Max Chaffkin (2:10)

Well, it's. Stacey, there is one very, very positive economic indicator that we need to discuss.

Stacey Vanek Smith (2:15)

Yes, tell me. I want some positive economic indicators.

Max Chaffkin (2:18)

Life of a showgirl didn't new Taylor Swift album hitting on Friday. Tomorrow, as we record this today, as you listen, you know, Taylor Swift, obviously huge mega phenomenon, she. She crisscrosses the country raising hotel rooms.

Stacey Vanek Smith (2:33)

Hit pause on the podcast and just go listen to that.

Max Chaffkin (2:36)

No, but I mean, seriously, this is. It does feel like a big cultural moment. You know, Taylor Swift, obviously the biggest pop star on the planet right now. She's had this Amazing run.

Stacey Vanek Smith (2:49)

She's been mentioned in the Beige book as one know what that is? Forces that has moved local economies. When her concerts come through town.

Max Chaffkin (2:56)

That's what I was alluding to. Like the eras tour when it would hit a town. Like hotel room prices would go way up. You know, restaurants would sell more food. I think there were literal earthquakes that happened because people were moving around so much in these stadiums. So.

Stacey Vanek Smith (3:10)

So you're saying this is this moment is the shutdown versus Taylor Swift. Can she do enough to salvage the US Economy?

Max Chaffkin (3:18)

I'm saying the government shutdown, Donald Trump and Chuck Schumer, they all have their calculation about where Americans are going to fall and how much pain are people going to be willing to accept. But they haven't counted on the fact that everyone's going to be distracted for like the next month listening to this.

Stacey Vanek Smith (3:34)

Album and dissecting all the lyrics.

Max Chaffkin (3:36)

Indeed. That aside, Stacy, I mean, the shutdown is happening.

Stacey Vanek Smith (3:41)

Yeah.

Max Chaffkin (3:41)

And like this sense of chaos, political chaos that then kind of tries to spill into the business world, that's continuing this week and I feel like that's maybe where we need to start.

Stacey Vanek Smith (3:51)

Yes, indeed. And in fact, I was at the University of Michigan earlier this week. I got to drop in on economist Justin Wolfer's Econ 101 class, which was delightful. It's a class of 500 students and at the end I tracked some of them down and asked them how they were feeling about the economy and like what their worries were about the economy at this moment. Here's what they said. What scares you about the economy right now?

Max Chaffkin (4:14)

The cost of living. Like I have like a girlfriend and when we talk about like our future, it's like, are we going to be able to get a house or like what are we going to do? I think it's a lot harder for people to get jobs. I think that's just a bigger worry in a lot of students minds. I mean, I would agree.

Chase Business Card Announcer (4:29)

I've applied to a bunch of jobs.

Max Chaffkin (4:30)

Like Panera Bread and things like that, and I haven't heard back at all.

Stacey Vanek Smith (4:34)

I was originally given a pell Grant and then it got taken away. How? I don't know. Just like the current administration announced that they would be like repealing certain student. Your pell grant got taken away? Yeah, just literally gone. There wasn't a notification or email or anything. It just was gone. What scares you about the economy right now? I would have to say the tariffs. That's really terrifying because President Trump does state that the other countries will be Paying these taxes. But as we've also Learned in Econ101, American consumers will probably be paying a lot of the tax for it.

Max Chaffkin (5:06)

The cost of food.

Zeke Fox (5:07)

Remember, like, back in the day, like.

Max Chaffkin (5:09)

You could get a Candy Bar for.

Zeke Fox (5:10)

99 cents, and now the king size.

Max Chaffkin (5:12)

Candy bar is going up to like, $3, $3.50. Like at the same stadium, a bottle of water could be like five, six dollars.

Zeke Fox (5:18)

So what.

Stacey Vanek Smith (5:19)

Oh, is this when you guys go to games? Do you all go to games?

Max Chaffkin (5:22)

Yes. Yeah. Yes.

Stacey Vanek Smith (5:24)

Really? University of Michigan, Big ten school, they all go to the games.

Max Chaffkin (5:28)

You know what I love about that? Like, and I say love, but I mean, what I appreciate about hearing those voices. We live in an era defined by kind of like reality television and social media where, like, presentation is everything and our politics is playing out. And essentially on screens and you have these two sides, like, trying to spin stuff. But all these policies, all the stuff that's happening in the economy, it has consequences. And that, like that woman talking about the Pell Grant is. Is a consequence. I mean, sounds really bad. It sounds really tough. And I do wonder, as we think about how the consequences of this government shutdown that we're. We're entering right now are going to play out. Those are the kinds of stories that are going to define, like, how we experience it. Not. Not like what Trump says on tv, not what Schumer, whoever says on tv. It's going to be stories like that. And I don't know, I just feel like we have to keep talking to those people. So good job, Stacey.

Stacey Vanek Smith (6:26)

The teacher of these really lovely students is economist Justin Wolfers, and he is here today to talk government shutdown. Thanks again for letting me sit in on your class. And welcome.

Justin Wolfers (6:38)

Hey, Stacy.

Stacey Vanek Smith (6:39)

Justin, what did you think of what your students had to say?

Justin Wolfers (6:43)

Well, they're brilliant, aren't they? I think. Well trained, articulate, and I think it's so lovely to hear young voices engaging in our economic debates. We're fighting about the future, and that's who they are.

Stacey Vanek Smith (6:56)

A's all around. That's what I say.

Justin Wolfers (6:58)

Oh, you're for grade inflation now.

Stacey Vanek Smith (7:02)

But, Justin, we brought you on to talk about the government shutdown, that terrible moment when politics and economics meet, and it is a mess. And right now we are in the middle of a shutdown. Before we kind of jump into the more granular issues. What do you see as going on here?

Justin Wolfers (7:21)

Mostly politics. I understand that people's first instinct at a moment like this is to call an economist because it feels like a Big deal economically. I think the reality is, if we think about the macro economy, the ups and downs of GDP and unemployment and recessions and booms and stuff like that, it's just not that big of a deal. So for folks who are not working in or very closely with the government, what I think the appropriate status is is sort of disappointed parent.

Stacey Vanek Smith (7:50)

But 750,000 people are not working today because of this. That feels like a big economic deal.

Justin Wolfers (7:57)

Absolutely. Although, Stacey, there's 140 million people who are. And 140 million is substantially bigger than 750,000. We're probably talking about a matter of weeks rather than the full year. And so you start to do this sort of math, and it starts to become fractions of a percentage point. Look, two things are true, and I want to be really clear about it, and I thank you for drawing can be that something's not a major macroeconomic issue yet still is a dumb and horrendous and pointless waste. And were I president, it wouldn't change the reality that a billion dollars is both a tiny fraction of GDP and a ton of money. And wasting it for no reason whatsoever feels utterly, utterly pointless and utterly dispiriting.

Max Chaffkin (8:47)

So, Justin, you're saying it doesn't matter economically, or at least on a macroeconomic point of view. And I feel like Stacey and I talked about this. We've both been business journals for a long time. These shutdowns come with some frequency, Right. The last one was in 2018. We're constantly hitting the debt ceiling. And if you've been through this a few times, a dozen times, however many it's been, you basically just start to feel like, like this is, like they're going to get it figured out. This is a sort of a manufactured political crisis. The only thing that matters really, is who gets blamed. Right. I do wonder if this one is a little bit different, only because this is coming in a larger context, which is that the Trump administration has been since the beginning, since January, just trying in various ways to kind of kneecap parts of the federal government. Right. And to me, this really feels like an almost repeat of Doge, which might seem weird to say, but like we had during the first couple months of the administration, Elon Musk going around sort of purporting to close various federal agencies, laying people off. I think it's yesterday, as we record this, on Thursday, October 2nd, that. That the workers who took deferred resignations are, in fact leaving the government. It's like another hundred thousand workers. And when you listen to what the Trump administration saying. And we listen to what Russ Vote, the head of the OMB is saying. They see this as an opportunity not just to furlough workers, but to attack parts of the bureaucracy permanently.

Justin Wolfers (10:20)

Yes, so much there, Max. So full of ideas. Let me start with the first one. You're like, enough of the government shutdown. Who cares? The problem with that thinking is the thing that eventually ends the shutdown is people are like, holy cow, this is terrible. And it causes political pain for one side or other of politics that causes enough that it pushes them back to the table and they sort it all out. If we all sit around and take people like me seriously and say, hey, it's not that big of a deal, then actually it will never resolve. And so I think your point that we're all sort of a little bit indifferent. Well, battered, bruised, and used to large scale shocks to how the government works right now, this would have been outrageous six years ago. And you and I, I think our blood would have boiled. And this might be the 13th worst thing to have happened so far in October. That removes the urgency. And if you remove the urgency, that then creates the possibility that this one actually runs on a whole lot longer. So the Last one went 34 days. When I say government shutdowns are not a huge event, I should say one, we already shut down most of the government two days every week. So if we made it a third wouldn't be a big deal.

Stacey Vanek Smith (11:39)

So the government gets shut down right now, it's not that huge of a deal, macroeconomically and potentially, you know, thousands of people will lose their jobs.

Justin Wolfers (11:50)

Wait, Stacy, could we just hold up? Because I want to get the premise right. So what has historically happened is non essential employees are told not to do any work. The government remains shut down for two weeks, then non essential, and then the shutdown ends and they come back to work. And usually in every past case, Congress has passed a law saying, even though you didn't do any work for those two weeks, we're gonna pay you anyway. So no one historically was losing their jobs through this. And then there's the essential workers who keep working, but they keep working without getting paid, and then they'll get repaid later.

Stacey Vanek Smith (12:26)

Right?

Justin Wolfers (12:27)

So there's no job cuts that are essential to this. What this gets to, though, is Max's earlier point, which is this is a political escalation at the current moment. This one's different because normally presidents are embarrassed by their inability to keep the government open.

Stacey Vanek Smith (12:41)

Right? This is like a shameful moment. Like, oh, you couldn't get it together and make a deal again.

Justin Wolfers (12:45)

Right. And what we have is escalation. Certainly in claims. The president says he's gonna go after Democratic priorities. He's gonna definitely not collect the trash from outside Max's house. And so on this president saying, well, you guys are doing me wrong. I'm just gonna fight back. Sort of sounds like when my kids were 5. He has no new powers to fire people right now that he didn't have yesterday. So if there was whole departments he wanted to shut down, if he could do it, he could do it two days ago, and he could still do it in two days time. So the president's claim that this brings on an escalation, there's no structural change that creates that escalation. So the escalation, though, is that he would be taking advantage of the political moment, that somehow the press and the people would let it slide, that he's going to do something that in other times we would find repugnant.

Max Chaffkin (13:39)

You know, I spent earlier this year a couple of months reporting on Russ Vogt, who, I said head of the OMB, super interesting character. He wrote part of the Project 2025 thing. He was involved in the last government shutdown, in fact, and he was kind of like hanging behind the scenes with Doge, right? The. I described him as like, you know, I can't remember the words I actually used, but like the real MA mastermind or the ideological mastermind or something like that. And what's interesting is Vogt had been saying for like a decade basically, that if we could, we should just like cut all these woke agencies, defang the deep state, massively cut back on the government. And that that was like a political end in itself. And that's what we saw essentially with Doge a couple months ago, right, where. Where they did this and then discovered, oh, crap, it's unpopular. Elon Musk suddenly had people protesting outside of his dealerships. People were suddenly putting bumper stickers on their cars, you know, trading their Teslas in. People hated this because, you know, for all the times we sort of complain and grouse about the ways that the government doesn't work, like it actually does work pretty well. That was one of the things I think we learned with Doge. And now they're kind of trying to run it back, but this time blame the Democrats. And like you said, Justin, nothing's really changed from a legal perspective, although I'm sure there might be arguments to be made about, oh, maybe it's an emergency or Something like that. But really, this is about can we pin this on Chuck Schumer? And I don't know what the answer to that. I don't think any of us actually know what the answer to that. I'm not even sure Russ Vote Donald Trump or Chuck Schumer knows the answer.

Justin Wolfers (15:16)

I'm not a very good political scientist, so I'm far less interested in who we pin it on. Although that's ultimately gonna be what resolves us. Right? One side or the other will find the situation's not working well for them and it's better for them to end it. There's a deeper economics here, which is why was Doge a failure and why would the same logic fail at the current moment? So many of us have an image in our minds of the federal government as big and bloated and pointless. And last time I went to the dmv, I thought the person behind the counter might actually have been a sloth. There's a kids movie where it's a sloth.

Max Chaffkin (15:52)

Zootopia. Is it Zootopia?

Justin Wolfers (15:53)

It is Zootopia. Yeah.

Max Chaffkin (15:55)

I got three little ones. I've seen that movie about 20 times.

Justin Wolfers (15:59)

It's a wonderful movie. But yeah, you walk in and like literally the DMV is run by a sloth. And I've been in that DMV and the sloth isn't even cute. They're resentful and middle aged and slow moving. And we take that experience.

Stacey Vanek Smith (16:13)

What's wrong with that? I'm just kidding.

Justin Wolfers (16:17)

We take that experience and we project it on the rest of government. There's a few things to recognise here. First of all, most of our experiences with government, with these annoying offices, are actually state and local.

Max Chaffkin (16:26)

I was just gonna say, you're talking about a state agency. That's a problem from Michigan.

Justin Wolfers (16:30)

Absolutely. But we all have that idea. And that's why there's a strong current, particularly through Republican politics. Oh, let's run the government like a business or let's choke it, or let's get rid of all these useless employees. Which is what you're hearing a lot of. Right. That's the wrong model for the federal government. There's an old saying about the federal government. It's an insurance company with an army. What do I mean by that? The federal government. Most of its spending is on what we call insurance programs. It's unemployment insurance, it's Medicare, it's Medicaid, it's.

Stacey Vanek Smith (16:58)

And those are like not at issue here at all. I mean, those are mandatory things. That is Not. This is what always blows my mind about the shutdowns. It's not about the big stuff. You know, I looked into this. I got really interested in how big a share of the federal budget went to federal workers. And so I actually looked this up. And as it turns out, if you, if you count the military salary, benefits, everything adds up to about 7% of the U.S. budget. And if you don't count the military, it's about 5%. So this is a very small part of the budget. And then this, this health care subsidy, the thing that's become a big point of contention between the right and the left, these sort of extra subsidies that got rolled out during the pandemic to help people afford health insurance. I mean, that is like 0.2% of the budget. That's really little. And it's just, it really striking to me that so much is happening over something that is such a small part of the $7 trillion budget that we spend every year.

Justin Wolfers (17:53)

The federal government, it's a small share of the economy. Much of its function is printing Social Security checks. Those checks are still going to go out. There are important things the federal government does. Some of them will be shut down for a small number of weeks. Maybe. I just want to come back to this is not a macroeconomic moment. Every dollar we waste is a dollar we didn't have to waste. And it's all for political posturing. So it's as if we've just given several billion dollars to both Democrats and Republicans to spend on political advertising so they can yell at each other.

Stacey Vanek Smith (18:26)

And the billion dollars, is that the cost or what is the cost here?

Justin Wolfers (18:29)

It's going to be several billion, which again, is a real amount of money. I hate wasting a billion dollars. We could spend that billion building schools or feeding the hungry or giving tax cuts to people whose yachts are not big enough.

Max Chaffkin (18:42)

Gilding the White House.

Stacey Vanek Smith (18:43)

That's right.

Justin Wolfers (18:44)

We could probably gild another whole room with that. One part of the story we haven't told is the public servants, Right? These are real people who I teach. The other job I have, you started with my economic students. I also teach in the Ford School of Public Policy. These are bright young things in their early 20s who are answered Kennedy's call to ask not what your country can do for you, but what you can do for your country, who believe deeply and profoundly in public service and have gone off to school to become smarter at it, and can't wait to go back out there and serve the greater good. And they're being treated appallingly. They're being treated as if they're the public enemy for the generation of students I'm teaching right now, there may not be jobs for them. For the folks who are currently in the federal government, which includes many of my former students, they're being asked to go without pay for as long as the politicians decide. And that's the thing. I will just tell you, this is not being an economist. This is being a person. I find it utterly dismaying the extent to which we are using people as pawns in greater political games. And I've seen more of that since January of 2025 than I've ever seen in my life. And every time I see it, it churns my stomach a little.

Zeke Fox (19:58)

Wow.

Max Chaffkin (19:59)

Justin, thank you for being here.

Stacey Vanek Smith (20:01)

Thank you, Justin.

Justin Wolfers (20:02)

Thank you very much.

Max Chaffkin (20:04)

Foreign.

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Stacey Vanek Smith (22:31)

I E. S. Okay, Max, at the top of the show, you promised that we were going to hear about the most interesting man in crypto. It is time to deliver.

Max Chaffkin (22:39)

Yeah. But we need to back up. And I just need to explain a little bit about Trump and crypto, because I think that's what the big issue here is.

Stacey Vanek Smith (22:46)

Okay. I do feel like the first six months of the Trump presidency, there's been a lot of crypto news. Some of it I followed, some of it, not so much. So what is going on right now with Trump and crypto?

Max Chaffkin (22:57)

Yeah, this is an industry that Trump seemed to despise during his first term. It's also one that I'm sure most listeners know. Lots of controversy, lots of allegations, some big ups and big downs. And many of the leading lights, you know, going back a few years ago, were either criminally charged or convicted or the subject of SEC cases. And basically, Stacey, with a couple of exceptions, all those cases pretty much are gone now. They've been.

Stacey Vanek Smith (23:25)

Well. And the president has his own coin. Zeal of the converted.

Max Chaffkin (23:29)

Indeed. Yeah, he's. He's in the crypto business now. And there's an amazing Business Week story out right now that kind of explains this. It's focused on Justin sun, who is, like I said, this wild figure in the industry. He's the founder of the blockchain network Tron. We'll explain what that is in a second. He owns that big, famous banana, or the banana that was duct taped to the wall.

Stacey Vanek Smith (23:52)

Oh, the art piece. Is he the guy who ate the banana?

Max Chaffkin (23:55)

He ate the banana. And the best thing about this story is that it was written by our colleague Zeke Fox, who wrote a book about crypto. It's called Number Go Up. It's really like the best book that I've read on the subject. Zeke is basically an expert in all kinds of financial chicanery. He covered all those ups and downs that I mentioned, and I wanted to talk to him and try to understand the story and why all these guys who I thought of as controversial figures, who would never find themselves in a room with anybody close to the presidency, are now in positions of power. What do they want? What does it mean for our country?

Stacey Vanek Smith (24:31)

So this story is called A Crypto Billionaire's Path from Pariah to Trump Money man. And Zeke wrote it with Moyao Shen. Max, take it away.

Max Chaffkin (24:40)

Zeke, thanks for joining us.

Zeke Fox (24:42)

Thanks, Max.

Max Chaffkin (24:43)

So you and I, I think, have covered aspects of this world for a long time. I thought of you always as like an expert on the. On financial scams, of which there are many in the world of crypto. And I had kind of gotten interested because of tech and politics and the way that crypto guys were trying to be influential and. And Justin sun kind of fits into both of these worlds. He was sued by the SEC in 2023, accused of him selling unregistered securities, of manipulating the market for tokens. And Tron, he denied wrongdoing. But then also, and this is where things get kind of interesting, the suit was paused after sun happened to pay $75 million. That's a lot of money to a company controlled by the Trump family. And at some point, he also invested $15 million. So for those keeping track at home, that's 90 million total in Trump's mean coin. We're not sure of the timing there. Maybe it was before or after the. But either way, after this big initial investment, Justin sun and the Trump family go into business together. Did I get all that right, Zeke?

Zeke Fox (25:48)

Yeah, as long as we're just very strict on the. We're talking about time here, son. First invested $90 million in Trump coins and then the lawsuit was paused. We don't know why exactly.

Max Chaffkin (26:04)

I'm just kind of curious. As somebody who had kind of followed these figures in crypto for a long time, Justin sun being kind of an important figure in this world, were you surprised when he just, like, showed up in Trump world, you know, when he appeared at this event in Arlington and like, gave a speech next to Trump?

Zeke Fox (26:23)

Yes and no. Within crypto, sun is infamous. As lawyers for Coinbase, the biggest US Crypto company, once said in court, he's kind of mysterious. Like, people aren't quite sure how rich he is or how he made his money, but he's really out there. He loves publicity stunts. He commissioned a theme song for his blockchain Tron, by the Oscar winning composer Hans Zimmer. He paid millions of dollars to have lunch with Warren Buffett, try to pitch him on crypto. It did not work.

Max Chaffkin (27:00)

Yeah, Buffett, not a fan of crypto.

Zeke Fox (27:01)

In general, hates crypto. And he, he ran for prime minister of the libertarian microstate Liberland.

Max Chaffkin (27:10)

Right. Which As I understand that somewhere in the Balkans. Is he. Is he the Prime Minister?

Zeke Fox (27:15)

He's the Prime Minister.

Max Chaffkin (27:16)

Right. Okay. And he likes to be referred to as yous Excellency. He has a title to that effect from Grenada.

Zeke Fox (27:22)

Yes, the title comes from Grenada. And this was because he was appointed their ambassador to the World Trade Organization.

Max Chaffkin (27:32)

I'm going to take a wild guess of how you get that appointment.

Zeke Fox (27:35)

So at the time, it has since come out that there was kind of a scandal there and diplomatic posts were for sale for $150,000. We asked sun how he got his post, and his lawyer said there was no impropriety.

Max Chaffkin (27:54)

Okay. So sun is this larger than life figure and like. And like you said, you know, he's sort of everywhere and nowhere in crypto. I think over the last, like, 10 years or so, this company, Tron, was at the center of this SEC thing that was dropped. It's his main thing. Like, what is Tron?

Zeke Fox (28:10)

Yeah. So Sun's been around since the 2017 ICO boom.

Max Chaffkin (28:15)

Initial coin offering.

Zeke Fox (28:16)

Yes. And this was like the first crypto bubble, when it seemed like anybody who just said the word blockchain could raise tons of money for whatever. The pitch was, like, pretty vague. It was going to be like a new decentralized Internet. It was going to be for content, it was going to be an app store. But at that time, it didn't really matter. And sun had kind of a following from his podcast in China called the Road to Financial Freedom Revolution. And so he raised, I think, $70 million or so for Tron in this ICO, despite the kind of vague pitch. And what Tron is, is it's very similar to other blockchains. So if you only think of crypto as like a replacement for dollars, that's kind of like a outdated vision of the industry. And a blockchain is kind of like a.

Max Chaffkin (29:15)

It's a ledger. The thing. The thing you usually hear is that it's a distributed ledger. It's like a way of keeping track of payments. But there are lots of people who think it could be useful for other things, like tracking inventory or something like that. I think that's the explanation and the one that is used when people are trying to explain why crypto isn't just a bunch of guys essentially trying to pump up worthless currencies.

Zeke Fox (29:41)

Yeah. And Tron has become. There's one particular thing that it's mainly used for, which is a stablecoin called Tether, just sort of like a digital dollar. And often when people transact in Tether, they're using Tron to do so.

Max Chaffkin (30:01)

So, and, and Tether is used by people who are investing in cryptocurrencies. It's also very, very useful for people who are trying to move money around without it being noticed. So that could be like money launderers, criminals, terrorists, and so on.

Zeke Fox (30:16)

Yeah. In the last, like, few years, word has definitely spread around the criminal world that there is this cool new way of moving money from person to person that does not involve revealing your identity.

Max Chaffkin (30:33)

Right. And a bunch of disclaimers here. Number one, Pretty much everyone in the crypto industry, when, when, when people point this out, will say something like, you know, US Dollars are used by money launderers and drug dealers. No one is trying to get rid of the US Dollar. Does it make the Federal Reserve complicit in drug dealing? We are trying to stop illegal activity. This is just like kind of a bad thing that's happening. And then the last thing they bring up is that, you know, many of these currencies are decentralized. Like, we don't even control, like, what is happening on this network really.

Zeke Fox (31:08)

They try to say, like a blockchain, like Bitcoin or Tron. It's like the protocols that power email or websites.

Max Chaffkin (31:15)

Right, right.

Zeke Fox (31:15)

We don't see anyone going after them.

Max Chaffkin (31:18)

Just technology.

Zeke Fox (31:19)

Yeah. Tron and Tether formed a. The T3 Financial Crime Unit. And they've said that even though it's just technology, we don't want people doing bad things here. We're going to try our best to root out crime.

Max Chaffkin (31:34)

So just, just to take a few steps back from the sort of questions around Justin sun, he was part of this larger, essentially like, bromance between Trump and the crypto industry. It started, you know, sort of mid campaign last year. I believe it was like July at the bitcoin conference. And I think the conventional wisdom for why Donald Trump, a populist who had in, in the past, said that he, you know, thinks crypto is terrible, he prefers the dollar, you know, in all sorts of ways. Doesn't seem like the kind of guy who would want to embrace crypto. The conventional wisdom, I think, for why he embraced it is basically money that this is a big class of donors and they were all writing him checks. And, and as a result, you had this kind of confluence where, where Trump took a lot of crypto money, he got into the crypto business, and he's also been changing policy and, and making and, and causing the SEC to, to drop cases such as the one that Justin Sun's involved in. If you had to make a case for, like, why Trump would embrace crypto at that moment, like, what is the case for doing it outside of donations? Just, like, trying to please donors? Like, is there any way that what these guys are offering either for the American economy or for the global economy somehow, like, fits Trump's agenda?

Zeke Fox (32:55)

I mean, the Trump argument is that the traditional players in the financial system have been discriminating against conservatives. They've been cutting off bank accounts of people like the Trumps because of, like, the perceived risk of dealing with them.

Max Chaffkin (33:12)

Right. This is the decentralization thing. Maybe you can't stop money laundering as well as you could if it were centralized, but you also can't discriminate against ideological viewpoints.

Zeke Fox (33:21)

Yeah. I think that Trump, he has a lot of respect for other rich people and that in the past, he may have thought that crypto was not real money and that these people were not really rich. But then once he saw that they had lots of real money in addition to cryptocurrency, he was like, all right, they seem like my kind of guys. Maybe we should hang out. Like, if they're buying memberships at Mar a Lago, they're donating to his campaign.

Max Chaffkin (33:45)

I also feel like there's something about Justin's son that's kind of Trumpy. Like, he's totally this, like, self created per who's like, using, like, all of these tools to sort of create an image. Like, you brought up the Hans Zimmer theme song for his company, which is funny. Like, what company needs a Hans Zimmer theme song? I almost want to hear it kind of coming up in the background as we're discussing it. Have you heard the theme song?

Zeke Fox (34:13)

I definitely have, but don't. I cannot describe it properly.

Max Chaffkin (34:17)

And then, you know, he bought this, this piece of art, the banana that had been duct taped to the wall. You brought the Buffett lunch. He basically, like, if there's any way to signal status or to use money to signal status, Justin sun has gone for it.

Zeke Fox (34:30)

Yeah, I mean, actually, it's kind of funny because, like, Trump, he's willing to sell any sort of, like, status symbol that you want as long as it's like a Trump status symbol. Like, he's like, pay me money and you can live in a Trump apartment or you can wear a Trump watch or whatever. And son is like, the perfect customer because he loves to spend lots of money on things that might make him look rich or important.

Max Chaffkin (34:55)

He got a Trump watch.

Zeke Fox (34:56)

In fact, he got a Trump Watch. He actually played a really key role in Trump, the Trumps getting into the crypto business. So Trump gave this speech. He said, you know, I love crypto. I'm going to deregulate the industry. It's going to be great. Everyone liked that. And then a few weeks later, Trump said, and I'm going to get into the crypto business myself. I've got this company called World Liberty. And the crypto industry, a lot of people were like, oh, man, this is like you're in it for the wrong reason.

Max Chaffkin (35:26)

Right.

Zeke Fox (35:26)

We thought you just, like, wanted to decentralize things. We didn't think you were trying to make money off of us. And so the sales of Trump's first cryptocurrency were really slow. It was looking like the project might not get off the ground. They'd set out to sell, like, hundreds of millions of dollars of these tokens, and they'd only sold a couple million. And sun stepped in and bought initially $30 million in one go. And this, like, got a lot of momentum for the Trump project. Son got named an advisor to World Liberty, and it kind of put him right in the. In the Trump's orbit.

Max Chaffkin (36:09)

And son, in addition to this money that went into World Liberty, he also bought one of the Trump Meme coins. It's another payment that effectively goes to companies controlled by the Trump family. I feel like I have to ask the question that, like, everybody is thinking, but maybe everyone is afraid to ask, which is, first of all, Justin Sun's born in China. He is not allowed to make political contributions to political candidates. You're also not, I don't think, allowed to just say, hey, I'm going to write a $75 million check to help with an SEC problem. How is this not improper? I mean, he's. He's making a payment to Trump's or many payments to Trump's family and also getting a bunch of policy considerations.

Zeke Fox (36:55)

Yeah. I think Trump has made it very clear that he sees nothing wrong with accepting payments or his family accepting payments from people who have business before his administration. And for this to be illegal, you'd have to prove that favors had been done in exchange for these payments. I mean, absent that proof, they can just say, hey, you know, sun really wanted to buy these coins. He thought they were good investments. And then Trump has, you know, said, I want to deregulate crypto because I see it as the future of money. And this case against sun was just one of many lawsuits the SEC had filed. I want. I'm instructing them to toss all of them. So it's not hard to find examples where there's a conflict of interest. But so far, I haven't seen anyone who's nailed down something where they've proven that, like, a particular action was taken because of a particular payment, which is like the current standard for what constitutes corruption.

Max Chaffkin (38:07)

Well, and like you said, Trump just blends his personal identity and his political identity. It's all kind of tied up together. And I feel like this story and this guy is just like one example, maybe the best example of how Trump is changing, you know, the presidency.

Zeke Fox (38:26)

There's something that Trump said, and this was about the $400 million jet that his administration was accepting from the government of Qatar that I think illustrates his attitude. And he said, I could say no, no, no, no. Or I could say thank you very much.

Max Chaffkin (38:51)

Okay, Zeke, to finish up here, we said at the beginning that Tron is decentralized, but in August, the Bloomberg Billionaires Index published an accounting of Justin Sun's assets. That accounting, and I'm pulling this from your story, was based on material that had been provided to Bloomberg by Justin sun had all a bunch of his assets, including his art collection, which I believe is worth 55 million, his plane and Airbus 200 million, and then this crypto wallet. And using this crypto wallet, Bloomberg calculated that sun had 60 billion Tron tokens, which is a majority of the supply. And he's suing Bloomberg over this?

Zeke Fox (39:33)

Yes. So after Bloomberg Billionaires published this valuation, sun sued in federal court in Delaware, and he claimed that this report included details that he'd been promised wouldn't be in there. Something Bloomberg has denied. And he said that listing his crypto holdings put him at risk of hacking or kidnapping. And he also said that the list of holdings that he provided to Bloomberg mistakenly included wallets that did not belong to him and that he does not in fact, own a majority of Tron's tokens. But when Bloomberg went to ask him which of these holdings are not actually yours, to get a little more detail on what he was saying, they did not respond. We've published our story. The lawsuit is still pending.

Max Chaffkin (40:43)

Zeke Fox, thanks for being here.

Zeke Fox (40:45)

Thanks, Max.

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Max Chaffkin (43:16)

All right, Stacy, the underrated part of the show. You're going to love this story.

Stacey Vanek Smith (43:21)

Okay.

Max Chaffkin (43:21)

I feel like this is going to be an economic indicator that is meaningful to you.

Stacey Vanek Smith (43:26)

Okay, shoot.

Max Chaffkin (43:27)

Okay, I'm joking because I know you hate it, but this is a story in Bustle. The headline is Even the Sugar Daddies are feeling the Squeeze. And it is about how the economic forces that we have been talking about on the show, the Vibe session, are impacting this sector of the economy, the sugar daddy sector of the economy, essentially, where wealthy men are essentially paying women to be their girlfriends. These men are feeling less wealthy, these sugar daddies and they are cutting back and they're the article suggests that people in this world have a new term to describe them splendid daddies, because they're so cheap. Because, like, Splendid is kind of a crappier version of Sugar. And so basically this is the Vibe session, but playing out in the world of sex work book.

Stacey Vanek Smith (44:18)

Right? Okay. Well, I obviously care about these issues a lot. I wrote a book about women in the workplace, Machiavelli for Women. And what this makes me think of immediately is, you know, for most of history, like women's economic opportunities was this attaching themselves in whatever way they could to a man because that was the only way to earn money or one of the only ways to earn money. I find it a little distressing that that still exists. But we still have, you know, like, a gender pay gap is still a really serious thing. So I just see when I hear these stories, I just feel like the economic limitations of women in the economy have not gone. Like, it makes me sad. I just feel like Bustle should do better because it's supposed to be a feminist publication, and women are having a hard enough time in this economy right now. Women, the participation in the workforce has. Has gone backwards recently for the first time in a long time, because childcare expenses have gotten so high and women's earning potential is lower than often their male partners or whatever husbands. And so if there's a. If it's a couple, often it's more economically feasible for the man to work and the woman to stay home. These are all the things going through my head right now when I hear about sugar daddies. I just feel like it's a very old profession, finding a rich boyfriend. But I just feel like of all the professions, you don't care. It is the hardest thing.

Max Chaffkin (45:45)

Like, of all the economic stories, the fact that these guys are, like, cutting back on their spending. We shouldn't be talking about it like, we should be talking about something else other than the. The tough times and sugaring.

Stacey Vanek Smith (45:59)

Well, I just think it's alarming that this is still a career path for women. I'm surprised and saddened that Bustle would cover this.

Max Chaffkin (46:08)

So, yeah, Stacey. And when we talked about this offline, it was even more. Stacey is sort of being gentle right now that she had some.

Stacey Vanek Smith (46:15)

I've had some time to digest it, so.

Max Chaffkin (46:18)

But one thing I wanted to say about this story is that the story is sort of premised on the idea that this is like the Vibe session. So you have these guys who are like. I think the. The lead anecdote is like a tennis coach. He's not able. He doesn't have as many clients. Right. People are cutting back on their tennis lessons. Therefore, he's cutting back on his expenses and essentially sending his girlfriends less money. And, and, and so, like, that is one possible explanation. The other possible explanation that the story suggests and that some of the women who are in this world put forward is that these guys are just cheap. And that it's not that the economy is bad, it's that like dating websites, it's that there's like a market problem.

Stacey Vanek Smith (47:01)

I would find it funnier if I felt like the stakes were lower. I just feel like the stakes are high, you know, like a lot of women are single parents. A lot of households count on women. Women live a long time. I just want to see women able to thrive in this economy. But I don't know.

Max Chaffkin (47:18)

I agree.

Stacey Vanek Smith (47:19)

Do better. Do better. Report on something else. The show is produced by Stacey Wong. Magnus Henriksen is our supervising producer and Amy Keen is our executive producer. Kelly Guerra handles engineering and and Dave Purcell, fact checks. Sage Bauman heads Bloomberg Podcasts. Special thanks to Jeff Muskus, Julia Rubin and Maria Lang. If you have a minute, please rate and review the show. It means a lot to us. And if you have a story that should be our business, please send us an email. Everybody'sloomberg.net that is everybody's with an slumberg.net we'd love to hear from you. Thank you for listening and see you next week.

Max Chaffkin (47:55)

Yeah, send us stories you hate too. We'll talk about those.

Stacey Vanek Smith (47:58)

We're fine. We're good with that. We want to hear stories you hate. I can troll Max with them next time if he wants to. To talk about sugar daddies.

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