The new president and his bitcoin-loving cronies want to turn the government into their own personal ATM.
Donald Trump visits a cryptocurrency bar called Pubkey in the West Village on September 18, 2024. in New York.
(Spencer Platt/Getty Images)
Donald Trump has not yet been sworn in as president, but one aspect of his second term is already coming into focus: self-interest, patronage and corruption on a scale that will surpass that of his first time in the Oval Office. From tax cuts to tariffs to digital currencies, Trump is building a government designed to redistribute wealth from the workers to the rich in a way not seen since the Gilded Age. The result, experts say, will be higher prices, lower consumer protections and deepening economic inequality in the United States.
The danger of bribery is real. The new Trump administration could be the most corrupt in more than a century, said Joseph Stiglitz, a Nobel Prize winner in economics and the professor at Columbia University, said Nation.
“There’s a huge risk of self-serving here,” Stiglitz said. “The danger lies not only in conflicts of interest, but also in the thinking of Trump and his associates, in which they do not even understand concept conflicts of interest. The irony is that here you have a president who was elected on a supposedly ‘populist’ platform who is engaged in the most massive redistribution of wealth in US history in favor of billionaires.”
Trump knocked no less half a dozen his fellow billionaires who serve in and around his administration, including Elon Musk, who has spent more than 250 million dollars elect Trump. Many of these oligarchs boast a total net worth north of $450 billiondo not have government experience. It seems to be their only qualification huge republican contributions to the campaign and, of course, slavish loyalty to Trump.
Many of these modern-day plutocrats trade in cryptocurrency, a highly volatile, speculative digital “money” that is not backed by any physical assets, but is “mined” by expensive, energy intensive computer servers and then traded mostly based on Internet rumors. Wealthy crypto managers and investors have backed Trump and other Republicans millions of dollars in a campaign donation. Now they are strive to earn.
The newly emboldened crypto-brothers delivery proposal of the senate to establish a federal crypto reserve fundin which the US government will be buy $100 billion worth of bitcoin and then store it in a “strategic reserve” like a digital version of gold or oil. The brothers insist that crypto will grow in the coming years — Bitcoin recently hit a record $100,000, presumably in anticipation of favors that Trump and GOP lawmakers will shower on the industry — and so they argue that the U.S. crypto reserve will help the federal government pay for the deficit. without costing the taxpayers a dime.
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Dean Baker, senior economist at the Center for Economic and Policy Research, says that’s nonsense. In fact, Trump’s plan looks like a brazen scheme to artificially inflate the price of crypto at taxpayer expense, allowing wealthy crypto holders including the Trump familyfor cashing in US dollars, according to Baker. In the process, the US government – indeed, US taxpayers – will inflate the price of this worthless digital asset, creating artificial demand. In other words, US taxpayers will be artificially subsidizing an industry based on nothing, whose financial profits flow disproportionately to wealthy asset owners.
“Crypto has no intrinsic value, so why should the government buy it?” Baker said Nation. “There is literally no reason other than to give money to Trump and Musk and their crypto friends. If they manage to hook up with the government, then they’ve found the ultimate scumbag. And very soon they will control the power.”
Meanwhile, Musk says his new nonprofit Department of Government Efficiency (DOGE) will cut $2 trillion in “waste” from the $6.75 trillion federal budget. It’s a pretty shameless project for a billionaire whose companies have been around for the past decade received more than $15 billion in federal contracts with the Department of Defense, NASA and other agencies. Now an unelected tech mogul wants to cut trillions in spending, raising the concept of a conflict of interest.
Musk’s “DOGE” plan to make government more “efficient” is just the latest twist in Republicans’ decades-long crusade to eliminate or privatize government agencies and gut consumer protections to pay for tax cuts for the wealthy. Economists call it “starve the beast,” and now the playbook is familiar: Step One: Create a budget crisis by passing tax cuts for the rich. Step Two: Declare that the budget crisis requires massive cuts to government programs because they are unaffordable. Step Three: Shut down the government. Or try anyway.
“I don’t think Elon Musk is going to propose cutting the billions of dollars he gets in government contracts,” Stiglitz said. However, Tesla’s CEO could benefit from other regulatory setbacks, such as the Trump transition team’s recent proposal to roll back autonomous vehicle safety reporting rules opposed by Tesla, whose electric vehicles are the deadliest cars on the road, according to a recent research.
Of course, the main driver of economic inequality will be Trump’s plan to extend the $2 trillion tax cut in 2017, which disproportionately favored rich people and corporations. Expect more of the same in 2025 – only with much greater spending – perhaps $5 trillion or more, respectively to the Center for Bipartisan Politics. Despite what Trump administration economic officials insisted at the time, the 2017 tax cuts did not doessentially pay for themselves. Instead, he was “bent on the rich, expensive, and failed to deliver on his promises.” respectively to a recent report by the nonpartisan Center on Budget Priorities. “Like the Bush tax cuts before it, the 2017 Trump tax cuts were a failure,” the report’s authors concluded.
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Meanwhile, Trump’s proposed tariffs could cost the average American family $2,600 a year. in accordance with a UCLA economist Kimberly Clausing. That’s because American importers, not foreign countries, will bear the costs of the tariffs bear most of these costs for consumers despite Trump false claims on the contrary. Clausing and her colleagues to argue that Trump’s plan to impose new tariffs would amount to a regressive tax that “will cost jobs, fuel inflation, increase the federal deficit and trigger a recession. It would also shift the tax burden away from the wealthy, significantly increasing the tax burden on the poor and middle class.”
There is also a serious risk of self-serving and patronage in US tariff policy. The first Trump administration exempted from the tariffs companies “related to higher campaign contributions to Republican politicians and lower contributions to Democrats.” respectively to recent work at Journal of Financial and Quantitative Analysis. The study’s authors concluded that the process “functioned—at least in part—as a highly efficient extraction system that allowed the administration of the day to reward its political friends and punish its enemies.”
It’s a stark warning about nepotism and corruption heading into Trump’s second term. If past is prologue, Trump’s tax cuts will benefit the rich, his tariffs will hurt the poor, his crypto policies will help his cronies, and his trade policies will benefit the highest bidder — this time on a scale that would make his first term get worse -received income looks like a bucket. “I don’t think there’s been a time in my lifetime with more potential for a massive government role in increasing inequality than what Trump is proposing,” Stiglitz said. “I think you’d have to go back a century or more to find anything like that.”
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