Hi friend,
While it’s 2025, many are still talking about the elections of 2024. Some (including James Carville on January 2nd) are shocked that an economy that doesn’t work for most Americans was a key driver for voters. We were not surprised. There were overwhelming facts showing that the American people were working harder and harder but falling further behind, fearful for the future, and desperate for help, particularly low- and moderate-income Americans and communities of color. Here’s just one example that we pointed out in July 2024: 39% of Americans worried they couldn’t pay their bills (52% of Latinos, 46% of Blacks, and 55% of those making less than $50K).
That 39% was higher than at any time during the Great Recession in the decade following the 2008 crash, which resulted in a lost generation. Remember, the bottom 90% of Americans were poorer in 2016 (when Trump won the first time) than they were in 2007 by between an astonishing 17-35%! By the time Trump won the second time, Americans were sinking under a mountain of debt: credit card users paid nearly $164 billion in fees and interest in 2022, which was up from $120 billion a year in 2018-2020. That was an increase of $44 billion or almost 40% in just 2 years. Bottom line: in just 12 months, $164 billion went from the pockets of Main Street Americans and into the pockets of the financial industry.
There are several reasons for the economy not working for most Americans, but a key one is the financial industry too often doesn’t support the real economy, jobs and growth. Adding insult to injury, the industry too often engages in wealth extraction for the few rather than wealth creation for the many. The results are wealth transfer, concentration, and hoarding by the top 10% at the expense of everyone else. This isn’t just bad for economic and social justice (and our democracy), but it also leads to financial instability, crashes and bailouts for Wall Street.
How did we get here? The financial industry uses its economic power to buy political power which it then uses to increase its economic power. That just happened again in the November 2024 elections, and the financial industry is about to reap the rewards. The Trump administration is going to unleash a very dangerous juggernaut of deregulation of the financial industry. Hard to say when, but that will most likely end in a terrible financial and economic crash, likely worse than 2008. The looming 100 years anniversary of the Great Crash of 1929 is ominous.
The incoming administration and its supporters, including those targeted for key regulatory roles, as well as the financiers of Wall Street are choosing to ignore the most basic and obvious lessons from those disasters (and even the more recent banking crisis of 2023). The Federal Reserve has already started by refusing to increase capital at banks, weakening stress tests, and otherwise failing to enact a single rule in four years. Making matters worse, the Vice Chair for Supervision just capitulated to the deregulation bullies and announced his resignation.
Unfortunately, this dangerous short-sightedness isn’t limited to the Fed. For example, Paul Atkins, President-elect Trump’s nominee to lead the SEC is also a deregulation zealot and industry cheerleader who, as a Commissioner at the SEC from 2002-2008, supported deregulation that contributed to the devastating 2008 crash. The incoming administration has also floated eliminating the Federal Deposit Insurance Company (FDIC) and Consumer Financial Protection Bureau (CFPB), two of the most successful government agencies in the history of the country. Adding fuel to the fire, the Trump team has also rolled out the red carpet for the crypto industry, which is going to result in massive consumer losses and destabilize the core of the traditional financial and banking systems.
While these actions will likely create a short-term boom over the next couple of years (unless derailed by tariffs, tax policy, war, etc.), it will be an artificially created sugar high, not one built on sensible capital formation and allocation based on organic economic growth that would be sustainable and durable. That means that the clock is ticking on a coming catastrophic financial crash that will likely be much worse than 2008. This is not hyperbole – there is always a lag after deregulation and the creation of artificial liquidity. That was true for “roaring ‘20s” followed by the crash and Great Depression; the “great moderation” of the early 2000s followed by the crash and Great Recession; the deregulation of the first Trump administration in 2017-2020 that led to the 2023 banking crisis when 3 of the 4 largest bank failures in US history happened. Much worse is likely to happen next time.
These activities by the financial industry are the structural drivers of wealth extraction and concentration, of inequality and injustice, and ultimately of an economy that simply does not work for most Americans. Better Markets exists to fight against these structural drivers and the industry onslaught that will enrich the already rich at the expense of Main Street American families, workers, consumers, investors, and taxpayers.
But we couldn’t do that without your support, which gives us the firepower to be a truly independent and fearless counterweight to Wall Street’s megabanks, the larger financial industry, and an incoming administration poised to put special interests before the public interest. Given what’s at stake, we ask again that you join us in this fight and donate now here.
Thank you!
Best, Dennis
Dennis Kelleher
Co-Founder, President & CEO
