Too many Americans have tried to replace the horrors of the Age of Trump with happy-pill halcyon tales suggesting that Donald Trump and his movement have been vanquished and made irrelevant by the hopeful possibilities of Joe Biden's presidency, and an imminent return to some new form of "normal."
Predictably, the hope-peddlers, stenographers of current events, professional centrists and other obsolete voices among the American news media have been more than willing to oblige and circulate such fictions.
Here are some uncomfortable truths.
For all of the allure of liberal schadenfreude and President Biden's popularity, Donald Trump and his followers have not been broken or otherwise defeated psychologically, emotionally or politically. If anything, he and they are becoming more bold, confident and sure of their long-term success.
Trump is behaving like a type of shadow president who believes he was never truly defeated by Biden and the Democrats. Trump will apparently speak at the CPAC political cosplay gathering next week, where he may announce himself as a kingmaker for the Republican Party, call out enemies who are to be purged for "disloyalty" and perhaps even announce that he will be starting a new political party for "real Americans" and "true patriots."
There is no civil war within the Republican Party about the legacy of Trump's presidency and the future of the "conservative" movement. Trump did not break the Republican Party or otherwise mold it into his vision. Instead, Trump gave the party, along with its voters and camp follower permission to be their true, ugly, dangerous, anti-democratic, white supremacist selves. It is no surprise then that Donald Trump remains extremely popular among Republican voters. His personal popularity, in fact, eclipses that of the Republican Party itself.
Public opinion polls and other research has repeatedly shown that Trump's followers believe that he and they were betrayed by the "Deep State" or other such imaginary forces who "stole" the 2020 election from their Great Leader.
Law enforcement and other experts in terrorism and counterinsurgency have continued to warn that Trump's insurrection and coup attack on the Capitol on Jan. 6 are just the beginning of a sustained period of right-wing terrorism and other political violence directed against Democrats, liberals, progressives, nonwhite people, Muslims, Jews and others deemed to be enemies of Trump and his movement.
What of Donald Trump's finances? The apparent media consensus holds that Donald Trump is on the verge of imminent financial collapse. Hundreds of millions of dollars in loans are coming due over the course of the next few years and Trump now lacks the protection of the presidency, along with the ability to exploit public resources to personally enrich himself as well as his family and other allies. Trump is also facing serious criminal investigations related to his questionable business practices as well as other apparent crimes related to his insurrectionist plot.
But this consensus about Trump's fading finances and wealth overlooks one important detail: He is a cult leader, and his followers are potentially an almost infinite source of funding.
William Cohan is a special correspondent for Vanity Fair. His writing has also been featured in The New York Times, The Financial Times, The Atlantic, Fortune and The Nation. Cohan is also the author of several bestselling books about finance and Wall Street, including "Money and Power: How Goldman Sachs Came to Rule the World" and "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street." His most recent book is "Why Wall Street Matters."
In this wide-ranging conversation, Cohan explains how Donald Trump could potentially use his fanatical followers to make billions of dollars each year. He also details how the corruption of the Trump regime likely includes manipulation of the stock market and other financial crimes, which he believes the Biden administration and Congress should investigate.
Cohan also shares his thoughts on the present and future of the American economy in an age of pandemic, and what the wild speculation in such companies as GameStop and Bed Bath & Beyond really reveals about the stability of the stock market.
This conversation has been edited for length and clarity.
There is a desperate yearning for a return to "normal" following Trump's presidency and the coronavirus disaster and all the personal and financial destruction it has caused. What will this new normal look like for small businesses, for example? I worry that many neighborhood businesses will be gone forever.
Big-name brand stores in the Soho neighborhood of Manhattan are struggling, while independent stores in Brooklyn are doing fine. Many small and medium-sized businesses have struggled greatly throughout this crisis. The Fed has helped in an extraordinary way those companies, generally big companies, that can access the capital markets. Those companies have refinanced debt and obtained more debt and equity financing. They have also been able to issue junk bonds and refinance their debt.
This represents about 1% of companies. And then there are the other 99% of businesses that are small and medium-sized businesses. If it weren't for the PPP loans, many of those businesses would have closed down. There are other businesses, such as restaurants and other small and medium-sized businesses, which are just going to disappear. But on the other hand, I see anecdotal examples where new entrepreneurs are coming along, people willing to take risks. The economic disruptions in New York, for example have made a lot of retail space much more affordable than it has ever been in the last two decades or so. It is creative destruction. This is the nature of capitalism generally, and the pandemic has exacerbated those tendencies.
A hundred years ago there was the Spanish flu pandemic, and it was followed by the Roaring '20s. The reason it was called the Roaring '20s was because World War I had ended, and the pandemic had ended, people were ready to live again, and all that pent-up energy was released.
There probably will be a crash, given where the asset bubbles are already. High-yield bond markets are in a bubble. The stock market is at an all-time high and certainly looking pricey. Bitcoin is out of control. Tesla is out of control. We have these GameStop-like charades. And this all comes before we have another version of the Roaring '20s. Ultimately, I think it is inevitable that a financial crisis is going to happen once every 10 to 15 years anyway.
In addition to the GameStop speculation, trading cards and other collectibles are now back in a huge way as well. I knew folks who opened baseball card, comic book and memorabilia stores in the 1980s and 1990s, and when that bubble burst, they lost everything. How do you explain the re-emergence of that market?
The truth is that each one of these narratives results from a different set of circumstances. What is driving Bitcoin is very different than the shenanigans that drove GameStop. But it all gets portrayed in the headlines in a very similar way. Now, both in my opinion represent a ridiculous level of speculation and gambling. They also both have this underpinning of wanting to "stick it to the man" and change the world.
With GameStop, that roller coaster has come and gone. Bitcoin is still going up. I think it's another just way to gamble, whether you understand what's going on or not. FOMO, or "fear of missing out," was the driver behind GameStop. GameStop came and went before the SEC could get its mind around it — and there wasn't even a head of the SEC because we were between administrations. There will be hearings and people will try to figure out how to prevent the GameStop insanity from taking place again. Such things have been going on for a long time. Flights of fancy are part of human nature — for example, tulip mania in the 17th century. What's the difference between GameStop stock and Bitcoin and tulip bulbs? To me, there is no difference.
One of the arguments is that what's happening now — with GameStop, for example — is all proof that Wall Street is a type of casino. Wall Street is corrupt. It can be rigged and played easily.
There are some 3,500 publicly traded equities in the U.S. So, one or two or three become the fascination of speculators, for whatever reason. We all know that now the Redditors got ahold of GameStop and AMC and Bed Bath & Beyond and whatever else may be next. But by and large, the capital markets are one of our country's greatest assets. They are certainly the envy of the world, whether Americans appreciate that or not. Has there always been speculation? Yes.
People love to gamble. People are at home. They don't go to work. They're working from home. They're sitting around and they get bored. "Why not see if we can make some money sitting around and doing nothing by buying into the GameStop bonanza? If it works out, great. If it doesn't, so what? I had some fun." There would be no way, if a person did any analysis on the fundamentals of GameStop as a business, that they would ever buy it unless they perceived that there was an opportunity for a short squeeze — which there was. By and large it was the hedge funds that were shorting GameStop and they made the right call. Over time, chances are the GameStop stock will continue to go down because the fundamental underlying nature of the business is not very good.
"Casino capitalism" is a phrase that is commonly used by critics of today's version of capitalism. What is that language and concept describing, accurately or not?
"Casino capitalism" is a nice alliterative phrase, but it is a complete oversimplification. There are five or 10 companies where people are speculating. Is there speculation in Bitcoin or in some commodities? Yes, there is a gambling element to some aspects of Wall Street. Did people 20 years ago bid up the price of GE stock to make it the most valuable company in the world? Yes. Is it now trading for a great deal less, a fraction of what it was then? Yes. But for the most part, the public markets and, to some extent, the private markets are the best judge of a company's value.
The media consensus is that Donald Trump is facing imminent financial collapse. That claim is also part of a much broader narrative of wishful thinking that Trump has been vanquished and will disappear from American public life. What do we actually know about Trump's money and financial prospects going forward? To my eyes he has many options available.
The fact of the matter is Trump is going to owe $400 million to Deutsche Bank in the next few years. In the past Trump has defaulted on loans left and right. This means Trump lost the assets associated with them. If Trump defaults on what he owes, it would mean that he'd lose a bunch of golf courses or perhaps even Trump Tower. I do not think that Trump is going to let it get to that, because it is obviously a terrible time to be trying to sell a Manhattan office tower. Chances are there will be time for the economy to improve before the money Trump owes will come due.
Two of his best assets are the minority stakes he owns in the Vornado office buildings, one in Manhattan and one in San Francisco. Steve Roth has tried to sell them and couldn't do it because of the Trump stink. So now the thinking is that maybe he buys out Trump, which in turn would give Trump cash. Then those properties could be sold, now that Trump is no longer attached to them. Certainly, Donald Trump could sell Trump Tower or 40 Wall Street. Those are basically debt-free, valuable assets. Trump is trying to sell his Washington hotel, but there do not seem to be any takers at the moment. I believe at some point in the future there will be.
As I wrote in my recent Vanity Fair article, what I've been hearing from people on Wall Street is that Trump could just do the obvious. Look at what Trump did after the 2020 election. He raised something like $300 million from his followers. Trump could also start a Substack site and have somebody write it for him. He doesn't even have to do it himself. He's got 72 million followers, so let's say 10 million of them agree to give him $100 a year. That is a billion dollars. And Trump could get that every year. He could easily begin to monetize these fanatical followers. That is the path of least resistance. And do not forget that Trump is a pretty lazy guy, so the Substack route makes sense.
Ivanka Trump and Jared Kushner, Trump's daughter and son-in-law, made at least $600 million during Donald Trump's presidency. This is a clear example of influence peddling and profiteering against the public interest. Is there any legal recourse to prevent this type of abuse in the future?
The whole Trump administration has been about abusing power, sucking up public money, and being confident that they will get away with it — and they have. I don't even know what to say about Jared and Ivanka. They are so keen on self-aggrandizement that they're completely divorced from reality.
At Vanity Fair you have written extensively about the alleged insider trading at the Chicago Mercantile Exchange, as well as other questionable financial dealings connected to the Trump administration. Should Joe Biden and Congress investigate these matters?
Absolutely there should be investigations. The FTC should be looking into these questions. The suspicious timing of so many of the trades at the Chicago Mercantile Exchange is well-documented. To me, investigations would be a necessary corrective and an important step in restoring the integrity of the markets, which should also include GameStop and insider trading among congresspeople. There are lots of ways to go about this. It will be a breath of fresh air if Gary Gensler does it. We certainly knew that nobody in the Trump administration was going to undertake anything of the sort, because they are all grifters.
With the benefit of more information and hindsight, what do you think the American people and the world will discover about the Trump administration? What is the big story not yet revealed?
Getting to the bottom — not of Trump's taxes — but of his balance sheet and financial projections. I have always wanted to see Trump's audited financials. I want to know who has lent him money, how much, and what he owes. I want to see it on one page.
That would be the revelation. That's when the American people and the world find out why Trump kowtowed to Putin and other dictators and oligarchs. Who has their hooks into Trump? Unlike every other president, Donald Trump did not put his assets into a blind trust. In keeping with his disruptive, chaotic approach to life, Trump ignored convention after convention and saw the presidency as the ultimate grift. Getting to the bottom of how much Donald Trump and his family stole from the American Treasury, and who around the world had their hooks into him and why, are the great unexplained mysteries of the Trump presidency.