Barely 48 hours after the midterms, Bernie Sanders posted four words that should alarm anyone who cares about American prosperity and security. “National data center moratorium now.” Representative Yassamin Ansari went further and said that pausing AI development should be a Day One priority for the new Democratic majority in the House. The vehicle is ready. The Artificial Intelligence Data Center Moratorium Act, introduced by Sanders and Alexandria Ocasio-Cortez, would impose an immediate federal freeze on the construction of new data centers and the expansion of existing ones until Congress passes comprehensive legislation. In practice that means an open-ended ban, conditional on Washington agreeing on everything from labor policy to civil rights to the meaning of “safe AI”. Anyone who has watched Congress try to pass a budget knows how long that would take.

This is the most self-destructive industrial policy proposal in the developed world since Germany decided to shut down its nuclear plants while importing Russian gas. And Beijing could not have designed it better.

Tuesday’s midterm elections were a rout. Democrats picked up seven Senate seats, including Texas, Kansas, South Carolina, Iowa, and Ohio, and flipped more than forty House districts, some of which Donald Trump had carried by double digits only two years ago.

Commentators will blame candidate quality, redistricting, or the president’s personality. The real lesson is simpler, and the Republican establishment will not like it. A party that claims to defend limited government but chooses to tax imports, run two-trillion-dollar deficits, and fund expensive wars ends up judged on what big government delivers. This week voters judged it, and they didn’t like what they got.

For years, extraordinary money supply growth and negative real rates have pushed asset prices to unwarranted levels. The resulting “everything bubble” spread across real estate, private equity, bonds, and stocks. Now, it is bursting.

The process begins when cheap and elevated liquidity, which is the assumption underpinning inflated valuations, suddenly evaporates. Fiscal deterioration pushes up sovereign borrowing costs, the energy shock squeezes purchasing power, and monetary tightening exacerbates both. Tech stocks are the high-profile victims. However, the deeper danger lies in the repricing of the entire financial system’s foundation.

Decades of bloated government, entitlements, subsidies, and mass migration have destroyed Europe’s competitiveness and growth, all paid for with ever-rising taxes and more debt. They have also created enormous social discontent. Taxpayers are exhausted, and the recipients of subsidies are looting and vandalizing the streets. The flames in French cities are the bill that is arriving.

On Saturday 17 October, France burned again. What began as marches against the cost of living and the state of public schools turned into the worst violence the country has seen in decades. According to the French government, 550,000 people took to the streets, 1,200 were arrested, and 150 police officers were injured. In Limoges, rioters set the city hall ablaze; in Marseille, they broke into the city hall; and in Lyon, they torched the tourist office. AFP reporters on the ground described scenes more intense than the 2023 riots and the Yellow Vest protests of 2018 and 2019, six months before a presidential election. Major cities, including Paris, Marseille, and Lille, suffered enormous commercial damage with smashed shopfronts, shattered glass, and ransacked retail spaces. In Bordeaux, Mayor Thomas Cazenave reported that up to 100 stores were looted in his city alone.