The Music Has Stopped.

Trump’s superpowers of distraction from gilded ballrooms, meetings with dictators, petty insults to the press, social media outbursts are being matched by the genuine Epstein file distraction and for the first time this White House is losing control of the narrative. But if we push past the real and perceived distractions there is a fundamental truth lying in wait that will take center stage.

The next financial crisis is here.

The Teapot Dome scandal, Prohibition, the Scopes Monkey trial, immigration crackdown, influenza pandemic and the rise of Christian fundamentalism and nativism—these were the issues that dominated the headlines during the Roaring Twenties of the past century. Just as the Epstein files, multiple cases against Trump, immigration crackdown, COVID-19 pandemic and rise of Christian fundamentalism and nativism have dominated the headlines a full century later. Echoes and rhymes if not outright duplications at times.

These scandals and issues were all anyone could talk about until they weren’t. Toward the end of the 1920s the economy was already in decline. The stock market crash didn’t happen all at once as we like to remember. Rather it belched and surged, fell and recovered until it slid…and kept sliding.. Further and further. It would be a quarter of a century before the stock market hit the peak that it had in 1929.

The thing about the stock market is that it’s the last to know. Pundits always personify the market as though it’s sentient and forward looking. Like it has both a mind of its own and the power of foresight. It’s why they say things like, “the market has already priced it in.” But the stock market is just a casino filled with gamblers playing on house credit and betting on the outcomes of things they do not control. The market of the 1920s soared to new heights on faith and leverage. Had it concerned itself with fundamentals it would have collapsed years before it did.

And the men who promoted the infinite wisdom and might of the markets back then were just as impressed with themselves as they are today. It’s hard not to be when every bet you make seems to work out. I mean, this bull run has been the most impressive in history so these men who control the markets must be equally so.

In the movie Margin Call, the character played by Jeremy Irons runs an investment bank on the precipice of default on the eve of the Global Financial Crisis (GFC). In it he gives a memorable speech in the early morning hours to the leaders he summoned and says to them that his only job is to listen for when the music stops.

Only the people in these same boardrooms can’t hear it because they can still hear the reverberations of the sound bouncing off their echo chamber. If they took the time to step outside the boardrooms and grand halls of their country clubs, they would hear only silence. In fact the only sound from within the hall is that of the musicians shuffling their music scores like the financial firms who are shuffling the books and ledgers in the hope of extending past the codas and final bars.

Tranches upon tranches of loans in the private credit markets are being rewritten. Some are being written off. Creative accounting allows these shadow banking firms to remove loans that have been altered with payment in kind (PIK) modifications, term extensions and roll ups from their troubled asset portfolios. Some of these loans unraveled completely, which we can only see through bankruptcy filings. Bankruptcy filings have increased 16% year-over-year just as foreclosures have risen 19% over the same period. Casualties of credit.

To understand the rhythms and sounds of the markets is to understand that the games of chance are for show. The real action is in the cash room. The credit extended by the house is the real fuel in the economy. The economy crashed in 1929 not because the games of chance closed up and the lights dimmed in the casino, but because the credit markets seized up. Everything and everyone was too highly leveraged and eventually the piper must be paid.

But here’s the thing:The music has already stopped.

So What Happens Now?

I take no pleasure in being right about this economy. And it’s not all Trump’s fault. If he’s to blame for anything, it’s the multiple accelerants that he’s pouring on the fire while he tries to hold an increasingly tenuous grip on the GOP. This stranglehold is the sum total of his power, and if he loses it over the Epstein files and his cloak of invincibility falls, then we should all fear what comes next. Absolute power may corrupt absolutely, but fading power acts out in even more punitive fashion.

So while his legislative and executive powers could theoretically wane in the coming months as more GOP members defect from Trump’s orbit, his instincts to make headlines with wild political and economic moves will wreak even more havoc. And the American people will be the ultimate losers in this battle.

My continuing (and deepening) obsession with economic matters comes from a place of genuine terror. As I stated above, this economy is not entirely Trump’s. We have been building toward a reckoning of epic proportions since the turn of the century with the removal of regulatory guardrails in the 1990s coming to a head in the early aughts and an overcorrection that created a shadow economy that now dwarfs the so-called regular economy. The evidence is overwhelming and ubiquitous.

The buildup of leverage and private credit brought down the global economy in the 1930s. The size and proportions of these factors pale in comparison to what we have today. The difference between them is solely our ability to manufacture money out of thin air. It’s what has held the U.S. economy together for the past 25 years as the manufacturing base was liquidated from our shores and sent to the far reaches of the planet where environmental and labor regulations simply did not exist.

As the world’s reserve currency, we could print our way out of any predicament without fear of hyperinflation, the death of any mature economy. But now our monetary chickens are coming home to roost and those very countries that inherited our industrial base have grown up. And they have plans of their own. The entire global monetary order is shifting and the U.S. dollar has lost its luster. Our treasury auctions—necessary to fuel our expanding debt—are more expensive than ever because demand is waning.

Private actors dressed as foreign intermediaries are stepping in to fill the void and playing roulette with leveraged funds in the process. Hedge funds registered to the Cayman Islands are sitting on $1.8 trillion in U.S. treasuries, which is $1.4 trillion more than the Treasury told us about. A fact we only learned when the Federal Reserve uncovered it through SEC filings. These hedge funds are trading treasuries in the overnight markets in what’s called a basis trade. More gambling, only this time it’s literally on 100x margin and the house’s money belongs to you and me. The Japanese carry trade that has been so vital to our debt picture since Reagan forced Japan to devalue its currency is beginning to unwind as their economy heats up, and their policy makers ignore our pleas to cool it off before Japanese investors repatriate the dollars that also prop up our treasury market. This is a very bad turn of events.

Nations we once called allies are reordering the global supply chain and their central banks are withdrawing from our debt auctions as well. Brazil, Indonesia, China, Russia, South Africa and India are discussing the possibility of a basket of securities that could prop up a global stablecoin in the near future to further decrease the reliance on the U.S. dollar as reserve currency to the world. And the Trump administration’s only response to that is to wed itself to the Saudi kingdom for cash and to build out a Trump family stablecoin empire as a safety net when his presidency concludes; a safety net that could make the Trump family one of the wealthiest on the planet if it plays out the way they’ve planned.

Here at home, U.S. companies have yet to realize any material value in the adoption of AI tools and yet companies are using it as an excuse to lay off employees at startling rates. So hopeful is Wall Street about the promise of AI that it is pushing equities to absurd limits despite the obvious downside risk inherent in both its success and failure. AI is the ultimate lose-lose scenario. If it succeeds, the labor force loses. If it loses, then we’ve flushed trillions of dollars in badly needed capital down the drain for no good reason.

All of which brings us back to Donald Trump. His economic agenda has proven to be the disaster that everyone knew it would be. The only thing propping up the job figures in the United States is the fact that he’s liquidating the entry level workforce through mass deportation. This is literally his sole accomplishment and it comes at a tremendous social and economic cost that won’t be easily repaired even if he drops dead tomorrow from a Big Mac induced coronary. And because he has filled his cabinet with sycophants and hacks, there is no one to guide the ship while he’s there and certainly no one to step in should he actually drop. Actually, there is one, but he’s not interested in the top job.

The single most capable person in his administration is the one responsible for this entire agenda: Russell Vought. And that’s the thing that eats at me. This is what they want. At least, it’s what he wants. The rest of them are too stupid to know what’s happening around them. All along Vought’s design has been to tear down the administrative state and usher in some sort of white Christian autocracy. No better way to do that than decimate the economy and deploy troops domestically. The feeble attempts of the judicial system to hold Vought’s most violent plans at bay are barely enough to maintain calm.

Russell Vought believes that America’s salvation lies in having a heavy-handed theocratic dictator in charge. Donald Trump is the bridge, not the endgame. In fact, Vought is on record (secretly) lauding the selection of JD Vance because he and people like Peter Thiel and Steve Bannon believe him to be their man on the inside. Waiting. Biding his time. The political miscalculation, of course, is that Vance possesses neither the skill nor the gravitas to manage an enterprise on the scale of the United States. We may be an empire in decline, but we’re still an empire.

Slow moving political coups such as Vought’s have succeeded in the past but they’re rare. In fact, the speed of his success might ultimately be his undoing. In tearing the country apart and destroying the economy, he risks immediate blowback. Americans still have the muscle memory of democracy and economic mobility. Even if these things have been elusive for certain populations, they exist in many of us and remain aspirational for most. It takes years to erase these sentiments and push a population to the brink.

To wit, Adolph Hitler became the head of the National Socialist German Workers’ Party in 1921. It took more than a decade for him to become Chancellor. And it took a few more years for Germany to devolve into autocratic depravity. These intervening years were particularly brutal for Germany. The Treaty of Versailles extracted more than money and gold from the defeated nation. It stole its dignity. We’ve seen the images of the Reichsmark being burned by the wheelbarrow for heat. The Great Depression caused heartache the world over but nowhere as profound as Germany. And still, it took 14 years from the end of the war to put the Nazi Party in power.

In the months ahead the collapse will be undeniable. The only way out will be more government intervention somewhere between the Obama stimulus packages and the COVID packages that spanned the Trump-Biden terms. Those were temporary fixes that undergirded the bottom of the economy and sent more wealth soaring to the very top of it. And in those instances there were serious technocrats in charge of the process. No such expertise exists in this White House, and if Trump succeeds in replacing Jerome Powell with an acolyte then no such expertise will exist there either.

The alchemy of dollar dominance, no matter how waning its influence, Trump’s incompetence, and muscle memory of democracy and mobility is what keeps the flame of optimism alive in me as Trump pursues Vought’s strategy. By driving the economy so fiercely and quickly into the ground while his man is still in office means even the most steadfast supporter of this agenda will turn on them. Every foreclosure, every bankruptcy, every denied claim, every pink slip is another push of the pendulum.

The only question that remains is whether we have the awareness to recognize this moment and offer something that reminds the American people of what once was and what is still possible.

Populist revolts will change the calculus in the House of Representatives and perhaps even in the Senate, but a genuine fiscal and monetary response to this crisis will only be possible if and when the Democrats make a clean sweep of both houses and the executive. A parade of moderate but tough talking centrist democrats will vie for the job in 2028 as the American people fall further into despair and we’ll once again be offered the least worst option and no real change.

And that’s why our work begins now. On the ground and in the dirt.

There is no Bernie and no scenario, as far as I can tell, where the DNC will look to the progressive wing to answer the call. But that doesn’t mean there isn’t a progressive path forward. Our job is to put Medicare for All on the lips of every American. This is the tent pole of progressivism and the cover for all the other pieces to come together. Don’t focus on the top job. Look to the second job, just like Vought looked to Vance.

Today is the day to join the local DSA or Working Families chapter in your region. Our job is rhetorical from this day forward. To speak our demands into existence. To repeat them until they are undeniable. The genius of the Mamdani campaign was its tangibility and repetition. Make buses fast and free. Free universal childcare. Freeze the rent. The DNC will nod to affordability. They’ll talk about reviving Obamacare subsidies. They’ll talk about job creation. They’ll talk tough on crime. Our job is to translate and convert these messages. When they say Obamacare, we counter with Medicare. When they say job creation, we say Civilian Labor Corps. When they say tough on crime, we say mental health coverage and Housing First. When they say affordability, we say tax the rich.

Politicians are products of sentiment. The ones who tap into it emerge the victor. Our job isn’t to pick the candidate, it’s to drive sentiment. But to do that we have to know what we’re asking for.

Medicare for All. Civilian Labor Corps. Housing First.

As for the second in charge, I’ll give you my vote now. Sherrod Brown. We need labor inside the White House for the first time ever. And I mean ever. No senator has been more aligned with the labor movement than Sherrod Brown. He lost his senate seat in the most expensive senate race in history because crypto money poured in to defeat him. Now he has an opportunity to run again to fill a vacant seat with a two year term. Job one is to carry him to victory so he’s back in the game and the public eye. He’s old. But he’s game. The best VPs are those who can navigate the halls of Congress. And if you can find one who is incorruptible and a booster of the labor movement, then you’ve struck gold.

I write like this to solve puzzles. And the hardest thing to do when the pieces are scattered all over the table is to put the first few together. You start with the edge pieces. Find the corners. Fill in some obvious patterns. Pretty soon you’ve outlined the puzzle and can start filling it in.

Our corner pieces are Medicare for All, a Civilian Labor Corps, Housing First and flipping House seats in safe blue districts that are held by centrist to right leaning Democrats. The labor movement can only build coalitions with organizations like DSA and Working Families if that’s where the momentum is and our support lies. Those are the organizations we should be joining and writing checks to. All of the other pieces come together over time, and many of them won’t. That’s the nature of politics.

Everything begins and ends with the economy. And the music has already stopped. So while they listen to the reverberations in their echo chambers, we need to busy ourselves writing the next symphony. Remember, Russell Vought already has the next movement of his dystopian symphony written. The only way to prevent it is to drown it out.

Learn about our 5 Non-Negotiables of the Left.