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 Happy Friday, Fintech Takers! It was great reconnecting with many of you in person in Atlanta this week, or, in some cases, meeting for the first time! Emerge, the Financial Health Network’s annual event, was well-worth the trip and I appreciate the work that the whole team at FHN did to bring it to life! While I was walking around the event and talking to folks, I caught the germ of an idea, which I just had to pursue. I’ve spent most of the week staying up late to research and write it. I hope you enjoy it. - Alex Was this email forwarded to you? Sponsored by Fifth Third Bank Embedded finance is getting more complex, and agentic AI is about to amplify it. DEEP DIVE A Crisis of Confidence"In a nation that was proud of hard work, strong families, close-knit communities, and our faith in God, too many of us now tend to worship self-indulgence and consumption. Human identity is no longer defined by what one does, but by what one owns. But we've discovered that owning things and consuming things does not satisfy our longing for meaning. We've learned that piling up material goods cannot fill the emptiness of lives which have no confidence or purpose. The symptoms of this crisis of the American spirit are all around us. For the first time in the history of our country a majority of our people believe that the next five years will be worse than the past five years." Those words were written in 1979 and spoken by President Jimmy Carter, as a part of his famous "Crisis of Confidence" speech. However, if the ideas expressed in that quote sound distinctly 2026 to you, you're not alone. Financial nihilism is a topic that I have been obsessing over for the last couple of years, and lately I've been wondering if the conditions that are creating that nihilism — the economic, political, and social uncertainty that we all feel, combined with the real structural pressures squeezing our livelihoods and financial welfare — have any good historical parallels. Have U.S. consumers experienced these types of conditions before? If so, did they exhibit similar financially nihilistic tendencies to what we are seeing today? Andrew Ross Sorkin has put the 1920s back in the public consciousness with his excellent book, 1929, and there's a pleasing symmetry to comparing the 1920s to the 2020s. But I think a more apt decade-to-decade comparison might be the 1970s to the 2020s. They aren't exact duplicates. But they rhyme. And the places where they don't rhyme tell us something profound about how the rest of this decade may play out. Strong Numbers. Bad Vibes.Before we can compare the 1970s and the 2020s, we need to be specific about what we're actually comparing. It's tempting to use a word like "vibecession" (coined by Kyla Scanlon in this brilliant 2022 essay that you should absolutely read) as shorthand and move on, but I think it’s worth trying to be a bit more precise. What we're talking about is a very specific macroeconomic condition. One that doesn't show up in any single statistic and that, confusingly, often runs counter to the prevailing economic narrative of the time. That condition is this: a gap between objective economic data (jobs, wages, GDP) and subjective forward-looking sentiment (expectations, confidence, the sense of where things are heading). When that gap is small, the economy and the population are telling the same story. When the gap is large — when the data says "everything is fine" but people say "everything is broken" — you have something that looks a lot like what President Carter was describing in 1979, and what we're living through now. I’ve never heard anyone describe the stagflation of the 1970s as a vibecession, but the term fits fairly well. By the numbers that economists tracked at the time, the decade wasn't a disaster. Unemployment rose from an average of 5.4% in the first half of the decade to 7.9% in the second half. That’s high by 1960s standards, but nowhere near Depression-era levels. Real GDP grew through most of the decade, and by 1980, the population was, in real terms, wealthier than it had been in 1970. By a lot of conventional measures, the 1970s were a normal decade with some rough patches. But that's not how anyone living through it experienced it. By 1979, when President Carter gave the speech, the University of Michigan Consumer Sentiment Index — the closest thing we have to a thermometer for the national mood — was reading in the 60s, with months spent in the 50s. That's recession-level sentiment in what was, technically, a year of economic growth. The expectations component of the index, which captures what people think the future will look like, was even worse. President Carter's line about a majority of Americans believing the next five years would be worse than the past five wasn't rhetorical flourish; it was lifted directly from polling that his advisor Pat Caddell had been showing him. The 2020s have produced an even sharper version of this gap. Unemployment fell to a 50-year low of 3.4% in early 2023 and has remained historically low since. Real wages, especially at the bottom of the distribution, have risen. The American Enterprise Institute has documented that the upper-middle class is now the largest income group in the country, with 31% of households there compared to 10% in 1979. The AEI describes this as a "booming up" of the income distribution rather than a hollowing out. By any conventional reading of the economic data, the 2020s economy has been one of the strongest in modern history. And yet the Michigan Consumer Sentiment Index hit an all-time low of 44.8 in May of this year — its third straight monthly decline, lower than at any point during the Great Recession, lower than during the worst months of the pandemic, lower than any reading in the 75-year history of the index. And again, within the Michigan survey itself, the divergence between present and future is striking: the Current Conditions component has held up better than the Expectations component, which has fallen more sharply. This gap is what Scanlon was naming. It's not a recession in the technical sense. It's something stranger and, I think, more interesting: a state in which the lived experience of the economy decouples from the measured performance of the economy. The rules people thought they were operating under don't seem to be producing the outcomes they expected. The present is fine, but the future feels deeply uncertain. Both the 1970s and the 2020s had a specific accelerant that turned a vague feeling of uncertainty into acute anxiety: inflation. In the 1970s, the trigger was supply shocks. The OAPEC oil embargo in October 1973 quadrupled the price of oil in a matter of months and produced something Americans hadn't seen since World War II: physical scarcity of a basic good. Gas stations ran out of gas. States implemented odd/even rationing based on license plate numbers. People sat in lines that stretched around the block to fill up their cars. Then in 1979, the Iranian Revolution jumped the problem to a different level. Inflation, which had been simmering in the high single digits, broke into double digits and stayed there. The 2020s version is structurally different but feels similar. The trigger wasn't a physical supply shock at the gas pump (although we are now experiencing that … yay!). It was a pandemic-driven supply chain collapse, followed by tariff-driven price increases on a broad swath of consumer goods. The result hasn’t been gas lines, but it has had the same essential impact: consumers suddenly can’t trust that the price of necessities will be stable from one month to the next. The cost of groceries, rent, insurance, and used cars have all moved in ways that violated the implicit contract Americans had with the post-2008 economy, which was that inflation, at least, would not be the thing that hurt them. The reason it matters to identify these specific economic conditions, rather than waving vaguely at "bad vibes," is that those conditions correlate, shockingly well, to certain consumer behaviors: how they work, how they save, what kinds of credit they take on, and what kinds of speculative bets they make. The single clearest of these behavioral signals, across 75 years of American economic history, is the price of gold, which has a habit of going parabolic in exactly the moments where the gap between objective conditions and subjective consumer perceptions and expectations widens. I asked Claude to create a chart showing this correlation. The visual is striking:  The three shaded bands are the periods when consumer sentiment broke down most severely — the 1970s stagflation era, the global financial crisis and its aftermath, and the current period that started in 2022. In all three, gold moved sharply higher. The 1970s saw gold go from $35 to $850, a 2,300% move. The 2008-2011 stretch saw it triple. And the current period has seen gold roughly double in three years, with the move accelerating sharply in 2024 and 2025. What's most striking about the current period isn't just that gold is rising. It's the conditions under which it's rising. The 2008-2011 rally was a rational response to a legitimate crisis. Banks were failing, unemployment was north of 10%, and the financial system was teetering. Nothing was going well, and gold is what people reach for when nothing is going well. The 1970s rally is harder to explain that simply. The decade had real stressors, but it wasn't a continuous acute crisis; unemployment in 1979 averaged 5.9%, lower than the current rate in many quarters. What it had was something harder to name: a sustained malaise, built out of economic pressure, political dysfunction, and the sense that the rules of the post-war economy had stopped working. The 2020s are the same pattern as the 1970s, but more extreme. The economic data is mostly good. Unemployment is low, real wages are rising, growth is positive. And yet the malaise is, by the Michigan numbers, more severe than at any point in 75 years of measurement, and the gold response has been correspondingly larger. The question is why? A Loss of MeaningIn the early 1970s, the General Motors assembly plant in Lordstown, Ohio was reorganized for greater efficiency. The line speed went from 60 cars per hour to 101, the fastest assembly line in the world at the time, giving workers 36 seconds to complete tasks that had previously taken 60. Job tasks were broken down further. Workers had less time to complete each operation, less variation in what they were doing, and less ability to talk to anyone else while doing it. On March 4, 1972, more than 7,000 United Auto Workers went on strike. The strike lasted three weeks and shut down the plant. What made Lordstown famous wasn't the strike itself. American autoworkers struck constantly in the 1970s. What made it famous was the reason, or rather, the absence of a conventional reason. The Lordstown workers weren't striking primarily over pay. They were some of the highest-paid blue-collar workers in America. They weren't striking over hours or benefits. They were striking, as one worker put it, because "you feel stagnant; everything is over and over and over. It seems like you're just going to work and your whole purpose in life is to do this operation… This makes the average individual feel sort of like a vegetable." The press dubbed the phenomenon 'Lordstown Syndrome.' A federal task force took it seriously enough to assemble a 200-page report on it in 1973, titled Work in America. Ted Kennedy held Senate hearings on it. Gary Bryner, president of UAW Local 1112 at Lordstown, testified before Kennedy's subcommittee in July 1972:
Here's what's important about Lordstown: the jobs weren't actually going away. GM wasn't replacing workers with robots in 1972. The line was still being run by people. What had changed was the experience of the work; the sense of what it meant to spend your day there. The workers hadn't been automated out. They had been made to feel like they could have been. The 2020s have produced a structurally similar phenomenon, but with an important difference. The 1970s Lordstown worker felt like a cog: a person being treated like a machine. The 2020s knowledge worker is increasingly being made to feel like a piece of equipment about to be deprecated: a person whose work product may not require a person at all. The actual displacement, so far, has been modest. AI hasn't taken most knowledge-worker jobs. Lawyers still practice law. Marketers still write copy. Software engineers still write code. By every employment statistic we have, the white-collar job market in 2026 looks roughly like the white-collar job market in 2022. But the experience of the work has shifted profoundly. The marketing analyst who used to spend three hours writing a first draft now spends 20 minutes editing one that Claude or ChatGPT produced. The associate at the law firm who used to spend a week on a research memo now spends a day. The junior developer who used to build a feature from scratch now reviews one that Claude Code generated. The work is, in many cases, faster and easier. It is also, in a way that's hard to articulate but easy to feel, less theirs. This is the same phenomenon that the workers in Lordstown experienced, just with different technology. The job hasn't gone away. What's gone away is the sense that the worker is indispensable to the output. They're still necessary (for now) but they've been made to feel like they could have been replaced, and might still be. The line speed has been increased. The task has been broken down further. And the worker is left feeling stagnant in a way they hadn't before. The 2020s version is, I think, more corrosive than the 1970s version, because the implied threat is more existential. The Lordstown worker felt diminished but knew the job still needed them. The 2026 knowledge worker feels diminished and suspects the job may not need them for much longer. Both produce withdrawal. The second produces it more aggressively, and for a more rational reason. This is an important part of the story. When the work itself stops feeling meaningful, downstream financial behaviors change. The Desire to SaveUnsurprisingly, the personal savings rate in the 1970s was high. The decade averaged 12.2% — the highest of any decade since the Bureau of Economic Analysis began tracking the series — and peaked at 17.3% in May 1975. This is precisely what you would expect. When households perceive higher risk to their incomes and futures, they build buffers. Americans in the 1970s saw inflation eating their parents' retirements, watched gas lines form, lost trust in their institutions, and did exactly what you'd expect rational households to do under uncertainty. They saved. The problem was that saving didn't work. Federal Reserve Regulation Q capped the interest rate banks could pay on savings deposits at 5.25%. Inflation in the late 1970s ran between 9% and 13%, which meant the responsible American household was losing 4-8% of the real value of their savings every year. The harder they saved, the more they lost. There was an escape hatch, but it wasn’t available to everyone. Treasury bills paid the actual market rate, but had a $10,000 minimum (roughly $50,000 in today's dollars). Money market mutual funds, launched in 1971, pooled small investors' money to access T-bill yields, but even MMFs typically required $1,000 to $5,000 minimums. The escape hatch had been widened, but it still excluded most low-to-moderate income households. In 1980, Edward Kane wrote a working paper for the National Bureau of Economic Research that diagnosed what was happening in unusually blunt terms:
Read that last sentence again. A National Bureau of Economic Research paper, published in 1980, explicitly said that the U.S. regulatory system was victimizing small savers. The Federal Reserve itself publicly acknowledged the problem in a May 1979 press release titled 'Agencies announce regulatory changes to help small savers obtain a higher return on their deposits.' In the 1970s, we didn’t have a comprehensive savings boom, so much as the development of a two-tier savings system. Wealthy households saved heavily and earned real returns by routing around Regulation Q. Working-class households saved heavily and lost real value, because the only vehicle available to them was the one the regulatory regime was deliberately suppressing. The 2020s have produced a different problem, and it's a more concerning one. Americans today consistently report wanting to save more, but only 47% of Americans say they could cover a $1,000 emergency expense from savings. The precautionary impulse is alive and well. According to every survey, Americans know that they should be building a buffer. But that precautionary impulse isn't translating into action. Today’s savings rate isn't 12%. It's near 4%, half of its 20-year average. This isn't a Regulation Q problem (though the stablecoin industry might argue otherwise). There are ample high-yield savings options available to all consumers: T-bills, money market funds, and high-yield savings accounts, which all currently pay 4-5%, above inflation, with no meaningful minimum. The problem is upstream of the product. The 2020s household isn't being prevented from earning a return on their savings. They're being prevented from having savings in the first place. Cost of living, debt service, and rent inflation are eating discretionary income before the savings decision can even be made. Student loans, which barely existed in the 1970s, now service like a second mortgage for many young households. The squeeze has moved from the return on capital (the 1970s problem) to the availability of capital (the 2020s problem). This is the more frightening version of the same paradox. In the 1970s, the responsible household had spare dollars; they just couldn't earn a real return on them. In the 2020s, the responsible household is told the path is open, but discovers that there are no spare dollars to put on it. And there's a deeper structural difference: housing. In the 1970s, a young household with a fixed-rate mortgage was, functionally, being forced to save in a very effective way. The nominal payment was eroded by inflation while the asset appreciated. This 2006 research paper documented the dynamic explicitly: "the main winners [from inflation] are young, middle-class households with mortgage debt." The 2020s have closed off this avenue for saving and wealth building. Home prices roughly doubled in nominal terms between 2012 and 2024 while mortgage rates rose from sub-3% to over 7%. The median first-time buyer in 2025 was 40 years old, the oldest on record per the National Association of Realtors. Renters are paying inflated rent without the equity accrual. In the 1970s, the responsible middle-class household had a way out, even if it was hard: get a mortgage, sit in the asset, ride the inflation. In the 2020s, that path is closed for most young households. What they're left with is the same question every 1970s consumer eventually asked: if the responsible path isn't working, what else is there? The Temptation to BorrowIf consumers can't save their way to security, the obvious first move is to borrow through. And for a while, that works. Both the 1970s and the 2020s saw consumer credit expand dramatically. In both eras, that expansion was made possible by specific regulatory maneuvers that let lenders price products in ways that had previously been illegal. The 1970s story turns on a 1978 Supreme Court decision called Marquette National Bank of Minneapolis v. First of Omaha Service Corp. that almost no one outside banking law has heard of, and that quietly created the modern consumer credit industry. Before Marquette, every state had usury laws capping the interest rate that could be charged on consumer credit. The caps varied — Arkansas was 10%, New York was 18%, most states were somewhere in the middle — but they were binding. By the late 1970s, with inflation running double digits and the Fed Funds rate climbing toward 10%, national banks issuing credit cards literally could not make money under most state usury caps. The cost of funds was too close to the legal ceiling on revenue. With Marquette, the court resolved this by ruling, unanimously, that a national bank could charge whatever interest rate was legal in the state where the bank itself was located, regardless of where the borrower lived. This meant a bank could relocate its credit card operations to a state with no usury cap and export those rates nationwide. South Dakota and Delaware promptly abolished their caps to attract banks. Citibank moved its credit card operations from New York to South Dakota in 1980 for exactly this reason. The modern high-APR credit card industry — every 24%+ rate you see on a card statement — is downstream of that ruling. (Editor’s Note — If you’d like to go down the rabbit hole on this topic, I’d suggest listening to this episode of Bank Nerd Corner, and reading this article and this article from Kiah Haslett on the Depository Institutions Deregulation and Monetary Control Act of 1980.) The before-and-after is stark. In 1970, the average American household carried $78 in revolving credit. By the late 1980s, it was in the thousands. Today, Americans carry roughly $8,000. The 1970s consumer who couldn't earn a real return on savings discovered, courtesy of Marquette, that they could maintain their lifestyle by drawing on a credit card instead. The credit substituted for the savings that the regulatory regime had quietly destroyed. The 2020s version of this story has all the same structural elements, but it's happening across half a dozen products simultaneously, and none of it has required a Supreme Court decision. The Truth in Lending Act (TILA) defines what counts as 'consumer credit' and requires APR disclosure, finance charge limits, and structured consumer protections. The modern consumer credit innovation playbook is, almost entirely, a series of moves designed to deliver functional credit while staying outside TILA's definition:
Each of these is, functionally, a Marquette-style evasion: identifying the boundary of consumer credit regulation and structuring a product to sit just outside it. The difference is that Marquette took a Supreme Court case to break the existing perimeter. The 2020s regulatory arbitrage has been market-driven, with each new creative product design choice daring regulators to catch up. The downstream effect is the same in both decades. Consumer purchasing power has been artificially extended, masking the squeeze on real savings. The 1970s consumer maintained their standard of living by running a balance on a Visa card. The 2020s consumer maintains theirs by splitting groceries across BNPL, advancing two days of pay through EarnIn, and rolling a $200 short-term loan through Dave. The mechanics are different. The behavioral pattern is the same: when you can't save your way to security, you borrow your way to something that feels like security. Until you can't anymore. Which brings us to speculation. The Desperation to GambleWhen the responsible path stops working — when savings are eaten by inflation or by cost-of-living, when credit eventually runs out — consumers reach for speculation. And in both the 1970s and the 2020s, the speculative response to consumers’ crisis of confidence was broader, faster, and more democratized than at any other point in modern American history. The 1970s response was anchored in tangible assets. Gold went from $35 in 1970 to $850 in January 1980, a 2,300% increase. Silver ran from roughly $6 per ounce in early 1979 to a peak of nearly $50 by January 1980, a 700%+ move in a single year. Atlantic City legalized casino gambling in 1976; Resorts International opened in May 1978 to crowds lined up along the Boardwalk.  State lotteries went from a single New Hampshire experiment in 1964 to a $1 billion industry by 1978, with the Massachusetts scratch-off (1974) compressing the gambling dopamine loop from weeks to seconds. The 2020s response is in many ways the same impulse, except it’s being facilitated by more sophisticated (and dangerous) infrastructure. Gold is again rallying — hitting 53 all-time highs in 2025 alone and reaching a record $5,542 per ounce on January 29, 2026. Investment demand surged 84% year-over-year to 2,175 tons. But unlike the 1970s, gold is only one layer in a much larger stack of speculative activities. Sports betting hit $167 billion in legal handle in 2025, generating $17 billion in revenue, up from $4.6 billion in handle just before PASPA was overturned in 2018. Prediction markets went from a niche curiosity to $44 billion in volume in 2025, with Kalshi and Polymarket processing combined lifetime volumes of $150 billion by April 2026. Zero-day-to-expiry options (which are options that expire within hours of being traded, making them functionally short-term bets on intraday price movement) now account for roughly 57% of S&P 500 options volume, with retail traders responsible for 50-60% of that flow. Memecoin trading on Pump.fun (ughhh… I hated typing that) peaked at $61 billion in weekly volume in early 2026, with one lawsuit estimating that 60% of retail traders lost money for combined losses topping $4 billion. What's striking about this stack isn't just its scale. It's its abstractness. The 1970s consumer was buying ounces of gold. The 2026 consumer is buying a yes/no contract on whether the Fed will cut rates next month, or a 0DTE call option on the S&P 500 that expires in four hours, or a memecoin whose entire reason for existing is that its ticker is funny. The speculation has moved from tangible assets that might preserve value to abstract claims that might explosively multiply value, or vanish entirely. This psychological shift matters. The 1970s consumer wanted to preserve what they had. The 2020s consumer is reaching for something they feel they were never going to have through the conventional path. When you can't save your way to a down payment, and you can't borrow your way to security, a 0DTE option on Nvidia or a $50 long shot on Polymarket starts to look less like recklessness and more like the only math that could plausibly work. The infrastructure makes this possible in a way it never was before. Pump.fun launched in January 2024 and by mid-2025 was facilitating tens of thousands of new memecoin launches per day. Kalshi and Polymarket are accessible from a phone in 30 seconds. DraftKings is one app icon away. Robinhood will let an 18-year-old trade options the same afternoon they download the app. The friction that historically separated retail consumers from speculative venues — geographic, regulatory, technical, financial — has collapsed almost entirely. The behavioral pattern is the same as the 1970s. The mechanics are radically different. And the regulatory environment surrounding this entire shift is moving in the opposite direction from where it moved in the 1970s. More Competition. Less Consumer Protection.So far, the 1970s and the 2020s have (mostly) rhymed — same macro paradox, same loss of meaning at work, same desire to save and frustration with the savings options, same reach for credit, same desperation to gamble. If that were the whole story, the conclusion would be straightforward: history repeats, and we're roughly halfway through a known cycle. But there's one place where these two decades don't rhyme. And it's the one place that may matter most. In the 1970s, while the federal government was loosening the market-structure regulation of consumer finance (phasing out Regulation Q, eventually accepting Marquette's neutering of state usury caps, etc.), it was simultaneously building the modern consumer-protection regulatory regime from scratch. Consider the legislative output of a single decade:
This is a staggering burst of consumer-protection lawmaking. While Reg Q was being repealed and Marquette was deregulating interstate credit-card pricing, Congress was simultaneously building a floor under consumers: disclosure regimes, anti-discrimination rules, debt collection conduct standards, and a community-investment requirement that obligated banks to serve the communities they collected deposits from. The political theory was coherent. More competition required more protection. If you were going to let banks and lenders compete more freely on price, you needed a regulatory floor that prevented that competition from descending into predation. The 1970s consumer didn't get a great deal, but they got a better one than they would have without the floor, and this work arguably set the table for a relatively prosperous and stable next couple of decades. As of this writing, the regulatory equation is looking unbalanced. The market-structure regulation is loosening. Crypto and stablecoins are getting federal legitimacy, sports betting is spreading across the states, prediction markets are operating with CFTC blessing nationwide (including for sports event contracts that effectively replicate sports betting in states where it isn't otherwise legal), and the regulatory perimeter around BNPL and EWA has been allowed to remain ambiguous. That part rhymes with the 1970s. What doesn't rhyme is what's happening on the consumer-protection side. The Consumer Financial Protection Bureau, the agency that consolidated and operationalized most of the 1970s consumer-protection statutes after the 2008 financial crisis, has been functionally dismantled. By April 2026, the agency had been reduced from ~1,700 staff to ~1,174, with plans to take it to 556. The One Big Beautiful Bill Act, signed July 4, 2025, halved the CFPB's funding cap from 12% to 6.5% of the Federal Reserve's 2009 operating expenses. What’s left of the CFPB has rescinded nearly 70 interpretive rules, policy statements, and advisory opinions dating back to its inception, and has removed consumer advisories, press releases, and guidance from its website. The specifics of these rollbacks matter. The credit card late fee rule was vacated by a federal court in April 2025. The overdraft fee rule was overturned by Congress through the Congressional Review Act. The Open Banking Rule (Section 1033) is stuck in the void. The Section 1071 small business lending data rule has been narrowed. And in April 2026, the CFPB finalized a rule that effectively eliminates disparate impact analysis from enforcement of the Equal Credit Opportunity Act — a foundational pillar of fair lending since 1974. This is the most important structural difference between the eras. The 1970s response to a vibecession produced a healthy tension between two distinct regulatory impulses: loosen market structure to encourage competition, tighten consumer protection to prevent that competition from becoming predation. Neither side of the equation worked perfectly, but the tension between them produced something approximating a livable equilibrium for the average consumer. The 2020s response has lost that tension. The Biden administration tried to tighten both sides, restricting market structure (through the FTC's merger guidelines, the SEC's crypto enforcement posture, the CFPB's expanded enforcement) while also tightening consumer protection. The Trump administration has loosened both sides, letting market structure run free while simultaneously dismantling the consumer-protection apparatus. Neither approach reproduces what the 1970s got right, which was the productive friction between the two. Congress, for its part, has largely opted out of the regulatory conversation entirely, except when it has been activated to loosen market structure on behalf of well-funded industry interests. The 1970s Congress that passed TILA, ECOA, HMDA, and CRA in rapid succession has no contemporary equivalent. The federal lawmaking function that built the 1970s consumer-protection floor has, for practical purposes, stopped functioning. The exception is at the state level. California, New York, Colorado, and a handful of others have stepped into the federal vacuum. But state-by-state consumer protection is a patchwork, not a floor. It protects consumers in some zip codes and not others, and it's vulnerable to federal preemption fights that the current administration is actively pursuing. Bottom line: At the federal level, we have lost the productive tension between competition and protection that defined the 1970s. The states are partially filling the gap, but unevenly. And this is happening at exactly the moment when consumers have never had more options, more easily available to them, to borrow money and to speculate with it. How will the rest of this decade play out?Picture, for a moment, the financial life of a consumer living today. The paycheck arrives on Friday. Two days before payday, they used an EWA advance to buy gas. Their groceries got split into four payments using BNPL. There's a $200 short-term loan from Dave that rolls over monthly. Their primary checking account at one of the big four banks pays 0.01% on the $500 left after rent. The rest of their money sits in $50 worth of memecoins, a Polymarket position on the next Fed decision, a few 0DTE call options on Nvidia, and a DraftKings balance that they tell themselves is "for the playoffs." Every element of that stack would have been illegal, impossible, or unimaginable in the 1970s. The malaise of the 1970s produced similar consumer behaviors and similar financial products to enable them. However, that decade also eventually produced something more enduringly valuable: a build-out of consumer protection laws and regulations that set the table for the relative stability consumers experienced through the 80s, 90s, and early 2000s. The 2020s present a far more extreme version of the challenge that we navigated in the 1970s. Consumer malaise has sharpened into nihilism. Worker ennui has descended into doomerism. The scope and accessibility of product options for borrowing and speculation have increased dramatically. The decade isn’t over. We still have time to meet the moment. To respond with thoughtful laws and regulations that find the right tension between encouraging the competition needed to solve today’s structural economic challenges and ensuring that the excesses of that competition don’t leave consumers worse off than they were before. But we need to get started now. The clock is ticking. MORE QUESTIONS TO PONDER TOGETHER Big news for the endlessly curious (yes, you): I’m collecting your fintech questions on a rolling basis. What’s keeping you up at night? What great mysteries in financial services beg to be unraveled? Think of it this way, if a stranger is a friend you just haven't met yet, your question is a Fintech Takes conversation waiting to happen. One that could headline a Friday newsletter or be answered in an upcoming Fintech Office Hours event. Drop your question here, whenever inspiration strikes! Thanks for the read! Let me know what you thought by replying back to this email. — Alex | |||||||||||
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