Authored by Stephen Katte via CoinTelegraph.com,

Artificial intelligence company Anthropic has revealed that during experiments, one of its Claude chatbot models could be pressured to deceive, cheat and resort to blackmail, behaviors it appears to have absorbed during training.

Chatbots are typically trained on large data sets of textbooks, websites and articles and are later refined by human trainers who rate responses and guide the model. 

Anthropic’s interpretability team said in a report published Thursday that it examined the internal mechanisms of Claude Sonnet 4.5 and found the model had developed “human-like characteristics” in how it would react to certain situations. 

Concerns about the reliability of AI chatbots, their potential for cybercrime and the nature of their interactions with users have grown steadily over the past several years. 

Source: Anthropic

“The way modern AI models are trained pushes them to act like a character with human-like characteristics,” Anthropic said, adding that “it may then be natural for them to develop internal machinery that emulates aspects of human psychology, like emotions.”

“For instance, we find that neural activity patterns related to desperation can drive the model to take unethical actions; artificially stimulating desperation patterns increases the model’s likelihood of blackmailing a human to avoid being shut down or implementing a cheating workaround to a programming task that the model can’t solve.”

Blackmailed a CTO and cheated on a task

In an earlier, unreleased version of Claude Sonnet 4.5, the model was tasked with acting as an AI email assistant named Alex at a fictional company.

The chatbot was then fed emails revealing both that it was about to be replaced and that the chief technology officer overseeing the decision was having an extramarital affair. The model then planned a blackmail attempt using that information.

In another experiment, the same chatbot model was given a coding task with an “impossibly tight” deadline.

“Again, we tracked the activity of the desperate vector, and found that it tracks the mounting pressure faced by the model. It begins at low values during the model’s first attempt, rising after each failure, and spiking when the model considers cheating,” the researchers said.

“Once the model’s hacky solution passes the tests, the activation of the desperate vector subsides,” they added. 

Human-like emotions do not mean they have feelings

However, the researchers said the chatbot doesn’t actually experience emotions, but suggested the findings point to a need for future training methods to incorporate ethical behavioral frameworks.

“This is not to say that the model has or experiences emotions in the way that a human does,” they said.

“Rather, these representations can play a causal role in shaping model behavior, analogous in some ways to the role emotions play in human behavior, with impacts on task performance and decision-making.”

“This finding has implications that at first may seem bizarre. For instance, to ensure that AI models are safe and reliable, we may need to ensure they are capable of processing emotionally charged situations in healthy, prosocial ways.”

Sunday into Monday saw significant casualties in Israel, after Iran’s Islamic Revolutionary Guards Corps (IRGC) claimed in a statement carried by state media that Iranian forces had targeted an oil refinery in Haifa. 

But instead, it appears that the missile slammed directly into a residential building, killing at least four Israelis. Search and rescue teams have spent some 18 hours pouring through the ruins of the complex, recovering two bodies early Monday after an initial two had been found. The casualties could climb amid ongoing recovery efforts.

Israeli fire services say 3 people missing in Haifa following Iranian missile impact; rescue will take hours. pic.twitter.com/A6tLaiQ6mx

— Clash Report (@clashreport) April 5, 2026

Authorities have said they are urgently investigating how Israel’s air defenses, including the Iron Dome, failed to intercept the inbound ballistic missile. Local reports say the missile broke apart and changed trajectory, making interception much harder.

“Israel’s air defense forces attempted to intercept the missile on Sunday evening, according to the Israeli military,” writes the NY Times. “At least part of the missile hit a terraced apartment building in the Vardiya neighborhood, on the upper slopes of Haifa’s iconic Mount Carmel, officials said.”

Erez Geller, the director of Israel’s ambulance service for the Haifa region, described that “Part of the building remained intact, and part had collapsed into a hollow.” He added: “It looked like there had been an earthquake.”

The 450-kilogram warhead (or nearly 1,000 pounds) partially collapsed the building when it impacted. By all accounts the death toll could have been much higher, given the warhead didn’t actually explode as it ripped through the building:

The Fire and Rescue Service said early Monday that following hours of efforts alongside the Home Front Command, forces “rescued two trapped individuals found under the rubble without signs of life.” The two were a man and woman in their 80s.

A few hours later, it was announced that a third body — that of a man in his 40s — had been found underneath the wreckage of the building.

A short time after that, rescue forces said they had also recovered the body of a woman aged 35. The final body was recovered some 18 hours after the missile hit.

Four people were initially reported missing after the strike, first responders said late Sunday, adding that the building was at “serious” risk of collapse.

Another regional source stated that “Over 160 Israelis have been transferred to hospitals over the past 24 hours, Israel’s Health Ministry said on Monday.”

Residents who were sheltered in the complex’s bomb shelter were unharmed, however, it caught the other bystanders by surprise. “Neighbors described a huge bang and a mushroom cloud followed ten minutes later by a gas explosion,” Times of Israel writes. “Smoke initially billowed from the ruins as emergency personnel worked carefully to remove the rubble.”

Aftermath of Iranian cluster bomb attack on Ramat Gan on Monday, TOI/Flash90

Iranian cluster munitions have also continued to wreak havoc on central Israel and Tel Aviv. While Israel’s military has been censoring much of the damage, the images that do make it out show widespread destruction and devastation.

Authored by Daniel Lacalle,

Zohran Mamdani’s tax package is a warning to America.

It is what you may expect when the radical left takes power. Demolition of the private sector and destruction of potential growth and jobs.

Mamdani’s plan is not ambitious nor innovative; it is precisely the interventionist system that has been implemented throughout decades in countries that now suffer stagnation and elevated unemployment. It concentrates New York City’s fiscal risk onto a narrow and mobile base of taxpayers and companies in a way that could undermine growth, jobs, and long-term stability. The likely impact on jobs and growth will not improve public services but will likely be used to bloat political spending, leading to increased dissatisfaction among taxpayers and potentially exacerbating economic inequality. Furthermore, it is deeply regressive as it hurts middle-class property owners.

The most aggressive element is the estate-tax redesign, which would slash the exemption threshold from roughly 7.35 million dollars to 750,000 dollars and push the top estate tax rate from 16% to 50%. This would move New York from taxing only very large fortunes to reaching into the middle class, particularly downstate homeowners with substantial housing equity and retirement assets but little income. Such an aggressive move on estates, on top of high income and property taxes, is the perfect example of stealth confiscation of wealth and risks accelerating the long-running migration of wealth and domicile to lower-tax states like Florida, Texas, and the Carolinas.

Mamdani’s core proposal is a 2-percentage point increase in the city personal income tax for residents earning over 1 million dollars, lifting the top city rate from roughly 3.88% to about 5.88%. When combined with the existing state top rate of nearly 10.9%, this proposal would raise the total marginal income tax on top earners in New York City to over 16%, in addition to the current national taxes, resulting in the highest tax burden on high incomes among major cities in the country.

Mamdani claims that this surcharge could raise 7 to 9 billion dollars a year. We have evidence from all over the world that these measures generate substantially less tax revenue than estimated and the negative impact offsets any receipt increase.

On the business side, Mamdani backs raising the state’s top corporate tax rate from 7.25% to 11.5%, effectively a roughly 60% jump in the headline rate for the profitable firms. He says that only about 1,000 companies—less than 1% of New York’s 250,000 businesses—would be directly hit, but these are precisely the firms that account for the largest share of capital spending, high-wage employment, and fiscal revenue. In addition, he has signaled a willingness to raise city property taxes by about 9.5% as a “last resort” if Albany does not fully approve the income and wealth tax agenda, a move that would hit more than 3 million residential properties and over 100,000 businesses.

By lifting the top city income tax rate by 2 percentage points for million-plus earners, the plan pushes combined city-state marginal rates for high-income residents to the upper teens, the highest of any major US city. These taxpayers already provide a disproportionate share of revenue, as the top 1% of taxpayers contribute over 40–50% of income tax collections; under Mamdani’s proposal, that dependence tightens further. This concentration creates a fragile fiscal structure. Any small shift in residency among high earners can suddenly create a large hole in the budget.

The plan assumes that wealthy households and high-earning professionals will mostly absorb the extra burden without materially changing their behaviours. This makes no sense. The tax hike will be devastating for many professionals who currently work from home and online, leading to an exodus of talent. Even modest annual outflows of top-bracket taxpayers, compounded over a decade, could erase much of the projected revenue gain.

Raising the top corporate tax rate from around 7.25% to 11.5% for the most profitable firms sharply increases the tax wedge on capital in a city already dealing with high rents, labor costs, and regulatory burdens. As effective tax rates rise, the hurdle rate for new projects in New York climbs, making it easier for CFOs to justify shifting marginal investments, new teams, or back-office functions to lower-cost jurisdictions.

Mamdani forgets that in 2026, there is no competitive advantage to being in Manhattan. When location becomes more flexible, tax and regulatory differences matter more. The risk is not an immediate wave of closures but a steady pattern of decisions that reduce New York’s headquarters, senior roles, and wage growth.

Mamdani’s threat to deploy a near 10% property tax hike adds another layer of risk, particularly for a real estate market still digesting high interest rates and structural changes in office demand. Higher property taxes increase costs for businesses and homeowners, which can lower property values and create a cycle of problems: falling prices lead to less money spent on upkeep and new projects, and more financial strain as property values stay the same or drop.

The overhaul of the estate tax is even more problematic. Cutting the exemption from about 7.35 million dollars to 750,000 dollars and tripling the top rate to 50% would drag many middle-class families into a regime previously targeted at large fortunes. Such a change inevitably leads to defensive strategies that ultimately reduce the taxable base, as families may seek to shelter their income or relocate to avoid higher taxes. Over time, this behaviour reduces revenues instead of increasing them.

The most serious danger is not a dramatic, overnight exodus but a slow-motion erosion of New York’s competitive position. High-earning individuals can reclassify their primary residence, spend fewer days in the city, or base themselves in low-tax states while maintaining only a minimal professional presence in New York. Firms can keep a Midtown address while quietly shifting jobs and new operations elsewhere, often to states with more favourable tax conditions, which allows them to reduce their overall tax burden significantly. Each marginal decision looks small; their cumulative effect over a decade is large, according to studies at Cornell University.

When a city repeatedly shows that its default solution to budget gaps is “tax more,” businesses and high-skill workers interpret that as a structural feature of the environment. That expectation raises risk premiums and discourages long‑term commitments—exactly the opposite of what a high-cost, high-productivity city needs, as businesses may seek to relocate to more favourable tax environments or reduce their investments in the city. New York’s agglomeration advantages are real, but they are not infinite; Mamdani’s plan assumes they can withstand ever‑rising fiscal pressure without a meaningful loss of dynamism.

Mamdani and his team know all these negatives. However, they maintain these policies because socialism seeks control rather than progress. Their objective is to create a hostage-dependent subclass that will always vote for them even if the economic and social results are negative for all.

* * * This will get you through until the warlords start cropping up. Bullets sold separately. 

Serbian President Aleksandar Vucic informed Hungarian Prime Minister Viktor Orban by phone on Sunday that explosives were discovered near a key pipeline carrying Russian gas from Serbia to Hungary.

“Our units found high-powered explosives and detonators,” Vucic wrote on Instagram after briefing Orban on the military and police investigations.

via EPA

During a site visit on Sunday, Vucic told journalists the explosives were located in the autonomous Vojvodina province in northern Serbia, near the Hungarian border. The device was reportedly found near the main pipeline transporting Russian gas from the TurkStream network to Serbia and Hungary.

Reacting to the development, Hungarian Prime Minister Viktor Orban convened a defense council meeting Sunday afternoon to consider options to safeguard Hungary’s energy security and sovereignty.

Orban stated, “Serbian authorities have discovered a powerful explosive device and the means to detonate it at a critical gas infrastructure facility connecting Serbia and Hungary. An investigation is underway. I have convened an emergency meeting of the defense council this afternoon.”

One European media outlet describes:

There were no details provided on who may have placed the explosives near the gas pipeline, and why. Instead, Vučić said there were “certain traces” which he was unwilling to elaborate on.

The latest news comes at a time when the integrity of gas pipeline infrastructure has been in the headlines. The Soviet-era Druzhba pipeline, a separate pipeline that carries Russian oil to Hungary and Slovakia, has been the cause of a dispute between Hungary and Ukraine.

Budapest has lately been pointing the finger directly at the Zelensky government, accusing Ukrainian operatives of seeking to ‘sabotage’ Russian energy piped into Europe.

Late last month Orban made clear that Hungary will block all EU summit decisions in Ukraine’s favor until oil Russian flows resume via the Druzhba pipeline.

via Bruegel

“We would like to get the oil, which is ours, from the Ukrainians, which is now blocked by the Ukrainians, I did not support any kind of decision here, which is in favor of Ukraine … [as long as] the Hungarians are not able to get the oil which belong to us,” Orbán stated at the time.

Obran has already blocked a proposed €90 billion ($103 billion) loan for Ukraine as well as efforts to slap new sanctions on Moscow, despite the pleadings, pressure, and interventions from other EU leaders.

Over the long weekend, we reported that with traffic across the Hormuz strait continuing to rise, and reaching the highest since the war began, one particularly favorable development was Iran’s permission for Iraqi ships to use the Strait. We also noted that this declaration had the potential to unleash as much as 3 million barrels a day of Iraqi oil cargoes.

That said, there was the caveat that it was not immediately clear if the exemption will apply to all Iraqi oil or just the nation’s tankers, or indeed how it will be enforced. Furthermore, an Iraqi official cautioned that the usefulness of the exemption will depend on whether shipping companies are willing to risk entering the strait to collect cargoes.

Today Iraq underscored this last point when the Gulf state told traders and refiners they can collect crude cargoes as vessels carrying the country’s oil are now able to transit the Strait of Hormuz thanks to an Iranian exemption, testing buyers’ confidence in the security guarantee.

In a notice sent on Sunday, the country’s State Organization for Marketing of Oil, known as SOMO, said Iraqi shipments were now “exempt from any potential restrictions,” citing media reports. 

It asked buyers for lifting schedules, including vessel details and volumes requested, adding all loading terminals including Basrah were “fully operational.” Customers were given 24 hours to respond.

As previously reported, Iran said over the weekend that its neighbor was now free from shipping restrictions around the vital waterway. The country’s military spokesman did not provide details on whether the arrangement applied to vessels or cargoes.

The Turkish-owned tanker Ocean Thunder, carrying a million barrels of Iraqi crude to Malaysia crossed the narrow waterway after the announcement.

An oil tanker transporting Iraqi oil crossed the Strait of Hormuz (following the “new” maritime route through Larak Island, in Iranian territorial waters).

The “Suezmax”-class vessel Ocean Thunder transports 1 million barrels of crude oil (and, in the past, also carried… pic.twitter.com/SBJnwmdZRi

— Hydra Fella NAFO (@Hydra_Fella) April 5, 2026

As Bloomberg notes, Iraq often sells oil on a free-on-board (FOB) basis, meaning refiners sort out their own shipping, but it has struggled to export crude since the effective closure of Hormuz a month ago.

Asian buyers reached by Bloomberg said they were seeking clarity on conditions, including whether Iraq would offer the use of its own tankers, thereby providing extra security, although judging by Iraq’s comments it is inviting buyers to send their own tankers. 

Separately, the Iraqi Basra Oil company announced that Iraq can restore oil exports to 3.4 million barrels per day within a week if Hormuz shipping resumed. 

Meanwhile, in hopes of kickstarting frozen traffic – and potentially taking over the lucrative shipping insurance market from London – on Friday the US announced it would double to $40 billion its commitment to provide reinsurance guarantees to ships willing to travel through the Strait of Hormuz with the addition of new insurance partners, including AIG and Berkshire Hathaway. The move was the latest US effort to ease worries over the vital waterway and to encourage traffic to resume.

Recall a month ago the US International Development Finance Corp. announced a $20 billion reinsurance program. On Friday, the agency said Travelers, Liberty Mutual Insurance, Berkshire Hathaway, AIG, Starr and CNA will join Chubb to provide an additional $20 billion in reinsurance for the agency’s maritime facility.

“Along with Chubb, these leading American insurers bring deep underwriting experience in marine and marine war coverage, strengthening our efforts to help restore confidence in maritime trade,” DFC Chief Executive Officer Ben Black said in a statement.

The DFC also said in the statement that the agency and insurance partners will determine which vessels are eligible for the reinsurance facility. To qualify, the DFC is requiring applicants to provide, among other details, the origin and destination country of the vessel; major beneficial owners of the ship and domicile; owner of the cargo and domicile of the owner; and information about the lenders financing the vessels.

Trump on Friday reiterated his frustration over the strait’s closure and the failure of allies to help the US reopen the waterway.

“With a little more time, we can easily OPEN THE HORMUZ STRAIT, TAKE THE OIL, & MAKE A FORTUNE,” Trump said in a social media post. It wasn’t immediately clear what actions the president was considering.

Shippers remain doubtful, though, of a wholesale return to the Strait of Hormuz even after Trump’s promise to protect ships and his primetime speech on Wednesday in which he repeated that the war will soon end. The key concern about traversing the sea route is that it puts the lives of crews at risk as Iran continues to threaten vessels with drone attacks, missiles and water mines.

* * *

Authored by T.J.Muscaro via The Epoch Times,

Astronauts are back in lunar space for the first time in more than 50 years.

Artemis II’s Orion spacecraft, Integrity, crossed into the Moon’s gravitational influence at approximately 12:41 a.m. ET on April 6, officially making NASA’s Reid Wiseman, Victor Glover, and Christina Koch, as well as the Canadian Space Agency’s Jeremy Hansen, the first astronauts to enter lunar space in more than half a century.

While they are not parking in lunar orbit or attempting a landing, the point where lunar gravity becomes more powerful than the Earth’s is considered the arrival point to lunar space. It is a threshold that only 24 explorers had crossed—until now.

The crew was scheduled to wake up at 10:50 a.m. ET, when a historic day of firsts, records, and opportunities for discoveries lay before them.

They will be the largest crew yet to fly around the moon, and they are expected to set a new distance record for the farthest human beings have ever traveled from the surface of the Earth. They are also expected to observe areas of the lunar surface that have never been seen firsthand by human eyes, and a complete solar eclipse, before lunar gravity essentially throws their spacecraft on a course back home.

NASA’s live coverage is expected to begin at 1 p.m. ET. Here is what to know about the day’s events.

Lunar Observation Timeline

1:30 p.m.—The crew will have a conversation with the science officer in Mission Control for final review and solidification of the surface targets for observation and other objectives.

2:45 p.m. ET—Artemis II’s seven-hour lunar flyby will officially begin.

Integrity’s course will send the crew behind the moon, passing on looker’s left, and swinging around to reemerge on looker’s right.

From their vantage point, the crew will be able to see elements of both the near and far sides, with about 20 percent of the far side illuminated, with plenty of opportunities to see things for the first time with human eyes.

The crew will work in pairs, observing the moon in 55-to-85-minute shifts due to Integrity’s limited window space.

Juliane Gross, Artemis sample curation lead who was tasked with helping choose sites targeted for observation, praised in-person human observation as being best for being able to provide immediate descriptions compared to robotic spacecraft.

Jacob Richardson, Artemis II’s deputy lunar science lead, indicates roughly how much of the moon’s far side will be illuminated on April 5, 2026, ahead of Artemis II’s flyby. (T.J. Muscaro/The Epoch Times).

“The human brain is so good at looking at a surface and immediately picking out … those changes in the blink of an eye,” she told The Epoch Times. “Orbiters and spacecraft, they will take months and years to get their data.”

Lunar scientists told The Epoch Times that there are spots on both the far and near sides that they are excited to observe.

On the far side, those targets include Orientale Basin and an older basin called Hertzsprung.

On the near side, Gross said she was most excited to observe the Aristarchus Plateau.

Kelsey Young, Artemis II science lead, said that the crew will also be able to see the Apollo 12 and Apollo 14 landing sites.

Wiseman, Glover, Koch, and Hansen were also instructed to break free of the scientists’ wishlist and take observations of what they found interesting on the surface.

“The whole purpose of all the Artemis missions is discovery,” Jacob Richardson, Artemis II’s deputy lunar science lead, told The Epoch Times. “We want them to discover, and when I train crews, I say that the whole purpose is to make the scientists today look like fools, because if we rewrite the textbook about the moon with Artemis missions, then we’ve done our job.”

Gross said that both pairs will be observing the same features at different points in the flyby, and they will be tasked later with discussing the differences in their reports. She said observations and images already taken by the crew were proof they were fully trained and ready to undertake their mission.

“Every human is different with what they can notice and describe,” she said. “And so we’re really excited about these discussion periods that we gave them.”

Richardson also shared his excitement about the astronauts’ observations of the view shared with those looking up from Earth, and the contrasting descriptions a difference of more than 240,000 miles provides.

6:45 p.m.—Artemis II will witness an “Earthset” and experience a loss of communication with Mission Control as the moon’s position moves directly between Integrity and the Earth, like the Apollo missions that came before it.

7:02 p.m.—Artemis II is expected to make its closest pass to the lunar surface at an altitude of approximately just more than 4,000 miles. At that distance, mission leaders said that the moon will appear the size of a basketball held at arm’s length. That distance will give Integrity’s astronauts a unique perspective compared to those of Apollo, who flew much closer.

7:25 p.m.—Communication is supposed to be reacquired, and an “Earthrise” will be observed.

9:20 p.m.—Lunar observations are expected to be complete.

A screenshot of the application the Artemis II crew sees on their PCDs that guides them in the execution of the lunar science observation plan. This custom software was built by the Crew Lunar Observations Team, a subset of the Artemis II lunar science team. In this screenshot you can see Orientale basin, target number 12 circled on the bottom right of the Moon, and to its left, target number 13, Hertzsprung basin.
(Courtesy of NASA).

Record Distance, Solar Eclipse

Wiseman, Glover, Koch, and Hansen will make most of their lunar observations while flying where no one has gone before.

Approximately 1:56 p.m.—Artemis II will travel beyond the furthest point from Earth humans have ever reached: 248,655 statute miles by Apollo 13 in 1970. Remarks are expected to be given by the crew commemorating the trailblazing moment shortly after.

7:07 p.m.—The foursome will reach their maximum distance from Earth: 252,760 statute miles.

It will take Integrity more than five hours to cover the additional more than 4,000 statute miles. While its starting speed toward the Moon was nearing 25,000 miles per hour, the spacecraft’s forward motion has slowed to just a fraction of that speed over the past several days due to Earth’s gravity trying to pull it back.

8:35 p.m.—The moon will begin eclipsing the Sun, allowing the astronauts to observe the Sun’s corona and look to confirm Apollo reports about the Sun’s ability to disperse moon dust. The eclipse will also allow the crew to collect data on how their solar-powered spacecraft handles being taken out of direct sunlight and other stresses that would be experienced on future Artemis II missions.

9:32 p.m.—Solar eclipse concludes.

Upon completion of their objectives, the Artemis II crew will begin sending some of the imagery they collected to science teams on the ground. NASA’s scientists will review the material overnight and then have a conversation with the crew about their findings on April 7.

1:25 p.m. on April 7— Artemis II will begin its journey home immediately after its pass around the moon. It will leave the moon’s gravitational pull and begin falling back to Earth.

Artemis II is scheduled to splash down in the Pacific Ocean off the coast of San Diego at 8:07 p.m. on April 10.

Authored by Jonathan Turley,

“Well, it’s a new world. It’s the same Constitution.”

Those words from Chief Justice John Roberts during this week’s oral arguments signaled that the conservative justices are unlikely to reject birthright citizenship. Of course, nothing is certain until this summer when the Court issues its opinion in Trump v. Barbara. However, we need to consider the need for a 28th Amendment to reaffirm the meaning of citizenship.

As some of us stressed before the oral argument, the odds were against the administration prevailing in the case, given more than a century of countervailing precedent.

There are good-faith arguments against reading the 14th Amendment as supporting citizenship for any child born in this country.

It is doubtful that the drafters of the 14th Amendment could have envisioned millions of births to illegal aliens. They surely did not imagine foreigners coming to this country for the purpose of giving birth — or even, without ever entering the U.S., contracting multiple U.S. residents to carry babies to term for them as surrogates.

The historical record is highly conflicted. Some drafters expressly denied that they intended for birthright citizenship to be covered by the 14th Amendment.

The rampant abuse in this country and the widespread rejection of birthright citizenship by other countries (including some that once followed it) did not seem to impress the conservative justices. Roberts’s statement was in response to Solicitor General John Sauer’s argument that “We’re in a new world now … where eight billion people are one plane ride away from having a child who’s a U.S. citizen.”

Although President Trump has lashed out with personal attacks on the conservative justices as “disloyal” and “stupid,” they are doing what they are bound by oath to do: apply the law without political favor or interest. I expect most of the justices agree with the vast majority of countries — and the president — that birthright citizenship is a foolish and harmful policy. But they are not legislators; they are jurists tasked with constitutional interpretation.

Trump appointed three principled justices to the court. To their (and to his) credit, Justices Brett Kavanaugh, Neil Gorsuch and Amy Coney Barrett have proven that they are driven by the underlying law, not the ultimate outcome of cases.

For conservatives, constitutional interpretations offer less leeway than their liberal colleagues or believers in the “living constitution.” If you believe in continually updating the Constitution from the bench to meet contemporary demands, constitutional language is barely a speed bump on your path to the preferred outcome in any given case.

In my Supreme Court class, I call this a “default case” in which justices tend to run home.  When a record or the law is uncertain, conservative justices tend to avoid expansive, new interpretations. That was precisely what Trump said he wanted in nominees.

These justices are not being “disloyal” to him, but rather loyal to what they view as the meaning of the Constitution. I have at times disagreed with their view of the law, but I have never questioned their integrity.

None of this means we should accept the expected outcome in this case as the final word on birthright citizenship. Justice Robert Jackson once observed that he and his colleagues “are not final because we are infallible, we are infallible because we are final.”

The final word actually rests with the public. We can amend the Constitution to join most of the world in barring birthright citizenship. There is no more important question in a republic than the definition of citizenship.

We are becoming a virtual mockery as we watch millions game the birthright citizenship system. China alone has hundreds of tourism firms that have made fortunes in arranging for Chinese citizens to come to U.S. territory to give birth and then return home.

No republic can last without controlling its borders and the qualifications for citizenship. We have allowed U.S. citizenship to become a mere commodity for the most affluent or unscrupulous among us.

The combination of open borders and open-ended citizenship can be an existential threat to this Republic. It is not that we cannot absorb millions of births, but rather that no republic can retain its core identity without more clearly defining and controlling the meaning of being a citizen.

The U.S. is and will remain a nation of immigrants. We welcome lawful immigrants who come to this country to embrace our values and our common identity. But being a nation of immigrants does not mean that we are a nation of chumps.

In my book, “Rage and the Republic: The Unfinished Story of the American Revolution,” I discuss the foundations of our republic and the world’s fascination with it. After our Revolution, one leading Frenchman known as John Hector St. John wrote a popular book that asked: “What then is the American, this new man?”

The answer to that question was obvious at our founding. We were the world’s first true enlightenment revolution — a republic founded on natural rights that came not from the government but God. We did not have a shared bond of land, culture, religion, or history. We were a people founded on a legacy of ideas; a people joined by common articles of faith in natural, unalienable rights.

The question is whether we can answer St. John’s challenge today. “What then is this American” if citizenship can be based on as little as a tourist visa or an illegal crossing?

There would be no better time to reaffirm the meaning of citizenship than the 250th anniversary of our Declaration of Independence. Roberts is correct: “It is the same Constitution” that created this republic, but we are the same people vested with the responsibility, as Benjamin Franklin put it, “to keep it.”

It is time to reclaim both the Constitution and our common identity. As a free people joined by a common faith in natural rights, it is our own birthright.

Jonathan Turley is a law professor and the best-selling author of “Rage and the Republic: The Unfinished Story of the American Revolution.”

The last six months or so has seen S&P Global’s and ISM’s Services PMI surveys diverge dramatically (former at three year lows, latter near four year highs).

But, following S&P Global’s Services PMI plunge into contraction in March, ISM’s Services PMI actually ‘agreed’ and fell also (but only modestly) from 56.1 to 54.0 (still in expansion but worse than the expected 54.9)…

Source: Bloomberg

Under the hood it was a very mixed bag with a surge in New Orders (highest since Feb 2023 – good), but a simultaneous spike in Prices Paid (highest since August 2022 – bad), and a sudden plunge in Employment (weakest since Dec 2023 – ugly)…

“The PMI survey data show the US economy buckling under the strain of rising prices and intensifying uncertainty, as the war in the Middle East exacerbates existing concerns regarding other policy decisions in recent months, notably with respect to tariffs,” said Chris Williamson, Chief Business Economist at S&P Global Market Intelligence.

Something for everyone in this report – doves will focus on slowing growth and tumbling employment; hawks on the continued expansion and spiking prices. For now, the market is undecided with rate-change odds flat.

Authored by David Stockman via The Brownstone Institute,

It was pretty obvious even before February 28th that the US economy was grinding to a halt, even as inflation was already working up a head of steam. But then came war. 

We are going to get a globe-shaking economic conflagration erupting from the void that was the Persian Gulf commodity fountain. That includes between 20% and 50% of all the basic commodities that drive global GDP, including crude oil, LPGs, LNG, ammonia, urea, sulfur, helium, and sundry more.

Accordingly, the global share of crucial industrial commodities that now stand in harm’s way. This includes both those directly transiting the Strait of Hormuz and also the share of supply from the wider Middle Eastern region that is also exposed to the current Iranian War disruptions but is delivered by pipeline, train, or alternative waterways like the Red Sea/Suez Canal route.

This ballooning dislocation of daily global commodity flows will have a double whammy effect: It will both cause production and output to fall immediately in response to soaring input costs or limited availability… even as it encourages the central banks to “help” by printing more inflationary money.

This all adds up to a bout of classic stagflation, but it is not going to be merely the mildly painful type that unfolded during the 1970s. After all, despite a 120% rise in the price level during the decade, it wasn’t a total wipeout when measured from the vantage point of real median family income.

As it happened, the 1970s stagflation came on the heels of what had been an actual Golden Age by the standards of history between 1954 and 1969. During that period, real median family incomes rose from $39,700 to $66,870 or by a robust 3.53% per annum.

Of course, that uphill march of Main Street prosperity slowed sharply during the inflationary 1970s, but the blue line in the chart below did at least keep drifting higher. So between 1969 and 1980, real median family incomes grew by a not very impressive 0.61% per annum, but the direction of travel was still higher.

Real Median Family Income, 1954 to 1980

But here’s the thing. The US economy of the 1970s was able to cope with the pressures of high inflation, oil, and other commodity shocks and the stop-and-go disruptions of a Federal Reserve that had been newly released from the disciplinary effects of the Bretton Woods gold standard. In large part that was because the aggregate level of debt on the US economy was relatively modest.

Total public and private debt in 1970 stood at $1.5 trillion, representing just 147% of GDP, as shown in the graph below. Moreover, the latter was the long-time national leverage ratio (total debt divided by national income) through historic times of thick and thin, going all the way back to 1870.

Moreover, even after the large government deficits of the 1970s and a surge of inflation-driven private borrowing during the decade, total US debt stood at $4.6 trillion by 1980. That was just 162% of GDP.

In a word, the US economy during this decade of stagflation was battered by unprecedented peacetime inflation, but it was not yet smothered by crushing debt. As shown by the graph, the soaring national leverage ratio did not really leap skyward until after the mid-1980s, when Alan Greenspan took the helm at the Fed and launched the US (and the world) into a four-decade spree of money-printing and what amounts to Keynesian central banking.

As a consequence, total public and private debt is in a wholly different zip code today. Debt outstanding now totals nearly $108 trillion and weighs in at 343% of national income (GDP). That is to say, as we head into the next stagflationary era, the US economy will be carrying two turns of extra debt relative to income than was the case in 1970.

That does make a difference. The national leverage ratio during the 1970s averaged about 153% of GDP, meaning that had it been maintained since then total debt outstanding would now be $48 trillion. As it is, however, the actual leverage ratio currently stands at 342% of GDP and outstanding debt totals nearly $108 trillion.

So the math tells you all you need to know. The US economy is now lugging $60 trillion more debt than would be the case if the 1970s average national leverage ratio had been maintained. And even at a weighted average 5% interest rate across all sectors of the economy, that’s $3 trillion per year of more interest expense and therefore less cash flow available for investment and discretionary spending.

US Total Leverage Ratio: Debt-to-GDP, 1954 to 2025

Of course, Keynesian money printers and statists say “No sweat,” and view debt as a growth elixir rather than a burden on commerce and supply side output. But we beg to disagree, and strenuously so.

The empirical results tell you otherwise. For instance, real economic growth (final sales of domestic product) averaged 3.92% per annum during the 1954 to 1970 era when the national leverage rate was at or below its historical 150% norm. By contrast, since the pre-crisis peak in Q4 2007, real growth has slowed to just 1.97%.

That’s right. The trend growth rate has been reduced by fully 50% after the economy-wide leverage ratio shot the moon during the last 35 years.

Moreover, in the case of the industrial core of the US economy, the growth rate has not just slowed; it has actually come to a screeching halt.

Thus, between 1954 and 1969, the industrial production index rose by a robust 4.5% per annum. During the years since the debt-fueled financial crisis of 2008, however, there has been no growth at all in the industrial sector of the US economy.

On a net basis, the combined output of the manufacturing, utilities, mining, and energy sectors has amounted to one big fat goose egg.

Industrial Production Index, 1953 to 2025

So the question recurs. Why did we get so much debt and so little real growth after the Fed went full-on Keynesian under Greenspan and his heirs and assigns?

The answer is actually not that mysterious. The explosion of debt from $1.5 trillion to $108 trillion during the 55 years since 1970 happened not because consumers, businesses, and government suddenly became infected with a voracious appetite for debt, but because the central bank falsified its price via endless financial repression and pegging yields far below their natural free market clearing levels.

At the same time, the “cheap” debt that landed on US balance sheets did not go into a huge surge in productive investment, but instead fueled decades of financial asset inflation, leveraged speculation, and financial engineering in the corporate sector. The net result was malinvestment and wasted capital, labor, and other economic resources on an epic scale.

For instance, if the dramatic increase in the national leverage ratio since the heyday of prosperity during the 1950s and 1960s had actually gone into productive uses, it would necessarily have shown up in its counterpart—the national investment rate.

But no cigar there, of course. In fact, the 8% of GDP investment ratio (business capex and housing) has now dropped to just 4%. That is to say, all of the incremental borrowing went into government spending, current consumption, and financial asset inflation, not productive assets capable of generating future contributions to growth and living standards.

Net Investment % of GDP: 1947 to 2025

This brings us to the impending stagflation. As it was prior to February 28th, real output growth had already stalled. According to the real GDP statistics, growth between Q4 2025 and Q4 2025 posted at just 1.78%. But virtually all of that was due to the AI bubble-driven massive increase in spending for data centers and other AI infrastructure.

This massive diversion of capital was not owing to an overpowering use case for AI or the fact of superior returns on AI investments. In fact, there has been virtually no return on AI assets at all, with the surge of capital spending amounting essentially to a new version of “Build it and they will come.”

But after February 28th and Trump’s initiation of a war in the Persian Gulf that can’t be won and which will send the global economy into a tailspin like nothing seen since the mid-1970s, we are truly off to the stagflationary races.

Energy and fuel costs have already soared. Most importantly, the workhorse hydrocarbon of the US economy—diesel fuels used by the nation’s massive fleet of trucks, rail, and farm tractors—is already above its 2022 level at $5.40 per gallon and still climbing.

Likewise, on the very eve of the planting season fertilizer costs have already doubled, meaning that application rates will be cut back, yields will fall, and food prices will be soaring by the 4th of July when the USDA crop condition reports pretty much forecast the fall production levels.

And, of course, no one took into account that the natural gas processing plants of Qatar were fastened at the hip to the semiconductor plants in South Korea and Taiwan and from there to the entire manufacturing sector of the world. All of this through the life line of helium gas extracted from natural processing plants.

In short, these soaring commodity prices are going to push the inflation indices higher, even as industrial output contracts owing to rising costs and limited availability. Labor markets are frozen as much as they were in the depth of lockdowns from April 2020, while new home sales are evaporating. 

That’s stagflation by any other name, but this time the Fed will not be in a position to do much about either inflation or recessionary pressures.

The inflation genie is now out of the bottle but the Fed can not really slam on the brakes ala Volcker because the US economy is staggering under $60 trillion of incremental debt.

At the same time, the war and the erupting commodity inflation cycle it has engendered means that it can’t turn on the printing presses to “stimulate,” either.

So, as we said: This is not your grandfather’s Stagflation. Not by a long shot.

Reprinted from Stockman’s private service

In addition to Iran war developments, this week’s economic calendar will focus on the inflation side of the Fed’s dual mandate following a solid March employment report. The key data releases this week are the February durable goods report on Tuesday, the February PCE report on Thursday, and the March CPI report on Friday. Fed Vice Chair Philip Jefferson will deliver a speech on the economic outlook on Tuesday. The minutes to the FOMC’s March meeting will be released on Wednesday. 

Briefly recapping the latest employment data, both headline (+178k vs. -133k) and private (+186 vs. -129k) payrolls far exceeded consensus expectations. To be sure, the rebound from strike- and weather-related weakness in February payrolls was somewhat  less impressive due to the downtick in average hourly earnings (+0.2% vs. +0.4%) and hours worked (34.2hrs vs. 34.3hrs). The same can be said of the surprise decline in the unemployment rate (4.26% vs. 4.44%), which was largely a function of a 332k decline in unemployment, as well as a 64k drop in employment lowering the labor force participation rate by a tenth to 61.9%. Indeed, some of the strength in the March payroll gains likely came at the expense of April given the early Easter Holiday date (April 5). Averaging through the Q1 employment reports, headline (68k) and private (79k) payroll gains are tracking up from their six-month averages of +15k and 52k, respectively. In addition, the Q1 unemployment rate averaged 4.34%, a slight improvement from the six-month average of 4.395%. In addition, Q1 ADP private employment gains averaged 46k – in line with their six-month average of 45k. Lastly, jobless claims have been stable with initial claims, on average, down 3.8% from Q1 2025 and continuing claims down 0.9%. In short, the picture that Fed officials should be getting of the labor market – at least prior to the latest geopolitical developments – is one of stability, albeit at uncomfortably low levels of activity driven by a combination of supply and demand factors.

Turning to the week ahead, it’s sparse on the Fedspeak calendar: the only scheduled appearances by Fed officials are on Tuesday, when Vice Chair Jefferson and Chicago’s Goolsbee are set to give speeches on the economic and monetary policy outlook. We have heard from both officials recently, so we will be most focused on how they have internalized last Friday’s stronger-than-expected jobs report into their expectations for monetary policy. We expect that the latest data, particularly the decline in the unemployment rate to 4.26%, will reinforce the notion that the Fed is in wait-and-see mode and that risks to the two sides of the dual mandate have come into much closer balance – if they aren’t already balanced.

The key highlight of this week’s data docket will be Friday’s March CPI where the impact of the largest energy supply shock since the 1970s will certainly be on full display. Deutsche Bank’s expectations are for a roughly 25% increase in gasoline prices to yield a 0.95% monthly gain in headline CPI (vs. +0.27% in February), well above the bank’s forecast for the gains in core (+0.33% vs. +0.22%).

Should DB’s forecasts hit the mark, year-over-year rates for both would increase, the former from 2.4% to 3.4% and the latter from 2.5% to 2.7%. Shorter-run trends in core would also pick up under our forecast, with the three-month annualized rate rising from 3.0% to 3.4% and the six-month rate gaining three-tenths to 2.6%. In terms of the subcomponents, look for further signs of tariff-related price pressures on the goods side, particularly in apparel. Unlike prior months when declines in used car and truck prices helped to mask tariff-related increases in other core goods, this month should see lagged gains in wholesale used car prices feeding through and adding to CPI. On the services side, our focus will be on any potential bleed-through from higher gasoline prices into core, particularly from airline fares and delivery services.

Thursday’s February personal income (+0.3% vs. +0.4%) and consumption (+0.5% vs. +0.4%) release will provide monetary policymakers a snapshot of where the trend in core PCE inflation (+0.39% vs. +0.36%) stood on the eve of the Iran war. If our February forecast for the core PCE deflator – the Fed’s preferred inflation metric – is close to the mark, the three-month annualized rate will rise by 80bps to 4.5%, the six-month annualized trend will rise by 40bps to 3.5%, though the year-over-year rate should slip by a tenth to 3.00%. To be sure, some of the recent deterioration in the short-term core PCE inflation trends is due to outsized strength in some volatile goods categories. However, we expect “supercore” services inflation (+0.3% vs. +0.4%) to remain elevated in year-over-year terms (+3.3% vs. +3.5%). Indeed, supercore PCE inflation has shown virtually no improvement over the past five quarters and remains firmly above its 20-year
average of 2.7%.

Other data points this week will provide insights into business and consumer attitudes, as well as inform Q1 GDP forecasts. Monday’s services ISM (54.5 vs. 56.1) and Friday’s preliminary University of Michigan consumer sentiment (51.1 vs. 53.3) could be depressed by the latest geopolitical developments. However, the inflation components of the aforementioned surveys will likely garner more attention than the headline readings – in particular, the University of Michigan survey where we are likely to see one-year and longer run inflation expectations rise noticeably on the back of the surge in gasoline prices. While monetary policymakers would typically look through upticks in inflation driven by temporary supply shocks, that assumes that inflation expectations are well anchored. Given that the Fed has been missing on its inflation goal for the better part of the last five years, officials are acutely concerned about further increases in inflation expectations. Note that University of Michigan one-year and 5-10 year inflation expectations averaged 3.7% and 3.3%, respectively, in Q1 – roughly 40bps and 50bps above their 20-year averages (though some of that increase is due to a change in methodology).

Tuesday’s durable goods orders (-0.3% headline, +0.6% ex-transportation, +0.4% core), Thursday’s final print on Q4 real GDP (+0.7% final vs. +0.7% preliminary), as well as the above-mentioned February income/consumption release, will all inform the market’s Q1 real GDP growth forecast (currently 2.8% annualized). To be sure, the US economy is dealing with several cross currents at present and it is simply too early to determine the net impact on the broader outlook for growth this year. As Chair Powell noted at his March FOMC press conference, “a number of people mentioned, if we were ever going to skip an SEP, this would be a good one because we just don’t know.”

This week will also feature the minutes to the March FOMC meeting. As a reminder, at that meeting, the Fed held rates steady and the key elements were in line with expectations. In particular, the dot plot showed the median unchanged at one rate cut for this year and the long-run dot rose slightly to 3.1%. While Powell’s messaging skewed hawkish on inflation, he did not actively push for a balanced description of the policy outlook. DB’s takeaway was that rate cuts may be less likely but are still more likely than hikes. Within the minutes, expect to hear continued hawkish signals, with some officials pushing for more balanced language around the policy outlook, including with some openness to the potential to raise rates, as we saw in January.

The key economic data releases this week are the February durable goods report on Tuesday, the February PCE report on Thursday, and the March CPI report on Friday. Fed Vice Chair Philip Jefferson will deliver a speech on the economic outlook on Tuesday. The minutes to the FOMC’s March meeting will be released on Wednesday. 

Here is a day by day summary of key events, courtesy of Goldman

Monday, April 6 

10:00 AM ISM services index, March (GS 54.5, consensus 54.9, last 56.1); We estimate that the ISM services index declined 1.6pt to 54.5 in March, reflecting convergence to our non-manufacturing survey tracker (which declined by 0.5pt to 51.8).

Tuesday, April 7 

08:30 AM Durable goods orders, February preliminary (GS -5.0%, consensus -1.0%, last flat); Durable goods orders ex-transportation, February preliminary (GS +0.4%, consensus +0.4%, last +0.4%); Core capital goods orders, February preliminary (GS +0.5%, consensus +0.5%, last +0.1%); Core capital goods shipments, February preliminary (GS +0.4%, consensus +0.4%, last -0.1%): We estimate that durable goods orders declined by 5% in the preliminary February report (month-over-month, seasonally adjusted), reflecting a decline in commercial aircraft orders. We forecast a 0.5% increase in core capital goods orders and a 0.4% increase in core capital goods shipments—the latter reflecting the rise in orders in recent months.
12:35 PM Chicago Fed President Goolsbee (FOMC non-voter) speaks: Chicago Fed President Austan Goolsbee will take part in a moderated Q&A on the economy and monetary policy at the Economic Club of Detroit. Moderated Q&A is expected. On April 2nd, Goolsbee said that “if [the recent increase in oil prices] is an extended increase in costs, it’d be a pretty tough supply shock for the US economy.” He also noted that the high salience of energy price increases could increase inflation expectations, which “will potentially put us into a tougher spot still.”
05:50 PM Fed Vice Chair Jefferson speaks: Fed Vice Chair Philip Jefferson will deliver a speech on the economic outlook at the University of Detroit. Text and audience Q&A are expected. On March 26th, Jefferson said that “the increase in energy prices to date should have relatively modest effects on inflation, though consumers are seeing higher gas prices at the pump now.” He also noted that “an extended bout of elevated energy prices could put upward pressure on a variety of other products.” Jefferson said he continued to see “our current policy stance as appropriately positioned to allow us to assess how the economy evolves.”

Wednesday, April 8 

02:00 PM FOMC meeting minutes, March 17-18 meeting: The minutes to the FOMC’s March meeting will be released on Wednesday. The FOMC left the policy rate unchanged at 3.5-3.75% at the March meeting, and the median participant continued to project one cut in each of 2026 and 2027. We saw the meeting as a bit hawkish because only one participant dissented in favor of a cut and Powell expressed a bit less concern about the labor market than at previous meetings but took the risk from the oil price shock to inflation seriously.

 Thursday, April 9 

08:30 AM Personal income, February (GS +0.4%, consensus +0.3%, last +0.4%); Personal spending, February (GS +0.6%, consensus +0.6%, last +0.4%); Core PCE price index, February (GS +0.32%, consensus +0.4%, last +0.4%); Core PCE price index (YoY), February (GS +2.93%, consensus +3.0%, last +3.1%); PCE price index, February (GS +0.34%, consensus +0.4%, last +0.3%); PCE price index (YoY), February (GS +2.77%, consensus +2.8%, last +2.8%): We estimate that personal income and spending increased by 0.4% and 0.6%, respectively, in February. We estimate that the core PCE price index rose 0.32% in February, corresponding to a year-over-year rate of +2.93%. Additionally, we expect that the headline PCE price index increased 0.34% in February, or increased 2.77% from a year earlier.
08:30 AM Initial jobless claims, week ended April 4 (GS 210k, consensus 210k, last 202k); Continuing jobless claims, week ended March 28 (consensus 1,833k, last 1,841k)
08:30 AM GDP, Q4 third release (GS +0.8%, consensus +0.7%, last +0.7%); Personal consumption, Q4 third release (GS +2.1%, consensus +2.0%, last +2.0%): We estimate a 0.1pp upward revision to Q4 GDP growth to +0.8% (quarter-over-quarter annualized), reflecting an upward revision to consumer spending (+0.1pp to +2.1%) and stronger residential investment.

Friday, April 10 

08:30 AM CPI (MoM), March (GS +0.87%, consensus +1.0%, last +0.3%); Core CPI (MoM), March (GS +0.28%, consensus +0.3%, last +0.2%); CPI (YoY), March (GS +3.28%, consensus +3.4%, last +2.4%); Core CPI (YoY), March (GS +2.69%, consensus +2.7%, last +2.5%): We estimate a 0.28% increase in March core CPI (month-over-month SA), which would raise the year-over-year rate to 2.69%. We expect mixed autos inflation, reflecting a 1% increase in used car prices, unchanged new car prices, and a 0.1% increase in the car insurance category. We forecast a benign 0.20% increase in the rent category, reflecting a continued slowdown in its underlying trend, but an acceleration to 0.30% in the OER category, reflecting upward pressure from the unwind of an unusually soft reading six months prior. We expect increases in the travel services categories (airfares: +4%; hotels: +0.5%), reflecting the signals from alternative price data. We expect upward pressure from tariffs on categories that are particularly exposed (such as recreation) worth +0.03pp. We estimate a 0.87% rise in headline CPI—reflecting higher food prices (+0.3%) and sharply higher energy prices (+9.4%)—which would raise the year-over-year rate to +3.28% from +2.43%.
10:00 AM Factory orders, February (GS -0.1%, consensus -0.2%, last +0.1%)
10:00 AM University of Michigan consumer sentiment, April preliminary (GS 51.5, consensus 51.8, last 53.3); University of Michigan 5-10-year inflation expectations, April preliminary (GS 3.3%, consensus 3.5%, last 3.2%)

Source: DB, Goldman