The Social World

Tag: Economics

  • Eclipse of the boomers

    Eclipse of the boomers

    Shortly after Christmas, the oldest baby boomer will turn 80. The 75 million people born between 1946 and 1964 who have dominated the American political imagination since the Eisenhower administration are starting to fade from the scene.

    Anyone who has felt oppressed by the baby boom – and this includes virtually every non-senior citizen in the country – will complain that it’s about frickin’ time. If the boomers are only now losing their influence, they long ago lost their marbles. What was the archetypal boomer moment of recent years? Probably Hillary Clinton’s 2016 presidential campaign. But maybe it was the indignant boycott of Spotify by Neil Young and Joni Mitchell over the Covid “misinformation” to which Joe Rogan allegedly gave vent in 2022. Although this pair of Woodstock-era Canadian singer-songwriters are slightly too old to belong to the baby boom proper, the crusade to which they were summoning their fans was a perfect example of the boomer style, with its sanctimony, its performative dudgeon, its imputation of ignorance and immorality to anyone who disagrees – all in the service of a questionable proposition.

    Spotify executives must have agonized for nanoseconds over how to respond to this “either-he-goes-or-we-go” ultimatum. Should they cut loose Rogan, the most listened-to talker in the fastest-growing audio-streaming genre, with a political influence to match? Or should they part with two folk singers whose Spotify fanbase (however numerous their listeners elsewhere) probably consists of 11 septuagenarians sniffling in front of their toasters in retirement communities across Arizona? Hmm. The Spotify execs didn’t need a weatherman to know the way the wind blows.

    Looking at the boomers these days, it is natural to ask how anybody could ever have been pushed around by such a feckless and unconvincing bunch. The answer is an actuarial one. It wasn’t the boomers’ powers of persuasion that enabled them to rally the country behind a succession of dim ideas, from complex derivatives to the Iraq war. It’s just that they were numerous enough to be demographically invincible. If the boomers wanted something, they got it, by force of numbers, and this was as true when they were six as it was when they were 60.

    Before they could even talk, society was being reconfigured around them, for better and for worse. By 1964, all 75 million boomers had been born – and the United States had only 191 million people in it. Boomers made up about 40 percent of the country. What sort of parents wouldn’t have voted for a vast expansion of secondary and university education to speed their kids’ way into the upper-middle class? On the other hand, a bumper crop of 18-year-olds stretching as far as the eye can see did nothing to reduce Lyndon Johnson’s crazy ambition to fight a war in Vietnam, where tens of thousands of boomers would die.

    Although no one ever sat down and calculated it, this critical number – 40 percent – would give a rough idea of baby-boom power as the generation passed through the various stages of life. Boomers started voting in the 1966 elections, and by the time Ronald Reagan chased Jimmy Carter from the White House in 1980, they were casting 40 percent of the votes. Two years later they were at 43 percent.

    The boomers were sometimes polarized on major issues, it is true. But on any matter that united them, it required a near-unanimous resistance movement to stop them. That is why politicians made the country liberal on sex in the 1970s, when the boomers were mostly in their twenties; business-friendly in the 1980s, when the boomers were mostly in their thirties; and investment-friendly – starting with Bill Clinton’s second term – in the 1990s, when the oldest boomers were entering their fifties.

    This was important, because the boomers’ command over the economy would wind up more impressive than their command over the political system. When the Berlin Wall fell in 1989, the boomers were between 25 and 43, entering their most energetic adult years just as America was being called on to write the rules for the global economy. When they were in their prime, in the prosperous 1990s, they made up well over half the workforce.

    But now the boomers, submerged beneath immigration and colliding with mortality, make up only about 20 percent of the population. Each year, 1.8 million of them die, and that number is set to rise steeply.

    This is going to have a startling consequence. The baby-boom vision of what American society is about has been embraced almost unanimously by all society’s institutions since about 1968, when the oldest boomers were graduating from college. Boomers quarrel over the details of this vision, but not over its basic tenets, which seem to be: 1) The main thing that happened in American history is slavery; 2) There is not much difference between men and women; 3) Youth is the best part of life.

    Through their preponderance in the marketplace and the voting booth, boomers have been able to sell these propositions to the American public as the merest common sense. But they are no such thing. For most of American history they were considered outright untruths, and most non-boomers probably think of them as such today.

    There is going to come a moment when the boomers’ political power falls below the threshold necessary to prop up this vision of things. It could happen before the next election. And then something is going to happen that no one has given much thought to: control over our politics and our culture is going to pass to a non-baby boom generation – perhaps a much younger one – that looks at the world in its own, totally different way.

    This article was originally published in The Spectator’s December 8, 2025 World edition.

  • Andrew Ross Sorkin reconstructs the 1929 crash

    Andrew Ross Sorkin reconstructs the 1929 crash

    During the great financial panic of 1907, the banker J.P. Morgan locked the titans of the financial world in his lavish private study to determine which banks to rescue and which to let fail. This intervention saved the banking system, restoring public confidence. But trust in Wall Street was shaken to its core. Six years later, Congress passed the Federal Reserve Act, which sought to stabilize the American financial system by establishing a central bank to regulate credit and serve as lender of last resort. By the mid-1920s, the very mechanisms that were designed to promote stability had fueled a surge in stock market speculation. In 1929, a narrative history of this feverish bull market and its tragic unraveling, Andrew Ross Sorkin seeks to illuminate “the most significant – and largely misunderstood – financial disaster in modern history.”

    Throughout the 1920s, National City Bank and its securities affiliate, the National City Company, had extended credit to investors and brokerage firms, allowing stocks to be purchased with as little as 10 percent deposit. Margin loans increased sixfold over the decade. Once confined to professional investors, stock speculation became a national pastime as Americans borrowed their way into the booming market. At the start of the year, the surging “Coolidge market” had begun to resemble a bubble. As Sorkin writes: “On February 2, the Federal Reserve Board in Washington, fearing that a speculative bubble was taking hold, issued an advisory to the Fed’s regional banks, discouraging them from making loans to support stock speculation, particularly stock that was bought on margin.”

    In an attempt to cool this market, the New York Fed had moved to raise the discount rate from 5 to 6 percent. “The Fed’s killing the goose which laid the golden egg,” complained Charles Mitchell, National City Bank’s president and chairman. To persuade the president-elect, Herbert Hoover, to take his side against the Fed, Mitchell called upon the influential auto magnate William Durant. “I’m sure there’s a way we can get to Hoover,” Durant reassured him.

    Sorkin is at his best in his granular reconstruction of the unfolding collapse on Wall Street. He traces the months of 1929 week by week, from the Federal Reserve’s warnings about speculative lending in February to the cynical maneuvering of bankers and industrialists attempting to prop up the market. On March 26, defying the Fed’s tightening policy, Mitchell ordered his bank to extend loans, “no questions asked,” to support share prices. On another fateful evening, Durant, unvetted and uninvited, talked his way into the White House to privately urge Hoover to contravene the Fed.

    Sorkin’s 1929 reveals a gallery of tragic figures whose genius and folly shaped the destiny of the United States at a critical point in its history. There is Thomas W. Lamont, the impoverished minister’s son turned JP Morgan partner and de facto chairman of the bank; Jesse Livermore, the self-educated speculator who got his start running bets for organized crime in Boston before making millions as a short-seller; Carter Glass, a son of the Confederate South who overcame his lack of formal education to become the leading congressional expert on banking and a driving force behind financial regulation; and National City Bank’s Mitchell – or “Sunshine Charlie” – whose boundless optimism disguised his fatal hubris.

    On Thursday, October 24, as the bubble began to burst, Mitchell emerged from meetings with a consortium of bankers at the JP Morgan offices in Lower Manhattan. “I am still of the opinion,” he told the press, “that this reaction has badly overrun itself.” The “Big Six” bankers had formed a pool, injecting around $100 million into the market that afternoon. All of this was coordinated in secrecy. “If the public knew exactly what they were doing, it wasn’t clear whether it would instill confidence or undermine it,” Sorkin writes. It was to no avail. When the market opened the following Monday, October 28, the Dow suffered the largest single-day drop in stock market history. The rout continued into November. “In the space of just two months, the market had fallen by half, wiping out $50 billion, which represented about half the US gross national product.”

    The market rallied into the spring of 1930, recovering almost half of its losses. But then “the air simply leaked out of the balloon.” Credit markets had been eviscerated. On June 17, Hoover signed the Smoot-Hawley Tariff Bill, raising tariffs on foreign goods to an average of 60 percent, which worsened an already teetering economy. Then began a string of bank failures.

    Critical accounts of Wall Street, far removed from the hagiographic magazine profiles of the previous decade, began emerging en masse in the media. Meanwhile, Hoover made himself easy prey for the Democrats, who swept the 1930 midterms, a prelude to Franklin D. Roosevelt’s landslide victory in the 1932 presidential election. What began as a vote of confidence in the American system would ultimately empower Roosevelt to reshape it entirely.

    1929 revives a decisive episode in financial history amid renewed uncertainty about the resilience of American markets and the global economy. Based on eight years of exhaustive archival research, Sorkin’s study offers a rare combination of scholarly rigor and narrative verve. Implicit in his account is a cautionary insight: the very ambition driving America’s financial system ensures its perpetual vulnerability to excess and collapse.

    This article was originally published in The Spectator’s November 24, 2025 World edition.

  • Why Thomas Sowell still matters

    Why Thomas Sowell still matters

    New York socialist Zohran Mamdani is hailed as the social media sensation of American politics. He knows how to talk directly to young people, we’re told. Yet an account called “Thomas Sowell Quotes” has almost twice as many followers on X as Mamdani.

    Sowell turned 95 this year. He is an unlikely influencer and yet hour-long interviews with him, published by Stanford’s Hoover Institution, have been watched millions of times. In his most popular video, Sowell argues for personal responsibility over dependence on the state and is meticulous in his use of empirical evidence. Black men who read newspapers and own library cards have had the same income as their white counterparts since 1969. Married black couples have the same poverty rate as white couples and have done for decades. And then comes the understated, Sowellian kicker. “Apparently lifestyle choices have consequences.”

    This is Sowell at his intellectual finest, cutting through stupidity and receiving wisdom with precision. There are those, he argues, who have an unconstrained view of politics, in which elites can create a perfect world. Then there are realists like him, who accept that humans have flawed natures and that much about our lives is unknowable.

    Those utopians are not just misguided but dangerous, harming the very people they hope to help. What follows from this relentless logic leads Sowell and his followers toward a kind of libertarian conservatism. We’re told that MAGA has killed the old Republican mantra of small government and free markets. And yet Sowell is more popular than ever.

    I joined a recent celebration of his life at the Hoover Institution, watching as prominent conservatives and libertarians met to talk about his ideas and influence. There was a surprising amount of emotion as people discussed a man who has remained intensely private even in his role as a “public” intellectual. Sowell appeared in a brief video message from his office.

    Those who know of Sowell know the official story. He was born in 1930 in the Jim Crow South and was raised in a house without electricity or running water. He was orphaned as a child, sent to live in racially segregated Harlem with his aunt and then, somehow, turned his life around. At 16 he dropped out of school and was hired by Western Union, delivering telegrams. Walking the streets, he watched New Yorkers and wondered why some lived in splendor while others led lives of squalor.

    This question, one of social justice, led him to Harlem’s public libraries where he found the works of Karl Marx. Sowell joined the Marines during the Korean War, learned the value of discipline, left for the civil service in DC and night school. From there he made it into Harvard – and a life of research and argument. He is still a social justice warrior, not the shrill kind that he debates but a warrior armed with truth and reason.

    During his time in Korea, Sowell learned how to use a camera and developed a love of photography. It seems appropriate for a man whose life has been about accurately representing the world. Back at the Hoover Institution, some attendees expressed surprise at an artistic display of his photography, featuring grand images of Yosemite and the Pyramids of Giza. Sowell is a man of many talents.

    He has also seemingly met, mentored, or influenced every prominent black conservative you can think of, from Walter Williams to Shelby Steele to Supreme Court Justice Clarence Thomas. Thomas took the stage to share stories of his own deep friendship with the man. As a young student and an anarchist anti-war protester, Thomas said he once threw one of Sowell’s books into the trash out of furious disagreement.

    He must have taken it out of the trash because, just a few years later, he met Sowell and, like a groupie, asked for his signature. The Supreme Court Justice told how Sowell’s thought has been like “an oasis in the desert,” inspiring him to stand against a sea of critics. Thomas had to pause at one moment, the room quiet as he tried not to be overwhelmed by emotion.

    On stage, too, was Peter Robinson, a former speechwriter for Ronald Reagan, who reminded Thomas that he’d once toured his Supreme Court chambers and saw a large brass plaque etched with the Sowellian phrase from the Griswold decision: “Do not emanate into the penumbra.” When Robinson rushed with glee to tell Sowell about it, the economist replied: “I know – I gave Clarence that plaque.”

    Robinson is now known as the bespectacled host of Hoover’s Uncommon Knowledge interview series, appearing in many of the most popular clips with the latter-day Sowell, teeing up quotes from the likes of Ta-Nehisi Coates for the wiser man to demolish. In one of the happy accidents of longform interviews, the interactions are easily clipped for the era of YouTube shorts, Instagram reels, even TikTok.

    The format is repeated: Robinson poses a seemingly daunting, complicated question and Sowell responds by lacing a heater over the right-field wall (a chance he never got when, as a high-school dropout, he tried out for the Brooklyn Dodgers in 1948 – he failed the necessary fielding test). Sowell’s gift for the pointed jab can be traced back to his days as a student, when he admits he once described a classmate from England that he found particularly irritating as “nasty, British and short.”

    Sowell’s acerbic intellect is a joy to watch; you can almost imagine his fans giggling as this gentleman in large-rimmed glasses and a sweater delivers pithy put-downs of (mostly) leftist ideas. There are also a quarter of a century of columns to read from too, for those not yet inured to the social media age. Of the Democratic socialists, he writes: “The fatal attraction of the government is that it allows busybodies to impose decisions on others without paying any price themselves. That enables them to act as if there were no price, even when there are ruinous prices paid by others.”

    For the race-hustling reparation advocates: “Anyone who wants reparations based on history will have to gerrymander history very carefully. Otherwise, practically everybody would owe reparations to practically everybody else.”

    For anyone in particular: “It is usually futile to try to talk facts and analysis to people who are enjoying a sense of moral superiority in their ignorance.” What disabused him of the Marxism of his youth? Facts and analysis, of course.

    Sowell’s appeal is that he refuses to be confined to just one lane of commentary and he has no fear of controversial topics – particularly criticism of liberal weaponization of white guilt. Look, he says, armed with statistics and evidence, at the effect that well-meaning governments have on black Americans. He was scrutinizing the same arguments made by Ibram X. Kendi, Nikole Hannah-Jones and the 1619 Project decades before they made them.

    Coleman Hughes, the young essayist known for his insights on race and culture, told of a conversation he’d recently had with his New York finance fiancée. “She said, ‘Did you know that the British Empire ended slavery?’” Hughes discovered that she, too, had seen Sowell’s videos on her timeline, delivering truth in the clear and certain tones of a well-read man.

    For all his achievements, Sowell’s work has remained at the outskirts of the academy. Scottish historian Niall Ferguson told us that he learned about Scottish history from Sowell’s writings and yet says Sowell is “utterly exiled from graduate courses.”

    Victor Davis Hanson, who also works at the Hoover Institution and has lunched with the man every week for decades, says Sowell has a way of infuriating those who object to his views. “Tom understands how much he frustrates people simply by force of experience.” The irony is that Sowell’s rejection by academia has coincided with an explosion of his commentary as it reaches new generations and an online audience.

    Hughes said the appeal of Sowell in this era of social media is partly down to his distrust for the established intelligentsia and his rejection of its convoluted language. “The expert class bamboozles with big words. Sowell despises that and expresses it in these direct terms,” Hughes says. “Sowell cuts through the noise with deep insight, straight to the point.”

    For an author whose books would weigh down even a strong back, Sowell’s aphoristic style fits the era of short attention spans. Even at 95, his charm and intelligence are enough to intimidate his academic foes and inspirational enough to make Clarence Thomas cry.

    This article was originally published in The Spectator’s November 10, 2025 World edition.

  • A rare earths deal is China’s gift to Trump

    A rare earths deal is China’s gift to Trump

    Donald Trump went nuclear. Before his meeting with Chinese leader Xi Jinping at an air base in South Korea, he ordered the Pentagon to test atomic weapons on an “equal basis” with China and Russia. Was Xi impressed?

    Probably not. While Russia expressed indignation, China did not permit itself to be distracted by Trump’s nuclear shenanigans. Instead, Beijing aimed to obtain economic concessions from a prideful Trump, which it did. From the outset, Xi sought to bring Trump down a peg, declaring that “both sides should consider the bigger picture and focus on the long-term benefits of cooperation, rather than falling into a vicious cycle of mutual retaliation.”

    Trump seems to have absorbed the lesson. He caved to Xi on a number of fronts, including dropping tariffs to 47 percent (still a staggering amount that is set to punish the American consumer) and dropping port fees on Chinese ships. In return, Xi promised to end his suspension of the export of rare earth minerals for a year and to purchase soybeans from America. How many? Trump said it would be “tremendous” amounts. But during Trump’s first term, China made similar vows and never followed through. The big payoff for Trump, however, was that he and Xi agreed to meet each other next year. According to Trump, “I’ll be going to China in April, and he’ll be coming here sometime after that, whether it’s in Florida, Palm Beach or Washington, DC.”

    For Trump, the prospect of a fresh visit to Asia seems to possess a new cachet. He received no presents from Xi, but was clearly impressed by the numerous gifts that were bestowed upon him in Malaysia, Japan and South Korea. The high point came at South Korea’s Gyeongju National Museum, where Trump received a replica of a tall golden crown that he was told “symbolizes the divine connection between the authority of the heavens and the sovereignty on Earth, as well as the strong leadership and authority of a leader.” Trump also received the Grand Order of Mugunghwa, a civil honor made of a laurel leaf medal. Trump was pleased, indicating that he would “like to wear it right now.”

    So much for No Kings. The truth is that Trump has long had a penchant for viewing himself in monarchical terms. Earlier this year, the White House posted on social media a fake TIME magazine cover of Trump wearing a golden crown with the headline “Long Live the King.” South Korea was simply following Disraeli’s famous adage: “Everyone likes flattery; and when you come to Royalty, you should lay it on with a trowel.” 

    When he returns to America, however, Trump will encounter a less gilded reception. His popularity ratings continue to sink, according to a new Economist poll – 39 percent of American approve of the President and 58 precent disapprove. And for all Trump’s nuclear muscle-flexing, the National Security Nuclear Administration would require about three years to resume nuclear testing and many of its employees are currently furloughed as a result of the government shutdown. With problems mounting at home, it’s small wonder that Trump enjoys cavorting abroad and collecting tribute.

  • Javier Milei wins on chainsaw-slashing reforms

    Javier Milei wins on chainsaw-slashing reforms

    Javier Milei, Argentina’s self styled “anarcho-capitalist” President, defied pessimistic poll predictions on Sunday to win in the midterm elections and save his radical economic reforms.

    With almost all the votes counted, Milei’s La Libertad Avanza (LLA) party had won nearly 41 percent of the national vote, while the main left-wing Peronist opposition Fuerza Patria party netted just over 31 percent. 

    Up for grabs in the election were 127 of the 257 seats in the lower house of Congress, and 24 out of 72 seats in the upper house Senate. The LLA won 64 lower house seats and 12 in the Senate, enough for Milei to overcome an opposition veto against his most radical measures.

    Although the opposition retains ultimate congressional control, the triumph will come as a huge relief to the Trump administration in Washington, which had thrown a controversial $40 billion lifeline to Milei to prop up the falling Argentine peso and rescue Trump’s ideological soulmate. The US President congratulated Milei on Truth Social, writing that Milei was “doing a wonderful job” and that his “Landslide victory” justified his confidence in his Argentine ally.

    The chainsaw-wielding Argentine President, who once led a Rolling Stones tribute band, literally sang that he was “king of a lost world” at a victory rally in a Buenos Aires hotel, and vowed that his win would enable him to complete his mission to “make Argentina great again.”

    Using Trump’s favorite slogan underlines the debt that Milei owes to the American President, who had threatened to withdraw the aid package to Argentina if Milei lost the elections.

    Bond markets had piled pressure on the peso causing a run on the currency and forcing the country to dangerously dip into its dollar reserves after Milei lost local elections last month in Buenos Aires province – where 40 percent of the country’s population live.

    Milei’s cost- and job-cutting program has already succeeded in reducing Argentina’s inflation rate from 200 percent in 2023 when he took office, to around 30 percent in September. He had slashed tens of thousands of jobs in the country’s bloated state sector and merged overlapping ministries, but the cost of living remains high for ordinary poorer Argentines. The pain of his program, coupled with corruption allegations against Milei’s powerful sister Karina, had hit the President’s popularity. Investors feared that his reforms would be brought to a juddering halt.

    Now markets should feel reassured, especially as Milei has pledged that the most painful part of his program is over, and that the country will now begin to feel its benefits. Milei told supporters at his party HQ that Argentina had turned its back on “a century of decadence” and voted to continue along the path of “freedom, progress and growth.”

    Milei will still need the support of smaller conservative and centrist parties to push his reforms through Congress. Former President Mauricio Macri, the leader of the Republican Proposal party (PRO), said Milei could count on his backing.

    Another former president, the Peronist chief Cristina Fernandez de Kirchner, appeared on the balcony of the apartment where she is under house arrest over corruption charges and blew kisses at her supporters. However, she stayed silent on her party’s loss in Buenos Aires last month.

    Observers await the markets’ verdict on Milei’s triumph when they open on Monday, though most analysts expect the peso to recover sharply and regain much of the ground lost in its recent falls.

  • Why gold is at an all-time high

    Why gold is at an all-time high

    Gold is in the middle of what looks like an unstoppable bull run. It has already punched through $4,000 an ounce. At the rate the price is rising, it may well go to $5,000 within a few weeks, and perhaps even $6,000 as the next year unfolds. There have been lots of different explanations for this, from the looming collapse of the dollar, to secret Chinese buying, to the conspiracy theories circulating on the wilder fringes of the internet, such a secret plot to re-establish the gold standard, or attempts to replace all the metal that is meant to be stored at Fort Knox, America’s official gold reserve, which apparently went missing decades ago. But the real explanation is very simple: it is the only way to hedge against soaring government debt. So long as spending remains out of control, gold is a one-way-bet.

    At $4060 an ounce, gold is already at an all-time high, and looks set to go a lot higher before this bull run is over. Why? It may reflect a weakening of confidence in the dollar, although President Trump seems to have given up on his fight with the Federal Reserve, and the US economy has taken tariffs in its stride. Or it may reflect buying by central banks, although given that the Polish central bank is the largest buyer this year that may be exaggerated. 

    But the main reason is that government debt is spiraling out of control. In the US, the deficit is likely to remain above 5 percent of GDP even with the government shut down. President Trump shows no interest in bringing that under control. He even looks set to give away all his tariff revenue with $2,000 checks to every household instead of reducing the deficit. In Britain, the Labour government has clearly lost control of its spending, and it is now at the mercy of party rebels who insist they shouldn’t be bossed around by the bond market. In France, a succession of Prime Ministers who attempt to merely slow the rate at which spending rises are kicked out of office. Japan’s new PM Sanae Takaichi looks set to start spending again. Even Germany, the last man standing, has suspended its debt brake, and will borrow up to €900 billion this year to fund investment in infrastructure and defense. All those governments range across the right and the left of the political spectrum, but they are all united on one point: they are determined to keep borrowing more and more.

    Perhaps it will all work out fine. The extra spending may accelerate growth, as the UK’s Labour Party and Germany’s Christian Democrats hope it will. Or perhaps it can just be rolled over in perpetuity, which seems to be the strategy of the MAGA Republicans. We will see. The important point is this: if any of those plans go even slightly wrong, and the growth doesn’t materialize, or a recession hits, then gold will be the only asset worth holding. The only real surprise is that it has taken so long for gold to start soaring in price – and now that it has started, it won’t stop until borrowing comes under control again.

  • Can stablecoins make America the crypto capital of the world?

    Can stablecoins make America the crypto capital of the world?

    “I will make sure the US is the crypto capital of the world,” Donald Trump vowed earlier this year. In July, he signed the Guiding and Establishing National Innovation for US Stablecoins (Genius) Act. The Act creates federal guardrails for dollar-pegged stablecoins and regulates who can issue and redeem them. Concerns from law enforcement are also addressed, by making sure anti-money laundering and consumer regulation applies.

    But what are stablecoins? They are digital tokens built to stay at a stable price, usually one dollar. They sit on the blockchain – the computer protocol that makes crypto work – but what’s underpinning their value are real-world assets, usually cash or government bonds. So you get all the benefits of crypto’s instant, 24/7, deregulated and decentralized systems – but without the rollercoaster rises and losses, that made bitcoin famous. Stablecoins are supposed to be crypto without the chaos.

    Getting ahead of crypto’s latest innovation would be distinctly American. Washington has repeatedly reinvented money to suit its power. But who, exactly, is “minting” these coins? Should it be private firms, or do central banks have a role? One crypto trader-turned-influencer suggests governments “should cut out the existing private issuers of these tokens” and instead mint their own currencies in crypto form. “They would be able to offer guarantees for the underlying asset that private companies cannot,” he explains. If states lend legitimacy to blockchain technology then crypto values could skyrocket, too.

    Regardless of who issues them, the benefit of stablecoins, the trader explains, is that they allow “instant transfer and settlement between anyone, anywhere in the world.” So no delays, barriers or time lags when you want to move money. They also enable decentralized finance, or “DeFi,” whereby people can lend, borrow and swap assets without the need for a bank in the middle – all policed by ones and zeros. And it’s not just cash and bonds to which crypto coins might be pegged. Tokens can now “represent assets like gold, stocks and real estate,” the investor says. There’s even one that’s underpinned by bottles of fine wine, and a coin linked to whisky barrels. Argentina attempted to launch a crypto cow, with digital tokens guaranteed by grass-fed cattle.

    There’s an arms race to be won here. Treasury Secretary Scott Bessent has said the Genius Act is “essential to securing American leadership in digital assets” and that stablecoins “will expand dollar access for billions across the globe.” This, he said, would be a “win-win-win for everyone involved: users, issuers and the US Treasury Department.”

    If the dollar dominates stablecoins, America could dominate global finance for centuries

    The Trump administration would be the biggest winner of all, though. Not only would mass uptake of dollar-backed crypto lead to a surge in demand for US treasury bonds – making America’s $37 trillion national debt cheaper to finance – but it would completely cement the dollar’s dominance in global transactions and could even replace sovereign countries’ own payment systems across the globe. The European Central Bank is fearful this could lead to a loss of control over Europe’s own monetary policy. If the dollar dominates stablecoins and they’re adopted en masse, America could dominate global finance for centuries.

    Wall Street is listening intently and the stablecoin market is growing – fast. The amount of stablecoins available on Ethereum – one of the most popular blockchains – has doubled in a year to more than$160 billion. The total market is now worth more than $280 billion, made up mostly by dollar-pegged “Tether” (which is also the most profitable company in the world per employee). JP Morgan expects the total market cap of stablecoins to hit half a trillion in two years’ time. Congress followed Japan, which first introduced a Stablecoin Law back in 2022. A couple of other Asian and Arab countries got there before the US, too. And the EU looks set to beat Britain to taking action, with European policymakers looking at launching a digital Euro on the blockchain as soon as possible.

    If countries lean into a private model – with anyone, in theory, able to mint their own digital currencies – the benefits for individual liberty are significant. One of the state’s most powerful tools for exerting control over its citizens would be removed.

    But none of this comes without risk. The Nobel Prize winner Jean Tirole warned in the Financial Times that the unregulated nature of stablecoins could mean governments could be forced into decisions they don’t want to make, should the tokens fall apart during a financial crisis. If doubts arise about the true value of crypto or trust in the link to the underlying real-world asset, then the companies minting the coins could face runs on their deposits. The return on the underlying assets currently used by most mints – cash or government bonds – have historically been pretty poor. Firms issuing stable coins then become incentivized to use riskier underlying assets with higher returns.

    It would be questionable if users and issuers of crypto came begging, caps in hand, to governments for bailouts considering the traditional libertarian, utopian view of crypto that it should be a tool for bypassing the state. But if deposits become large enough, you can count on it happening.

    Still, Trump is pressing ahead. In August, he signed an executive order forcing regulators to allow crypto to be offered within 401(k) retirement plants. Meanwhile, the Trump family stablecoin, USD1, is facilitating billion-dollar deals and is predicted to become the largest stablecoin on the market. Trump wants to plant the world’s crypto capital firmly on an American map. With stablecoins, he just might.

    This article was originally published in The Spectator’s October 13, 2025 World edition.

  • How the Arctic could thaw US-Russia relations

    “It is in Alaska and in the Arctic that the economic interests of our countries converge and prospects for implementing large-scale mutually beneficial projects arise,” said Yuri Ushakov, Vladimir Putin’s long-time foreign policy adviser and former Russian ambassador to the United States, at a Friday press conference in Moscow. His words pointed to Arctic economic cooperation being firmly on the agenda when Donald Trump meets Vladimir Putin in Alaska on Friday. For Trump, a massively important commercial deal of this kind is his typical negotiating strategy. It’s the “Art of the Deal” – offer something big, lucrative and tangible, then leverage it to unlock political concessions. It’s the template Trump just used to broker a peace agreement between Rwanda and the Democratic Republic of Congo, where economic incentives were bound up with resolving a long-running security dispute.

    An Arctic agreement between the US and Russia could revive energy collaboration between the two countries on a breathtaking scale. A deal would be massively lucrative for both sides. The Arctic contains an estimated 13 per cent of the world’s undiscovered oil, roughly 90 billion barrels, and 30 per cent of its undiscovered natural gas. Russia controls around half of that, with explorers pointing to 2,300 million metric tons of oil and condensate, and 35,700 billion cubic meters of gas. It’s a bonanza tailor-made for Trump’s America First. Parlay US expertise and capital into these frozen assets and the pay-off would be staggering. The shipping upside is no less compelling. The Northern Sea Route offers the promise of slashing shipping times between Asia and Europe by up to 50 per cent. As melting ice slowly opens the Arctic lanes, that cut becomes ever more real: less fuel burned, no queueing at chokepoints, and avoidance of piracy hotspots. Pair that with a fleet of US oil champions and Arctic logistics savvy, and Trump suddenly holds a commercial deal that has the feel of an irresistible boardroom trophy.

    The US and Russia have been here before. In 2011 ExxonMobil struck a landmark deal with Russia’s Rosneft to explore and drill in the Russian Arctic, including the Kara Sea. It was a project worth tens of billions, giving Exxon access to vast untapped reserves and giving the Russians US technology and expertise. Drilling began, but the partnership was suspended in 2014 when western sanctions were imposed after Russia’s annexation of Crimea. Bringing it back to life, or using it as the template for new ventures, would be straightforward in commercial terms. The infrastructure, geological data and corporate relationships already exist. A revived Arctic partnership could go beyond oil and gas to include liquefied natural gas terminals, port upgrades, and joint development of the Northern Sea Route, binding the two economies together in one of the last great frontiers for energy extraction.

    There is no confirmation that the Arctic and Ukraine will be explicitly linked. Yet the logic is obvious enough and the hints coming from Moscow cannot be ignored. For Putin, the Arctic could be the sweetener that secures US agreement to a settlement on his terms in Ukraine. Moscow is unlikely to shift on the fundamentals: Crimea and the Donbas are written into Russia’s constitution as part of its territory. Any deal would lock in those gains, demand Ukraine’s demilitarisation and secure a buffer against Nato. Trump could claim an Arctic deal as a massive commercial win for the US and the end of a war which he insists was caused by Biden. Putin could gain Washington’s help in pushing Kyiv to accept the deal.

    Trump’s leverage is blunt. Kyiv’s very survival depends on American weapons and cash. By threatening to cut them off, Trump can force Zelensky to the table on terms Kyiv has long rejected. For Trump, this is straight from his negotiating playbook: create a crisis point, hold the most valuable card, and make sure everyone knows you are prepared to walk away. For Zelensky, the choice would be between accepting a peace agreement that leaves Ukraine truncated, or facing a war without US backing.

    Ukraine’s position is fragile. Its army is drained, its economy battered, and its war effort hinges on western aid. European and UK promises mean little without US firepower and financing. If Trump decides to pivot towards an Arctic bargain with Putin, Kyiv may need to fall in line or face the battlefield more or less alone. Zelensky can draw red lines, but without American support they’ll count for little.

    The EU and Britain would protest loudly, but they lack the leverage to block an American/Russian deal. Brussels, London, Paris and Berlin have all made clear that no settlement should be struck over Ukraine’s head, yet moral objections are no substitute for raw power. British, French and German support for Ukraine may not make much of a difference to the Russian advance if the war were to drag on without full US support.

    Kyiv would be furious about a deal on the Arctic linked to Ukraine. Zelensky has built his presidency on reclaiming occupied land and has vowed never to cede Crimea or the Donbas. A deal that locks in those losses would be denounced as a betrayal. London would echo the outrage, while Brussels would convene summits and issue condemnations. Yet despite the rhetoric, the Europeans would be powerless to change the outcome. The settlement would already be signed and control of US financing of the war firmly in Trump’s hands.

    Beyond the western alliance, the reaction would be far warmer. Much of the global south sees the war in Ukraine less as a clash over borders, and more as a drag on global trade and growth. For China, India and Brazil, an end to the war, even entirely on Russia’s terms, would be hailed as pragmatic diplomacy. Trump could present the Arctic bargain as proof that US-Russia cooperation can solve global problems, and this would help blunt criticism from Europe and the UK.

    The incentives for both Trump and Putin line up neatly. For Trump, it would be another Trump ‘deal’ in which commercial muscle underwrites a political settlement. Putin would keep his territorial gains and reopen the Arctic to US investment, and Ukraine would be left to make the best of a settlement it didn’t shape. Britain and the EU would be reduced to a role of bystanders.

  • Trump has gained the upper hand over China

    Stockholm

    This week, the fate of the global economy could have been decided over a Mongolian barbecue in a Stockholm tourist trap. On Tuesday, just 50 yards from Sweden’s seat of government, Rosenbad – where the US Treasury Secretary Scott Bessent and the Chinese Vice Premier He Lifeng had been wrangling over trade negotiations – the Chinese delegation suddenly exited the talks and headed for lunch near the Mongolian buffet place, where they had eaten the day before. Its windows were covered up and a sign announced it would be closed for three days for a “private event.” The Americans stayed behind, making do with salad.

    China, still the factory of the world, remains the biggest test of Donald Trump’s resolve

    The Chinese had left to “report back to the mothership,” as Bessent later put it. But the mothership apparently did not budge. After talks resumed, it soon became clear that no breakthrough agreement had been struck.

    China wanted another extension to its tariff truce with America, which expires on August 12. Bessent said that was a call for his mothership, Donald Trump. The Treasury Secretary seemed to hint that Trump would approve such an extension. “Just to tamp down that rhetoric, the meetings were very constructive. We just haven’t given that sign-off,” he said, diplomatically.

    The problem is that two major issues haven’t been resolved: fentanyl, and the Chinese support for Russia and Iran. On fentanyl, “we seem to have a sequencing problem,” said Bessent, delicately. The Chinese want Trump’s tariffs to be reduced before they take action to prevent the manufacture of the chemicals that make the drug, which killed 50,000 Americans last year. The US side wants things to happen the other way round.

    Moving on to Iran and Russia, Bessent said: “One thing we are not pleased with, I’m sure the President won’t be, but it’s no secret: the Chinese buying 90 percent of Iranian oil. They’ve contributed $15 billion in dual use technology to the Russian war machine.”

    Insiders and Chinese officials kept a nervous eye on Trump’s Truth Social media account for signs of an angry orange eruption. But Trump, returning from Scotland on Tuesday night, sounded sanguine. “They had a very good meeting with China, and it seems that they’re going to brief me tomorrow,” he told reporters on Air Force One. The President appears to be in a better mood than he was in February, when he seemed hellbent on exploding trade relations with the world and especially China.

    On rare earth metals and magnets, Bessent and his Chinese counterparts appear to have made progress, building on previous meetings in London. Other key topics that didn’t make it to the negotiating table were the future of TikTok and a possible meeting between Trump and Xi – “that’s at the leaders’ level”, the Americans said.

    Officials inside the room told me that most of that time was spent playing a civil but pointed game of “My economy’s bigger than yours”. 

    “We had a big exchange – a very long exchange – and briefings on the economies of both countries,” Bessent reported. The Chinese, he added, “believe that their economy is in good shape.”

    America’s aim is to rebalance China’s financial model – which Bessent calls “the most unbalanced economy in modern times,” the likes of which we haven’t “seen since the British Empire” – away from mass manufacturing and toward internal consumerism. This isn’t just about dollar dominance or bringing in an estimated $300 billion to the US economy from tariffs: it’s about changing China. “They believe that they have a robust consumer economy, and they do not believe that they have a manufacturing surplus that is making its way into the rest of the world. Which I disagree with,” said Bessent.

    Outside the nearby Sheraton and Diplomat hotels, bored police officers milled about. Anyone searching for drama had to look to the press corps, which consisted mostly of Chinese journalists. Trade talks are bigger news in Beijing.

    There was some fretting about “optics” from US officials. Representatives of the US Treasury were concerned about the white-walled room the Swedes provided for Bessent’s television appearance – “hostage vibes,” muttered one aide. A spat over the positioning of the Chinese and American flags outside Rosenbad was also rumoured.

    What’s clear is that Trump has gained the upper hand in the trade war. When he unleashed his tariffs on what he called “liberation day,” the global expert consensus was clear: disaster. The tariffs, we were told, would amount to the largest tax hike on Americans since the 1910s. Inflation would soar. Growth would stall. Businesses and capital would flee.

    But the orthodoxy has, so far at least, been proved wrong. The numbers have come in better than expected. Inflation has stayed close to the 2 percent target. Almost 800,000 jobs have been created this year. Second-quarter GDP is expected to grow at a healthy rate of 2.4 percent. The stock market has rebounded sharply and is up nearly 10 percent since Trump’s re-election. The forecasts were pessimistic.

    America has won in Europe too. Europe has agreed to invest some $1.4 trillion into American energy and infrastructure in exchange for a reduced yet still significant tariff rate of 15 percent. The French Prime Minister called it “submission”.

    America has won in Europe too

    America has effectively challenged Europe to pick a side, Washington or Beijing, and for now Europe has chosen Washington. “I don’t know if they have our back,” said Bessent, “but clearly, the European relationship with the Chinese had a substantial deterioration.” As the US put up the tariff wall, the door opened for increased trade flows between Europe and China.

    According to Bessent, however, the EU has decided that being flooded with more cheap Chinese goods – while Beijing continued to protect its manufacturing at every turn – is not an economic blessing.

    “I had told them: this is what’s going to happen,” says Bessent. “There is now much more unity between the US and the allies. They’re now seeing the downside [of China] the US has seen.”

    The tariff regime, then, has frightened the world away from its dependence on a frequently malevolent Chinese superpower. Trump’s madman tactic makes everyone crazy, but it appears to have worked. The fear that Trump really might go all the way with his threat of 100 percent-plus tariffs, never backing down, has enabled him to walk things back toward normality while achieving his objectives.

    China, still the factory of the world, remains the biggest test of Trump’s resolve. But all sides know that, as America settles its trade disagreements with the rest of the world, it is Xi Jinping who now most needs the tariff pause to continue.