Congratulations, American taxpayer: You are going all in on crypto.

This weekend, President Donald Trump announced that he is moving forward with a plan to create a strategic cryptocurrency reserve, purchasing bitcoin and ether, as well as the more esoteric instruments XRP, solana, and cardano. The reserve will “elevate this critical industry after years of corrupt attacks,” Trump wrote on his social-media site, Truth Social. “I will make sure the U.S. is the Crypto Capital of the World.”

For the taxpayer, the purpose of such an initiative is obscure. The crypto industry is a hyper-speculative casino. It is not essential to the American financial system, nor are cryptocurrencies essential to the American public. Workers cannot put bitcoin in their gas tanks; parents cannot feed XRP to their kids; businesses do not need cardano to build roads, light cities, produce vaccines, or provide loans to homeowners and entrepreneurs.

Yet for the White House, the purpose is obvious. Trump’s commerce secretary, his AI and crypto czar, and several of his most influential policy advisers are crypto investors, and the president launched his own memecoin. Establishing a reserve would boost prices, enriching these public officials and the crypto magnates donating tens of millions of dollars to Republican campaigns. It would not be a public investment, but a private giveaway—one of a mounting number in the Trump era.

The White House has put out few details on how a federal crypto reserve would work. But a stalled Senate bill would order the government to purchase 100 million bitcoins, hold the assets for two decades or longer, and sell them to retire the national debt. The government could transfer the $19 billion in crypto it has seized from criminals to the stockpile; the Treasury could finance additional purchases by revaluing the gold reserve, Senator Cynthia Lummis of Wyoming has proposed, so that “not a single U.S. taxpayer dollar” would be spent. Trump’s crypto czar has also indicated that the reserve would not involve new taxes or spending.

[Read: The crypto world is already mad at Trump]

Yet the reserve would use taxpayer resources, diverting them from other purposes. If crypto prices soar, the Treasury could retire a chunk of the debt. If crypto prices crater, the public would end up worse off. “I don’t think turning the government into a hedge fund is a viable solution” to the country’s fiscal challenges, Mark Zandi, of Moody’s Analytics, told me. He suggested addressing them the old-fashioned way, by cutting spending, raising taxes, and promoting growth.

Government experts see no strategic justification for the proposed reserve. The United States maintains stockpiles of crucial materials: vaccines and other pharmaceuticals, rare-earth minerals used in weapons manufacturing, crude oil. “There are important differences between reserves for real commodities, like petroleum, where a shortage may result in serious harm to the American people,” and the kind of speculative fund Trump is promoting, Bharat Ramamurti, an economic adviser to the Biden administration, told me. “Cryptocurrency does not meet any of those standard conditions.”

For the many, the reserve poses an unnecessary risk; for the few, it offers rich rewards. The mere prospect of the government speculating in the crypto market is already enriching the small share of Americans heavily invested in the assets. The price of bitcoin, ether, solana, XRP, and cardano jumped more than 10 percent when Trump published his Truth Social post. More broadly, the proposed reserve would mainstream a fringe industry and create public interest in high crypto prices—justifying later interventions in the market and nudging foreign governments and institutional investors to get in too.

The crypto fund is only the latest example of ascendant crony capitalism in Trump’s Washington. The president is strip-mining taxpayer resources and doling out contracts and favors to the politically connected. The risk is not just corruption, but higher interest rates and less competitive markets.

The tariffs that Trump has implemented on imports from China, Mexico, and Canada create a massive opportunity for favor-trading. In Trump’s first term, the White House imposed levies on $550 billion worth of Chinese goods, allowing American firms to apply for a tariff exemption if they could not find substitutes for imports or if the tariff would “impose significant harm on American interests.” An analysis found that the Office of the U.S. Trade Representative disproportionately awarded exemptions to firms that made contributions to Republican candidates and disproportionately denied exemptions to firms supporting Democrats. The policy amounted to a “quid pro quo,” the economists concluded.

The Trump administration has pushed more blatant quid pro quos this time around. The advertising conglomerate Interpublic Group is attempting to merge with its rival Omnicom. Lawyers from Elon Musk’s X suggested that  Interpublic executives should boost advertising spending on the social-media platform “or else,” The Wall Street Journal reported. Or else, the Interpublic employees gathered, they run the risk of federal regulators scuttling or delaying the merger. Musk has also agitated for the Federal Aviation Administration to award a contract for air-traffic-control communications systems to SpaceX, his space-technology company. As a special government employee, Musk is supposed to be banned from influencing contracts in which he has a financial interest.

Threatening companies that decline to call the Gulf of Mexico the “Gulf of America.” Investigating firms that choose to maintain DEI policies. Proposing to privatize the United States Postal Service. Each is an example of the Trump administration trying to aid his supporters or damage his opponents, without regard for the public’s welfare. Each is an example of crony capitalism.

The strategic crypto reserve is a foolish idea, and the broader trend a dangerous one. Fifty years of studies on Russia, Hungary, Indonesia, India, the Philippines, and elsewhere have found that governments creating policies for and awarding contracts to politically aligned firms warps investment and damages markets. Connected firms flourish. Disfavored firms struggle. Corruption takes root. Taxpayers end up with degraded public services, and lose confidence in their elected representatives. In extreme cases, the practice heightens interest rates, slows down GDP growth, and makes countries vulnerable to financial collapse.

Trump fashions himself a swamp-draining, free-market-loving conservative, but there’s nothing conservative about this kind of intervention in the economy. “I’m against it! I’m against it all,” Veronique de Rugy, an economist at the right-of-center Mercatus Center, at George Mason University, told me. Trump “just announced: Farmers, prepare yourselves to sell all your products here; we’re going to tax exports. What is he talking about, really? Five percent of the consumers in the world are here. There’s only so much corn I can eat.” She told me she held out some hope for Trump’s deregulatory push and his plans to cut the budget. But she worried about the government being in hock to steel CEOs, crypto bros, Big Agriculture executives, military contractors, and anyone else who happens to have deep pockets and Trump’s ear, particularly given the president’s willingness to push his executive authority beyond the limits of American law.

“For us libertarians,” de Rugy said, “it feels like we’re being punched in the face with our own fist.”

A book festival in Vilnius, meetings with friends in Warsaw, a dinner in Berlin: I happened to be at gatherings in three European cities over the past several days, and everywhere I went, everyone wanted to talk about the Oval Office performance last Friday. Europeans needed some time to process these events, not just because of what it told them about the war in Ukraine, but because of what it told them about America, a country they thought they knew well.

In just a few minutes, the behavior of Donald Trump and J. D. Vance created a brand new stereotype for America: Not the quiet American, not the ugly American, but the brutal American. Whatever illusions Europeans ever had about Americans—whatever images lingered from old American movies, the ones where the good guys win, the bad guys lose, and honor defeats treachery—those are shattered. Whatever fond memories remain of the smiling GIs who marched into European cities in 1945, of the speeches that John F. Kennedy and Ronald Reagan made at the Berlin Wall, or of the crowds that once welcomed Barack Obama, those are also fading fast.

Quite apart from their politics, Trump and Vance are rude. They are cruel. They berated and mistreated a guest on camera, and then boasted about it afterwards, as if their ugly behavior achieved some kind of macho “win.” They announced they would halt transfers of military equipment to Ukraine, and hinted at ending sanctions on Russia, the aggressor state. In his speech to Congress last night, Trump once again declared that America would “get” Greenland, which is a part of Denmark—a sign that he intends to run roughshod over other allies too.

[Read: A Greenland plot more cynical than fiction]

These are not the actions of the good guys in old Hollywood movies, but the bad guys. If Reagan was a white-hatted cowboy, Trump and Vance are mafia dons. The chorus of Republican political leaders defending them seems both sinister and surprising to Europeans too. “I never thought Americans would kowtow like that,” one friend told me, marveling.

The Oval Office meeting, the subsequent announcements, and the speech to Congress also clarified something else: Trump, Vance, and many of the people around them now fully inhabit an alternate reality, one composed entirely of things they see and hear in the ether. Part of the Oval Office altercation was provoked by Zelensky’s insistence on telling the truth, as the full video clearly shows. His mistake was to point out that Russia and Ukraine have reached many ceasefires and made many agreements since 2014, and that Vladimir Putin has broken most of them, including during Trump’s first term.

It’s precisely because they remember these broken truces that the Ukrainians keep asking what happens after a ceasefire, what kind of security guarantees will be put in place, how Trump plans to prevent Putin from breaking them once more and, above all, what price the Russians are willing to pay for peace in Ukraine. Will they even give up their claims to territory they don’t control? Will they agree that Ukraine can be a sovereign democracy?

But Trump and Vance are not interested in the truth about the war in Ukraine. Trump seemed angered by the suggestion that Putin might break deals with him, refused to acknowledge that it’s happened before, falsely insisted, again, that the U.S. had given Ukraine $350 billion. Vance—who had refused to meet Zelensky when offered the opportunity before the election last year—told the Ukrainian president that he didn’t need to go to Ukraine to understand what is going on in his country: “I’ve actually watched and seen the stories,” he said, meaning that he has seen the “stories” curated for him by the people he follows on YouTube or X.

Europeans can also see that this alternative reality is directly and profoundly shaped by Russian propaganda. I don’t know whether the American president absorbs Russian narratives online, from proxies, or from Putin himself. Either way, he has thoroughly adopted the Russian view of the world, as has Vance. This is not new. Back in 2016, at the height of the election campaign, Trump frequently repeated false stories launched by Russia’s Sputnik news agency, declaring that Hillary Clinton and Obama had “founded ISIS,” or that “the Google search engine is suppressing the bad news about Hillary Clinton.” At the time Trump also imitated Russian talk about Clinton starting World War III, another Russian meme. He produced a new version of that in the Oval Office on Friday. “You’re gambling with World War III. You’re gambling with World War III,” he shouted at Zelensky.

[David Frum: Trump, by any means necessary]

But what was ominous in 2016 is dangerous in 2025, especially in Europe. Russian military aggression is more damaging, Russian sabotage across Europe more frequent, and Russian cyberattacks almost constant. In truth it is Putin, not Zelensky, who started this conflict, Putin who has brought North Korean troops and Iranian drones to Europe, Putin who instructs his propagandists to talk about nuking London, Putin who keeps raising the stakes and scope of the war. Most Europeans live in this reality, not in the fictional world inhabited by Trump, and the contrast is making them think differently about Americans. According to pollsters, nearly three quarters of French people now think that the U.S. is not an ally of France. A majority in Britain and a very large majority in Denmark, both historically pro-American countries, now have unfavorable views of the U.S. as well.

In reality, the Russians have said nothing in public about leaving Ukrainian territory or stopping the war. In reality, they have spent the last decade building a cult of cruelty at home. Now they have exported that cult not just to Europe, not just to Africa, but to Washington too. This administration abruptly canceled billions of dollars of food aid and health-care programs for the poorest people on the planet, a vicious act that the president and vice president have not acknowledged but millions of people can see. Their use of tariffs as random punishment, not for enemies but for allies, seems not just brutal but inexplicable.

And in the Oval Office Trump and Vance behaved like imperial rulers chastising a subjugated colony, vocalizing the same disgust and disdain that Russian propagandists use when they talk about Ukraine. Europeans know, everyone knows, that if Trump and Vance can talk that way to the president of Ukraine, then they might eventually talk that way to their country’s leader next.

Eight years ago, President Donald Trump got generally good reviews for his first speech to a joint session of Congress. Back then, it would have seemed both incredible and churlish to suggest that the man who delivered that relatively conciliatory, relatively presidential speech, might within four years try to overturn an election by violence.

But that’s what happened. And that attempt remains the single most important fact about Trump’s first term as president.

Eight years later, not even Trump’s staunchest partisans would describe his 2025 address as conciliatory. He mocked, he insulted, he called names, he appealed only to a MAGA base that does not add up to even half the electorate. But in 2025, the big question hanging over the nation’s head is not one about oratory, but about democracy. In 2017, Americans did not yet know how far Trump might go. Now they do. They only flinch from believing it.

Second-term Trump has opened his administration with a round of actions likely to prove drastically unpopular: tariffs that raise prices, budget cuts that will reduce services for veterans, at national parks, for anyone who depends on weather services. Prices are rising, measles is spreading, airplanes are falling out of the sky. His effective co-president and chief policymaker, Elon Musk, is widely distrusted and disliked. Trump’s repeated claims of massive fraud within Social Security strongly suggest that he’s got something big and radical in mind for the most popular program in American life.

Trump knows he’s steering into political trouble. He alluded to “disruptions” ahead because of his policies. His party holds the narrowest of margins in the House of Representatives. Yet he’s governing without the slightest concession to majority opinion, even to a majority sense of decency. He talks of the Democrats as remorseless enemies. At the same time, he is making political choices that would normally seem certain to deliver those enemies a big majority in the House after the midterms. Is he delusional? Crazy reckless? Or is this a signal that the man who tried to overturn the election of 2020 has some scheme in mind for the 2026 midterms?

Maybe Trump has turned over a new leaf. There was, however, a tell in this speech that Trump’s attitude to other people’s consent remains as contemptuous as ever.

In his joint-session speech, Trump returned to his fancy of annexing Greenland to the United States. He read aloud from the teleprompter some perfunctory language about respecting Greenlanders’ right to decide their own future. But when he came to the end of the section, he apparently ad-libbed a thought of his own: “We’ll get it one way or another.” That’s not the language of a man who has learned his lesson about respecting democratic choice.

In the second term, unlike the first, Trump has swiftly and methodically installed do-anything loyalists at the FBI, the Department of Justice, and the Department of Defense. Given Trump’s 2021 record, that seems something to worry about now.

Had Trump lost the 2024 election, he would right now be facing sentencing for his criminal convictions in the state of New York. He would be facing criminal and civil trials in other states. He was rescued from legal troubles by political success. Now Trump’s acting in ways that seem certain to throw power away in the next round of elections–if those elections proceed as usual. If they are free and fair. If every legal voter is allowed to participate. If every legal vote is counted, whether cast in person or by mail. Those did not used to be hazardous “if’s.” But they may be hazardous in 2026.

Trump is keenly alert to his legal danger, deeply committed to keeping power by any means necessary. He also seems to be sleep-walking toward a stinging political loss that will expose him to all kinds of personal risk. He’s not trying to expand his coalition, to win any votes he does not already have. So what is his plan to preserve his immunity and his impunity? Trump’s behavior in 2021 showed that there were no limits to what he would do to keep power. What will 2026 show?

American politicians of both parties have always known that giving the response to a presidential address is one of the worst jobs in Washington. Presidents have the gravitas and grandeur of a joint session in the House chamber; the respondent gets a few minutes of video filmed in a studio or in front of a fake fireplace somewhere. If the president’s speech was good, a response can seem churlish or anti-climactic. If the president’s speech was poor or faltering, the opposition can only pile on for a few minutes.

So pity Senator Elissa Slotkin of Michigan, who got handed the task of a response to Donald Trump’s two hour carnival of lies and stunts. Slotkin gave a good, normal speech in which she laid out some of her party’s issues with Trump on the economy and national security.

It was so normal, in fact, that it was exactly the wrong speech to give.

But first, it’s important to note that it was a good speech. Slotkin wisely decided to forego any stagey settings, appearing in front of neatly placed flags instead of in her office or a kitchen. She gave a shout-out to her home state while managing to avoid folksy familiarity or posturing. She also stayed away from wonkery, speaking in the kind of clear language people use in daily conversation. (Okay, there was some thudding language about investment and “jobs of the future,” but these are minor speechwriting offenses.)

[Read: The Trump backers who have buyer’s remorse]

And to her credit, Slotkin reminded people that Elon Musk is an unaccountable uber-bureaucrat leading a “gang of 20 year olds” who are rummaging through the personal data of millions of Americans. As a senator from a state bordering Canada, she asked if Americans are comfortable kicking our sister nation in the teeth.

So what’s not to like? Slotkin—like so many in her party lately—failed to convey any sense of real urgency or alarm. Her speech could have been given in Trump’s first term, perhaps in 2017 or 2018, but we are no longer in that moment. The president’s address was so extreme, so full of bizarre claims and ideas, exaggerations and distortions and lies, that it should have called his fitness to serve into question. He preened about a cabinet that includes some of the strangest, and least qualified, members in American history. Although his speech went exceptionally long, he said almost nothing of substance, and the few plans he put forward were mostly applause bait for his Republican sycophants in the room and his base at home.

It’s easy for me to sit in my living room in Rhode Island and suggest what others should say. But in her response, Slotkin failed to capture the hallucinatory nature of our national politics. As a former Republican, I nodded when Slotkin said that Ronald Reagan would be rolling in his grave at what Slotkin called the “spectacle” of last week’s Oval Office attack on Ukrainian President Volodymyr Zelensky. But is that really the message of a fighting opposition? Is it an effective rallying cry either to older voters or to a new generation to say, in effect, that Reagan—even now a polarizing figure—would have hated Trump? (Of course he would have.) Isn’t the threat facing America far greater than that?

[Read: Lawful, but enormously destructive]

Slotkin’s best moment was when she pleaded with people to do more than be mere observers of politics, and said that doomscrolling on phones isn’t the same thing as genuine political engagement. And she issued her own Reaganesque call to remember that America is not just “a patch of land between two oceans,” that America is great because of its ideals. But her admonition to her fellow citizens not to fool themselves about the fragility of democracy, while admirable, was strangely detached from a specific attack on the source of that menace.

Did Americans vote for Kash Patel to lead the FBI, or RFK Jr. to run the Department of Health and Human Services, or Pete Hegseth for secretary of defense? Trump took time to recognize and praise all three of those men in his speech. So why not ask that question—directly and without needless throat clearing about the importance and necessity of change?

Slotkin’s response reflected the fractured approach of the Democrats to Trump in general. Some of them refused to attend tonight’s address, some of them held up little ping-pong paddles with messages on them (a silly idea that looked even worse in its execution), and others meandered out. One, Representative Al Green of Texas, got himself thrown out within the first minutes, a stunt that only gave Speaker Mike Johnson a chance to look strong and decisive, if only for a moment.

I’m not a fan of performative protest, and initially I thought the Democrats who chose to attend the address made the right call. But when Trump referred to Senator Elizabeth Warren of Massachusetts as “Pocahontas,” they could have left en bloc, declaring once they were outside that they would take no part in any further demeaning of the House chamber—or, for that matter, of American democracy. Instead, they sat there and took it, their opposition to Trump a kind of hodgepodge of rage, bemusement, boredom, and irritation.

Slotkin’s address suffered from the same half-heartedness that has seized the Democrats since last November. Her response, and the behavior of the Democrats in general, showed that they still fear being a full-throated opposition party because they believe that they will alienate voters who will somehow be offended at them for taking a stand against Trump’s schemes.

Slotkin is a centrist—as she noted, she won in areas that also voted for Trump—and her victory in Michigan proved that centrism can be a powerful anchor against extremists. But centrism is not the same as meekness. America does not need a “resistance,” or stale slogans, or people putting those slogans on little paddles. It needs an opposition party that boldly defends the nation’s virtues, the rule of law, and the rights of its people.