A Great Trump Crash?
By Joe Guinan
May 27, 2025
On May 27, TDC President Joe Guinan was asked to speak to a group of U.S. labor organizers on the imminent prospects of a financial crash and the dilemmas of opposition and resistance to Trump’s economics. His remarks were given in a personal capacity and are reproduced below.
Good evening.
I’ve been asked to speak to the threat of a financial and economic crash under Trump – and to the questions this prospect raises concerning lack of preparedness, and also some of the challenges a prepared left response would need to take into account, given the contradictions and incoherence of Trump’s economic policy management.
I’ll end with a few things I think it’s important that we begin to do.
There has been a lot of talk about a likely Trump recession – especially with the on-again, off-again tariffs and other measures that are likely to impact the American and global economies – but what about something worse?
What about a Great Trump Crash?
Recurring financial crises under neoliberalism
The first thing to say is that a financial crash – and wider economic crisis flowing from it – is very likely to occur on Trump’s watch.
This is simply a matter of the law of averages.
Financial crises in the neoliberal period have typically occurred on average every ten years (usually punctuated by smaller contained crises that did not in the event spread to threaten the stability of the financial system as a whole).
The last full-blown financial crisis – the Great Financial Crisis of 2007-2009 – is now fifteen years behind us.
Even if, as seems likely, the COVID-19 pandemic – and the resulting controlled shutdown of much of the economy and unprecedented government intervention to manage that crisis – had the effect of absorbing or averting or deferring a financial crisis for a time, that deferred crisis is now once again coming due.
“Even if, as seems likely, the COVID-19 pandemic – and the resulting controlled shutdown of much of the economy and unprecedented government intervention to manage that crisis – had the effect of absorbing or averting or deferring a financial crisis for a time, that deferred crisis is now once again coming due.”
As we pointed out back in July 2018 in a Democracy Collaborative report entitled The Crisis Next Time, the U.S. banking system remains overly-financialized and fragile and poses a continuing systemic risk to the American and global economies.
The previous governmental response to the Great Financial Crisis did not adequately address the underlying problems with bank practices and financial regulation, and those measures have since largely been unwound.
While the current structure and behavior of U.S. banks persists, future financial crises are all but inevitable.
So while its exact timing and severity cannot be predicted, both the accelerating frequency of financial crises in recent decades and the continued consolidation of the banking sector suggest that we will face another financial crisis sooner rather than later.
Trump’s economic policy tripwires
This would be true even in “normal” times under neoliberalism.
But these are not normal times.
Everywhere we look there are new tripwires being laid, actions by the Trump Administration that could easily serve as the proximate cause or trigger of a financial crisis that could cause a chain reaction ending in a great crash.
“Everywhere there are new tripwires being laid by the Trump Administration that could easily serve as the proximate cause or trigger of a financial crisis that could cause a chain reaction ending in a great crash.”
Trump’s economic policies are being enacted so capriciously and chaotically and with such abandon (and seeming malice!) that they could easily spark a crisis.
For example:
On-again off-again tariffs that are seizing up global trade and investment (and could involve significant insider trading), with trade shocks taking time to have their full economic effect;
Deregulation, especially of finance that reduces the safeguards against – and even incentivizes – risky speculative behavior;
Large-scale cuts to the federal workforce and especially to non-military discretionary federal spending that could pull the rug out from under entire sectors and regions;
Even interference with that holy of holies, the Treasury payments system!
And, of course, the aggregate effect of Trump’s economic (mis-)management might tip the economy into a recession that could itself trigger a financial crisis, with consumer spending accounting for two thirds of economic activity, half of which is attributable to the bottom 90 percent of the income distribution.
Widespread economic and financial precarity
As job markets soften, there will be knock-on effects on debt repayment and other economic activity that feeds into financial sector health.
Most Americans are (and have been for a long time) in a situation of extreme financial precarity, with nearly 40 percent of households unable to say how they would meet an unanticipated expense of just $400. (We laid out all of this in our 2024 second edition of our Index of Systemic Trends.)
This fragile precarity could very easily destabilize the FIRE sector.
The share of credit card debt ninety days or more past due is increasing across geographies and income groups, and the delinquency rate on all loan types is at its highest levels since the pandemic – driven in part by the end of the holiday on student loan repayments, which is impacting ability to pay across the board.
As Mark Zandi, chief economist of Moody’s Analytics, told the New York Times: “The economy is really vulnerable to anything that could go wrong, and clearly there’s a lot that could go wrong.”
Contradictions of a Trump response
If – when – there is a significant financial crisis on Trump’s watch, the weak regulatory reforms put in place after the last crisis (themselves now largely eroded) will likely be insufficient to deal with it effectively.
This is especially true given the ongoing consolidation of financial firms and the outsized growth of the highly risky shadow banking sector.
The response to the previous financial crisis, the 2007-2009 Great Financial Crisis, under Bush and Obama does not give much cause for comfort.
Recall the manner in which government bailouts were enacted for Wall Street, but not for Main Street.
As a result, the Obama economy saw the weakest, most lopsided recovery from any of the eleven recessions since 1945.
It played no small part in the public anger that helped deliver us Trump.
So it is important to remember that Trump is a symptom of the longer-run slow-boiling crisis that has brought us to where we are today, and not the crisis itself.
“It is important to remember that Trump is a symptom of the longer-run slow-boiling crisis that has brought us to where we are today, and not the crisis itself.”
Keeping that in mind is essential to avoiding the trap of being caught on the wrong side of “status quo/change” and “system/anti-system” dynamics that are the overriding key to understanding political outcomes all around the world over the course of the past decade, not least here in the United States.
The complexity comes from readying ourselves for a new dimension of the crisis under Trump, which is that he may not respond to a financial crisis in the manner of every other Administration since World War II.
Bailouts are the instruments of neoliberal capitalism confronted with financial sector meltdown. Private profits, public losses. The socialization of risk and the privatization of reward. We all know that story.
But I don’t think that we can necessarily count on a Trump bailout and economic rescue of the kind that we have become accustomed to expect from U.S. administrations (even as we on the left prepared our own robust critique).
The automatic stabilizers might not be deployed this time.
This goes to the matter of the fractions within capital with which Trump is most clearly financially and politically aligned.
Getty Images
The looting-and-pillaging stage of late neoliberalism
Certainly, a section of Trump-supporting capital could, in the face of a financial meltdown, be expected to call for a typical neoliberal response in the form of government rescue.
But Trump is just as likely to align with the shock doctrine disaster capitalists for whom economic calamity is an opportunity to hoover up distressed assets.
There are two sides to every trade, and even a Bear market has winners as well as losers.
We got a foretaste of this with the stock market reaction to the tariffs, when the billionaire class sold high, bought low and widely, and came out way ahead from the turmoil.
With Trump we are in an era of slash-and-burn late capitalism, the looting-and-pillaging phase of end-stage neoliberalism. And just as he is gutting FEMA assistance to those impacted by natural disasters, he could easily let a financial crisis burn with scant regard for the little people impacted on the ground. Not least because he is aligned with crypto interests whose economic interests lie in undermining confidence in the safe harbor of the dollar and the U.S. Treasury.
“With Trump we are in an era of slash-and-burn late capitalism, the looting-and-pillaging phase of end-stage neoliberalism. Just as he is gutting FEMA assistance to those impacted by natural disasters, he could easily let a financial crisis burn with scant regard for the little people impacted on the ground.”
In financial matters as well as across the rest of policy, Trump is an agent of ungoverning and not of governing, of the undermining of the fiscal as well as the administrative state.
Our response to all this – which should include demands for public ownership of the banking system and the bailout of Main Street not Wall Street – must be well-prepared and ready to deploy on two fronts at once.
Against the usual neoliberal bailout of private capital at our collective expense.
But also against the “burn, baby, burn” impetus to fire-sale conflagration of disaster capitalism.
Pulling that off without falling into the arms of one or the other will be no easy matter.
Political education for the working class
At the end of the day, this is a period of vulgar materialism, of the raw struggle over and between material interests.
Our only safeguard against what is to come is a militant and politically well-educated and -aware movement capable of mobilizing in defense of ordinary working people and our communities and interests in the face of the most aggressive plutocratic power- and money-grab any of us has yet seen in our lifetimes.
Making sure we have that movement is the immediate task ahead.
Thank you.
