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financial crisis
Don't Mourn Alan Greenspan
He never mourned for you.
Jun 24, 2026
Alan Greenspan, who served as chair of the Federal Reserve from to 1987 to 2006 and who died on Monday, was a monster. He was the Henry Kissinger of economic policy. Like Kissinger, he was mistakenly considered a genius. Reporters, businesses, and many members of Congress hung on his words—more accurately, his jargon-filled word salad, which obscured more than it explained—to understand what was going on in the economy. Despite the fact that his policies, like Kissinger's, were a blatant failure, he was, also like Kissinger (who also died at 100), still taken seriously by the media after he left government service, and made a ton of money as a consultant. Both men caused enormous harm and suffering for which they were never held accountable.
The New York Times obituary has a few paragraphs about writer and pseudo-philosopher Ayn Rand's influence on Greenspan, but doesn't do justice to the fact that Rand's inner circle wasn't just a discussion group. It was a cult. Greenspan absorbed her belief that selfishness was the highest principle. It was that view that guided his economic thinking, including when he was Fed chair, and before that, chief economic advisor to President Gerald Ford.
The core of Rand's influence was Greenspan's belief that government should play no role in regulating business. He believed that corporations could police themselves without any government rules. He reflected Rand's belief that corporations' self-interest and greed, and those of major shareholders, would lead them to behave responsibly.
Greenspan was appointed Fed chair by Ronald Reagan in 1987 and reappointed by George H.W. Bush, Bill Clinton, and George W. Bush. He was also part of the corporate ruling class, serving on the boards of several Fortune 500 corporations, including Mobil Oil, J.P. Morgan, the Aluminum Corp. of America (Alcoa), Morgan Guarantee Trust Co., Automatic Data Processing Inc., Capital Cities/ABC, Pittston Company, and General Foods.
Greenspan's influence, along with the intense lobbying by the banking industry, provided the justification for the dismantling of dismantling of decades of government bank regulations, providing lenders with the leeway to engage in an orgy of mergers, speculation, and risky and racist lending practices that ultimately led to the collapse of major Wall Street firms.
The banking industry's greed—its insatiable appetite for profits and wealth—led to the 2007 mortgage meltdown, the implosion of the housing market, the near-collapse of the financial industry, and the breakdown of the whole economy, including widespread layoffs and foreclosures, from which we have still not fully recovered. But it was made possible by the see-no-evil views of Greenspan and his ilk.
In the late 1990s, during Greenspan's watch at the Federal Reserve, banks and private mortgage lenders began pushing subprime mortgages, many with “adjustable” rates that jumped sharply after a few years. These risky loans comprised 8.6 percent of all mortgages in 2001, soaring to 20.1 percent by 2006. That year alone, 10 lenders accounted for 56 percent of all subprime loans, totaling $362 billion. These loans were a ticking time bomb, waiting to explode.
Starting in 2007, housing prices fell by third. Americans lost $7 trillion in wealth. Over 5 million Americans lost their homes. The drop in housing values affected not only families facing foreclosure but also families in the surrounding communities because having a few foreclosed homes in a neighborhood brings down the value of other houses in the area. The neighborhood blight created by the housing collapse was much worse in African-American and Hispanic areas because they were the primary victims of subprime loans and almost twice as likely as whites to lose their homes to foreclosures.
Brooksley Born, chairwoman of the Commodity Futures Trading Commission from 1996 to 1999, wanted her agency to regulate derivatives and other exotic financial investments (including credit default swaps) that she accurately predicted were too risky and would lead to disaster. But Greenspan, along with President Clinton’s Treasury Secretary Robert Rubin and economic advisor Larry Summers, stopped her from exercising the kind of regulatory authority that would have prevented the calamity. In 2000, Edward Gramlich, a Federal Reserve Board member, repeatedly warned Greenspan about subprime mortgages and predatory lending, which he said jeopardized the twin American dreams of owning a home and building wealth. He tried to get Greenspan to crack down on irrational subprime lending by increasing oversight, but his warnings fell on deaf ears.
Greenspan was the leading culprit of the policies that led to the economic collapse. He allowed the banks' short-sighted gluttony to cause enormous human suffering.
It wasn’t until the system imploded that Greenspan gained any insight about the fundamental flaw of his belief that greed is the best operating principle for the economy. In 2008, testifying before the House Committee on Oversight and Government Reform, Greenspan admitted: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief…. This modern [free market] paradigm held sway for decades. The whole intellectual edifice, however, collapsed in the summer of last year.”
Of course, there was plenty of evidence throughout history that big corporations do NOT behave responsibly unless they are required to do so by government regulations and enforcement. This has been especially true of banks. But because Greenspan was such a libertarian ideologue, in thrall to Rand and others, he could not, or refused to, see what was right in front of him. For the millions of Americans who lost their homes, their jobs, and their small businesses through no fault of their own. Greenspan's self-awareness came much too late.
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Canada Is Quietly Putting War Into Your Portfolio
By hosting the proposed Defence, Security, and Resilience Bank, Canada risks transforming war from a political decision subject to public scrutiny into a financial product.
May 07, 2026
Canada is set to host the headquarters of the proposed Defence, Security, and Resilience Bank, or DSRB, a new multinational institution designed to mobilize tens of billions in financing for military and security projects among allied nations. In short, what we are seeing is the quiet normalization of something far more consequential: the permanent financialization of war.
The structure being envisioned for DSRB closely resembles other multilateral financial institutions. It would raise capital on global markets, issue bonds, and extend loans to governments and defense companies. That means funding for military supply chains, weapons systems, and defense infrastructure would increasingly flow through financial markets rather than direct public expenditure. In doing so, war itself risks being transformed from a political decision subject to public scrutiny into a financial product embedded in portfolios.
And so, with remarkable efficiency, we may be arriving at a point where, whether you like it or not, you are investing in war. Not because you consciously chose to, but because modern finance rarely asks for permission. It integrates. It diffuses. It embeds. Just as complex mortgage-backed securities seeped into pension funds and retirement portfolios before the 2008 Financial Crisis, instruments tied to defense financing could quietly become part of the same financial plumbing that underpins everyday savings. Deposits in major banks, such as Royal Bank of Canada or Toronto-Dominion Bank, feed into broader lending and investment pools. If those banks help underwrite DSRB bonds or finance defense projects, then ordinary savings are, at least indirectly, part of the system. You won’t need to opt in. The system will do it for you.
Once you are in that system, try opting out. Go ahead—divest. In theory, it sounds simple. In practice, it is anything but. Large pension funds, such as the Canada Pension Plan Investment Board or the Ontario Teachers’ Pension Plan, operate within a web of financial relationships that makes complete divestment extraordinarily complex. If DSRB bonds are rated as safe investment-grade assets, they could easily find their way into fixed-income portfolios. Even if funds choose to avoid them directly, indirect exposure remains: through banks that underwrite the bonds, through ETFs that bundle defense assets, and through lending syndicates that finance defense contractors. “All the king’s horses and all the king’s men” of global finance, institutions like JPMorgan Chase and Deutsche Bank, are already lining up behind this model. When the entire financial stack aligns like this, divestment becomes less a matter of choice and more a question of how far you are willing, or even able, to disentangle yourself from the system.
The DSRB starts to look like a "World Bank for Warfare."
What emerges is not just a new bank, but a new layer of abstraction between citizens and the consequences of war. Traditionally, military spending is debated, however imperfectly, through parliaments and public scrutiny. A financialized model shifts that process into capital markets, where decisions are driven less by voters and more by risk assessments, yield expectations, and institutional incentives. Over time, this risks normalizing war as an investable asset class, something to be priced, traded, and held in portfolios rather than questioned in public forums.
That transformation carries consequences. One of the most immediate concerns is that such a bank could normalize or even facilitate controversial military interventions. If borrowing costs for defense spending are lowered, the financial barriers to launching military operations also fall. History offers a sobering precedent. The Iraq War was widely condemned after the central justification, claims of weapons of mass destruction, collapsed under scrutiny. Yet the war had already been financed, executed, and justified through institutional momentum. A system like DSRB could make such momentum easier to sustain, not harder. When capital is readily available, restraint becomes less likely.
Over time, this could make war financing a permanent feature of the global system. What used to be occasional becomes routine, and what was once debated becomes taken for granted. In that sense, the DSRB starts to look like a "World Bank for Warfare."
Equally concerning is the question of democratic oversight. Traditional military spending must pass through national parliaments, where budgets are debated by elected representatives. A multilateral financial institution operates differently. By raising funds on global capital markets and deploying them through loans and financial instruments, DSRB could create a layer of decision-making that sits at arm’s length from voters. The result is a subtle but significant shift from public accountability to financial abstraction. Decisions about long-term military financing could become less visible, less contested, and ultimately less democratic.
What makes this shift particularly jarring is where it is happening. Canada has long cultivated an image of a country that prioritizes diplomacy, multilateralism, and peacekeeping. Yet by stepping forward to host the DSRB, it is positioning itself not just as a participant in global security, but as a financial hub for its expansion. The very country that has emphasized de-escalation is now spearheading an ecosystem designed to sustain long-term militarization.
In a world where defense financing is deeply embedded in financial markets, peace does not simply reduce risk; it disrupts revenue.
The implications extend beyond symbolism. By helping institutionalize a system capable of mobilizing upwards of $100-135 billion in defense financing, Canada is effectively tying part of its economic future to the expansion of military spending. That alignment carries risks. When financial systems are built around a particular sector, they begin to depend on its growth. We have seen this dynamic before, most notably in the housing market prior to the 2008 Financial Crisis, when an entire economic ecosystem became reliant on ever-expanding real estate values.
Apply that same logic to the realm of defense, and the parallels become difficult to ignore. A system that depends on continuous military spending creates subtle but powerful incentives: to maintain high levels of defense budgets, to expand procurement programs, and to sustain the geopolitical tensions that justify both. Over time, what begins as risk management can evolve into dependence. A system built to finance war risks becoming a system that depends on it.
Then comes the uncomfortable question: What happens if the wars actually stop?
In a world where defense financing is deeply embedded in financial markets, peace does not simply reduce risk; it disrupts revenue. If the assumptions underpinning defense-linked investments are built on sustained spending and ongoing tension, then de-escalation could trigger a recalibration across portfolios, institutions, and markets. The consequences would not remain confined to defense companies or financiers. They would ripple outward to pension funds, public investment vehicles, and the everyday savings of millions who never consciously chose to participate in this system.
This is where the analogy to the 2008 Financial Crisis becomes more than rhetorical. Before that collapse, housing was treated as a permanently expanding asset class. Financial innovation spread exposure across the system, embedding risk in places few fully understood. When the underlying assumptions failed, the fallout was systemic. Homes were lost. Savings evaporated. Institutions faltered.
Now imagine a similar architecture built around militarization. A world in which conflict is not just a geopolitical reality, but a financial dependency. Where instability is quietly priced into the system as a driver of returns. And where, if that instability recedes, the economic consequences are felt far beyond the battlefield.
At that point, the challenge will not just be moral or political, it will be structural. Governments may find themselves trying to stabilize a system that has grown dependent on the very thing it claims to minimize: war. And there may come a moment when the system simply breaks, and it becomes impossible to put Humpty Dumpty back together again.
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Trump Agency ‘Setting Stage for Another Financial Crisis’ With Attack on Prediction Market Regulations
"By moving to crush state safeguards for prediction markets in court, the CFTC is giving gambling companies a green light to prey on all Americans," said one critic.
Feb 17, 2026
A key federal regulatory commission has announced that it will be fighting against individual states' powers to regulate prediction markets.
Mike Selig, chairman of the US Commodity Futures Trading Commission (CFTC), wrote in an editorial published by the Wall Street Journal on Tuesday that his agency has exclusive powers to regulate prediction markets, and that it would be backing an appeal by Crypto.com aimed at overturning state regulations.
Selig, who was appointed to his post by President Donald Trump last year, said this action was necessary because the prediction markets "face an onslaught of state-driven litigation," with many states claiming that these markets are subject to their laws regulating gambling.
"The CFTC will no longer sit idly by," Selig declared, "while overzealous state governments undermine the agency’s exclusive jurisdiction over these markets by seeking to establish statewide prohibitions on these exciting products."
The CTFC commissioner also disputed that prediction markets constituted gambling, saying instead that they are derivative instruments of the kind that the CFTC was given sole jurisdiction to regulate under the 1936 Commodity Exchange Act.
"These exchanges aren’t the Wild West, as some critics claim, but self-regulatory organizations that are examined and supervised by experienced CFTC staff," Selig concluded. "America is home to the most liquid and vibrant financial markets in the world because our regulators take seriously their obligation to police fraud and institute appropriate investor safeguards."
Selig's announcement was greeted with skepticism by Emily Peterson-Cassin, policy director for the Demand Progress Education Fund, who warned the CFTC was making the same mistakes made by regulators that led to the 2008 global financial crisis.
"The 2008 financial crisis happened because we let bankers gamble on housing," said Peterson-Cassin. "Now the CFTC is trying to let gamblers gamble on every aspect of life. By moving to crush state safeguards for prediction markets in court, the CFTC is giving gambling companies a green light to prey on all Americans and is setting the stage for another financial crisis."
The CFTC announcement was also criticized by Republican Utah Gov. Spencer Cox, who said that state regulations for online betting markets are fundamentally different from the kinds of futures markets traditionally regulated by the commission.
"I don’t remember the CFTC having authority over the 'derivative market' of LeBron James rebounds," he wrote in a social media post. "These prediction markets you are breathlessly defending are gambling—pure and simple. They are destroying the lives of families and countless Americans, especially young men. They have no place in Utah."
Cox further vowed to "use every resource within my disposal as governor of the sovereign state of Utah, and under the Constitution of the United States to beat you in court."
Former Republican New Jersey Gov. Chris Christie also criticized Selig for trying to interfere in the rights of states to regulate betting markets, arguing that "sports betting is not a derivative, it’s gambling."
Ron Filipkowski, editor-in-chief of MeidasNews, raised suspicions about the effort to undo state regulations on betting apps and pointed to Donald Trump Jr.'s connections to popular prediction markets Polymarket and Kalshi.
As reported by the New York Times last month, Trump Jr. "is both an investor in and an unpaid adviser to Polymarket, and a paid adviser to Kalshi," as well as "a director of the Trump family’s social media company, which recently announced it would start its own platform called Truth Predict."
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Warren Warns 'Trump Could Be Setting the Stage' for Next Financial Crash
Discussing the post-2008 financial rules, Trump's Treasury chief told a Fox host that "we have to take the financial system out of this straitjacket."
Dec 17, 2025
President Donald Trump's administration "wants to turn the clock back to 2008 and let Wall Street run wild."
That's how US Sen. Elizabeth Warren (D-Mass.) responded on Wednesday to Treasury Secretary Scott Bessent's comments to Fox Business Network host Maria Bartiromo about the administration's deregulatory push.
Without naming it, Bessent took aim at the Dodd-Frank Wall Street Reform and Consumer Protection Act, a 2010 law that Warren, then a longtime Harvard University professor, fought for in the wake of the 2008 financial crisis.
Recalling that era, Warren said: "We all know how that ended—with taxpayers bailing out Wall Street while millions lost their homes and got fired from their jobs. Donald Trump could be setting the stage for the next crash."
Warren was far from alone in calling out Bessent after journalist Aaron Rupar noted that during the Fox interview, the ex-hedge fund manager said: "I chair something called FSOC, the Financial Stability Oversight Council, and these 2008, 2009, 2010 financial rules were too tight. They have hamstrung the American financial system. It was time for a change. We're gonna be safe, smart, and sound in terms of our deregulation. But we have to take the financial system out of this straitjacket."
University of Michigan business law professor Jeremy Kress said: "Fact check: The decade following the Dodd-Frank Act marked the longest period of economic growth in US history. The main problem with the post-2008 reforms is that they did not do nearly enough to limit the nonbank risk-taking that Bessent and his allies have enabled."
Progressive political commentator and YouTuber Kyle Kulinski declared, "These people are hell-bent on creating a new Great Depression."
Dean Baker, senior economist at the Center for Economic and Policy Research, said, "Remember BLEAT: Bessent Lies about Everything All the Time."
The Fox appearance on Tuesday came after Bessent earlier this month announced an overhaul to the structure of FSOC—which was established by Dodd-Frank—and wrote in the introduction letter to the council's annual report that it "would shift its focus from 'prophylactic' regulatory and supervisory policies to an approach aimed at removing red tape in areas like artificial intelligence, in a bid to spur economic growth," as Politico summarized at the time.
As Politico also reported:
Markets groups and members of Congress expressed their concern over the changes. In a letter to Bessent... Sen. Elizabeth Warren (D-Mass.) expressed concern that the FSOC has met fewer times this year than in any past year of its existence and that the council is "sabotaging its own authorities." Dennis Kelleher, CEO of Better Markets, an advocacy group focused on regulation, stated that "undermining the FSOC is undermining the economy and the financial system."
Sharing the Politico report on social media earlier this month, Kress said that "this is a dereliction of duty by the Financial Stability Oversight Council. But if there is a silver lining, it is that the Trump administration now unequivocally owns whatever crisis lies ahead."
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5 Lessons From the End of the Larry Summers Era
Summers’ influence was immense, but so were his blind spots. It’s time for economics that values people and the planet over power and prestige.
Dec 03, 2025
The era of Larry Summers’ dominance in American economics is over. It’s a good moment to take stock.
Summers has been just about everywhere money talks. From Harvard to the Treasury, through the Clinton and Obama White Houses, onto Wall Street, and into think tanks and policy networks that shape the nation’s economy—including the Center for American Progress, the Peterson Institute for International Economics, and the Hamilton Project at the Brookings Institution—he has left a mark few economists ever achieve.
Yet his career also shows the risks of concentrating authority in economists whose prestige, ambition, and attachment to abstract models can outweigh attention to real lives. Time and again, he let the interests of financial elites, spreadsheet obsession, and ingrained biases create troubling blind spots. The consequences for ordinary people and the planet simply faded into the background.
The silver lining: Summers’ record offers a clear road map for reform, highlighting what economics should not be: a discipline that prioritizes prestige, profit, and elegant equations. And it points toward what it could be: smarter, fairer, more accountable, and genuinely focused on human well-being and the Earth we inhabit.
Lesson 1: Sexism is Costly
Let’s be blunt: Economists who don’t see women as equals weaken the very core of their discipline.
Tasked with understanding how people, resources, and institutions interact, they can’t model societies, predict outcomes, or craft effective policy if they don’t accurately perceive half the population. Bias isn’t just a moral failure. It corrupts analysis.
If Summers had respected women’s intellectual authority, he might have heeded Brooksley Born when she pushed to regulate derivatives as chair of the Commodity Futures Trading Commission (CFTC).
Summers’ comments while president of Harvard suggesting women lack the natural faculties to excel in higher mathematics and science reveal a deeper flaw: outdated, discriminatory, and intellectually sloppy thinking. (Any lingering doubt about his mindset vanishes when you read his 2017 email to Jeffrey Epstein: “I observed that half of the IQ in world was possessed by women without mentioning they are more than 51% of population.” A leap beyond casual sexism, this was a bold assertion of women’s intellectual inferiority).
Such attitudes have real consequences for economics, leadership, and policy.
Consider: If Summers had respected women’s intellectual authority, he might have heeded Brooksley Born when she pushed to regulate derivatives as chair of the Commodity Futures Trading Commission (CFTC). Instead, he joined forces with Alan Greenspan and Robert Rubin to shut her down—a disastrous misstep that helped set the stage for the unregulated derivatives boom and the 2008 financial crisis.
America is still paying for that one.
The economics profession itself pays a steep price for sexism. Institute for New Economic Thininkig research by Giulia Zacchia, Orsola Constantini, and Moshen Javdani shows that structural bias in hiring, research evaluation, and theoretical norms pushes women and fresh ideas to the margins, producing models and policies that miss the full picture of how economies really function.
Summers’ personal conduct compounds his professional failings. In the Epstein files, Summers discussed a Chinese female mentee in explicitly sexual terms. He detailed his attraction and referred to the possibility of a sexual relationship, asking Epstein whether it was “meaningful” to discuss “the probability of my getting horizontal w peril,” a code name for the woman in question. He speculated about how to make himself seem “invaluable and interesting” to her, implying that intimacy could follow. This behavior obviously violates professional boundaries.
Sexual harassment isn’t just harmful to the people targeted—it hurts businesses, families, and the economy too, as I have documented (Parramore, 2018), while Zacchia and Izaskun Zuazu emphasize the need to challenge the deep-rooted gender inequalities that make harassment possible. Unfortunately, Summers’ sexism proved too deeply rooted to excise.
Summers’ departure opens the door to economics that not only produces more accurate models and better outcomes for society, but fully embraces the talents and insights of female students and economists.
Lesson 2: When Economists Favor Wall Street, America Suffers
Summers’ career offers a clear example of how cozy ties between elite economists and Wall Street create harm.
While president of Harvard (2001-2006), Summers had what colleagues described as a “huge influence over Harvard money matters.” He pushed for a risky investment strategy for the university’s endowment, even though as early as 2002, Iris Mack, an analyst at the Harvard Management Company (HMC), warned Summers’ chief of staff about what she described as “frightening” use of derivatives and inadequate risk-management protocols. But her warnings, and those of Jack Meyer, the head of the endowment, who warned of investments in “stocks, bonds, hedge funds, and private equity,” were disregarded by Summers. (Mack was dismissed, and alleges she was fired for voicing concerns; she later reached a settlement with the university).
Summers’ investment strategy backfired sharply when the 2008 crash hit, costing the university dearly: 27% of its endowment, to be precise. By then, Summers was working at a hedge fund and would soon spin through the revolving door into Barack Obama’s White House.
In another telling episode, Summers shielded his colleague Andrei Shleifer during the scandal over Harvard’s 1990s-era Russia privatization program. Shleifer and associates were found liable by a federal court for using insider access to invest in Russia while advising on US-funded economic programs: a clear conflict-of-interest. Harvard ended up shelling out a $26.5 million settlement, but Shleifer kept his tenured position, thanks in part to Summers’ influence.
Summers’ Wall Street-friendly instincts have reached deeply into policy. During the 1990s and early 2000s, he advocated deregulation and reduced oversight for banks, contributing to the conditions that triggered the 2007-2008 financial meltdown, when millions of regular people lost jobs, homes, and savings. After public office, he continued profiting from that same financial ecosystem, collecting large fees through consulting, speaking engagements, and corporate board positions.
In Wall Street’s corner he remained: In 2023, he pushed the government to guarantee all deposits at Silicon Valley Bank, arguing that failing to do so would be a “Lehman-like error,” while downplaying conflicts of interest with firms tied to the bank. He warned against listening to “moral hazard lectures” about bailouts. (It was not reassuring to learn that Summers turned out to have undisclosed ties to firms connected to SVB’s largest depositors).
In 2025, Summers warned that asset prices are “frothy,” but instead of calling for regulations or protections for people who might lose their savings, he framed his concern in a way that would calm investors. His focus seemed to be on keeping financial elites calm above all else.
Summers has consistently emphasized market stability over robust support for working people, advocating Fed policies that favor large banks and investors. Coupled with his continued advisory roles with financial-sector firms (many now lost due to the Epstein files), these moves reinforced a career-long pattern: prioritizing the interests of the wealthy while leaving Main Street to fend for itself.
Which brings us to the next lesson.
3. Working People Must Be Prioritized in Economics
Regrettably, it bears repeating that economics has too often been treated as a game for elites, focused on numbers on paper, financial flows, and abstract deficits, while the jobs, homes, and livelihoods of working people are pushed aside. Summers personifies this very problem.
For example, Summers pushed interest‑rate hikes and emphasized deficit reduction over job creation. As political protégé of deficit‑hawk Rubin, and later as head of the National Economic Council (NEC), under Obama, Summers repeatedly plugged austerity, even at times when stimulus was badly needed to support working people.
In December 2008, a full month before Obama’s inauguration, Summers drafted a 57‑page memo warning of a grim economic outlook, but he also downplayed how severe the downturn could be. That memo laid the foundation for a flawed stimulus plan and economic strategy that prioritized deficit targets over urgent jobs recovery.
Larry Summers’s record on global economic policy offers a revealing portrait of his priorities: market logic over human lives, and financial returns over planetary survival.
The results were stark. Actual job losses far outpaced the administration’s optimistic estimates, and the recovery was painfully slow for millions of Americans. After leaving the NEC, Summers went on to warn against aggressive fiscal support, focusing instead on deficit risk and inflation concerns, often at the expense of middle‑class wage earners trying to get back on their feet.
In the wake of the Covid-19 pandemic, Summers repeatedly championed what many view as market-first, investor-friendly economic priorities over aggressive support for working-class Americans. In 2021 he blasted the stimulus bill (American Rescue Plan) as “the least responsible macroeconomic policy in 40 years,” warning that huge fiscal spending combined with loose monetary policy was “kindling” an inflation fire.
This neglect of working people is a failure of economics. When economists treat deficits and interest rates as ends in themselves, rather than tools to support lives and livelihoods, they lose the real purpose of economic analysis.
For too long, the rules of economic policy have been written by those fail to understand the stakes of unemployment, insecure work, or debt. Larry Summers isn’t just a powerful economist, he’s also very wealthy: His net worth rocketed from around $400,000 in the mid-1990s to $7-31 million by 2009, largely through high-paid Wall Street consulting, hedge-fund work, and speaking fees. Today, estimates put him at roughly $40-50 million.
Perhaps this background helps explain his longstanding emphasis on austerity over labor-market protections.
4. Economics for the Planet, Not Just Profits
Larry Summers’s record on global economic policy offers a revealing portrait of his priorities: market logic over human lives, and financial returns over planetary survival.
Over decades, he repeatedly helped shape policies that forced vulnerable populations, particularly in developing countries, to subordinate basic needs like health, education, and environmental protection to debt repayment and economic “efficiency.”
One episode has come to symbolize this worldview. In 1991, while serving as chief economist for the World Bank, Summers’ office circulated an internal memo drafted by Lant Pritchet and cosigned by himself, which suggested that dumping toxic waste in developing countries would actually benefit them economically. The memo noted that, because wages and estimated “economic losses” from illness were lower in developing countries, the health costs of pollution would be “cheaper” there than in wealthier nations. Although Pritchett later insisted the memo was merely sarcasm, the fact that it moved through Summers’ office and carried his signature sparked international outrage.
After the memo became public, Summers told a reporter: "I think the best that can be said is to quote La Guardia and say, 'When I make a mistake, it's a whopper.'"
Many agreed. Brazil’s then-Secretary of the Environment Jose Lutzenburger, excoriated Summers’s logic as “perfectly logical but totally insane,” noting that it exemplified “the unbelievable alienation, reductionist thinking, social ruthlessness, and the arrogant ignorance of many conventional ‘economists’ concerning the nature of the world we live in.”
This was not just a one-off. In the 90s, Summers used his power to block meaningful climate action, opposing US participation in Kyoto Protocol. He claimed that rapid greenhouse‑gas reductions could carry “unknowable economic consequences.”
Even when he later moved toward what some considered climate-friendly policies, his proposals revealed much about his real concerns. For instance, in 2017 he backed a modest carbon-pricing scheme, but only if it replaced stronger environmental regulation and came with rebates and border adjustments. In an op-ed titled, “Why we should all embrace a fantastic Republican proposal to save the planet,” he favored “raising the price of carbon and less emphasis on command-and-control regulation.” That approach aligns neatly with the wish lists of deep-pocketed polluters and carries little of the urgency environmental scientists and communities fighting climate disaster demand.
Summers also supported the North American Free Trade Agreement (NAFTA), which has been widely criticized for undermining environmental regulations in Mexico, weakening labor protections, and allowing corporations to externalize ecological costs across borders. Once again, Summers appeared to prioritize trade liberalization and corporate profits over environmental justice and workers’ rights.
Under Obama, he continued to warn of potential economic risks of aggressive efforts to limit carbon emissions. More recently, in 2022, Summers promoted a World Bank plan to leverage massive new borrowing to address poverty and encourage a “global green transition.” On the surface, this looks progressive, until the focus on financing and efficiency is revealed. Rather than advocating real structural change, Summers continues a pattern of putting capital and market mechanisms over meaningful, just environmental action.
5. A New Beginning
In the big picture, Summers’s retreat leaves both a gap and a long‑overdue opportunity.
More than ever, the US—and the world—needs economists who put real people first: who design policies that protect jobs, homes, and communities; who confront climate change rather than downplay it; who treat women, working people, and marginalized groups as full participants; and who put their focus on social well‑being.
As the 19h‑century critic John Ruskin famously wrote, “The only wealth is life.” Economics must finally reflect that truth (Spear, Parramore, 2015).
We now have a chance to build a life‑centered economics, one that prioritizes human flourishing, environmental stewardship, and equitable opportunity—not just the interests of the elite few.
The opportunity is here. Let’s seize it.
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How Trump Promotes Grotesque Corporate Lawlessness
Dropping corporate cases en masse, as the Trump administration is doing, portends a return to recklessness and greed that fueled corporate catastrophes like Wall Street’s 2008 financial crisis.
May 08, 2025
“Corporations First.” That’s the slogan that would truthfully describe the Trump administration’s approach to law enforcement, not “America First.”
A new investigation by my organization shows that the Trump administration is dropping investigations and enforcement actions against corporations that showered money on Trump’s inauguration earlier this year.
Seventy-one big businesses, which were facing at least 102 ongoing federal enforcement actions at the time of Trump’s inauguration, collectively gave a whopping $57 million to the Trump-Vance inaugural fund, we found. And many may now be collecting special favors.
Time will tell whether the payments by other big corporate inauguration donors—like Amazon, Apple, Boeing, FedEx, Goldman Sachs, Google, Johnson & Johnson, Nvidia, and Pilgrim’s Pride—will see enforcement go away, too.
Trump’s inaugural haul from corporations facing investigations and lawsuits alone is comparable to the total amount raised for the inaugurations of former Presidents Barack Obama in 2009 ($53 million) and Joe Biden in 2021 ($62 million). And it’s just a third of the record-breaking $239 million Trump collected overall, $153 million of which came from corporate donors.
Regardless of president or party, private funding for the presidential inauguration poses a serious threat of corrupt influence buying by corporations and the wealthy. Unlike the vast majority of Americans, they can ingratiate themselves to an incoming administration with six- and seven-figure checks.
Donations by for-profit corporations are particularly suspect—corporations’ purpose, after all, is to amass wealth for private investors, an agenda that frequently pits them against laws and regulations that protect consumers, workers, and the broader public interest.
We may not know exactly what favors corporations might seek. But it’s reasonable to assume that getting rid of penalties or investigations for ripping off consumers, exploiting workers, polluting our environment, and engaging in illegal and unfair business practices would be high on the list.
Public Citizen has compiled a list of more than 500 enforcement actions against corporations that the Trump administration inherited from the Biden administration. During President Trump’s first 100 days alone, federal agencies halted or dropped at least 126 of these enforcement actions.
These include actions against 15 corporate inauguration donors whose cases were dismissed or withdrawn, plus six whose cases were halted. These 21 corporations collectively donated $18 million to the inaugural fund.
These include companies accused of violating consumer financial protections, such Bank of America, Capital One, JPMorgan, and Walmart; some crypto businesses accused of violating securities laws, such as Coinbase, Crypto.com, Kraken, and Ripple; private prison corporations that allegedly mistreated inmates, like CoreCivic and GEO Group; and businesses accused of engaging in illegal bribery schemes in foreign countries, including Cognizant, Pfizer, and Toyota.
Time will tell whether the payments by other big corporate inauguration donors—like Amazon, Apple, Boeing, FedEx, Goldman Sachs, Google, Johnson & Johnson, Nvidia, and Pilgrim’s Pride—will see enforcement go away, too.
To be fair, some cases against corporate inauguration donors do appear to be proceeding unhindered. The antitrust cases against Google and Meta are proceeding, the FTC’s case against Uber for deceptive billing practices has been filed, and Gilead Pharmaceuticals is being required to pay $202 million to settle allegations of paying illegal kickbacks to doctors.
These signs of ongoing enforcement are a good thing. But among the more than 100 cases being dropped and halted, they’re exceptional. Because of the mass firings of federal workers at enforcement agencies, they likely represent the conclusion of past enforcement efforts, not the continuation of an ongoing trend.
Dropping corporate cases en masse, as the Trump administration is doing, is a greenlight for corporate lawlessness. It portends a return to recklessness and greed that fueled corporate catastrophes like Wall Street’s 2008 financial crisis, the Oxycontin-fueled opioid crisis, BP’s oil spill disaster, and Boeing’s deadly 737 Max crashes.
It is the definition of “corporations first.”
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Trump Federal Reserve Pick Called 'Gift to the Banking Industry'
"At a time when climate-related financial risks are only growing, the Fed should be stepping up to protect the economy—not retreating," said the head of the Sierra Club's sustainable finance campaign.
Mar 19, 2025
The watchdog group Public Citizen is warning that the U.S. President Donald Trump's pick to serve as in the Federal Reserve's stop supervisory role is a "banking industry favorite."
On Monday, Trump tapped Federal Reserve Gov. Michelle Bowman to take over as the new vice chair of supervision. Bowman must be confirmed by the Senate before taking the role, which was created by the Dodd-Frank Act in the wake of the 2008 financial crisis in order to develop policy recommendations for the Fed's Board of Governors around supervision and regulation.
Michael Barr, who was vice chair of supervision from July 2022 until earlier this year, stepped down from the role in February but remains a member of the Board of Governors.
"Bowman's nomination for vice chair for supervision is a gift to the banking industry," said Elyse Schupak, policy advocate with Public Citizen's climate program, in a statement on Tuesday. "Under her leadership we can expect loosening capital requirements, lax bank supervision, and neglect of emerging risks to the financial system, including from climate change."
According to Bloomberg, Bowman is expected to take a "lighter touch" to bank regulation compared to Barr.
Bowman, the former state bank commissioner of Kansas and former VP of Farmers & Drovers Bank in Kansas, has been a critic of a landmark plan to require banks to hold more capital. The plan, called "Basel III Endgame," is opposed by big banks that are lobbying against it, according to the think tank the Brookings Institution.
"I'd be excited to see Miki Bowman appointed," Goldman Sachs CEO David Solomon told Fox News last week, after her likely appointment was reported by multiple outlets. "I think the industry would be excited."
Ben Cushing, director of the Sierra Club's sustainable finance campaign, also weighed in on the selection of Bowman.
"Major U.S. banks are exacerbating threats to financial stability and long-term economic growth through their continued financing of dirty energy and insufficient investment in clean energy. Regardless of changing political winds, the Federal Reserve has a duty to supervise and regulate these and other risky banking practices," Cushing said in a statement on Wednesday.
"At a time when climate-related financial risks are only growing, the Fed should be stepping up to protect the economy—not retreating under political pressure from climate deniers and Wall Street," he added.
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We Must Create a Broad Anti-Fascist Movement to Fight Back Against Trump 2.0
The struggle against neofascism in the U.S. must be taken by all those whose rights are being targeted under the second Trump administration.
Feb 02, 2025
A few years ago, Noam Chomsky warned about the return of fascism in contemporary capitalist societies. He pointed out that 40 years of neoliberal policies—a one-sided class war launched by the business class and its allies against the working people, the poor, the minorities, the young, and the old—had produced massive levels of inequality and increased social tension, “yielding a breeding ground for extremism, violence, hatred, search for scapegoats—and fertile terrain for authoritarian figures who can posture as the savior.” Thus, as he put it, “We’re on the road to a form of neofascism.”
However, it is specifically the economic and political repercussions of the financial crisis of 2007-08 that originated in the United States as a result of the collapse of the U.S. housing market and then spread to the rest of the Western world through linkages in the global financial system that became a catalyst for the revival of ultranationalism and the surge of authoritarianism and far-right parties and movements across advanced capitalist democracies. Parties that were either non-existent or struggling to gain political legitimacy and mass popularity were propelled into the political mainstream in record time. As has been pointed out, many of the most prominent far-right parties in Europe today, such as those in Germany and Italy, are “children of financial crises.” The financial crisis of 2008 is also the primary factor behind the transformation of Hungary under Victor Orban into the most far-right nation in Europe.
In the United States, it was the Obama administration with its big bailouts for financial institutions and broken promises that set the stage for the rise of Trumpism by breeding citizen disillusionment with the government. The pandemic and the subsequent economic disruption, combined with the widespread protests over the death of George Floyd and President Donald Trump’s own response to the crisis with threats to use the military against protesters, led to a Biden victory over Trump in 2020. Young voters and progressives helped former President Joe Biden win even though he campaigned with a centrist strategy and refused to back policies such as universal healthcare and a wealth tax, which were being advocated by Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.), respectively.
For the past 40 years, neoliberal capitalism has been hard at work in making people think not like citizens but rather like consumers.
Yet, Biden’s electoral victory in 2020 did not mean that Trumpism had been defeated. Trump had been spewing racism and hate from the moment he entered politics, and his promise to “drain the swamp” resonated with many voters who, like their counterparts across Europe, were fed up with politics as usual and were looking toward a public figure, a savior, who would confront the despicable elites. Unfortunately, citizens in contemporary capitalist democracies can be as easily duped, perhaps even more so, as those living under a dictatorship. But the Democrats lost the 2024 election not so much because of inflation but rather because of the disastrous Kamala Harris campaign in which she totally threw the working people under the bus. As a result, she helped Trump make gains among almost all demographic groups, including African American and Latino voters who have been traditional supporters of the Democratic party, and triumph in all the seven swing states. Her campaign confirmed the suspicions of many that the Democrats have become the party of the elites. Indeed, even voters who previously backed the Democrats see the party as unwilling to fight for people and “overly focused on diversity and the elites,” according to new research by the progressive group Navigator Research.
Fed up with politics as usual and deteriorating socioeconomic conditions, voters who have thrown their support behind far-right politicians appear not to be overly concerned with the drift of liberal democracies toward authoritarianism. For instance, polling shows that the majority of U.S. citizens support mass deportations of undocumented immigrants. European countries have also been adopting deadly border policies as many of the continent’s citizens demand stronger border controls. In Germany, for instance, the conservatives even worked together with the far-right party Alternative for Germany (AfD) in passing a non-binding motion calling for drastic restrictions on migration. Thankfully enough, the German parliament rejected the immigration bill by 350 votes to 338, with five abstentions.
What the drift toward authoritarianism says about the state of liberal democracy in the Western world is hardly encouraging news. Neoliberal capitalism has weakened in enormous and profound ways both the institutions and the culture of a democratic polity. Under neoliberal capitalism, liberal democracy has lost its capacity to respond to the needs of the working people. Economic liberalization, deregulation, privatization, and the dictatorship of finance capital (reinforced in the Anglo-Saxon context through the ideological prism of social Darwinism) have forced social democracy on the retreat across the Western world. In its turn, popular mainstream media reinforces the neoliberal ideology in multiple ways, such as by what Noam Chomsky calls “the strategy of distraction” and by “treating the public like children.”
For the past 40 years, neoliberal capitalism has been hard at work in making people think not like citizens but rather like consumers. A citizen is one who participates in the affairs of the polity and is concerned for the well-being of his or her community and the weak and most vulnerable among us. A consumer is one whose identity and values are with reference to the self and has surrendered power to the market and to those who make the ultimate decisions for his or her wants and needs. The first is active while the latter is passive. The nearly 90 million eligible U.S. voters who did not vote in the 2024 presidential election are consumers or what people in the classical city-state of Athens called idiotes—that is, the private individuals who did not hold office and did not participate in public affairs. Incidentally, it is from the Greek word ἰδιώτης that we get the contemporary English word “idiot.”
Indeed, one could credibly argue that the U.S. is now on track to having a full-fledged neofascist regime because nearly 90 million eligible voters opted to skip the 2024 presidential election, while millions who did vote for Trump did so out of pure ignorance as to what Trump represents. Acting like an emperor and engaging in colossal acts of cruelty toward the weak and the vulnerable surely gives enormous pleasure and satisfaction to those racists and bigots that make up such a huge part of the MAGA movement, but this fact alone also reveals the rather exceptional fragility of U.S. democracy, since it rests on a political culture that is obviously incapable of escaping its racists roots. Trump’s efforts to end diversity, equity, and inclusion (DEI) programs are deeply rooted in racism and will only make U.S. society less tolerant toward the “Other” and thus even more racist.
Ultimately, the most critical question is how we fight back against neofascism in the U.S. right now. Fascism is not inevitable. It reared its ugly head in the past and was ultimately defeated everywhere by people who refused to subordinate themselves to a brutal and hateful form of politics. But the fact that it is still rearing its ugly head all over the Western world today is clear proof that neoliberal capitalism has failed to keep fascism at bay. Increased protectionism, chauvinism, jingoism, and repression are objectively necessary for a system that thrives on exploitation and by widening the gap between the haves and the have-nots, all the while engaging in a vicious assault on the public sector.
Trump 2.0 is an unmistakably neofascist administration that will be run by highly dangerous and unqualified cabinet appointees. A left resistance to Trump’s neofascist regime is vital but must be based on a political struggle that merges with every other struggle. The anti-fascist movement that must emerge against the tactics of the Trump 2.0 presidency should build strong alliances between workers, women, minorities, and environmentalists. The struggle for workers’ rights, women’s rights, minority rights, and LGBTQ rights are all part of the same struggle against 21st-century neofascism, a movement that wishes to turn back the clock.
Thus, creating an anti-fascist mass movement that merges different struggles is of the utmost importance. We should not forget that fascism in the past came to power after assuming the character of a mass movement. It is the same now. Trumpism is a reactionary social movement, and we may not be that far away from becoming a witness to the emergence of an army of modern blackshirts, especially since the pardoning of Capitol attackers has sent a clear message to white supremacists across this country that the current government is on their side.
As the renowned communist and feminist leader Clara Zetkin argued more than 100 years ago, fascism was “an expression of the decay and disintegration of the capitalist economy…”
The same can be said today in reference to the rise of neofascism. It is an expression of the inherent political, economic, and social contradictions of capital accumulation under a neoliberal regime.
Zetkin saw “fascism as the strongest, most concentrated, and classic expression… of the world bourgeoisie’s general offensive.” Accordingly, she concluded that “the struggle against fascism must be taken up by the entire proletariat.”
The same goes today. The struggle against neofascism in the U.S. must be taken by all those whose rights are being targeted under the second Trump administration. And the strategy to do so is the united front, as Clara Zetkin would surely have advocated if she were alive today.
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Will Crypto’s Roaring 20s Lead to a Second Great Depression?
Crypto “bros” invested big-time in 2024’s presidential and congressional campaigns and want unrestricted access to the global banking system. What could possibly go wrong?
Jan 28, 2025
Life in the United States has never been better—if your personal fortune stretches well into the thousands of millions.
Our new year has dawned with 813 Americans cavorting in billionaire land. These deep pockets ended 2024, notes an Institute for Policy Studies analysis, with a combined wealth over $6.7 trillion. They averaged over $8.2 billion each.
Need some perspective on that $8.2 billion? The typical American worker, according to the latest U.S. Bureau of Labor stats, would have to work over 136,000 years to earn that much.
Growing linkages between crypto and the more traditional economy have expanded the economic peril.
Billionaires, of course, don’t have to actually do any labor to collect their billions. They just let their money do the heavy lifting.
That money, if invested in enterprises that provide us with useful goods and services, can add real value to an economy. But these days our billionaires and their billions don’t have to produce anything of value to climb up the wealth ladder. They can make big bucks manufacturing—at a heavy environmental cost—a product that has no real-life value whatsoever.
Welcome to the world of cryptocurrency.
Crypto emerged amid the turmoil of the Great Recession, an economic catastrophe that began late in 2007 with the bursting of a housing bubble that U.S. financial institutions had pumped up with subprime mortgages and assorted other exotic financing schemes.
Crypto’s early aficionados, notes the British economist Michael Roberts, claimed that cryptocurrencies like Bitcoin would eliminate “the need for financial intermediaries like banks.” Cryptocurrencies existed only electronically, as elaborate computer code that takes huge amounts of energy to “mine.” No government guarantees backed their value, and no crypto champs sought those guarantees.
Within this frame, crypto values spent a dozen years bouncing mostly upward. By mid-2024, the crypto world had turned into a speculative colossus worth some $2.5 trillion. But crypto’s biggest players were doing little celebrating. The industry seemed to be losing its big-time momentum.
Just two years before, a spectacular crypto crash had cost the sector’s founders and investors a combined $116 billion. By the end of 2023, some 20 nations had banned banks from dealing with crypto exchanges, and critics were blasting the crypto industry for pumping ever more fossil fuels into the atmosphere “to solve complex mathematical problems that have no productive purpose.”
Early in 2024, Pew Research polling found the American public exceedingly “skeptical” about cryptocurrency, with almost two-thirds of the nation’s adults having little to no confidence that cryptocurrencies rated as either reliable or safe. Only 19% of Americans who had actually invested in crypto, Pew found, deemed themselves “confident” with the industry’s “reliability and safety.”
Last June, one of the nation’s most influential financial market analysts, Securities and Exchange Commission chair Gary Gensler, gave cause for even more public unease. In congressional testimony, Gensler described the crypto market as a “Wild West” that has investors putting “hard-earned assets at risk in a highly speculative asset class.”
“Many of those investments,” Gensler added, “have disappeared after a crypto platform or service went under due to fraud or mismanagement, leaving investors in line at bankruptcy court.”
In the battle for public opinion, crypto kings realized, they were losing. Their response? Crypto’s big guns moved to lock down as much political help they could buy. They spent last year flooding millions upon millions of dollars into primary and general election races against lawmakers who had dared to support meaningful moves to regulate crypto’s digital highways and byways.
“It’s time to take our country back,” roared one deep-pocketed crypto mover-and-shaker, Tyler Winklevoss. “It’s time for the crypto army to send a message to Washington. That attacking us is political suicide.”
In no time at all, the Lever’s Freddy Brewster notes, this new crypto offensive had lawmakers in Congress, from both sides of the aisle, signaling their openness to minimizing any serious attempts at crypto regulation. The November elections would go on to generate a substantial crypto-friendly majority in the House and a Senate almost as crypto-committed.
Helping to produce this smashing crypto triumph: over $250 million in campaign contributions from the three top cryptocurrency political action committees.
No one would ultimately jump on the 2024 crypto political bandwagon more dramatically than Donald Trump. Up until then, the former president had been a pronounced crypto skeptic.
“I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air,” Trump announced on social media in 2019. “Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity.”
But Trump would eventually come to see the potential in crypto campaign dollars and turn himself into the political world’s most visible crypto booster. In May 2024, Trump became the first major presidential candidate to accept donations in cryptocurrency. In July, he gave a fawning keynote address at one of the crypto world’s premiere annual conferences.
Trump saw something else in crypto as well. The industry, he ever so accurately perceived, could turbocharge his own personal wealth, to levels far outpacing his old-school investments in office towers and classic hotels—and all without engaging in any sort of real risk.
So Trump did that crypto engaging. By Inauguration Day, thanks to the release of his own “red-hot” crypto token, Trump had more than 90% of his personal net worth in crypto assets.
To protect that investment, Trump will undoubtedly put his signature on legislation—first introduced by Wyoming Republican Sen. Cynthia Lummis—designed to force the federal government to buy up a national stockpile of cryptocurrency as a reserve just like the gold in Fort Knox. Getting crypto reserve status, cheers billionaire MicroStrategy executive chair Michael Saylor, would rank as a truly noble 21st-century “Louisiana Purchase.”
But independent analysts see “no discernible logic” to any move in that direction.
“I get why the crypto investor would love it,” observes Mark Zandi, the chief economist at Moody’s Analytics. “Other than the crypto investor, I don’t see the value, particularly if taxpayers have to ante up.”
Turning crypto into a reserve currency, explain other analysts, would “prop up” cryptocurrency prices. Reserve status, note Wall Street on Parade editors Pam and Russ Martens, would enable crypto billionaires to sell their crypto “without driving down” cryptocurrency prices—because these billionaires would have “a perpetual buyer on the other side of their trade.”
Having the government buy up crypto, as Dean Baker at the Center for Economic and Policy Research recently told The Nation, has “literally no rationale other than to give money to Trump and Musk and their crypto buddies.”
Not surprisingly, conventional financial institutions—outfits ranging from Goldman Sachs and Citigroup to BlackRock and other big asset manager funds—would like to share in that money harvest. They’ve all begun entering the crypto “fray,” points out the economist Ramaa Vasudevan, and institutional investors “are also banging at the door.”
Crypto, adds Vasudevan, is “turning on a spigot of financial fortune-hunting.”
That sort of hunting, historically, has almost always ended in crashes that left average people the hardest hit. In our new crypto age, that could easily happen again.
The various crypto crashes we’ve seen over recent years, as the Lever’s Freddy Brewster noted last month, have “mostly affected” people already invested in cryptocurrencies. But the growing linkages between crypto and the more traditional economy have expanded the economic peril.
“Potential victims of future crashes,” Brewster warns, “could balloon if the nascent industry is allowed to become more entrenched with traditional banks.”
And that entrenching is approaching overdrive.
“Crypto bros are heading into 2025 with great expectations,” notes Bloomberg columnist Andy Mukherjee.
These “bros” invested big-time in 2024’s presidential and congressional campaigns. Now they want, Mukherjee adds, “unhindered access to the global banking system.”
What could possibly go wrong?
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Trump’s Crypto Scam Threatens the Economy and His Own Power
For oligarchs, the rise of digital finance provides large moneymaking opportunities. But for the rest of us, it increases the risk of another financial crisis.
Jan 27, 2025
As of Friday, the Trumps’ cryptocurrency meme coins—the $TRUMP and $MELANIA cryptocurrency coins—had a combined market value of about $6 billion.
Days before taking the oath of office, now-U.S. President Donald Trump announced on his social media platform the creation of the $TRUMP coin, featuring Trump’s image from the July assassination attempt, and said: “Join the Trump Community. This is History in the Making!”
The $MELANIA coin soon followed.
Any wealthy person, corporation, or foreign leader wishing to curry favor with Trump now has a particularly easy means—just buy $TRUMP and $MELANIA cryptocurrency tokens.
Despite no details about the coin’s value, use, or risks, Trump supporters. gamblers, and those wishing to suck up to Trump bought it—sending the coin’s price into the stratosphere. On paper, the Trump family is now several billion dollars richer.
Trump once denounced crypto, but as the crypto industry poured tens of millions of dollars into 2024 campaigns, he changed his mind. Not only did he see the political power of the crypto industry; he saw an opportunity to make a pile of money.
He then promised to make the United States the “crypto capital of the planet.”
In September, the Trump family started World Liberty Financial, which they marketed as a platform to facilitate borrowing and lending in digital currencies. (Trump receives a cut of the sales of WLFI, the cryptocurrency associated with the platform.)
Now that he’s taken office, Trump plans to make billions off his presidency by implementing policies that favor crypto.
The Truth About Crypto
Cryptocurrencies serve no useful purpose other than the purchase of other crypto assets, money laundering, extortion, and scams. As economist Paul Krugman has said, their market value rests on nothing but “technobabble and libertarian derp.”
They also use huge amounts of energy.
And if they infiltrate Wall Street, they could destabilize the entire financial system.
The crypto industry has a dubious reputation. Sam Bankman-Fried, founder of FTX, one of the world’s biggest crypto exchanges, was last year sentenced to 25 years in prison for fraud. Changpeng Zhao, founder of a rival exchange, has spent four months locked up for money-laundering.
But the richest people in America with huge power—the oligarchy, including Trump—support cryptocurrencies. Not only can they make a fortune, but crypto advances their long-term aim of shifting financial controls out of a democratically elected system of government and into their own hands.
Trump II and Crypto
Now that he’s president, Trump is actively promoting crypto—reversing former President Joe Biden’s attempts to prevent the crypto industry from infiltrating Wall Street.
Biden’s tight rules made it prohibitively expensive for banks to hold digital assets on behalf of clients, and stopped them from developing their own crypto products, such as stablecoins (tokens pegged to the dollar or other assets).
The Federal Deposit Insurance Corporation (FDIC), a watchdog, stopped dozens of such projects on the basis that it did not know how digital assets ought to be treated in regulatory filings.
With Trump, though, banks and the crypto industry are now pushing in the same direction, and face little resistance. New and enormously profitable forms of risk-taking are emerging—for a small group of people able to take such risks and able (like the Trump family) to profit of their own crypto products.
Trump is putting crypto-friendly people into place at key federal agencies, boosting its prospects. In December, he picked Washington lawyer Paul Atkins, a known crypto booster, to chair the Securities and Exchange Commission, America’s main financial regulator.
Last week, the Securities and Exchange Commission altered its guidance so that financial institutions no longer have to account, on their own balance-sheets, for crypto assets held on behalf of customers. The SEC rolled back accounting guidance that had deterred banks from getting involved with crypto.
Trump has tapped the venture investor and digital currency enthusiast David Sacks to oversee administration policies on crypto (and artificial intelligence).
Then, this past Thursday, Trump issued an executive order committing the Trump administration to “protecting and promoting” the crypto industry:
The digital asset industry plays a crucial role in innovation and economic development in the United States, as well as our nation’s international leadership. It is therefore the policy of my administration to support the responsible growth and use of digital assets.
The order gives his administration authority to establish a national cryptocurrency stockpile—a stash of digital coins that the crypto industry has spent months lobbying the new administration for because it further legitimizes crypto and adds to the demand for it.
Trump’s order also prohibits the creation of a “central bank digital currency,” overseen by the government. And the order promises “fair and open access to banking services” for crypto (responding to complaints from crypto companies that banks have denied them accounts).
In effect, Trump is writing the rules for a business venture from which he and his family are personally profiting. It could earn them hundreds of billions of dollars.
If you’re outraged by this, fine. You’re probably outraged by a large number of things Trump has done since January 20.
The Larger Picture
The real significance of such blatant profiteering off the highest office in the land is what it reveals—not just about Trump but about the entire oligarchic enterprise he fronts for. It is likely to contribute to a vast wave of public alarm and disgust.
Just as Elon Musk is demonstrating how huge wealth can create enormous personal political power, Trump is demonstrating how enormous personal political power can create huge wealth.
Musk sank a quartet of a billion dollars into electing Trump, and was rewarded with a key spot as director of the so-called department of government efficiency, or DOGE (Dogecoin, itself a cypto token, has benefited from Musk’s vocal support)—creating vast conflicts of interest over crypto and Musk’s myriad businesses (X, SpaceX, and Tesla, which are regulated by federal agencies and also major government contractors).
As crypto and banking begin to merge, bank deposits will become more vulnerable to movements in the crypto market, and banks more vulnerable to runs.
This dynamic—great power creating huge wealth, and huge wealth creating great power—is central to the oligarchic takeover of America. And both are premised on the corruption of democracy.
Any wealthy person, corporation, or foreign leader wishing to curry favor with Trump now has a particularly easy means—just buy $TRUMP and $MELANIA cryptocurrency tokens.
The corruption will grow worse because neither Trump nor Musk has any sense of limits. Nor do any of the oligarchs surrounding them, such as David Sacks, who Trump picked to oversee his administration’s policies on crypto and artificial intelligence.
Like Musk, Sachs serves as a "special government employee,” which does not require Senate confirmation or full financial disclosure, and allows Sacks to maintain his business interests while influencing policy. Expect more conflicts of interest.
As crypto and banking begin to merge, bank deposits will become more vulnerable to movements in the crypto market, and banks more vulnerable to runs. That’s what happened at Silvergate and Signature, two crypto-focused banks which collapsed in 2023. Both were broken by a tumble in cryptocurrency prices that began in late 2021 and then reverberations from FTX’s collapse.
The biggest beneficiaries of all this are the highest rollers—the oligarchs who have been pushing crypto for years. And now Trump is in on it and stands to personally gain billions, as will those seeking to curry his favor by buying his coin.
The Endgame
The American public doesn’t abide flagrant self-dealing. We don’t want public officials personally profiting by decisions that are supposed to be made in the public’s interest.
You may be thinking: “But Trump has been profiteering for years off his presidency, as have members of his family. And they’ve gotten away with it.”
True, but what’s happening now is much bigger and far more visible. It involves an entire industry (crypto), and conspicuous members of the American oligarchy who are investing in it, including the president and officials around him.
And it’s inherently risky. For oligarchs, the rise of digital finance provides large moneymaking opportunities. But for the rest of us, it increases the risk of another financial crisis.
Unbound greed combined with unconstrained power is an explosive combination. When the blowup comes, it will take Trump, Musk, and the oligarchy with it.
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