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This article appears in the June 2025 issue of The American Prospect magazine. Subscribe here.
There’s an economic principle named after a 16th-century British financier—Sir Thomas Gresham—who urged Queen Elizabeth I to clean up the sorry state of the national currency. Gresham’s Law states that “bad money drives out good,” and while Sir Thomas meant “bad money” in terms of coinage that didn’t carry the intrinsic value of gold or silver, the principle applies just as well to the business world. Simply put, honest companies have a hard time competing with dishonest ones.
This is intuitive if you think about it. An auto dealership that only sells lemons and lies about it will earn well above fair value for their vehicles. Snake oil doesn’t cost as much to make as a useful medication. Robbing your customers is more lucrative than making sure they’re satisfied.
If you accept this premise, then you should recognize that we’re about to see a lot of honest businesses either turn to the dark side or close up shop.
The first Trump administration didn’t pay much attention to white-collar civil and criminal enforcement, but this term is off the charts. Investigations into any business executive with even a passing relationship to Trump have been scotched, with beneficiaries ranging from the richest man in the world to the husband of the education secretary. Over 100 active enforcement actions have been either paused or dropped across the executive branch. In March, Trump donor Trevor Milton was pardoned after being sentenced for lying to investors; in April, Trump issued a corporate pardon to BitMEX, a crypto exchange that had pled guilty to failing to prevent money laundering.
Entire areas of the law, from prohibitions on U.S. companies bribing foreign countries to crackdowns on public corruption to bans on workplace discrimination, have essentially vanished. An orgy of deregulation, mainly benefiting corporate activities, is being planned. About $50 million in donations for Trump’s inauguration festivities came from companies under active federal investigation or lawsuits, and it’s hard to believe that any of those cases will see the light of a courtroom, or that any of those executives will be held accountable.
Most importantly, anyone who buys a product or secures a loan has been abandoned by their government. The consumer protection unit and (literally) the kleptocracy unit of the Justice Department will both be disbanded; the Consumer Financial Protection Bureau has been defanged (even if 1,500 of its workers have been temporarily saved by court orders); and two Democratic commissioners of the Federal Trade Commission were illegally fired.
Busting up the safeguards against rapaciousness and greed means that the bad money will drive out the good. Trump’s second term has sent up a giant flashing signal to every miscreant, thief, and bad actor in America that their moment is now. “All signs point to open season on anyone who would have relied on these kinds of protections to soften the invisible hand,” Rick Claypool, research director at Public Citizen, told me.
But where will the bad money lurk? What will it target? Who is at risk? We wanted to explore what to watch out for in a golden age of scams, what innovations will emerge in the exciting industry of parting people from their money. In this issue, we detail different critical segments of the economy—health care, higher education, energy efficiency, small-business sustainability—where financing is a hurdle and desperation can create opportunity. And we pay special attention to the most powerful beneficiary of a country without financial watchdogs: the president himself, who is now less the commander in chief and more of a crypto mogul and meme coin hype man who just happens to be able to sign bills into law.
It’s important to document where the next scams will originate, because unrestrained corporate misconduct has historically fueled larger catastrophes. “We have seen this movie before, when the mortgage crisis ripped a hole in the world economy,” Seth Frotman, former general counsel of the CFPB, said in a congressional hearing in March, “and the sequel may well be much worse than the original.”
Let these stories be both a warning and a call to action, to help avoid abusive practices and to learn about the presidential directives from whence they spring.
