It may be almost impossible to make data centers pay their ‘fair share’ of electricity costs by Theodore J. Kury

 

Many major tech companies have pledged to pay their fair share of the costs associated with generating and transmitting more electricity to serve large data centers. But ratepayers across the United States are worried about the potential costs they might have to bear. That’s because it’s not immediately clear how the cost of data centers’ energy will be calculated. The effects of price increases are likely just beginning, and their full effects may not be felt for years.

For example, a recent report by the organization that monitors the PJM market, an area that encompasses all or part of 14 mid-Atlantic and Midwest states, concluded that expected power demand from data centers was a primary reason for US$23 billion in customer price increases that will last until at least the end of 2028.

I have studied the programs states have launched to address the needs of these large electricity customers. Prices are set by state utility commissions, who determine which customers’ rates will increase by how much to pay for new investments in electricity infrastructure. It’s not simple.

 

The complexity of setting prices

Setting a price for electricity is straightforward in principle but complicated in execution. Regulators identify the costs to provide service, allocate the costs to customers and design prices to recover those costs.

First, regulators identify the costs that a utility company incurs to provide service. Regulators look at the value of the assets the utility company invests in, such as power plants, transmission lines and substations, as well as its day-to-day operating expenses, such as salaries, fuel, replacement parts and electricity it purchases from other sources. Then these costs are allocated to categories of customers, such as residential, commercial and industrial.

Ideally, costs are allocated to the customers who cause them, but that can be complicated to determine. For example, imagine a data center is built in an area that lacks existing power lines and is located 50 yards from a nearby electric substation. It’s clear that the data center should pay to run a 50-yard power line from the substation to the data center.

 

But what if the power company needs to upgrade the substation to handle the increased needs of the data center? Or secure additional sources of electricity? In these cases, the investments are part of the electricity grid that everyone uses. These costs will likely be shared among all customers.

Cost analysts review each line of a utility company’s costs, often thousands of items, and determine how each cost will be allocated. Each decision incorporates one basic idea: What’s your share?

For instance, if a group of customers uses 20% of the electricity delivered by the utility, they would be allocated 20% of the costs associated with energy delivery. Other cost items may be allocated based on the number of customers or how much electricity customers use at particular points in time, but the idea is the same.

Finally, the analysts set prices that are designed to recover the costs allocated to each customer group. So, the costs that are allocated to you are directly reflected in the electricity prices that you pay.

Flexibility and a potential loophole

One common criterion for figuring out how much a customer should pay is based on what is called “coincident peak demand” – the amount a customer group uses at the moment when all customers are collectively using the largest amount of electricity. Costs associated with overall peak usage are typically split proportionally – but this opens an opportunity for data centers to exploit the system.

Data centers often are able to fine-tune their electricity consumption, using more one minute and less another, in ways that residential users can’t easily replicate. Computerized systems can automatically adjust the amount of work a data center is doing, while a homeowner would either have to race around shutting off appliances to meaningfully reduce the amount of power their home was using or invest in a device that does.

Their flexibility means data centers may be able to learn to predict when system loads will peak and consume little to no power in just the right period to avoid contributing to peak loads, as has happened with cryptocurrency-mining operations in Texas. So when regulators look at their usage to determine prices, data centers may be able to avoid paying any costs allocated through coincident peak demand, even if they use large amounts of electricity at other times.

 

Who speaks for you?

When utility regulators decide how costs should be allocated to each customer group, they solicit input from different groups. The utility company initially submits its own proposal for how it thinks costs should be allocated across its system.

Large industrial customer groups representing customers such as factories will also submit their own proposals for how to allocate costs and set rates. Retail customer groups representing large and small stores will submit theirs. And large data centers, with the resources to hire experts in cost allocation, will submit theirs as well. Some states have specific state-government agencies to do some of this work on behalf of particular commercial groups, such as Pennsylvania’s Office of Small Business Advocate.

Regulators don’t always get a good sense of residential customers’ voices, though. Every state except Georgia, Idaho and Louisiana has an office of the consumer advocate that represents customer interests in proceedings before the state utility regulator. But they are often charged with representing all customers in the state without bias, meaning they cannot advocate for outcomes that would impose costs on one group of customers in favor of another.

So while every state’s consumer advocate is concerned with keeping the utility’s costs as low as possible, they may be barred by law from adopting a position on how those costs should be allocated. This lack of representation in this aspect of rate-setting for average households may lead to situations where the data centers’ advocates argue for minimal costs to be allocated to them – but nobody advocates on behalf of residents to examine or refute that argument.

 

Citizens left holding the bag

There are other risks for residential customers, too. Utilities’ investments in electricity infrastructure last for many years. But not every proposed data center will get built, and some may use less energy than originally projected. Technology may even change, making some data centers obsolete after a year or two of operations.

If those events happen, then any costs the utility company incurred to provide enough electricity will be spread among all the other customers.

The allocation process may be even more complicated for municipal utilities regulated by city councils or independent boards, or cooperative utilities regulated by elected boards in rural communities. These groups may not have full-time staff who are utility or regulatory experts, yet they face the same decision-making challenges as trained professionals and might have to retain outside experts to aid in the process.

Consumers need to be aware of the importance of cost allocation and how it affects their electricity rates. I believe they should provide public comments to the regulators and speak during open hearings, as there may not be anyone else effectively advocating for their interests.

As climate change damages streets and highways, the road ahead may be expensive by Scott Neuman

 

A heat wave scorched much of the eastern United States over the Fourth of July weekend, bringing extreme temperatures that caused roads to buckle, snarling holiday traffic.

Nowhere was this more dramatic than on a stretch of concrete-paved Interstate 97 south of Baltimore, where one lane of traffic suddenly warped, forcing its closure. A city street in Chicago experienced a similar, though less dramatic, pavement failure, and several state departments of transportation warned motorists to watch for additional heat-related road damage.

Scientists say such heat waves are becoming more common and more intense. Climate change is driving more extreme temperatures, along with heavier rainfall. Both can contribute to pavements expanding and cracking, making roads temporarily impassable as they await expensive repairs. It raises the question: Are the nation's roads ready to meet the challenge of a warmer, wetter future?

 Civil engineers say the answers aren't entirely straightforward.

 

What is happening to the nation's roads?

Heat-related road failure occurs when moisture-weakened pavement gets hot, expands, buckles and warps — especially if the high temperatures last for several days, according to Charles Marohn, founder and president of the Minnesota-based Strong Towns, a nonprofit that advocates for more resilient and safer urban areas.

When water gets underneath a roadway, "it'll get a little bit squishy, and instead of being firm, it'll start to move a little bit," Marohn says. That weakens the pavement — and when it expands, it breaks.

"You take that prolonged period of just intense heat, a lot of traffic on top of it, and that's when you have something like this happen," Charlie Gischlar, a spokesperson for the Maryland Department of Transportation, says about the I-97 incident in Baltimore.

Amit Bhasin, a professor of civil, architectural and environmental engineering at the University of Texas at Austin, says it's typically a problem with concrete — also known as rigid — pavement. To account for expansion, steel rebar or expansion joints between concrete panels can be added, he says.

But as anyone who has driven down such highways can attest, the rhythmic clack-clack sound of expansion joints built into the pavement can be annoying for motorists.

 

"You don't want to provide too much of it because then you affect ride quality," says Bhasin, who is also the director of the university's Center for Transportation Research. But too little means "it expands more than what it's designed for, [so] it's going to buckle."

Asphalt, the sticky, black substance used to coat many roads, acts differently. "What you see is [that] … ruts form, especially in slow-moving traffic areas," he says. "It tends to be … like a liquid under a hot summer afternoon."

Marohn says asphalt is typically less durable, but easier to repair, while concrete has a longer service life before failing. But when concrete does fail, he says, "it goes really bad, really quick."

 

What can be done?

While concrete highways typically cost more to build, they tend to last longer and require less maintenance over their lifetime, Bhasin says. Asphalt roads, by contrast, are less expensive up front but generally need more frequent repairs and resurfacing.

"Any time you design an asphalt or concrete mix, you're designing for a certain range of temperatures," Marohn says. "Extreme events expose the limits of those assumptions," he says. Under normal conditions, a pavement might perform just fine, but when temperatures fall outside the expected range, problems start to appear.

For some roads, a more durable — and more expensive — blend of asphalt might be the solution, engineers say. For rigid roads, "if you're using reinforced steel, then you would want to consider different percentages of steel reinforcement," Bhasin says. "If you're applying joints, then perhaps [engineers could use] … a slightly different joint spacing ... or changing the size of the panels themselves."

The biggest problem is weather and climate data — or a lack thereof — but "if there is a trend that predicts different kinds of extreme event scenarios, then those should be incorporated into the pavement design," Bhasin says. "Engineers have figured this out, and they can design it. They just need to know what to go off of."

Anyone can design super-robust roads, he says. "We could be very conservative and say, 'OK, let's design for extreme events,'" he says. But the cost would be higher. "So you have to make the call that 'I'll be OK if 99% of the time this works and maybe 1% of the time the traffic is disrupted."

 

"In many ways, we've designed our infrastructures over decades, if not centuries, for temperatures that have been relatively milder," Mikhail Chester, a professor of engineering at Arizona State University, told NPR's All Things Considered recently. "Now, as temperatures are hotter, you're starting to see the dynamics of those extremes take hold, exceeding the design thresholds of those infrastructures and their particular assets."

Chester says the way the country has approached infrastructure, such as roads, in the past "doesn't seem to be sufficient" for the future. What's needed is a pivot. "And that's going to require us to innovate, which we are doing. It's going to require us to share that knowledge, which we're starting to do."

 

FACT FOCUS: Trump says illegal immigration increased car insurance premiums. Experts say otherwise by MELISSA GOLDIN

 

President Donald Trump this week credited his tough immigration policies for a drop in car insurance premiums, falsely blaming illegal immigration during his predecessor’s time in the White House for a prior increase.

In a Monday post on Truth Social, Trump shared a graphic showing the year-over-year change in premiums from 2021 to 2026. It rises sharply from 2021 to 2023 and begins dropping in 2024, culminating with negative growth so far in 2026. The graphic cites a Council of Economic Advisers’ analysis of data from the Bureau of Labor Statistics.

“Car Insurance Premiums rose to RECORD HIGHS, forcing Law-abiding American Citizens to subsidize the ‘free riding’ Biden Illegals,” the post reads. “After over a year of ZERO ILLEGAL IMMIGRATION, and our highly successful efforts to REVERSE the Biden Invasion, Car Insurance Premiums have come tumbling down.”

 

But experts say that although the data in the graphic aligns with industry trends, it was chiefly the COVID-19 pandemic — not illegal immigration — that caused the uptick.

Here’s a closer look at the facts.

CLAIM: Trump’s tough immigration policies have led to a drop in car insurance premiums, after a spike under the Biden administration caused by illegal immigration. 

 

THE FACTS: This is false. Experts say that increased costs were primarily due to effects from the COVID-19 pandemic, such as riskier behavior on the roads and supply chain disruptions that led to higher repair costs. Now that insurers are on a better financial footing, they are cutting rates to stay competitive. There is no evidence to suggest that illegal immigration played a significant role in either the rise or the fall of insurance premiums.

“This claim is pure fiction,” Michael Clemens, a professor of economics at Johns Hopkins University and a senior fellow at the Peterson Institute for International Economics, said of Trump’s claim. “It does not arise from any study by the White House, by the auto insurance industry, or even by anti-immigration pressure groups. It has no basis in anything but inflammatory statements that juxtapose two unrelated trends.” 

 

Driving decreased during the early days of the COVID-19 pandemic, which was declared in March 2020, as people began social distancing and working from home became the norm. According to experts, this led to fewer accidents and therefore fewer claims, leaving insurance companies with high profit margins that they used to cut rates and compete for new customers.

When people began driving again in large numbers, starting in 2022 as the country recovered, that meant more accidents and more claims. Experts said factors like reckless driving and distracted driving also contributed. At the same time, supply chain issues made auto parts and other materials more expensive — costs insurance companies passed on to drivers in their premiums.

In 2024, rates began going down again as accidents declined and insurers found themselves in a better financial position.

“Over the past two years, the auto insurance industry has generated an underwriting profit following the implementation of significant rate actions to offset losses,” said Mark Friedlander, a spokesperson for the Insurance Information Institute, a leading industry association. “Average auto insurance premiums have begun to stabilize, and replacement costs are more in line with the U.S. inflation rate. We are seeing average rate decreases being implemented across numerous states, as well as dividends being paid to policyholders by major auto insurers such as State Farm and USAA.”

 Asked to provide evidence that people who entered the U.S. illegally caused car insurance premiums to increase, White House spokesman Kush Desai said: “Thanks to the Trump administration’s commonsense law and immigration enforcement policies, traffic fatalities have dropped dramatically, with eased congestion in high-immigration cities and the removal of more than 20,000 non-English-speaking commercial truck drivers who posed safety risks on our roadways. These objective facts are lowering risks for American drivers on American roads — and thus lowering car insurance premiums.”

 

A 2023 study published in the Journal of Insurance Issues found that populations with a higher number of people who entered the U.S. illegally have a higher number of uninsured drivers, who do raise car insurance premiums. However, the link only exists in states where people in the country illegally are not allowed to obtain driver’s licenses, generally a prerequisite for being insured to drive a vehicle.

Clemens said that this link also cannot account for the approximately 50% increase in car insurance premiums seen after the COVID-19 pandemic. He estimated that the surge in illegal immigration during the Biden administration can explain only about a .07% increase in premiums.

In his Truth Social Post, Trump also repeated his regularly debunked claim that Biden’s immigration policies let tens of millions of criminals into the U.S. from prisons and mental institutions.

 

'That was the greatest day of all our lives': The migrants who passed through Ellis Island by Myles Burke

 

Isabel Belarsky was one of the millions of people who were processed on Ellis Island before its immigration facility closed in 1954. In 2014, she told the BBC about reaching the gateway to the US from the Soviet Union in 1930.

On 12 November 1954, a Norwegian seaman Arne Petterson was questioned by immigration officials after overstaying his US shore leave. He risked being deported, but instead he was granted parole, and as he stepped on board a ferry in New York Harbor, he was snapped by a photographer. He was the last person to be processed on Ellis Island.

The same day, the island that had been millions of migrants' first glimpse of the US closed its immigration facilities for good. By the time Petterson left, Ellis Island was mostly being used as a detention centre for illegal entrants and suspected communists, but for more than 60 years for many people it was a stepping stone to a whole new life.

 Situated at the mouth of the Hudson River between New York and New Jersey, the island had been selected by President Benjamin Harrison as the site of a central immigration facility in 1890 when it became clear that the one in Manhattan was unable to cope with the influx of new arrivals. In the decades before Ellis Island opened, the patterns of immigration to the US had shifted. From the 1880s there was a sudden rise in people coming from southern and eastern Europe. Many of them were trying to escape poverty, political oppression or religious persecution in their home countries. But as President John F Kennedy wrote in his 1958 book A Nation of Immigrants, "There are probably as many reasons for coming to America as there were people who came."

 

Many of the people who would help shape the identity of US were processed at the island as children

In preparation, the island was enlarged, partly by using landfill hollowed out from New York's first subway tunnels, and a new dock and three-storey timber building were constructed. This building would need to be rebuilt just five years later when a fire burnt it to the ground, destroying all passenger records dating back to 1855.

On 1 January 1892, Ellis Island opened to receive immigrants. At its peak, during the early years of the 20th Century, thousands of people passed through its gates each day. Angel Island in San Francisco Bay had the same role on the west coast from 1910 to 1940. But according to the National Park Service, some 40% of Americans living today are descended from immigrants who came through Ellis Island. Many of the people who would help shape the identity of the US in the 20th Century, from film director Frank Capra (born in Italy) and science fiction writer Isaac Asimov (born in Russia) to actress Claudette Colbert (born in France) and cosmetician Max Factor (born in Poland), were processed at the island as children.

Isabel Belarsky was one such child. In 1930 she made the arduous sea voyage to the US with her family from what was then the Soviet Union. "Oh boy, that was some journey. It was cold, we had nothing to wear. Everybody was freezing. Finally, we came through Ellis Island," she told the BBC in 2014.

 

So near and yet so far

The steamships on which immigrants such as the Belarskys journeyed were divided by money and class, with the majority of people being third class passengers crowded together, in often unsanitary conditions in steerage. Before a ship could enter New York Harbor, it first had to stop at a quarantine checkpoint off Staten Island. There doctors boarded the vessel looking for signs of sickness, such as smallpox and cholera. People with contagious diseases were banned from entering the US, as were polygamists, anarchists and convicted criminals, among others. The first restrictions on immigration had begun to be enacted by Congress in the 1870s. Many of these had an explicit racial prejudice, with laws that first targeted Chinese migrants and later excluded immigration from most Asian countries.

If the ship passed its health inspection, the first and second-class passengers would be interviewed and processed onboard. During Ellis Island's first few decades, immigrants to the US did not require passports, visas or any official government paperwork at all. Passports existed, but they were only universally adopted in 1920. Instead, when passengers first boarded a ship, they gave spoken answers to questions which were recorded in its manifest. These were then checked by US officials and, provided those wealthier passengers were sickness-free and had no legal issues, they were allowed to enter the US, bypassing Ellis Island entirely.

 Everyone else was tagged with the ship's name and the page number where they appeared on the manifest. They were then put on a ferry to Ellis Island where their future would be decided. When they arrived at the island and entered the main building, women and children were separated into one line and men into the other. Then they climbed the steep winding staircase to the registry room on the second floor, carefully watched by doctors who were looking out for signs of wheezing, coughing or limping that suggested health problems.

 

When they reached the registry room, they faced a brief medical examination. This was a nerve-racking experience. Immigrant children were asked their names so the doctors could check that they were not deaf or dumb. Toddlers who were being carried were made to walk to prove that they could. "It was interesting but a little frightening, too, because we couldn't speak English," Belarsky told the BBC.

If the doctor suspected a health issue they would mark letters on that person's clothes in chalk: H for heart problems, X for mental illness, CT for trachoma – a highly contagious and much feared eye infection that can lead to blindness. The test for this was particularly uncomfortable: doctors would turn a person's eyelid inside out using their fingers or a buttonhook, an implement used for fastening small buttons. If a person got a chalk mark, they would be removed from the line and confined in what was called the "doctor's pen" for a more thorough examination.

If they then failed a medical inspection they would be detained or outright refused entry and sent back to where they had travelled from. In some cases, this could mean a family being broken up. Official statistics record that only around 2% were refused entry to the US, but that still means that nearly 125,000 people, who had endured the long and difficult journey to get there, were sent home within sight of Manhattan. 

Women travelling alone or with children were often viewed as potential burdens to the state

Those who passed the medical exam proceeded to a legal screening. Inspectors would check their tags and quiz them, often with the help of an interpreter, about everything from their eye colour and who paid for their passage to whether they were literate and whether they had ever been held in a mental health institution. Most people were processed quickly and went through Ellis Island within a few hours. But if a migrant's answers didn't match the ones on the ship's manifest, or if the inspectors were suspicious about them for some reason, their name was marked with an X and they were detained.

 

The American dream

Around 20% of immigrants who arrived at Ellis Island ended up being temporarily detained there. This could happen for a variety of reasons. Women travelling alone or with children were often viewed as potential burdens to the state. Officials would frequently class them as Liable to Become a Public Charge (LPCs), detaining them until a male family member – because no women were allowed to leave Ellis Island with a man not related to them – could turn up and vouch for them. Unmarried women who were pregnant could be judged by inspectors as "immoral" and held. Stowaways who weren't on the manifest, migrant labourers suspected of being brought into the US to break union strikes, and anyone officials deemed to be politically suspect could be detained or refused entry.

Although Isabel Belarsky's father, Sidor, was a renowned opera singer who had been invited to come to the US, her family was still automatically detained at Ellis Island. This was because at the time the US did not maintain diplomatic relations with the Soviet Union. Detainees would sleep in triple-tiered bunk beds in dormitory rooms on the building's third floor, receiving three meals a day until their cases could be resolved. Sometimes this could mean an overnight stay, sometimes it could be weeks or months. "They gave us 10 minutes every so often to go outside. When we went out they counted us," said Belarsky. "And when we came back, they counted again. When we sat down, when we ate, they also counted."

If arrivals had been detained because they were ill, and they hadn't been refused entry, they would be held in hospital wards on the island. While most recovered, more than 3,500 immigrants died on Ellis Island in sight of New York and their dream of a better life. Some 350 babies were also born on the island, although this was no guarantee of citizenship for the child.

 

Once an immigrant's health or legal issues were successfully concluded, they were registered and free to enter the US and start their new lives. Belarsky said: "For me it was very exciting when I was a youngster. And finally, somebody got us the papers to leave Ellis Island. It was a beautiful sight. Beautiful. That was the greatest day of all our lives." 

By the time the Belarsky family came through in 1930, the era of mass immigration to the US had already come to an end. Following World War One, the US Congress enacted sweeping laws based on race and nationality which restricted who could come into the country. The Quota Act of 1921 and the Immigration Act of 1924 were designed to cap annual immigration, imposing strict quotas that favoured people from northern and western European countries. 

 As immigration decreased, Ellis Island's role began to change. During World War Two, some 7,000 German, Italian and Japanese nationals suspected of being enemy aliens were interred there. Later, US soldiers returning from the war were treated in its hospital. In the late 1940s, as the Cold War developed, suspected communists who were swept up in the paranoia of Senator Joseph McCarthy's Red Scare were incarcerated there while the US government reviewed the often secret evidence against them. But by the 1950s, the use of air travel and modern entry procedures at airports made Ellis Island increasingly obsolete. In 1954, after 62 years of operation, it finally closed down, but it is open again today as a museum that highlights the rich history of new arrivals to the US. 

 

Native Americans celebrate victory at the Battle of Little Bighorn, 150 years later By Kadin Mills

 

CROW AGENCY, Mont. — Under the expansive Montana sky, hundreds of members and descendants of 19 tribal nations gather at one of America's most famous battlefields. They're here to watch as Native American riders on horseback charge onto the same land their ancestors did 150 years ago when they defeated the U.S. Army's 7th Cavalry under the command of Lt. Col. George Armstrong Custer.

The riders race across the dry landscape — kicking up clouds of dust before circling at the top of a hill at Little Bighorn Battlefield National Monument. Some of them are wearing headdresses and regalia, others are wearing tank tops and T-shirts. Many of them are carrying their tribal flags in a show of unity — the same unity that made possible their swift victory on June 25, 1876.

 "It was so important then, 150 years ago. ... It's important today still," said Gaby Strong, who is Sisseton-Wahpeton and Mdewakanton. "Our victories are still possible."

 

Custer's goal was to force Native Americans onto reservations. After the 1874 discovery of gold in the Black Hills, Indigenous peoples living off reservations were directed to report to their U.S. field offices, called Indian Agencies, or be deemed hostile.

Native American leaders, including Crazy Horse and Sitting Bull, organized villages and tribes together in a resistance effort.

Several battles broke out in what is now Montana and South Dakota as military forces attempted to push remaining groups onto reservations.

"Crazy Horse, he went from band to band, leader to leader, to tell them about this idea of our relatives coming together for a much greater cause than themselves," said Christopher Eagle Bear. He is Sicunga Lakota from the Rosebud Sioux Tribe.

In 1876, Custer was tracking a nomadic village of various peoples, including the Oceti Sakowin (Sioux), Cheyenne and Arapaho. Custer was tracking that camp with the help of about three dozen Arikara and Crow scouts. Scouting for the U.S. government was a common practice among many tribes.

Custer divided his forces of around 700 men into three columns, hoping to surround the village.

 

By June 25, the village had swelled to an estimated 8,000 people. Custer decided to attack early out of fear the allied tribes would disband and escape — a decision which proved to be a fatal mistake.

"It was early morning, they were camped. Then all of a sudden they'd seen Custer's platoon coming over the ridge," Eagle Bear said, recounting the battle known to the Lakota as the Battle of Greasy Grass.

 

"They say the battle lasted as long as it took you to make a cup of coffee and drink it," he said.

Custer was outnumbered. By the battle's end, 268 of Custer's forces were killed, mostly U.S. soldiers. Custer was among those killed. On the other side, fewer than 100 Native Americans were killed, including women and children.

Custer's crushing defeat sparked fear and outrage nationwide. The U.S. government responded by changing its approach to Indian policy, shifting to forced assimilation. Just three years after the battle, the first off-reservation federal Indian Boarding School opened in Carlisle, Pa. Hundreds more followed, beginning a century of abuse that attempted to erase Native ways of life.

"They realized that they couldn't destroy us head on. … So after that, they did the next best thing that you could do to tear apart a nation, and that was take away the children," said Eagle Bear.

 

Eagle Bear is camping at the site of that historic village. To commemorate their victory, people from various tribal nations have set up their tipis here, and there is a council lodge in the middle of the camp.

Eagle Bear is here as one of the coordinators for the Rosebud Sioux Tribe's camp, and he said he wants to set an example for the next generation.

"Someday from now, you know, the kids that are here today, they're going to come together during the 200th anniversary and they're going to talk about what they witnessed as kids," he said. "My prayers are being answered every single day with the fact that these kids are here."

 

Just feet away, a group of children are playing lacrosse with traditional sticks to the sound of drumming. And cooking for the camp are members of the Sicunga Youth Council.

"We've been planning this for roughly eight months now. So it's very heartwarming to see everyone that actually showed up and that's here," said Ashlen Bonshirt, a member of the youth council.

"We did plan the lacrosse, and there's yoga, and there are all these different amazing things for our youth," she said. "But on the other side of it is the garbage, the showers — everything that is here, we had to plan for it."

The camp is full of young people. School groups, youth councils and kids with their families are staying in tipis all around. Many of them are learning things about the battle that weren't covered in school.

 

"I feel like a lot of it is whitewashed," said 13-year-old Gianna Larocque-Mahto. She's Dakota, of the Sisseton-Wahpeton Oyate, and she's here with her grandmother.

"We didn't get to learn about the Native people's side, like the Dakota people's side. We only got to learn from one perspective," she said. "And I feel like that's not fair. ... I think it's important that we learn from all different people's perspectives and not just one person."

 

Eighteen-year-old Champion Marquez is Cheyenne. He's also staying at the camp, and he's been volunteering here this week — working security, helping elders and setting up tipis.

Marquez said the commemoration gives him hope for the future. "Hope that a bunch of new generations are going to learn about what happened at the Battle of Little Bighorn. Seeing all these kids having fun, playing with each other, all these events for them happening."

"Seeing all this here just [reassures] that … we're still here."

 

At this point, the Reflecting Pool deserves an Emmy by The Washington Post

 

If you turn on Fox News, you can watch White House press secretary Karoline Leavitt announce that six arrests have been made of individuals who allegedly vandalized Reflecting Pool. If you go to CBS's social media, you can watch reporter Ed O'Keefe tell President Donald Trump that, actually, there is no evidence of vandals causing a 250-foot gash in Reflecting Pool. The next day, on YouTube, you can watch Trump stand under an umbrella and explain to reporters that, in fact, it's a 350-foot slit — 100 feet longer than he'd originally claimed — "in the form of lots of little slits" and also, "it's a shame."

In case you are a latecomer to Reflecting Pool, here's a recap of what's happened so far this season: In April, Trump announced plans to refurbish the National Mall's historic Reflecting Pool in time for the country's 250th anniversary, saying that under the watch of previous presidents it had become "filthy." He awarded a no-bid contract to a company that had worked on his own swimming pools and spent several weeks bragging that the finished product would last for decades: "If you had a knife, you can't even cut it."

Days after the renovations were completed, the pool began blooming with algae in mid-June. Neon green water spewed from hoses nearby. Interior Department workers commenced dumping gallons of hydrogen peroxide into the water. The following week, chunks of the Reflecting Pool's new sealant started peeling off and floating to the surface. Ducks were found dead in and around the pool. Trump began blaming vandals, saying the pool had been cut with "a knife of some kind."

On social media, you can watch law enforcement issue warnings to anyone who now tries to touch Reflecting Pool. Swedish newscaster Stina Blomgren briefly dips her hand in the water, and a member of the National Guard approaches: "Please refrain from touching the water. That will be the last time you do that — any time after that you will be detained."

On TikTok, you can listen to hydrogen peroxide experts, algae experts and conspiracy theorists explain what they think has gone wrong with Reflecting Pool. You can visit the Washington Monument's EarthCam, which offers a 24/7 live stream of Reflecting Pool. There, you can chat with around 60 other visitors at any given time who have all logged on to make sure nothing else happens to Reflecting Pool on their watch, even though, from this camera angle, any people surrounding Reflecting Pool are the size of dust mites.

A journalist named Emily Miller who calls herself "the running reporter," because she is also a certified personal trainer and frequently jogs while reporting, uploaded a series of photographs and clips to X that she said were proof of vandalism, but I watched that video at least five times, and I have no idea what she is talking about. The clips were mostly of workmen chatting and close-ups of rock.

Reflecting Pool has everything. It's a drama. It's a farce. It's a whodunit. It's a murder mystery. The victims are ducks. Reflecting Pool is entertainingly low stakes because it is not, for example, a war. The worst-case scenario is that the United States is out several million dollars and that Lee Greenwood has to sing "God Bless the U.S.A." at the "Rally to End All Rallies" — Is that a promise? — in front of a body of water that currently looks like why God Blessed Tetanus Shots.

It is also high stakes because it definitively proves something, but what it definitively proves apparently depends on your political persuasion. If you are partial to Trump's narrative, for example, it proves that one of the primary villains in this story is a 67-year-old former Olympian who competed for the United States in canoe slalom racing before deciding to turn to a life of Reflecting Pool crime. (David Hearn was on a bicycle ride, he later said, when he stopped by the Reflecting Pool and noticed a partially detached piece of liner. He said he reached down to feel it, at which point he was handcuffed by Park Police.)

To watch Reflecting Pool is to bear witness to both the behaviors of your government and of your fellow citizens. To see what they are willing to believe. Who they are willing to blame.

You can watch flashback footage of the presidential motorcade driving down the Reflecting Pool last month before it was refilled. If you are partial to a narrative different from the one offered by Trump, you can join armchair detectives speculating that perhaps it was this — multiton vehicles driving over a brand new surface before it had a chance to cure — that was more likely to cause the pool to fail than a 67-year-old on a bike ride. Who is to say?

We've been told that on the next episode of Reflecting Pool, the water is going to be emptied again.

Trump announced it on Truth Social earlier this week. "We will drain some of the water, either before or after the Fourth of July, to do the permanent repair."

‘Hugely Troubling’: A Former Wall Street Regulator Is Getting Nervous by Victoria Guida

                                   Are regulators sowing the seeds of another bank bailout?

 Sheila Bair was not only a central figure in the government’s response to the 2008 financial crisis — she also warned about the risky mortgage lending practices that precipitated it.

Now, the former head of the FDIC is warning that today’s crop of financial regulators are forgetting the lessons of that painful saga by weakening banks’ capital buffers, which act as fortifications against unpredictable losses and are intended to ward off potential taxpayer bailouts.

 

“Regulators have to stand strong, because the banks, it’s in their financial interest to drive those capital levels as low as possible,” Bair told me in a recent, hour-long conversation. “And if they don’t stand firm against it, we’re going to have another crisis.”

Bair, tapped in 2006 by President George W. Bush to lead the agency responsible for safeguarding the deposits of everyday Americans, has never conformed neatly to partisan teams on financial regulation. She’s a Republican with a bit of populist flair, someone eager to rein in “too big to fail” banks with simpler but tougher capital rules.

Today, as ever, the correct calibration of such rules is something of a holy war in financial industry circles, with no simple answer. But Bair says regulators under the Trump administration are going the wrong way.

She pointed to a simple measure of banks’ capital levels — one that considers how much debt they’re taking on without factoring in what kind of risks they’re taking — that suggests megabanks’ capital buffers are now roughly where they were in 2009.

It’s unclear where the next threats to the financial system might come from. Bair is less worried about crypto, for instance, than she is about turmoil in private credit markets, where lenders that aren’t banks make riskier loans to businesses. But the whole point of capital is that it’s intended to guard against the unexpected.

And right now, she’s worried that regulators are letting their guard down.

 

Regulators under the Trump administration are doing a lot to ease up on the financial system. They’re loosening rules for banks. They’re scrapping oversight of a lot of other financial firms by gutting the CFPB. Does that worry you?

Yeah, it’s hugely troubling. So much of this is just undoing what we did after the 2008 crisis, which, you know, we’re going on 20 years now, so memories fade.

 

It’s easy to make it partisan and all about Trump and deregulation, but you see these kinds of cycles when you have relatively benign periods in the banking system. Banks are profitable, and they come in and say, “We don’t need all this capital. You’re constraining lending.”

We were hearing that right before the 2008 crisis, so a lot of this is same old, same old. But regulators need to have a long memory, even if the industry doesn’t. Maybe purposely doesn’t.

I think there’s still some people on Wall Street, especially among the big banks and their lobbyists, that still think the crisis was all about government wanting poor people to have mortgages. “It’s all the borrowers’ fault, and what was the big deal? We got through it.” I fear they view bailouts as the new paradigm, and certainly I see how quick the regulators were to bail out those billionaire depositors in Silicon Valley, which was a relatively small regional bank.

The Fed has been willing to step in quite a bit over the years, including with just lowering rates when they see potential stress. So it doesn’t surprise me if the industry just thinks the Fed’s always going to have their back, so they can operate with a lot less capital.

It’s frightening how much more the big banks have levered up. And they did record dividend and buybacks last year — and another, what, $40 billion, in the first quarter? So to say they’re capital-constrained when they’re releasing all this capital for shareholders is hard to reconcile.

With deregulation, with some of the risk-taking that we’re seeing, do you see parallels between today and 2008?

 

Oh, a lot of parallels. Yeah. The deregulatory trends, we were definitely experiencing leading up to the 2008 crisis, that is true. Risk, to the extent I worry about risk in the system, I worry about private credit. There have been enough warning signs already that I hope that people are more on top of that than we were with the mortgage crisis. But there are similarities — it’s non-bank lending. It’s iffy collateral.

One of the things that made me feel better about private credit is that I didn’t think there was all this financial engineering sitting on top of it the way that we did with the mortgages. We don’t have the [collateralized debt obligations] and the CDO-squared and all the basically gambling going on top of these mortgages. But the financial engineering around private credit financing arrangements is also growing more complex, so it’s hard for me to be completely sanguine.

It’s not as bad as it was prior to 2008, but I think it’s still pretty bad. And I think they’re just getting going. The industry is coming in, they want way more on these capital rules than what the Fed has already proposed, which is pretty generous. So, we’ll see what happens.

They’re going after all these kinds of simpler brakes on excess leverage that are much easier to understand, and for the markets to see, and are transparent. They’re going after all that.

I think that’s another issue. It’s the sheer complexity of these rules. [Regulators] say they want to simplify. With 1,800 pages of proposals this year? I don’t think so. But it becomes an insider’s game. So the people best equipped to have the capability to comment are the banks, the ones who are going to make money off of this, who have their hordes of lawyers and analysts who can come in and dive in and do these weekly large complex comment letters.

 

This is one of the reasons I founded the Systemic Risk Council.

It’s hard, even for us — and look at our list of former regulators, central bankers, bankers. It’s a struggle to wade through all of this and provide any kind of counterweight to these large banks and their highly complex proposals. And it has become an insider’s game. Journalists, too, have the same challenges to figure out, who’s right? Who’s wrong? Where in the 1,800 pages are you going to look?

Kevin Warsh has got his hands full on monetary policy. I have no idea what he’s going to do on regulatory policy. But if it was just simplifying this stuff, making it more transparent, getting more balanced input in the rulewriting process — without getting into the substance — those would just be really welcome process changes that would produce much, much better rulemakings.

You said by some measures capital is roughly where it was in 2009. That’s even before all of these other capital changes are implemented?

Oh, yeah.

I assume it will get worse once these risk-based reductions come into place.

Banks can optimize these rules, shift their assets around, manipulate their models. We saw it before. They’ll do it again, no matter how hard you try to prevent it. It’s like loopholes in the tax code. You do what you can. It’s a hydra-headed monster. You keep batting it down, but they can manipulate these rules.

 

The banks are still mad because their market risk capital is going up. Damn straight the market-based capital should be going up, and it is — a tad. Not as much as it should. But they’re fighting that. And it just seems like this Fed wants to be very accommodative.

There are some positive things in those proposals. I don’t want to take that away from them. But, overall, it reduces capital when capital, if anything, should be going up.

How much of this is just a normal pendulum swing toward deregulation you often see under Republican appointees, and how much of this is because independent regulatory agencies are now much more responsive to the White House and Treasury?

That’s a good question. People talk about Fed independence, but they seem to only talk about the context of monetary policy. I think there’s a lot of administration influence at the Fed and the FDIC and the OCC. And some people say that’s fine. Some people say these regulators should be responsive to the political authorities. I don’t think that.

Politics swings more than the regulatory pendulum does, so you’re just going to exacerbate the natural tendency, the poor timing of regulators, to ease when good times are good, and then clamp down when things are bad. So I do think it’s worse because they’re trying to make the Trump administration happy.

And then my guess is the Trump administration wants to throw some sops to the big banks, because on other things like debanking, the anti-immigration stuff and crypto, they’re taking positions that are not consistent with where the big banks would like policy to go. So maybe they’re trying to balance things out.

 If there’s another area where risk weights should go up, it’s in private credit or any exposure where you have a situation where it’s a largely unregulated counterparty.

To be giving these highly favorable capital treatments when you’ve got this iffy collateral, an unregulated industry that’s already under distress — those risk weights should be going up, if anything. But it’s just another example of the bias towards weakening where they can, not strengthening.

 Regulators’ argument for loosening capital rules is that they want more lending to come from the regulated banking system. Is that the right instinct?

Look, we’ve always had nonbank lending. That’s not new. What’s new is that the banks, and this was going on pre-2008 too, the banks fueled this growth with their own financing arrangements with nonbanks.

 

You’ll have to use a lot more capital to fund the position if you lend directly to the company versus lending through a private credit intermediary. Plus the intermediary is doing all the underwriting, all the collateral management. They’re doing all the work for you. So it makes it very attractive for banks to fund [nonbank lenders], so yes, [nonbanks], to some extent, on the margin are creditors, but mostly they’re customers.

[Nonbank lending] is going to grow more with these [bank capital] proposals.

There’s a segment of the market where [private credit] can provide a service. But they’re making riskier loans. Some of them are making really irresponsible loans, and for regulated banks to be fueling that irresponsible lending, as they were during 2008 with mortgage lending — no. That’s something regulators should be worried about and clamping down on, not facilitating it with even lower risk weights.

We have pending legislation that would put a framework around crypto and put the CFTC in the driver’s seat on regulation. When there was a crypto blow up a few years ago, there wasn’t really that much of an impact on the broader system because it wasn’t really interconnected with the banks. The bank regulators still haven’t opened the floodgates to crypto, but I’m wondering how you think about the financial stability risks now of crypto.

I always distinguish between the assets and the technology. Crypto assets, they aren’t backed with anything but algorithms or a wing and a prayer or a presidential name, or whatever. I’m not a fan of those, and I think there is a lot of risk in that segment of the “crypto market.” But it’s small. It’s highly speculative. I think it’ll always remain. I don’t see it getting a lot bigger. I really don’t. I think you’re kind of seeing it leveling out already.

 

The technology, on the other hand: tokenization of real-world assets, which can move on a blockchain. You have a cleaner, more efficient, faster process to transfer a title. You have a cleaner, more efficient, more transparent process to track collateral. Those are really positive things that can help the banking system be safer.

Should banks be buying Bitcoin and other speculative assets? Absolutely not. They’re generally limited in their ability to hold risky assets, and I would put certainly crypto assets in that category. I don’t want bank exposure there, and hopefully that doesn’t happen. But that speculative segment of the market is, I think, still reasonably contained, and I don’t think poses a risk to the system.

Stablecoins too — a lot of people wring their hands. I’ve always been a supporter of stablecoins. I think it’s a very promising technology. I hate that it’s the payment of choice for a lot of scams and speculation with other crypto assets, but I still believe in it as a technology for legitimate, broader-scale use. And I know the banks, especially smaller banks, are worried about disruption. I think it can be compatible with them.

Being able to use stablecoins, custody stablecoins, facilitate stablecoin redemptions — those are all things that banks can and should be doing, and that would, frankly, make the stablecoin environment more stable. And a lot of that was not permitted in the Biden administration, which is unfortunate, because I do think, if given the appropriate latitude, the smaller banks can actually leverage the stablecoin technology in a mutually beneficial way. But they need the flexibility to do that.

The CFPB had oversight of all of these other financial firms that aren’t banks. Are we just not doing that right now? What are the risks there?

 

You’re seeing a resurgence of state consumer activity, and that’s making the banks unhappy, because they don’t want these piecemeal consumer rules, state by state. One of the ways that I argued this in supporting the CFPB is, if you have a national standard setter, you reduce the incentives of the individual states to come in with their own rules. So I think to some extent this is backfiring on the banks.

I knew a young woman who was being scammed by her landlord. The scam is, you leave your apartment, and you’re current on your rent, and you clean the apartment. Everything’s lovely. And then a couple months later, you get a notice from a debt collector that you didn’t pay your last month’s rent, and they’re going to notify the credit bureaus. They’re going to ding your credit score if you don’t pay up.

She had sent this sleazy debt collector all the receipts showing that she had paid her rent. And I helped her. We wrote two letters, one to the CFPB and the other to the state consumer regulator. And within a week, she got a response from the state consumer regulator, who called the sleazy outfit. They immediately backed off. Two months later, she gets this bureaucratic letter from the CFPB that she hadn’t followed the correct format in filing her complaint, so they were sending it back and really couldn’t help her. And it wasn’t like, “This is how you do it.” It was just a complete blow off. And I thought to myself, boy, if the Trump administration thinks they’re making friends with the consumers by doing that kind of stuff, then I don’t know what they’re thinking. So it’s just an example. It’s anecdotal. But on the ground, I think this matters.

And you’re right, the non-banks are pretty much scot-free at this point, which was another reason why some of the banking industry did support the CFPB, because it was going to bring in nonbanks into consumer protections.

 

At least you have some oversight with banks. Ironically, because the CFPB can only supervise banks above $10 billion, the community banks still have their continuous consumer exams. So that was kind of ironic, that the big banks were benefiting more than the smaller banks from the CFPB being effectively closed. But I think they’re running into a bigger hodgepodge of state consumer rules. The nonbanks are even more competition now, because they don’t have to worry about consumer rules, and that’s letting the bad players in.

I don’t know why industry thinks any of that is in their interest.

Now you’re seeing this executive order where it seems to be a big jump ball in reviewing everything, which I think is very dangerous.

It seems like this is once again going to be an all-out, potential dismantling of all the very sensible ability-to-repay rules that were put in place by the CFPB after the crisis, and that not only threatens financial stability, it threatens consumers. It threatens homeowners. You’re not doing any homeowner any favor by putting them in a mortgage they can’t afford, as we learned painfully in 2008.

 

You mentioned bailouts earlier. Where do you think we’re at on them, politically? Everybody really hates them conceptually, but if we had another part of the financial industry failing, do you think a bailout would be likely?

I think the new Fed chair is much less likely to intervene than the previous leadership. But when push comes to shove, because these guys are too big, they can blackmail the government, right? And if you don’t, then you worry that the little guy’s getting hurt if you don’t step in.

 

I do think that the best way to prevent failures is to begin with higher capital levels. Runs are almost always symptomatic of market concerns that the bank is no longer solvent or will soon become insolvent. A very well-capitalized, strongly capitalized bank will not have runs.

Instead, they’re lowering the capital requirements.

These big banks that are going to be so challenging to resolve? Make them have truly fortress balance sheets. Not little advertisements that they have fortress balance sheets or bogus numbers from the stress test or the risk-based rules. True fortress balance sheets, and that takes care of a lot of your problem.

That should be the first strategy. But they also need to have the political will. The market needs to believe that they have the political will to actually put these folks into some kind of a [temporary government-run company to run the bank’s operations until it’s sold or liquidated], wipe out the shareholders, impose losses on unsecured creditors, as you would in a bankruptcy proceeding, and if you just did that once, you would probably end bailouts.

I hope and pray that we don’t have another big bank get into trouble. But the trajectory of these capital rules, make no mistake, is weakening the resilience of the banking system and significantly lowering capital for the larger banks who have already, on a non-risk-weighted basis, been taking on a lot more leverage since the pandemic.

On Wednesday we get the stress test results. Doesn’t sound like you really trust them that much.

 

Oh, I don’t pay attention to them anymore. I just think they’re a dog-and-pony show. I do. I’m just so frustrated. I mean, they don’t stress what they should. They don’t stress the stagflation environment. The severe distress scenario always assumes interest rates basically go down to zero, so I think they’re misleading. I think they are an enormous time sink for bank staff and supervisors, and the rules keep changing, usually in response to industry requests to weaken them, not to strengthen them.

So, no, I don’t pay attention to them anymore, and I tell investors not to pay attention to them anymore. You can pay attention to them only to the extent that this is the Fed publicly saying this is [the banks’] capability to withstand stress. So, to the extent that locks the Fed into some kind of bailout, if they get into trouble, it might be relevant from that perspective. But as a test of the financial strength of the bank, no, I don’t trust them anymore. I really don’t.

I’d just scrap them. I really would.

I don’t think I’ve ever said that publicly.

If you were in charge right now — you’ve talked about raising capital requirements, scrapping the stress tests. What else would you be focused on right now? How worried are you about AI?

I want to say something good about the big banks: They have consistently been industry leaders on cybersecurity, and that’s not just me saying that. A lot of people say that.

 

I mean, it’s essential to their business model, having good cyber information security infrastructure and governance. But also for people they do business with, requiring that of them too, I think, has done a lot to improve security. I want to give a nod to that. And so that is an area where I have much more confidence that the banks are self-motivated to deal with these problems.

So far, the regulators have been hands off, saying, “This is evolving technology. We’re not going to put out guidance right now.” At this point, maybe that’s the right decision.

And there may be a big hack tomorrow, and I’ll be totally proven wrong. But I do think banks have their own strong motivation to deal with it, unlike capital, where the more leverage they can take on, the bigger their shareholder returns. They clearly have self-interest in lowering capital rules. I think their self-interest is to have really tight information security, because they know they’re cooked if there’s a significant hack.

But it really does all come back to capital. Because as I said earlier, if you have strong capital levels, so many of these other problems just go away. You don’t have liquidity runs. You don’t have failures. But regulators have to stand strong, because the banks, it’s in their financial interest to drive those capital levels as low as possible. And if they don’t stand firm against it, we’re going to have another crisis.