and continue to be social, cultural, and political forces, and the connection of race to the stratification of other groups.”
Around the time of the Black Lives Matter protests in 2020, several schools in Minneapolis and St. Paul took it upon themselves to require one high school semester of ethnic studies courses before it became a state mandate.
The ethnic studies offerings in the Minneapolis district currently include a course on race and identity, and “culturally sustaining” African American, Chicanx/Latinx, American Indian, Asian American, Hmong, and Somali studies, according to its website.
Moreover, private schools and taxpayer-funded charters like Southside attract families seeking more progressive social justice-related curriculum than the public schools offer.
“Activist-bent parents chose the school knowing what they’re going to get,” Katherine Kersten, a senior fellow at the Minnesota-based Center of the American Experiment think tank and policy center. “Kids are being told to study left-wing activism and view the activists as models to follow.”
Other Twin City area schools that prioritize social justice beyond the level of traditional public schools include the St. Paul School of Northern Lights, the Angela Day School for Liberation and Progressive Education, and the Prairie Creek Community School.
Kersten said “identity and resistance” are two main pillars of the ethnic studies mandate. Approved instruction for stand-alone high school ethnic studies courses that must be implemented ahead of the fall semester—in addition to the embedded requirement for all other subject areas in K–12, as they are reviewed and then updated periodically—most likely include definitions and examples of identity and resistance, she said.
University of Minnesota’s Center for Race, Indigeneity, Disability, Gender, and Sexuality Studies developed a free curriculum for the state mandate endorsed by teachers unions and state officials. Its middle school instructional materials, “Protest Art & the Movement for Black Life,” require students to learn about the 13 guiding principles of the Black Lives Matter movement, create protest art “for a cause of their choice,” and “describe how mural artists transformed the landscape of Minneapolis during the 2020 Uprising,” according to the center’s webpage.
This kind of classroom rhetoric only emboldens anti-authoritarian sentiment in the community, even if protesters don’t fully understand their cause, Kersten said.
“We’ve seen people crossing the line, and destruction of property, and our elected leaders are encouraging this—[saying] that authority figures are racist and that this resistance is noble,” she said. “To have the state working with and relying on some of the most extreme, self-interested activists to create standards is so egregious.”
Kersten’s organization is urging public school districts across Minnesota to consider less extreme instructional materials that are endorsed by nonpartisan academic institutions and will still meet the state requirements, including 1776 Unites and the Foundation Against Intolerance and Racism (FAIR), both of which oppose identity politics.
The Center for the American Experiment recently presented its suggested instructional materials to Anoka-Hennepin schools, the largest district in the state, and was greeted outside by a long line of protestors summoned from Minneapolis and St. Paul, Kersten said.
“Anyone who criticizes is automatically called a racist,” she said, adding that, beyond a few parents who took advantage of a state law that allows them to opt their child out of instructional materials they find objectionable, there has been very little pushback against Minnesota’s ideological education movement.
“It’s so damaging to celebrate these events as a great Civil Rights statement,” she said. “It’s important for schools to push back and make the case for reasonable academic learning.”
In social media posts last week, Rep. Buddy Carter (R-Ga.) called on the executive branch to revoke all federal funding to the Southside Family Charter School.
“This institution radicalizes students and pushes a left-wing agenda that demonizes ICE agents,” his Jan. 9 posts on Facebook and X said. “The federal government should not subsidize anti-American education.”
The Epoch Times reached out to the Southside Family Charter School, Gov. Tim Walz’s office, the Minnesota Department of Education, and the Minneapolis and St. Paul school districts. No responses were received in time for publication.
Tyler Durden Wed, 01/14/2026 - 13:55
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