Reckless Deregulation Risks Repeating the Devastating 2008 Financial Crisis

Tomorrow, Scott Bessent, a prominent financier, will take the stage to address the state of our financial system, a moment that carries weight far beyond Wall Street’s trading floors. His speech, scheduled for 10 a.m., arrives at a time when the foundations of economic stability feel more like shifting sand than solid ground. For those of us who value fairness, accountability, and the public good, Bessent’s words are a clarion call to confront the reckless deregulation championed by the current administration. The stakes couldn’t be higher: our financial security, our savings, and the dreams of millions hang in the balance.

The global economy in 2025 is a house of cards, battered by geopolitical storms, soaring debt, and the relentless march of inflation. Banks, we’re told, are stronger than they were before the 2008 crisis, with thicker capital cushions and sharper oversight. Yet the cracks are visible. Rising interest rates choke borrowers, geopolitical tensions choke trade, and the siren song of deregulation threatens to unravel decades of hard-won protections. Bessent, with his deep ties to markets, is uniquely positioned to sound the alarm, and his perspective could shift the narrative away from blind optimism toward sober reality.

For advocates of economic justice, this moment feels like a crossroads. The Trump administration’s push to slash regulations, epitomized by its audacious '10-for-1 Order,' prioritizes corporate profits over the public’s welfare. This isn’t just policy wonkery; it’s a direct threat to the guardrails that keep banks from gambling with our futures. As families struggle with rising costs and shrinking savings, the idea of loosening oversight on the same institutions that crashed the economy in 2008 feels like pouring fuel on a smoldering fire. Bessent’s speech could be the spark that reignites the fight for accountability.

What’s at stake isn’t abstract. It’s the single mother who can’t afford her mortgage because interest rates have spiked. It’s the small business owner priced out of loans by banks chasing bigger profits. It’s the retiree whose savings are eroded by inflation that policymakers seem powerless to tame. These are the voices drowned out by the drumbeat of deregulation, and they’re the ones we must amplify. Bessent’s platform gives him a chance to speak truth to power, and those of us who believe in a fairer system are watching closely.

The case for deregulation sounds seductive: free the banks, unleash innovation, and watch prosperity flow. Supporters of the administration’s agenda argue that red tape stifles growth, that banks need flexibility to compete in a cutthroat global market. They point to the resilience of banks in 2024, with strong balance sheets and steady profits, as proof that oversight can be scaled back without consequence. But this is a dangerous illusion, one that ignores history and the fragility of our current moment.

Look back to 2008, when unchecked greed and lax oversight brought the global economy to its knees. The Dodd-Frank Act, born from that wreckage, imposed strict rules to prevent another catastrophe. It required banks to hold more capital, stress-test their vulnerabilities, and prioritize consumers over reckless bets. Those reforms worked. European banks, bolstered by similar measures, now boast capital ratios far above minimums, a testament to the power of regulation done right. Yet the administration’s plan to gut these protections risks repeating the mistakes of the past, all for the sake of short-term corporate gains.

The evidence is stark. Global debt now exceeds 256% of GDP, a ticking time bomb that demands vigilance, not complacency. Rising U.S. Treasury yields, recently surpassing 4.5%, have jacked up borrowing costs, squeezing families and businesses alike. Emerging markets, already battered by capital outflows and currency swings, face even graver risks as geopolitical tensions disrupt trade and investment. In this environment, loosening the rules on banks isn’t liberation; it’s lunacy. Bessent’s speech could underscore this truth, rallying those who see regulation as a shield, not a shackle.

Then there’s the fintech frontier, where the administration’s lighter touch on digital currencies and AI-driven finance raises red flags. The shift toward a crypto-friendly stance, with an executive order pushing for a federal framework, sounds progressive but lacks teeth. Without robust oversight, stablecoins and digital assets could become tools for fraud or financial crime, as seen in past crypto scandals. The EU’s Markets in Crypto-Assets Regulation, by contrast, sets a gold standard with strict transparency and consumer protections. Why, advocates for accountability ask, can’t the U.S. follow suit instead of coddling innovators at the public’s expense?

The push for deregulation isn’t just a policy debate; it’s a betrayal of the people who bear the brunt of financial instability. When banks are freed to take bigger risks, it’s not the CEOs who suffer when things go south. It’s ordinary workers, homeowners, and small entrepreneurs who lose everything. The 2023 Silicon Valley Bank collapse, though contained, was a stark reminder that even well-capitalized banks can implode when oversight fails to keep pace with ambition. Advocates for economic equity know this history too well, and they’re fighting to ensure it doesn’t repeat.

Geopolitical risks only deepen the urgency. Conflicts like Russia’s war in Ukraine and trade tensions with China have already slashed global stock prices and triggered capital flight from vulnerable economies. Emerging markets, hit hardest, see their equities drop 2.5% on average during such shocks. These aren’t just numbers; they’re livelihoods destroyed, dreams deferred. Strong regulation, with stress tests and capital buffers, is the only way to brace for these storms. Yet the administration’s deregulatory zeal threatens to leave us exposed, prioritizing Wall Street’s bottom line over Main Street’s survival.

Inflation, still stubbornly high at 2.4% to 3.5% in the U.S., adds another layer of pain. Higher interest rates, while necessary to tame prices, have spiked debt costs, hitting borrowers hard. For emerging markets with dollar-denominated debt, the pain is even worse, as currency mismatches amplify the burden. Advocates for global justice argue that now is the time for coordinated, robust regulation, not a free-for-all that leaves the most vulnerable to fend for themselves. Bessent’s voice could amplify this call, urging policymakers to prioritize people over profits.

Scott Bessent’s speech tomorrow isn’t just a moment to diagnose the problem; it’s a chance to chart a better course. Those who champion economic fairness and stability must seize this opportunity to demand stronger oversight, not weaker. That means doubling down on capital requirements, stress testing, and consumer protections. It means rejecting the false promise of deregulation and embracing a financial system that serves everyone, not just the elite. It means learning from history, from the 2008 crisis to the fintech missteps of recent years, to build a system that can withstand the shocks of a volatile world.

The fight for a fairer financial system is far from over, but it’s one worth waging. Bessent’s words could galvanize advocates, policymakers, and citizens to push back against the tide of deregulation. They could remind us that regulation isn’t the enemy of progress; it’s the foundation of a just economy. As we brace for his speech, let’s hold fast to the belief that our financial future belongs to all of us, not just the powerful few. And let’s demand a system that reflects that truth, one rule, one safeguard, one victory at a time.