The Trump administration is full of inexperienced and unqualified Cabinet members, and one has been in the news a lot recently.
Secretary of the Treasury Scott Bessent, who previously failed as a human and a professional before he got to the federal government, is managing to keep his track record going under Donald Trump.
In 1992, Bessent worked for billionaire George Soros’ Quantum Fund. While there, he convinced Soros that they could short the Bank of England by betting against the pound.
It’s a complicated market manipulation story extensively covered by The New York Times and by Sebastian Mallaby in the book More Money Than God.
It resulted in Soros Investments making $1 billion.
In 1992.
Sounds pretty successful, and it is, in a cutthroat way, but it resulted in increased loan interest rates and higher inflation for ordinary Brits. Thirty-four years later, Britain is still struggling to recover.
One billionaire and one advisor caused the economic suffering of millions.
Market analyst Gordon Johnson reported on X last week that, in 2000, “Scott Bessent left Soros to run his own hedge fund. It folded in 2005. In 2015 he tried again, this time with Soros’ loan of $2 billion. Assets peaked at $5.1 billion in 2017 and finished 2023 at $577 million. Institutional investors reportedly went from 180 to 20, a retention rate that would embarrass a gym in February. And in 2018, Soros — the man who staked him — took his chips off the table. “
So of course, the second Trump administration hired Scott Bessent to head Treasury. A man who cares little for others and who is famously bad at his job.
So, how’s our economy doing under Scott Bessent? According to US News and World Report, we are at risk of recession: fewer jobs are added each month, making the labor market weaker. Inflation is too high. The war of choice in Iran adds to economic jitters. Tariffs have raised import costs. Fewer people are borrowing money. GDP growth has slowed.
It’s called the “K” economy, where the rich get richer, and the rest of us can barely pay for gas and groceries.
Bessent made news this week for two things: interfering with the bond market and threatening Iran.
On Aug. 19, Bessent announced that Treasury would buy back more of its own bonds to stabilize the bond market, a move met with skepticism from economists.
The buyback would accelerate inflation and make borrowing more expensive. JP Morgan likened the move to “paying your mortgage with a credit card.”
The buybacks would increase the federal deficit, already at $40 trillion.
Bessent also announced a new proposal against Iran, “Economic D-Day,” which would place more sanctions on Iran and countries who do business with them.
And that includes China, our third largest trading partner.
Canada is our first, but Trump has destroyed that relationship. Now the Secretary of Treasury is threatening to do the same with China.
Historian and chronicler Heather Cox Richardson reports that economist Paul Krugman said, “I can safely predict that the Chinese will make sure that the Iranian regime survives, and that they will thoroughly enjoy watching Trump slowly twist in the wind over the Strait of Hormuz.”
And Chinese Foreign Ministry spokesperson Lin Jian has announced, “China will take all necessary measures to firmly safeguard its own rights and interests.”
What could possibly go wrong?
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