By Hamilton Nolan

The White House will now allow retirement savers to invest in extremely risk and opaque crypto and private equity assets in their 401(k) retirement accounts. These sorts of investments had previously been banned. Why? Because they are risky and opaque and that is bad for retirement savers. Why will they now be allowed? Because both the private equity industry and the crypto industry are always in danger of suffering declines when enough money stops flowing into them, and opening the door to 401(k) money is a faucet of many hundreds of billions of dollars that will continue to keep valuations in those industries high. The shit that the smart investors would not pay for will now be packaged, branded, and sold to regular people who do not know any better. Who will benefit? Private equity firms, dumping their shitty stuff onto the public, and crypto firms, with a bigger pool of buyers for their worthless products. Who will lose? The public. 

These predatory industries have paid the Trump administration enough money to win support for this. That’s about it. Longer explanations are mostly bullshit.

Major banks have now decided to allow crypto to be used as collateral for loans. This sets the stage for a rapid collapse in crypto prices to spread its harm much more broadly throughout the financial system. Do you remember when, shortly before the 2008 financial crisis, the CEO of Citigroup famously said, “As long as the music is playing, you’ve got to get up and dance”? I don’t know why I just thought of that. 

Nations have governments. Nations are full of people. The government and the people are two different things. The failure to take this distinction seriously lays the groundwork for much of the world’s suffering. 

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Some governments are better and some are worse. What is the relationship, morally speaking, between the government of a nation and its people? You already know the answer to this question. When the country in question is your own, you understand this distinction perfectly. If you live in America, your government is run by Donald Trump. Ugh. You might despise that guy. You might have worked hard against him during campaign season. When you visit another country, and tell them that you are American, you might add, “But don’t judge me!” You would not want to be branded with the weight of the various stupid and despicable actions of your own government. You understand, first, that you do not agree with those things, and second, that you as a regular person have little power to affect those things. You are just living your life. You want to be respected as a human being.

Unfortunately, this simple and intuitive understanding of the difference between the government and the people of your own country often evaporates—or gets erased—when the discussion turns to foreign countries. When someone says “Russia,” you probably think of Putin, not of the teenage girl dreaming of what she will do after graduation. When someone says “Iran,” you probably think of something that is often referred to as “the regime,” rather than of the laughing family gathering for a holiday meal. This mental mistake, this unwitting juxtaposition of one thing for a different thing, is like a steamroller that paves the way for you to accept unacceptable things. You would never nod sagely and agree that a bomb should be dropped on a child. But air strikes to “cripple” the “command and control” of a “hostile regime?” Well, of course, serious people understand that this may be necessary in the grand chessboard that is geopolitics.