The recent stock market bump and the positive economic outlook may be short-lived, according to renowned political philosopher Noam Chomsky. Last week, the MIT professor claimed the rally could be nearing its end and that he expects another economic crash due to President Donald Trump’s cabinet choices.
Chomsky questioned Trump’s long-held claim that he’s against the Washington establishment and specifically pointed to the president’s cabinet, which included former Goldman Sachs executive and new Treasury Secretary Steve Mnuchin, according to an interview posted by AlterNet.
"Anti-establishment is kind of a joke," Chomsky concluded. "Take a look at Trump and take a look at who's appointed for the cabinet."
Chomsky added: "What's anti-establishment? This [cabinet] is drawing from the billionaire class, largely financial institutions, and military and so on; in fact, take a look at the stock market, that tells you how anti-establishment he is."
Earlier this month, and a day after Trump’s well-received address before Congress, the Dow Jones surged past an all-time record of 21,000 after just moving above 20,000 roughly six weeks earlier.
Chomsky credited the financial-market increase to Trump’s calls for deregulation and tax cuts but stressed it would eventually lead to Americans again bailing out the economy.
"As soon as Trump was elected, and since, stock values in financial institutions escalated to the sky," he said.
Investors are "delighted he's going to eliminate regulations, let them make more profit; of course, it'll lead to another crash, but that's somebody else's problem. The taxpayers will take care of that."
Such regulations, put in place under President Barack Obama after the 2008 financial crisis had crippled the economy, were rescinded by an executive order Trump signed on Feb. 3.
Trump had just met with Wall Street executives and the order was focused on the Dodd-Frank Act, legislation created to check financial institutions and another memorandum was signed for rolling back the fiduciary rule. That rule required brokers to always act in a client’s best interest rather than their own or their firms, specifically when it came to retirement accounts, the New York Times reported.