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Krugman Warns Trump Allies Are Mounting a 'War on Financial Stability'

He argues that loosened bank oversight plus a policy push for stablecoins could set the stage for a 2008‑style shock.

Overview

  • In a Nov. 28 Substack column, the Nobel laureate says key figures in Congress, the administration, and parts of the Federal Reserve are dismantling post‑2008 safeguards.
  • He cites efforts to weaken the Fed’s bank‑supervision role, noting that interest‑rate decisions have remained insulated from pressure so far.
  • Krugman points to the GENIUS Act, passed in July, which promotes stablecoins that he describes as a lightly regulated substitute for traditional banking.
  • He contends Trump is unaware of these moves, assigning responsibility to allies and cronies driving the agenda.
  • The economist urges Democrats to prepare for potential fallout, emphasizing that his warnings are analysis rather than evidence of an imminent crash.