The Trump Economy: From Grift to Governance
How Trump’s war on oversight, data, and institutions corrodes the foundations of capitalism.
James B. Greenberg
Aug 28, 2025
Markets run on trust. Trump runs on grift. What happens when the Fed, the dollar, and the data itself are bent to his will?
Credit, contracts, and investment all depend on the belief that numbers mean what they say, that rules will be enforced fairly, and that institutions will honor their promises. Even the dollar’s value rests on little more than confidence that the government won’t cook the books. Strip away that trust and what remains is not a functioning market but a casino.
Trump’s entire career has been built on bending trust until it breaks. Six corporate bankruptcies left workers and contractors unpaid while he walked away with his name still intact. Trump University was shut down for fraud. His foundation was dissolved for self-dealing. Property valuations rose or fell depending on what suited his tax or loan applications. He treated the balance sheet the way a magician treats a deck of cards: shuffle, misdirect, conceal. Profit came not from creating value but from exploiting loopholes, leaving others to absorb the losses.
In his current presidency, that private playbook has become public policy. The erosion of economic trust has not happened all at once; it has unfolded step by step, each move clearing the way for the next.
It began with the people he brought in. Trump chose appointees whose records showed not independence or competence, but a familiarity with the same kind of games he had played his whole life. At Treasury, Steven Mnuchin — the “foreclosure king” — had made his fortune throwing families out of their homes after the 2008 crash. At Commerce, Wilbur Ross, long accused of concealing assets and conflicts of interest, blurred the line between public office and private gain. At the EPA, Andrew Wheeler, a former coal lobbyist, dismantled environmental protections he had once fought against on behalf of industry. At the Department of Labor, Eugene Scalia, a corporate attorney famous for fighting worker protections, now presided over their unraveling. Even the IRS was steered by loyalists who cut back audits of billionaires while intensifying audits of the poor. These were not accidents of staffing but deliberate signals: Trump was surrounding himself with people who shared his instinct that rules exist to be bent, oversight to be dodged, and public office to be leveraged.
The next step was dismantling oversight. Inspectors general who asked questions were fired or replaced with loyalists. Congressional watchdogs were denied data or access. The agencies meant to keep track of how public money was spent were defunded or gutted. Pandemic relief funds and other vast pools of federal spending flowed with almost no transparency. Oversight was treated as an enemy to be eliminated. With the referees removed, the game could proceed unchecked.
This is more than corruption in the abstract. It is the deliberate undoing of a trust infrastructure that Americans built in response to crisis. After the Great Depression, the New Deal created institutions like the SEC, FDIC, Social Security, and an independent Federal Reserve to restore confidence in banks, markets, and government itself. Those reforms were not just laws; they were rituals of reassurance that rebuilt faith in numbers, contracts, and money. Trump’s project turns that legacy upside down. Where Roosevelt built guardrails to ensure the game was honest, Trump dismantles them so the house can win. He is not innovating but unbuilding, stripping away protections that kept capitalism credible for nearly a century.
Then came deregulation. Financial safeguards imposed after the last crash were rolled back. Bank stress tests were softened. OSHA enforcement was pared back. The SEC’s authority to police markets was weakened. These moves were sold as cutting red tape but shifted risk from insiders to the public. Deregulation wasn’t about unleashing efficiency; it was about clearing a path for crony enrichment without fear of consequences.
Once the referees were gone and the rules stripped back, attention turned to the numbers themselves. The Bureau of Labor Statistics faced pressure to present unemployment figures in more flattering terms. Leaders were threatened with dismissal when their reports contradicted the White House line. At the IRS, audits of billionaires fell even further while audits of the poor and working class rose, eroding any sense that the system was fair. Data that once gave investors and citizens confidence was massaged, delayed, or framed to suit political needs. When neutral facts are no longer available, reality itself becomes pliable, and trust erodes even faster.
All of this set the stage for the biggest prize of all: control of the Federal Reserve. For more than a century, the Fed has been the symbolic guarantor of economic honesty, its independence the anchor that steadied markets. Trump has attacked that independence directly. He has demanded rate cuts to goose the stock market before elections, threatened to remove board members who resisted him, and cast suspicion on the chair himself. The goal is not just lower rates but control of the story. The Fed produces the numbers that define the economy — inflation, growth forecasts, employment projections. If those can be bent to fit his narrative, then the official story of prosperity can continue no matter the underlying reality.
Control of the Fed also promises new avenues for grift. A captured Fed can funnel cheap credit to loyal industries, starve competitors, and water down oversight of reckless banks. Insiders with early knowledge of policy changes can reap fortunes. Asset bubbles can be inflated for profit and left to burst on the public. It would be Trump University and casino finance replayed with the global economy as collateral.
And the stakes are not just domestic. For decades, the United States has enjoyed what economists call the “trust dividend”: the privilege of borrowing cheaply and anchoring the world economy because the dollar is the global reserve currency. That status rests not on raw power alone, but on credibility — the belief that U.S. numbers are honest, that its central bank is independent, and that its institutions are sturdier than those elsewhere. If that credibility falters, even slightly, investors begin to hedge. Yields rise, capital shifts, foreign banks diversify. The dollar doesn’t collapse overnight, but the hidden subsidy Americans have long enjoyed, lower borrowing costs, deeper markets, global faith, begins to erode. Trust built the dollar’s supremacy; mistrust can chip it away.
The steady erosion of trust has its logic: first stack the deck with loyalists who share the same instincts for self-dealing. Remove the watchdogs who might cry foul. Strip back the rules that stand in the way of easy profit. Manipulate the numbers so the losses are concealed. And finally, seize the institution that anchors the system itself, so even money’s credibility can be bent to serve power.
What does this mean in practice? It means higher borrowing costs, tighter credit, more speculation, and less stability. When the people at the top treat data as putty and referees as obstacles, the price of doing business changes. Credit becomes more expensive because lenders add a surcharge for uncertainty. Investors demand higher returns to compensate for the risk that the numbers aren’t real, or that the rules will be rewritten overnight. The country has long enjoyed a “trust dividend” in the form of low borrowing costs and deep, liquid markets. Corrode that trust and the dividend flips into a penalty.
Banks feel it first. If supervision is politicized and stress testing becomes theater, large institutions lean into risks they can’t price, while smaller ones lose depositors to the giants. A flight to perceived safety concentrates power at the top, while community banks face merger or decline. Loan officers shorten maturities and raise standards for borrowers who aren’t insiders. That hits small and mid-sized firms first: the manufacturer financing inventory, the family business buying a second truck. Projects that once penciled out die under higher risk premiums. Jobs that would have existed never appear.
Markets respond by protecting themselves in the only way they can. Spreads widen. Balance sheets tilt toward cash and short duration. Equity markets grow frothy at the top and thin beneath, because momentum can live on rumor while sound investment needs credible numbers. Price discovery, the mechanism that depends on reliable information, breaks down. Prices move not because a risk has been measured but because someone whispered something. That is not a market; it is a rumor mill with a ticker.
Investors behave accordingly. If they can’t trust the baseline data, they reach for signals they believe can’t be faked: hard collateral, brand-name issuers, state-backed firms. Pension funds and households, which should be the patient capital of a society, are forced into a defensive crouch. Ordinary families save more if they can, because unpredictability makes them afraid. They postpone the car, the renovation, the degree. Economists call it precautionary saving. In plain language, it’s bracing for impact.
The tax system suffers too. Compliance depends not only on penalties but on legitimacy. People pay because they believe the rules are broadly fair. When it becomes clear the wealthy can tilt the field—by cutting audit staff for the top while increasing pressure on the poor—tax morale collapses. More underreporting, more schemes, more whispered advice about how to game the system. The “tax gap” becomes not just a budget problem but a civic one: it teaches people that only suckers follow the rules. That is fatal to a republic’s finances.
For households, the erosion shows up in daily costs and hidden risks: higher interest on credit cards and mortgages, pricier insurance as models lose credibility, delayed benefits because agencies are demoralized or captured, wage theft rising as enforcement vanishes. A society that can’t agree on numbers becomes a paradise for grifters and a gauntlet for everyone else.
And the burden is not shared equally. The wealthy can shield themselves with lawyers, accountants, multiple passports, and insider access. They can arbitrage mistrust. Ordinary families cannot. They pay in higher rates on credit cards and mortgages, in wage theft unpunished, in pensions diminished by volatility, in scams that flourish when regulators look away. What was once a public good, a system built on trust, on reciprocity and fairness, is converted into a private asset available only to those who can afford it. In anthropological terms, a society organized around mutual obligation and credible enforcement shifts into one organized around patronage and predation. Trust, which once circulated as social capital, is hoarded at the top while everyone else is left to fend in the dark.
At the national level, the consequences converge in the Treasury market, the definition of “safe.” A Treasury bill is backed only by trust. If the Fed is doubted, if the data is suspect, investors start to hedge. Yields rise. Liquidity thins. Foreign banks diversify a bit more, not because they have a better option but because they are wary of concentration. Americans don’t read reserve managers’ memos, but they pay for those decisions in the form of higher borrowing costs, which ripple into mortgages, student loans, and infrastructure.
Businesses adapt in ways that make the economy smaller. When you can’t rely on neutral enforcement, you seek patrons rather than partners. When rules are rewritten for friends, you invest in lobbying rather than machines. When numbers are massaged, you manage the narrative rather than the factory floor. That is how an economy with bright engineers and skilled workers ends up with fewer inventions than it ought to have, and why productivity stalls while fortunes built on influence grow.
And finally, the currency itself is at stake. The dollar’s strength has never come from perfection but from the belief that errors would be admitted and corrected, not buried. If truth becomes optional and the central bank a prop, the bill in your hand still buys coffee—until one day it buys a little less because someone, somewhere, priced in a little doubt. Enough of those days string together and the doubt becomes a habit. Once doubt is a habit, trust is hard to rebuild.
From an anthropological perspective, what has been dismantled is the social contract that allows economies to function. Reciprocity, reputation, and credible information make markets possible. Trump’s government substitutes intimidation, loyalty, and narrative control. Institutions that once generated trust are hollowed out and turned into shells. What began as personal fraud has become the operating principle of governance.
Trump’s defenders call this businesslike. But business cannot survive without trust in contracts, regulators, and statistics. By corroding those foundations, he has not strengthened the economy; he has turned it into a protection racket where insiders profit and the public carries the losses. This is not capitalism. It is kleptocracy in motion, and it leaves the economy weaker, more fragile, and far less trusted than before. If the dollar, the Fed, and the data can no longer be trusted, then the economy is no longer ours but theirs.
Suggested Readings
Campbell-Verduyn, Malcolm, ed. Trust in the Financial System: Restoring Confidence in a Post-Crisis World. London: Routledge, 2021.
Eichengreen, Barry. Globalizing Capital: A History of the International Monetary System. 3rd ed. Princeton, NJ: Princeton University Press, 2019.
Graeber, David. Debt: The First 5,000 Years. Rev. ed. Brooklyn, NY: Melville House, 2014.
Greenberg, James B., and Thomas K. Park. Hidden Interests in Credit and Finance: Power, Ethics, and Social Capital across the Last Millennium. Lanham, MD: Lexington Books, 2017.
Johnson, Juliet. A Fistful of Rubles: The Rise and Fall of the Russian Banking System. Ithaca, NY: Cornell University Press, 2020.
Johnston, David Cay. The Big Cheat: How Donald Trump Fleeced America and Enriched Himself and His Family. New York: Simon & Schuster, 2021.
Levitsky, Steven, and Daniel Ziblatt. Tyranny of the Minority: Why American Democracy Reached the Breaking Point. New York: Crown, 2023.
