Trump Dollars, Petrodollars & Other Gangster Loot (w/Richard Wolff)
Trump signing US money? Perfect! Prof. Wolff and I discuss.
There is a strange, perverse honesty in seeing Donald Trump’s signature on the hundred-dollar bill. As Prof. Wolff and I discussed, it’s a moment of “truth in packaging” for an empire in accelerating decline. For decades, the American project was wrapped in a polite veneer of international law and “bipartisan” institutions. That mask has slipped.
The 75-year “gangster arrangement” of the petrodollar is under pressure. Illegal war in Iran, presidential kidnapping in Venezuela, unlawful tariffs, and the desperate, circular logic of funding our enemies to keep oil prices down: it all seems more and more like hysterical posturing” against the inevitable flow of history.
Selected Quotes
Richard Wolff:
“In the great struggle between Trump’s attempt to change history and history itself, I’m betting on history.”
“What do you say about an empire so far in decline that the only way it can attempt to hold on is by strengthening the very forces it regards as its enemies?”
“The petrodollar was a deal—and it should be understood the way we’d understand any gangster arrangement.”
Richard Eskow:
“As far as fiat currency goes, well, he’s a fiat president: he does what he wants... So why not have a little truth in packaging on our currency?”
“Trump is Anthony Blinken without the bullshit.”
“A single bottleneck could overturn this entire 70-year system.”
Transcript (lightly edited)
Richard Eskow: An interesting thing happened the other day. We learned that Donald J. Trump is going to affix his signature to a U.S. currency bill. This is the first time in 165 years — which is to say, pretty much ever — that a president has signed any bill, much less while still in office.
Usually it’s the Secretary of the Treasury and/or the Comptroller who signs the bill. Trump’s $100 bill will coexist, signature-wise, with Treasury Secretary Scott Bessent’s signature. But cash continues to decline in use. If you think Trump branding is going to help with that, well, good luck to you. Here to discuss this very interesting development in the world of currency, finance, and economics is none other than our economic expert and economic historian, Professor Richard Wolff.
So first of all, Richard Wolff, welcome back to the program.
Richard Wolff: Thank you very much, Richard. Glad to be here.
Richard Eskow: Trump bucks. What do you make of it?
Richard Wolff: Well, I’m wondering whether the next step will be the disappearance of those old fuddy-duddies Washington and Franklin. Why only his signature? We should have his face right in the middle, where the portrait goes. We could have Donald Trump’s face on the bill — and we could all glower or smile, depending on our perspective, seeing him once again in our wallets.
Richard Eskow: What a nightmare. And yet I find a perverse thought coming to mind — and I thank you for suggesting this topic. At least, I suppose, one can appreciate the honesty. As far as fiat currency goes, well, it’s a fiat president: he does what he wants. And money is representative of a power structure, an elite, and special interests — which is what Donald Trump also represents. So why not have a little truth in packaging on our currency? But money, like they used to say in the college dorm rooms, it’s a construct, man, isn’t it?
Richard Wolff: In a way, it is fitting. Mr. Trump arrives at what I consider an accelerating moment of decline for the United States in the world economy, with all the upset and disorientation that implies. When a society goes through that moment — as England did, as the Romans did, as the Greeks did — why wouldn’t it be disorienting for Americans when it’s their turn for their economy to decline?
He is rewriting everything. The Constitution? Who cares? International law? Who cares? If you want to kill people in boats in the middle of the Caribbean, you just kill them. And when you’re asked about it, you do as Mr. Miller — Trump’s advisor — did: you explain that the world has always been governed by power and strength. In other words, we can kill those people because we can, and there’s no one to stop us. I can translate that plainly: there is no international law that we have to worry about.
It is remarkable when Mr. Rubio, the Secretary of State, lectures the Europeans with real emotion about how horrible it is that the Iranians are thinking of charging money for ships passing through the Strait of Hormuz — and declares that this is against international law. For him to say that with a straight face requires a level of willful, blind ignorance that one needs to stop and fully appreciate.
Anyway. Mr. Trump is tariffing everybody illegally — the Supreme Court of his own country tells him it’s illegal, and he immediately imposes new tariffs so the court has to decide it all over again. He is trying desperately to stop history. And so this break with historical norms, with all the logic of what is unfolding, that is his signature — figuratively and now literally. Why not put it on the currency too? Why not break with history there as well?
You correctly note it’s been 165 years — I didn’t know that. 165 years, and we have never had such a thing. That’s exactly why he wants to do it. Other people couldn’t overthrow the regime in Venezuela; he did. Other people couldn’t overthrow Iran; he’s trying to. The message is: I am going to undo history. History has been unfair to us, and I am going to fix it.
That is a level of megalomania that comes from him constantly. He’s not bound by honesty or precedent. I loved this too, from last week: he said that Biden’s Secretary of State, Anthony Blinken, endorsed his Iran policy. So the press went to Blinken and asked about it. Blinken’s answer: it never happened. Trump just bloviates and hopes nobody notices — or by the time they do, he’s already produced a new headline to distract everyone.
This is all a kind of hysterical gesturing, a desperate effort to do anything and everything to give the impression that he can reverse what has been happening in recent decades. He can’t, and he won’t. And sooner or later — and I understand it’s painful to have to wait — in the great struggle between his attempt to change history and history itself, I’m betting on history. He will be blown aside.
And when people turn on him, when they finally realize they’ve been hustled for eight years or longer, their rage will turn on the person who hustled them, and it will not be pretty to watch. If you want an example of how quickly things can shift, pay attention to Marjorie Taylor Greene, because that is the scenario you’re going to see replayed.
Richard Eskow: Marjorie Taylor Greene, who all of a sudden sounds surprisingly humane and reasonable on the subject of the slaughter of people in Gaza. It turns out that humans — even American humans — don’t like genocide, and they don’t like it being committed in their name and with their resources.
I’m torn, Richard Wolff, as I listen to you. I strongly agree with you — and I do — but I’m also somewhat conflicted about this idea of a “break with history,” because in a sense, yes, these things are a break with history. But in another sense, they are also an acknowledgment of it.
The term “cognitive dissonance” was invented, as I understand it, to describe the disturbance caused in a child’s psyche when their parents tell them things are one way and they’re actually another: “Your father and I really love you and we love each other and this is a happy home” — when it isn’t. That messes up a child’s mind. Trust me, I know.
And so in a perverse way, there’s actually less cognitive dissonance when Trump says, “I’m putting my signature on this bill because I can.” A hundred dollar bill is just about power. You mentioned Anthony Blinken — now there is the biggest hypocrite to walk this earth in quite some time. Talk about cognitive dissonance: listening to him and his boss, Joe Biden, express outrage that Vladimir Putin dared defy international law by invading Ukraine — and I agree it was a violation of international law — while they sneered at and dismissed the International Criminal Court and blatantly violated both international and domestic U.S. law to send weapons of mass destruction to Israel so it could pursue its genocide. We could go on and on.
At least — do you remember that New Yorker cartoon? A wolf is on a campaign billboard saying, “I will eat you.” And a crowd of sheep is cheering: “You’ve got to give it to that guy — he tells it like it is.” That, to me, is Trump. He’s Anthony Blinken without the bullshit.
Richard Wolff: That’s right, exactly. And you’re right — the attempt to break with history is itself proof of what that history actually is. It’s Don Quixote tilting his lance at windmills. He’s not going to win. He just doesn’t get it.
But here’s another layer to this. And I’m going to get in trouble for saying it, but I’ll say it anyway.
Richard Eskow: Please — we like trouble.
Richard Wolff: That is what a large number of Americans want. They want to stop the history they can sense is happening. They voted for him in part because — long shot though it was — he at least said he was going to break with all of this. Whereas Kamala Harris, Blinken, Biden, Bush, Obama — they were obviously part of what was failing to stop history. So: get this unorthodox guy who doesn’t know anything about conventional politics, who’s rough-and-tumble and crude and ignorant, but who says, “I’m going to change everything. Look at me — I’m different from those people.” And he was, and he is, and he has been true to that. He has behaved in ways other presidents did not dare.
He is, as you put it, what those other people were, but without the Harvard and Yale panache — the veneer, the polish. And I say this in full recognition of Harvard and Yale, since I attended both myself, and tried very hard not to come away with the phoniness that the Obamas and the Bidens all represent.
I can even feel for the American people in this regard. As you put it with that cartoon, they are sheep. He is a wolf. And they are celebrating that he at least says: “I’m a wolf, and I will do what I want.” And then they try not to understand that that means they’re his next meal. That’s what the American people don’t grasp — even now, as the cost of putting gas in their car becomes out of reach, with more to come, and the inflation they were told he had under control is about to take off.
It’s just extraordinary that he still has any poll numbers at all. And now, if he’s actually going to send hundreds of thousands of troops into Iran, he’s going to be killing large numbers of Americans on top of everything else.
Richard Eskow: It really is extraordinary. But I’ll say a slight word in defense of the American electorate here. First of all, most people don’t have, or don’t devote, a great deal of time to politics and history — the stuff you and I love and care about. If the present is not very good — and you and I have talked about this many times — life right now is not so good for most people. That means you’ve got to choose between the future and the past. The past wasn’t so great either, but we tend to forget that. And Trump is offering people an idealized past. Who’s offering them a good future? Not the Democrats. To quote Hillary Clinton in 2016: “America is already great.” No, it isn’t great for people who can’t make ends meet. And it hasn’t gotten any greater since 2016 when she said it.
But the various Democratic alternatives — “let’s return to bipartisan institutions” (and parenthetically, I hate the word “bipartisan” because it institutionalizes and legitimizes the idea that there are only two legitimate political parties; I much prefer “nonpartisan”) — those institutions gave us the national security state, the trillion-dollar defense budget, austerity economics, and so on. That bipartisan consensus is what they’re asking people to go back to. When you’re offering people a lousy present and Trump is offering them an idealized past, a lot of people say, “I’ll take a shot at that. Maybe the past wasn’t so bad after all.” Does that make sense?
Richard Wolff: Absolutely. And that’s very much part of the appeal of this moment. It’s also deeply frustrating, because millions of people — the demonstrations last Saturday were indicative — millions of Americans took time off to go into the streets and be part of a massive outpouring. You get a sense that they are there, but they don’t know exactly how to organize it, sustain it, or build on it. So it has the character of an expression of feeling that doesn’t know where to go with itself. That seems to me very dangerous.
I fear that the people who participate, and who don’t know how to take it to the next step, will then interpret the absence of that next step as an argument that it isn’t worth doing. Which is wrong — it is worth doing, and it does have effects. But you’re also correct that there’s no organized next step. Nobody is mobilizing, nobody is building structure.
So the irony is that all this people’s activity may end up simply meaning they vote Democratic in November — assuming we have elections — and that won’t change much, given who they’re likely to have to vote for. And then they’ll be very frustrated. And that frustration will make things worse. People don’t want to understand the dialectic: if you do no better than Biden after Mr. Trump, you allow—
Richard Eskow: —Mr. Trump to come back, or someone worse.
Richard Wolff: Exactly. And if Mr. Trump passes from the scene and what you get is another Hakeem Jeffries or Schumer — that sort of disastrous placeholder — and everything continues to deteriorate, there will be an even bigger groundswell for whoever the next Trump is. And for all the same reasons. The empire keeps declining, the Chinese keep growing faster and getting richer, watching the United States squander its capabilities while the Chinese sit there — if I were them — smiling at the spectacle of it all.
Three weeks ago, I believe I had it right: when Trump’s policies began to show that they had wildly underestimated Iranian resolve and resistance, and it became clear that oil prices were going to rise sharply — I’m told they’re now over $100 a barrel — he began to realize this was going to be a political backlash. And as he typically does when it’s brought to his attention that he’s just committed a disastrous error, he proceeded to make two or three more errors trying to fix the first one.
So what did he do? First, he removed sanctions on Russia for selling its oil anywhere in the world — sanctions that had been imposed in response to the invasion of Ukraine. I understand the logic: more Russian oil on the market offsets the price pressure. Yes, but you’re simultaneously funding Russia’s war against Ukraine.
Richard Eskow: Of course, yes.
Richard Wolff: And then two days later, he effectively did the same thing with Iran — removing sanctions on Iranian oil — which enabled Iran, the country he’s making war against, to sell its oil globally at wildly elevated prices, thereby funding its own defense against the United States.
What do you say about an empire so far in decline that the only way it can attempt to hold on is by strengthening the very forces it regards as its enemies? When you’re caught between getting hurt by rising oil prices that make the whole world your adversary, and funding the military of the people you’re at war with, you’re finished. That’s what it means.
The metaphor I’d use is this: doctors tell me that at a certain point in old age, different parts of the body begin to break down, and fixing one of them aggravates the problem of another. And at that point, it’s over. Watching us — me the taxpayer, you the taxpayer — funding Mr. Putin’s war in Ukraine and simultaneously funding the Iranians defending themselves against the United States: it is so absurd that you realize we have reached that point.
Richard Eskow: Well, it certainly feels that way. He might as well sign the currency now. We may end up carrying it around in a wheelbarrow like the Weimar Germans before this is over. But that brings up another subject — since we’re talking about bills and currency. I think a lot of people have seen the term “petrodollar” in the news over the years without really understanding what it means. This connects to how the current economic world order was essentially a spoil of war for the United States after World War II. Maybe correct me if I’m wrong, but you had Bretton Woods, the idea that the world’s currencies would be linked to the dollar, and this whole architecture of the petrodollar. Now, with the war involving Iran, we’re starting to hear the term “petro-yuan.” Could you take a moment and clear up any misconceptions about that?
Richard Wolff: Sure. You’re absolutely right — the petrodollar is in the process of disappearing. This is really part of the broader decline of the dollar from its role as the world’s reserve currency, a role it held for most of the last 75 years but has progressively lost. Already less than half of the world’s reserves are held in dollars.
The petrodollar was a deal — and it should be understood the way we’d understand a gangster arrangement, because maybe that’s what it was. Right after World War II, the United States figured out that the energy of the future was petroleum. By the end of the war, it was clear that oil would be essential to industrialization everywhere in the world. And in those days, oil was coming predominantly from the Middle East. We had some in Texas, but it was already clear that wouldn’t be nearly enough.
So in the aftermath of World War II, a deal was struck. The United States and Britain took the lead, carving up the desert around Saudi Arabia into seven or eight small countries — Saudi Arabia being the primary one, sitting atop enormous oil reserves, as the entire region was. We essentially created these countries out of nothing: Qatar, Bahrain, Kuwait, the United Arab Emirates, and the others.
Here was the deal: in each case, a local ruling family was told, “You can become billionaires. We will set you up as the head of a country. We’ll draw the boundaries on a map — just as European colonialists had been doing in Asia, Africa, and Latin America for the previous three centuries. Each of you will get a cut of the oil revenue. Five American companies and two European companies — the ‘Seven Sisters’ — will come and extract the oil. You can eventually participate in that, and you’ll take a nice cut off the top. A cut that will make you, overnight, not a desert family, but a sultan, an emir. You can buy châteaux in the south of France for your summer holidays. You will be among the richest people on the planet.”
So that was their end of the deal. Our end: we, the Americans, as the dominant economy and the world’s largest oil buyers, will buy your oil. We’ll pay you in dollars. But we require that you insist on payment in dollars from anyone in the world who buys oil from you. That’s the deal — you must do that if you want our business. And we’re the major buyer. Oh, and one more thing: we will station American military bases in your country to protect you — to make sure nobody disrupts this arrangement. We, the Americans, get oil at a good price; we convert it into gasoline and fertilizer and make a fortune. The big oil companies — and the politicians who made the deal, people like Kissinger and Nixon, if you want names — all benefit enormously.
And there was one final requirement made of those leaders. All the dollars flowing in — from us, from anyone else in the world who buys your oil and must pay in dollars — what are you going to do with all those dollars? You must commit to investing them back in the United States. That means buying shares in American companies — though not more than a certain amount, you can invest but not control them — and lending the rest to the U.S. government.
Americans know that when we run a budget deficit — currently over a trillion dollars a year — that happens because the government spends more than it raises in taxes. Did you ever wonder who lends the government the money to do that? Well, it turns out that one important lender — not the only one, but an important one — is precisely the Gulf states, who lend those same dollars right back to the United States government.
So we send the dollars over there; they send the oil to us; then they send the dollars back to us as loans. It is a circular gangster arrangement, paid for by the money we all spend on oil. It is a rip-off that will be studied throughout history as an extraordinary example of how an empire organized the global oil business to sustain itself. Because when the Gulf states lend money to the United States, the United States uses it to fight wars — in Afghanistan, in Vietnam, now potentially in Iran. America never fights wars with tax revenue, because if taxpayers had to directly fund the wars, they would oppose them. So wars are paid for by borrowing. And that requires lenders. And we organized those lenders through exactly this arrangement.
And by the way, it’s falling apart. Because what the Iranians are teaching the Gulf states is this: if you have an American military base in your country, it doesn’t protect you — it makes you a target. A target of whom? The Iranians answer: of us. Because the United States attacks us, we are going to attack the United States — and you’ve welcomed them in. You’d better rethink that. And no matter what they say publicly, they are all quietly rethinking it, because like Europe in a different context, they are now having to face the possibility that aligning themselves with the United States may have been betting on the wrong horse.
Richard Eskow: And where it gets interesting in terms of current events — correct me if I’m wrong — but my understanding is that Iran, in threatening to block the Strait of Hormuz, is essentially saying: we won’t let your oil through unless it’s paid for in something other than dollars. If that’s correct, then what it means is that the world’s preeminent superpower could lose this extraordinarily cushy arrangement because of the concentrated military power of Iran in one region, at one chokepoint. A single bottleneck could overturn this entire 70-year system. Am I right about that?
Richard Wolff: Absolutely. I’m not yet certain about oil being priced in yuan specifically, but I wouldn’t be surprised. What we do know is that the Iranians have long told the Chinese — and have apparently abided by this — that ships registered to Chinese enterprises carrying Iranian oil to China pass through the Strait of Hormuz without interruption. Iran has been a major oil supplier to China for a long time; that’s not new. And my guess is that Iran will now be more than willing to accept payment in yuan, both to further undercut the dollar and for the broader strategic reasons I’ve described.
But I should explain the larger picture: the petrodollar is becoming the petro-yuan not because of any single act of defiance, but because of something much bigger. China is now the fastest-growing, second-largest economy in the world. It will surpass the United States in total economic size by the end of this decade — we’re already in 2026, so I’m talking about the next four years. And why does that matter? Because it means that the whole world has been doing for 20 years what it will increasingly do: buying less from the United States and more from China. So the world needs fewer dollars and more yuan, because that’s where the economic action is.
This is why the dollar replaced the British pound — not through any single decision, but through a gradual shift in where the economic weight of the world lay. The Germans had hoped the world would adopt the Deutsche mark, and had they not lost World War I, it might well have happened. But they lost — twice — and that removed them from contention. The only real successor to the British Empire was the United States. After World War II, you couldn’t get goods from anywhere else anyway, which cemented it immediately. The Marshall Plan further locked it in: we gave Europe dollars on the condition that they be spent on American goods, ensuring that American companies captured all that spending. And the subsequent 75 years reproduced that dynamic through the Cold War and the structure of empire.
Another sign that the empire is passing is that we’re even having this conversation. The dollar is less and less central; the yuan is increasingly playing the role the dollar once played. It’s all very clear — except that we live in a country that desperately needs to deny all of it, to insist that these events are isolated and temporary, not part of a systemic decline. Because decline is too frightening a thought to entertain.
Richard Eskow: I would add to the decline narrative something that fascinates me: we decided to become the architects of a global financial system. But a global system — like an army that extends its supply lines too far — becomes brittle. The Bab-el-Mandeb Strait, closed by the Houthis, was our overextended supply line. The Strait of Hormuz handles two and a half to three times the volume — another overextended supply line. I think we’re going to see a world that’s increasingly rebelling against the oppressive nature of this financial system, cutting or damaging these various supply lines one by one. And that shows the empire is vulnerable not only to rival powers like China, but to its own overextension and fragility. Would you agree?
Richard Wolff: Absolutely. And I’d take it one step further. For me, the fundamental issue is profit. Over the last 75 years, we allowed the maximization of corporate profits to determine the global distribution of our economy. It became more profitable to stop making automobiles in Detroit and make them in China instead. Fine — but that globalized the automobile industry in an unprecedented way. And you can multiply that across virtually every other industry.
The profit motive said: make more money over there. But no one factored in the ecological cost of shipping goods back from China across the Pacific — the toll on fisheries, on human health, on the oceans themselves. If you actually account for what it will cost to fix the environmental damage, the extra profit evaporates. We’d have been better off keeping production in Detroit. But capitalism doesn’t work that way. Capitalism calls it “efficient” if it maximizes profit. It isn’t efficient, and it never was. That’s a fetishism of capitalism we should have outgrown long ago.
If you want to understand why we built these extended, fragile supply lines — why no one accounted for their vulnerability — it’s because private capitalists never had to pay for that fragility. They didn’t have to worry about it. Now they’re learning that they should have, because far away in Iran, someone can squeeze a narrow waterway and suddenly your entire system seizes up. You were so swept away by the internal logic of capitalism that you couldn’t think outside that frame. And that is a catastrophic failure — one that is helping to bring this empire down. The systematic fetishization of capitalist calculus is doing it in.
Richard Eskow: And I would argue — perhaps in closing — that even if everyone involved had fully understood decades ago that this would be the outcome, they would have done it anyway. Because the incentive structure of capitalism operates on a quarterly and annual basis. If it’s all going to collapse in 20 or 30 years, who cares? We’ll be long gone.
Richard Wolff: Indeed — I will no longer be the CEO of this company; I’ll have moved up to run another one. It’s Louis XV all over again: après moi, le déluge. “After me, the flood.” That mentality is structurally produced by the system, isn’t it?
Richard Eskow: I’ve got my island retreat in New Zealand, so I’ll be just fine. Well, okay — in closing, I suppose you and I and our listeners should think about who else might sign American currency now that Donald Trump has opened the door. I’m thinking Clint Eastwood, maybe?
Richard Wolff: LeBron James, I think, would be interesting.
Richard Eskow: It would be a step down for LeBron. Robert De Niro? But then, if the signatures are going to be truly representative of the American system, they’d have to be less heroic figures. Lex Luthor, perhaps.
Richard Wolff: Or allow me — even though I’m not proud of it — to wear my hat as an economist for a moment. I am quite pleased to see Scott Bessent’s signature appearing on the currency. Because what he says publicly, as opposed to what I assume he privately knows — if he had the same graduate education I did, which he did — makes him a very fitting choice by Mr. Trump.
Richard Eskow: All right, we’ll leave it at that. Professor Richard Wolff, as always, a tremendous pleasure. Thank you so much for coming on the program.
Richard Wolff: My pleasure too. Take care, Richard.