Crashing the economy: Inside Trump's blueprint for more grifting

Democrats are warning that Trump’s threats to increase our national debt by as much as $7 trillion (with new tax cuts for billionaires), shift billions of Treasury dollars into crypto, and impose tariffs on imported goods risk creating a financial crises and maybe even a second Republican Great Depression.

After all, tariffs will jack up inflation, crypto is incredibly volatile, and increasing the national debt will pull hundreds of billions out of the treasury in interest payments that could have otherwise been used to help the American people, rebuild our infrastructure, and upgrade our schools. Any of the three could trip off a national economic emergency: all three could be a perfect storm.

Trump, though, seems unconcerned, even though Republican economists are also signaling their alarm. Which raises the question: Why is he so willing to risk an economic crash on his watch with these risky policies?

To the average person, the idea of a recession or even a crash like we saw under Bush in 2008, Reagan in 1981/82, or Hoover in 1929 seems grim. Millions are laid off work, businesses are in crisis as bankruptcies erupt across the nation, and poverty explodes during a time when more than half of American families live paycheck-to-paycheck.

To understand why a billionaire like Trump — and the billionaires who put and keep him in office — might be not just willing but enthusiastic about creating an economic crisis, you first must view it from a rightwing billionaires’ point of view.

— First, a time of economic disaster is a great excuse to gut government programs or reduce taxes with the excuse that federal tax revenues have cratered along with the economy. Both Reagan and George W. Bush used recessions as an excuse to “stimulate the economy” by cutting trillions from the taxes of billionaires and big corporations.

Reagan’s Omnibus Budget Reconciliation Act of 1981 used that year’s severe recession as an excuse to reduce funding for social programs including food stamps, Medicaid, and Aid to Families with Dependent Children (AFDC). George W. Bush used his recession as the justification to try to cut Social Security, although that plan died in the face of widespread public opposition.

— Second, times of economic crisis increase the tolerance for strongman governments. FDR, for example, pushed through a number of then-radical programs using the Republican Great Depression as his excuse. Rightwing politicians were beside themselves, calling him a tyrant, communist, and usurper of constitutional authority, but the majority of Americans at the time were largely with him.

In Europe, Hitler used the Depression to his advantage when he came to power in 1933, demanding — and receiving — massive emergency powers including the ability to rule by decree and outlaw his political opponents.

Trump could similarly use a severe economic crisis to consolidate his power and ram through the authoritarian Project 2025 wish-list as a starting point to take America down the road to an America First form of neofascism.

His billionaire social media backers are already seeding the ground. The US and the UK both embraced neoliberalism (destroy unions, cut taxes on the rich, embrace free trade) around the same time (Thatcher/Reagan) with similar consequences for the middle class of each country.

A new study by Channel 4 in England, reported in The Times, found:

“Most young people are in favour of turning the UK into a dictatorship, according to a ‘deeply worrying’ study, which has revealed an acceptance of authoritarianism and radicalism among Generation Z.
“Fifty-two per cent of Gen Z — people aged between 13 and 27 — said they thought ‘the UK would be a better place if a strong leader was in charge who does not have to bother with parliament and elections.’
“Thirty-three per cent suggested the UK would be better off ‘if the army was in charge.’”

Where did they get these ideas? From social media, it turns out, including the feeds of accused racists, misogynists, and neofascists like “Andrew Tate and Jordan Peterson,” who were “trusted” by 42 percent of British young men.

Fifty-eight percent said they trusted social media posts more than traditional news sources. And 45 percent believe women have gained too many rights, echoing Tate’s argument that, as young British men told Channel 4, “We have gone so far in promoting women’s equality that we are discriminating against men.”

Here in America, the percentage of young men who believe women have acquired too much power has increased from 32% to 45% in just five years, while fully 52% say they trust what they read or see on social media.

— And third, billionaires often make the most money when there’s a crash. They absolutely love market collapses because they are, uniquely, in a position to profit from the same economic downturns that wipe out average working people or those who’ve invested their 401Ks in the market.

This is a story as old as capitalism. During the Republican Great Depression of the 1930s, for example, some of America’s greatest fortunes were made or massively expanded.

My (late) friend Gloria Swanson once told me over dinner in her apartment how her former manager and lover Joe Kennedy, who’d made a pile of money manipulating the stock market in the 1920s, bailed out as the market began its slide in 1929 and even shorted the market, increasing his wealth. But once it had crashed, when everybody was broke, she said, he bought stock with a vengeance.

“Cash is king” was the phrase of the day, and Kennedy was well stocked in cash (he even bought a movie studio). By the end of the Depression, he was one of the richest men in the nation.

J. Paul Getty’s favorite phrase was, “Buy when everyone else is selling, and hold on until everyone else is buying.” It’s something you can only do at scale if you’re fabulously rich to begin with.

The afternoon of the Great Crash — October’s Black Tuesday under Republican President Hoover in 1929 — Getty skipped his parents’ golden wedding anniversary to head to Wall Street where he began buying stocks, particularly in small oil companies that were in trouble.

“It is the opportunity of a lifetime to get oil companies for practically nothing,” Getty later wrote. Out of that, he became one of the richest men in the world.

Flash forward to the modern era.

When Wall Street banks — exploiting Republican-demanded deregulation of banking and investment rules — crashed the American economy in 2007, home prices (and, thus, homeowner equity) collapsed by 21%. Over 10 million Americans lost their homes to banking predators like “Foreclosure King” Steve Mnuchin, and tens of millions of others were underwater.

The stock market plummeted by over 50% in the last year of Bush’s presidency. On October 9, 2007 the Dow was at its all-time peak of 14,164 but by March 5, 2009 it had collapsed to 6,594.

While over 8 million Americans lost their jobs and were wiped out as the Bush Crash started today’s homelessness crises, the top 1 percent (and the Bush and Cheney families) saw it as a buying opportunity.

Working-class people were desperately unloading stocks in their 401Ks at a loss just to pay the bills, as wages plummeted in the face of a collapsing labor market.

But the morbidly rich were doing great.

Between 2009 — the bottom of the Bush Crash — and 2012 when the recovery really began, the top 1 percent of Americans saw their income grow by over 31 percent. Fully 95 percent of all the income increases in the country were seized by the top 1 percent of Americans during that period.

As the economy recovered, rich people who’d used their increased income to buy stocks at the market bottom rode the S&P 500 up by 462 percent to 2020. A billion dollars invested in 2009 became $4.62 billion in just 11 years, a period during which the combined wealth of American billionaires went up by over 80 percent.

Then they did it again 10 years later!

The Trump/Covid Crash of 2020, for example, presented America’s morbidly rich with another brand new and huge opportunity to get richer on top of a crisis brutalizing the rest of America.

Once again the market collapsed, this time under Republican Trump, and working people, now out of work, were selling their stocks at a loss just to pay the mortgage and buy food.

But for the wealthy, it was a gift from God.

March 16, 2020 — just after Trump declared a pandemic and lockdown — the Dow sustained the largest single-day crash in its entire history. For the investor class, Trump, and his billionaire buddies, this was an even better opportunity than the Bush crash of 2007!

Fewer than three months later, on June 4th, we learned that the seven richest people in America had seen their fortunes increase by fully 50 percent.

And with Trump’s massive tax cut for his fellow billionaires, they could keep most all of it: by that time the average American billionaire was paying less than 4 percent in income taxes (a situation that persists to this day).

Just during that one single terrible “crash” year of 2020, the Institute for Policy Studies documents, the world’s 2,365 billionaires saw their wealth increase by a full 54%, as U.S. billionaires saw their net worth surge 62 percent by $1.8 trillion. Average billionaire wealth worldwide increased 27% in that one year alone.

And now it begins anew: Republicans are meeting at Trump’s Doral golf resort in Miami today to plan strategy.

Don’t expect them to argue that it would be a bad thing if his plans provoked an economic crisis: To the contrary, that may well be exactly what they — and their billionaire owners — are hoping for.

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