By Preet Bharara

Dear Reader,

As you may know, I spent several days this week in California at the Code Conference, a gathering sponsored by Vox Media and hosted by journalist Kara Swisher, where tech and business leaders engage in frank talk about every issue under the sun. Speakers included CEOs like Elon Musk of Tesla and SpaceX, Marc Benioff of Salesforce, and Jason Kilar of WarnerMedia. The Stay Tuned podcast this week features my conversation with SEC Chair Gary Gensler at the conference.

Among the speakers was Scott Galloway, professor at the NYU Stern School of Business and Kara’s co-host on the Pivot podcast. His presentation is the inspiration for this week’s note. In typically entertaining and blunt fashion, Scott sped through scores of PowerPoint slides to argue, among other things, that we tend to misapprehend the importance of trends. Specifically, there are business and other phenomena that we either overhype or underhype. Rarely do we get it right. After citing to his own failed past predictions, Scott offered specific examples from both categories. In the overhyped category, according to the Professor, is billionaire space travel. On the other hand, space hauling — taking satellites into space, rather than people — is set to explode and yet is underhyped. Self-driving cars, he said, are overhyped, as predictions about how many such vehicles would be on the road by now have fallen woefully short. Public university brands, like the University of California, are set to boom but are underhyped at the moment.

All of this got me thinking about additional examples in the political sphere. For example, I believe, respectfully, that Beto O’Rourke running for governor of Texas is overhyped, as much as one might want him to win. On the other hand, there is a longshot political possibility that is rarely mentioned, which is frightening but also underhyped. Dare I say it without causing you to laugh at the absurdity? No, it’s not the possibility that Donald Trump returns to the White House in 2025, though that is certainly possible. No, I’m talking about the possibility that Trump becomes Speaker of the House in January 2023.

Unthinkable? You’d better think about it.

First, it would require Republicans to take back the House. That is a distinct possibility, if not outright likelihood. The margin in the lower chamber is razor thin. And it is almost axiomatic that the incumbent President’s party loses seats, often many seats, in the first midterm elections. Democrats lost a whopping net of 64 seats in 2010, after Obama was sworn in. They lost a net of 52 seats in 1994, after Clinton took office. In 2022, a net loss of only five Democratic seats would give control to the Republicans. That is eminently possible.

So, assuming Republicans flip the House, would it be legal to install Trump as Speaker? You would be forgiven if you believe, as I had believed, that the Speaker must be a sitting member of Congress. That’s not the case. Article I, Section 2 of the Constitution merely states, “The House of Representatives shall choose their speaker and other officers. . . .” Scholars generally agree that there is no requirement that the Speaker be an elected member of the body. Even if there were a debate about the legal propriety of the move, by what mechanism would Democrats block it? A court is going to tell another co-equal branch of government how to conduct its business? Issue an injunction? Good luck with that.

The next question is whether a Republican House majority would vote Trump in. Maybe not, because it’s crazy, but crazy is the order of the day over there if you haven’t noticed. Trump would have avid advocates, from Marjorie Taylor Greene to Paul Gosar to Lauren Boebert. Rep. Matt Gaetz is actively fundraising on the premise that a Republican House could put Trump in charge. Minority Leader Kevin McCarthy himself seemed open to the idea a few months ago, before walking back his statements, a spokesman saying he had misspoken. I’m not sure about that. How many Republicans voted for impeachment? How many have condemned the January 6th insurrection? How many would vote against Trump if he were on the Speaker ballot? Have the eye-rolling naysayers whipped the vote?

Pundits still resort to precedent, as if that means anything anymore. This is Jessica Levinson writing for MSNBC: “It’s important to note that every previous speaker has been an elected member of Congress. And that is almost unquestionably what the Founders intended.” That’s like saying it’s important to note that every previous President up to 2016 had not been a reality TV star. It’s meaningless.

This is Punchbowl News not long ago: “No, you don’t have to be a member of Congress to be speaker. No, it’s not going to happen. It would be impossibly hard for Trump to become speaker, although it is theoretically possible.” Really? It would be impossibly hard for Trump to become Speaker? What rigorous analysis. Think about how impossibly hard it seemed for Trump to become President back in 2015. Think about how impossibly hard it seemed back in November for Trump to steal the election; as we now know, it was likely staved off by a few honorable officials refusing to betray their oaths.

The final question is whether Trump would want the job. He has openly toyed with it; it’s also true that spokesman Jason Miller said in June that Trump had “zero desire” to be Speaker. Are you going to take that to the bank? Maybe he doesn’t want it, but it’s not hard to make a compelling Trumpian case in favor – back in the spotlight, Trump would have real power; probably he would be back on social media; his speeches would be covered; he could start impeachment proceedings against Biden on any spurious ground; he could muck up the works in a thousand ways and create general havoc. And that is his way. Ed Kilgore, writing in New York Magazine, wondered “whether he’d want the gig, which involves actual work in an institution about which he probably knows nothing.” Oh, right. Totally unlike the presidency.

After the last half decade, I’m not sure where this blithe dismissal of the Speaker possibility comes from. If you still think that more crazy can’t happen here, you are wrong. If you still think that authoritarianism can’t happen here, you are wrong. The upshot of all this is to stress the importance of the 2022 midterms. The most effective way to prevent Speaker Trump – and another term of President Trump, for that matter – is for Democrats to keep the House next year. Do everything you can to aid that effort.

Trump as President was underhyped in 2015; Trump as Speaker is underhyped now. Both scenarios were and are supremely far-fetched, but just like a breakthrough COVID infection, they can happen.

My best,


In Body Image

How Should Crypto Be Regulated?

By Sam Ozer-Staton

As the cryptocurrency craze intensifies, small-time investors and business titans alike are reading the tea leaves for signs of government regulation of the nascent industry. On Monday at the Code Conference in Los Angeles, Preet interviewed Gary Gensler, Chair of the Securities and Exchange Commission, about the future of crypto.

Preet spoke with Gensler following a spate of recent cryptocurrency news. On Friday, China declared all financial transactions involving cryptocurrencies illegal and issued a nationwide ban on cryptocurrency mining. Meanwhile, in the United States, Treasury Department officials indicated that regulation is forthcoming, specifically relating to “stablecoin,” a crypto asset that is ostensibly pegged one-to-one to the U.S. dollar or another stable asset, to protect against the kind of volatility traditionally associated with cryptocurrency markets.

Nellie Liang, an undersecretary of the Treasury, said last week of stablecoin: “It is important for the agencies to act quickly to ensure there is an appropriate U.S. regulatory framework in place.”

But what would a regulatory framework for crypto look like?

At the Code Conference, Preet pressed Gensler repeatedly on the question of how aggressively he would go after the industry. Preet specifically asked Gensler about recent remarks made by Ray Dalio, the founder of Bridgewater, the world’s largest hedge fund. Dalio said earlier this month at the SALT Conference: “I think at the end of the day if [Bitcoin] is really successful, they will kill it and they will try to kill it. And I think they will kill it because they have ways of killing it.”

In response, Gensler repeatedly said that he is “technology neutral” — that is, he is not biased against decentralized digital currencies. But he compared the need for regulation of the crypto space to the early days of the auto industry, saying:

“Let me just sort of make a thought exercise comparing this to when the automobile came along. Would it have been good for Detroit if somebody in the nineteen-teens didn’t come up with traffic lights, stop signs, speed limits and even a cop on the beat? It actually would not have been good for Detroit. Detroit would not have sold as many cars. Or if I could have a little bit more fun if it was if we were all watching football or basketball with no ref and no rules. I mean, for a game or two or maybe three games, it would be really exciting and interesting. But afterwards, it wouldn’t be.”

Later in the interview, Gensler was even more explicit, saying: “This is not going to end well if it stays outside the regulatory space.”

But what are regulators and critics of crypto so worried about?

Cryptocurrencies, critics argue, present a danger to the authority of central banks over the money supply in their countries. “Every country treasures its monopoly on controlling the supply and demand” of currencies, Bridgewater’s Dalio said in April. “They don’t want other monies to be operating or competing, because things can get out of control.”

Regulators are particularly worried about the possibility of a crash in the value of crypto assets, which, depending on who you ask, are classified as either a currency, a commodity, or a security. “I have seen one fool’s gold rush from up close in the lead-up to the 2008 financial crisis,” Michael Hsu, the Acting Comptroller of the Currency, a bureau within the Treasury Department, said in remarks on Tuesday. “It feels like we may be on the cusp of another with cryptocurrencies.”

The regulatory safeguards designed to protect the financial system from another crash do not currently extend to “crypto banks” — banking and investment apps that allow investors to easily buy, sell, and hold digital assets. While traditional banks are required to have reserves to ensure that if some loans go bad, customers can still withdraw funds, crypto banks are not required to be as well-capitalized, and the institutions that invest with them can take risky bets.

What questions or concerns do you have about crypto? Are you glad that Chair Gensler has suggested that he will act to reel in the industry? Or are you a crypto-optimist who would rather see the market, not the government, determine the industry’s fate?

Write to us with your reactions at letters@cafe.com.

In Body Image

Listen to Stay Tuned, “Regulating Crypto,” where Preet interviews Gary Gensler, the Chair of the SEC, at the Code Conference in Los Angeles. And don’t miss the bonus for Insiders, where Gensler takes questions from the audience.

Listen to Up Against The Mob, “Babysitting Sammy the Bull.” Elie speaks with James Gagliano, who was fresh out of the FBI Academy when he drew a bizarre assignment: safeguarding Sammy “The Bull” Gravano, a former Gambino mob boss who had recently flipped. Don’t miss the bonus for Insiders, where Elie and former Third Degree co-host Safeena Mecklai go behind the scenes of the episode.

Listen to Now & Then, “Government Debt Roulette,” where Heather and Joanne discuss the dynamics of the current political battle over raising the debt ceiling and offer an overview of debt throughout American history. Don’t miss the “Backstage” segment for Insiders, where Heather and Joanne discuss what makes debt fascinating and how ostensibly dry histories can actually be exciting.

Listen to CAFE Insider, “Fighting for Immigrants.” With Preet out this week, Joyce interviews Lee Gelernt, the Deputy Director of the ACLU’s Immigrants’ Rights Project.

— Listen to Note From Asha, “Never Let Your Skill Exceed Your Virtue.”


Scott Galloway, a Professor of Marketing at NYU Stern and co-host (with Kara Swisher) of the Pivot Podcast, is an insightful and irreverent analyst of today’s business environment. Follow him @profgalloway.


That’s it for this week. We hope you’re enjoying CAFE Insider. Reply to this email or write to us at letters@cafe.com with your thoughts, suggestions, and questions.

Edited by Tamara Sepper

The CAFE Team:

Tamara Sepper, Adam Waller, Sam Ozer-Staton, Jake Kaplan, David Kurlander, Noa Azulai, David Tatasciore, Matthew Billy, Nat Weiner, and Namita Shah.