The Three Dangers Threatening the United States

For the next week or so, I will be putting my attention elsewhere and won't have time to post here. But I'll return to this blog as soon as I can. In the meantime, I want to provide a few thoughts about what I believe to be the three greatest dangers that our country is currently facing. There is a bit of overlap among these, and none of them can be covered to the extent that they deserve in a post of this length (or, more accurately, shortness). I have previously touched on all of them as well. But to get to the point, the three great dangers that I see facing the United States are cryptocurrency, artificial intelligence, and political autocracy.

The dangers of cryptocurrency are not really the currencies themselves, but the side effects of them. The original vision of cryptocurrency, at least as I understand it, is that it would create a currency that was not controlled by governments. The philosophy of cryptocurrency supporters was aligned with the thinking of libertarians who valued freedom from government. Implicit in this thinking is that cryptocurrencies would actually be used. Individuals would be able to buy things with the currencies just as they do using U.S. dollars. Increasingly, however, cryptocurrencies have become vehicles for investment. In very simplistic terms, there are two types of investment. In one, the investment makes steady, though perhaps modest, returns. These returns could be in the form of dividends, for instance. Alternatively, the goal of the investment is profit from the increasing value of the asset. In other words, buy something at one price, wait for the price to go up, and then sell it. Monthly dividends are generally not much of a concern in this case. Almost exclusively, cryptocurrency investments are the second type. Cryptocurrency investors hope to buy low and sell high, but they don't really plan to use the currency as actual currency.

In general, cryptocurrencies have no real backing. Forget something like the gold standard; these currencies are no standard. Someone mints a coin, sets a price, and hopes that there are enough suckers — sorry, I mean investors — to buy it. If there are, the value of the currency will increase, creating wealth, at least on paper, for the original investors. This is literally the creation of money out of thin air. The only rational basis for such an investment — if you can call it that — is the belief that the value of the currency will go up. The investment is not based, for instance, on the hope that it will lead to the discovery of a life-saving drug or a new invention that will increase labor efficiency or be a consumer success. There is only the hope that there will be a continued supply of air to keep inflating the balloon. Therefore, the most important driver of cryptocurrency value is perception. If investors perceive that a currency will increase in value, they will consider it to be a good investment. As a result, the reputation and resources of the creators of the currency gain outsized importance. One of the best examples of the absurd nature of cryptocurrencies was the $HAWK memecoin. This was created by Haliey Welch — the "Hawk Tuah Girl" — who had become a celebrity overnight due to her description of an oral sex technique. Her popularity attracted enough investors for her memecoin that the market capitalization immediately reached $500 million. But, almost as quickly, sell-offs of the coins caused the value to collapse, essentially wiping out anyone who didn't get out in time. The main point here is that the magic of cryptocurrency is that you can create $500 million in value out of nothing more than publicly explaining that you use spit as a lubricant.

There are two clear dangers this phenomenon presents. The first is that, as in the case of $HAWK, naive investors will get wiped out. In principle, I have no problem with a fool and his money being separated. If you are stupid enough to believe that the Hawk Tuah Girl is worthy of your investment dollars and you then get rug pulled, that's your bad luck. It sucks to be you. But, all too often, and the bigger the loss the more likely it is, this becomes everyone else's problem. Taxpayers have to step in with a bailout. Though, so far, not in this case. The bigger problem is that this method of wealth creation has led to huge fortunes in a small number of hands. That money is being used to influence our political system. The cryptocurrency industry has spent millions of dollars on political campaign contributions, becoming such a factor that politicians are afraid to vote against the industry's wishes. Just recently, a number of Democrats voted with Republicans in the Senate to approve the GENIUS Act that would benefit the stablecoin category of cryptocurrencies. This bill actually prioritizes stablecoin owners over banking account holders in the case of a financial collapse. All of us with our FDIC-insured bank accounts will be standing in line behind stablecoin holders hoping that the funds don't run out first. This is what money made from air buys you.

I wrote an entire post about cult leader, convicted felon, and failed President Donald Trump and cryptocurrency. For Trump, cryptocurrency has supercharged his corruption. As my post explains, Trump has utilized almost every aspect of cryptocurrency to increase his wealth. Trump has literally auctioned off meetings with him to the biggest investors in his own cryptocurrency. We have a President who is completely committed to cryptocurrency corruption and a Congress that is almost fully controlled by the same industry. The threat that this presents to our democracy cannot be exaggerated.

The next major threat is artificial intelligence. Perhaps not surprisingly, this involves some of the same players as cryptocurrency. Also, not surprisingly, some of the same dangers have resulted. It is my belief, and I am certainly not alone in having this belief, that AI will not live up to its expectations anytime soon. Like cryptocurrencies, AI has led to huge inflations of wealth on paper. While AI companies generally have some assets, those assets come nowhere near the inflated market capitalizations of most of the companies. In a financial crisis, investors would lose out and lose out in a big way. However, these companies are rapidly reaching "too big to fail" stature. Or, at least too politically powerful to allow to fail. AI companies, like cryptocurrencies, are surviving on hype. The more that they can convince the public that AI is the future, the more they can keep their asset bubbles inflated. But, if AI fails to live up to its hype — more "when" than "if" in my view — taxpayers will likely be left holding the bag.

AI companies are also turning their financial strengths into political power. They came very close to including language in the One Big Beautiful Bill Act that would have prevented states from regulating AI for 10 years. In a time that the U.S. DOGE Service is taking a chainsaw to government spending, AI firms are receiving new government contracts. Grok, for instance, which just last week declared itself to be MechaHitler, was just awarded a $200 million contract by the Pentagon. AI companies, through mechanisms such as DOGE, are destroying governing institutions which — regardless of whatever shortcomings they may have had — generally worked, and replacing them with unproven AI systems. In addition to government, other industries such as healthcare and the financial sector are placing their futures in the hands of AI. If AI collapses, it is not only going to bring down the AI companies, but will impact government and these other industries as well. It is not an exaggeration to say that our entire economy is increasingly balanced on a very fragile asset bubble that could pop at any moment. Even worse, the bubble could not pop, but simply continue to expand and become even more dangerous. Every day that the bubble expands is another day that wealth is being further accumulated into a limited number of hands, and those hands belong to individuals who don't necessarily have our best interests at heart.

The final danger is one about which I have written frequently. Indeed, this entire blog was transformed to focus exclusively on this threat, which is autocracy. That Trump desires to be a dictator is not something that should require much explanation. His vision of rule is to sign executive orders and other documents that dictate law. Congress has become nothing but a rubber stamp for the limited use he has for the institution, and increasingly, the Supreme Court is behaving similarly. As Trump rules by Sharpie, Congress and the Supreme Court look on meekly, doing nothing to retain the checks and balances on which our political system is based. What was once "rule of law" is being transformed into "rule by law" in which the law is no longer aimed at achieving justice, but rather a tool for control. If you are a law firm that has offended Trump, a university that has not bowed low enough to the President, or a media company whose coverage of the administration has, however briefly, not been overwhelmingly flattering, Trump will use the force of law to punish you. Like Louis XIV, Trump believes that "l'état, c'est moi". How many times have we heard Trump comment that a foreign leader had been nice to him? Not being idiots, foreign leaders now show up at meetings with Trump prepared to offer golf courses or resorts in their countries, promises to nominate him for a Nobel Prize, or — at a minimum — loads of praise for Trump's brilliance. It is not national interests that concern Trump, but rather personal interests. By the same token, the periodic cabinet meetings that consist of nothing but department secretaries taking turns recounting Trump's greatness would probably shame even Kim Jong Un.

Trump is quickly gathering all the tools necessary for autocracy. As I said, he has cowed the other branches of government. Through the work of DOGE, information systems are being consolidated to give an unprecedented look into the private lives of Americans. In addition, thanks to the One Big Beautiful Bill, which is now law, he has funding for his own private Gestapo. Immigration and Customs Enforcement (ICE) will soon be the largest federal police organization in the country. Their methods of operating without warrants, avoiding due process, and facing little to check their activities — all the while hiding their identities behind face coverings and a lack of uniforms or badges — make ICE the epitome of a secret police force. An expanded ICE is likely to soon be occupying a number of Democratic cities in the way that they are currently doing in Los Angeles. Trump has already successfully tested the deployment of National Guard troops and U.S. Marines to cities. Moreover, Trump has recently taken an interest in the voting rolls of states and cities. In the name of fair elections, Trump will likely be interfering on behalf of Republicans to ensure their electoral victories. The threat Trump presents to democracy is not theoretical. It is real and it is happening today.

Our country currently faces a confluence of dangers as cryptocurrency and AI — two industries primarily supported by financial bubbles — artificially create wealth that is placed in a limited number of — and often the same — hands. The money created in these industries is used to corrupt our political system and directly support the autocratic tendencies of our current President, who is simultaneously gathering the tools necessary for dictatorial rule. While many are aware of these dangers, far too many have sought to personally benefit from the situation rather than confronting the unwelcome reality.