‘We are in a new era’: Trump’s bombshell $2.2 billion income haul, the ‘Big Player Theory’ and what happens when the president becomes the bubble

In the age of artificial intelligence, Syracuse University's Robert Koppl, progenitor of "big player theory," told Fortune, we have "augmented ignorance."

President Trump made big news this week by revealing how much income he’s personally made in his second term. The total number is $2.2 billion in 2025, according to White House disclosures, with roughly $1.4 billion of it coming from crypto assets. The unusual thing, several top economists, legal scholars and corporate governance experts told Fortune, is that this fits into a decades-old corner of economics: “big player theory.”

“I think we’re in a new era,” Steve Hanke, the so-called “Money Doctor” told Fortune. The Johns Hopkins economist, a veteran advisor on monetary policy to several administrations (including the Trump White House), told Fortune that when he saw the big income disclosure, he immediately flashed onto “the economics of big players.”

An expert in “dollarization” who has advised Asian, Eastern European, and South American governments, Hanke has spent decades studying market manipulation in developing countries and now sees the same dynamics playing out in Washington. A big player, in his formulation, is someone—a central bank head, a finance minister, or a president—big enough to independently move supply, demand, and market expectations.

Three characteristics define the phenomenon, according to both Hanke and Roger Koppl, the Syracuse University professor who originated the theory decades ago: the actor is big enough to shift markets, is not disciplined by profit and loss the way ordinary firms are, and operates by discretion rather than any knowable rule. A big player “introduces personality into markets,” Koppl said, and in so doing, “corrodes our ability to form reasonable expectations of the future.”

The Lineage

Both Hanke and Koppl frame big player dynamics as a broader structural shift rather than any single politician’s idiosyncrasy. Hanke pointed to European defense stocks soaring on rhetoric from German Chancellor Friedrich Merz, and to rare-earth market moves tied to Chinese leadership statements, as parallel examples. But Koppl traced a distinctly American lineage through a chain of precedents dating back more than 50 years, each one further eroding the market discipline that profit-and-loss accountability is supposed to provide.

He began with Richard Nixon as the source of two foundational ruptures that arrived almost simultaneously. The first: Nixon’s 1971 engineering of the federal bailout of Lockheed, the moment the U.S. government first signaled it would step in to rescue a large, politically significant corporation from the consequences of its own failure—establishing that certain firms were too important to be allowed to fail on market terms. The second, occurring the same year: Nixon’s decision to sever the dollar’s last remaining link to gold, closing the “gold window” that had constrained U.S. monetary policy since Bretton Woods.

Without a gold anchor, Koppl argued, “there’s no gold snapback on the money supply”—meaning the traditional mechanism that would have punished excessive credit expansion by draining reserves no longer applied. Together, these two 1971 decisions removed both the monetary constraint and the market constraint in the same year—freeing government to intervene more freely, and freeing large firms to take on risk without the same fear of failure.

From there, the government’s handling of Continental Illinois in the early 1980s produced the phrase “too big to fail.” Decades later, under Attorney General Eric Holder, the country arrived at “too big to jail”—a reference to prosecutorial reluctance to bring serious criminal charges against major financial institutions after the 2008 crisis. The bipartisan dimension matters to Koppl. When Barack Obama declared “I have a pen and a phone,” he was articulating a vision of presidential action independent of congressional rules—further evidence that discretionary executive power had become a bipartisan habit long before Trump. Each administration extended the range of action one president could take alone. Trump inherited the full accumulation.

Koppl’s ultimate point was not that Trump invented the phenomenon, but that he represents its logical endpoint after five decades of steady erosion. “Trump has just elevated the level of big player intervention to a new high—a new and very unfortunate high.”

From fundamentals to ‘noise’

The mechanism, according to Hanke, works like this: once a big player enters the scene, signals about market fundamentals become unreliable, and traditional analysis—discounting free cash flow to determine fair value—gives way to what Fischer Black, co-creator of the foundational Black-Scholes valuation model, termed “noise trading” in 1986. Noise trading is driven by rumors and hype rather than fundamentals or technicals, and it produces herding, or “bandwagon” behavior, in which investors stop analyzing independently and instead wait to see what signal the big player sends.

Hanke agreed that it is essentially a modern update of Charles Mackay’s 1841 bubble classic, Extraordinary Popular Delusions and the Madness of Crowds. “That’s exactly the point,” he said, running through the history of famous financial panics. “The tulip bubble, the South Sea bubble—all of those things qualify as noise trading.” The infamous Mississippi Bubble was a classic example: John Law both invented many aspects of modern finance and swung entire global markets through force of personality, convincing the king of France to back a scheme disastrously divorced from fundamentals. Mackay himself did not take his own book’s advice—he lost his shirt in the railroad bubble of the Victorian era, a detail that says something about the durability of the phenomenon he documented.

Hanke argued that discretionary policymaking “diverts entrepreneurial activity and attention away from economic fundamentals … and towards politics and how they might affect market sentiment.” The consequence: “skill is devalued. Luck counts for more.” Money managers, judged on relative rather than absolute performance, are prone to joining the herd. “If you go down and so does everyone else,” Hanke said, “you probably won’t receive a pink slip.”

Big player behavior has been clear to many observers for some time: an Iran strike occurring 33 minutes after a Friday market close—timed to avoid rattling investors before the weekend, with markets calmed again by Sunday reports of renewed diplomacy. Outsized trades executed just ahead of Trump’s Truth Social posts on Gulf oil policy have also drawn scrutiny as potential examples of insider trading.

The latest $2.2 billion disclosure—and especially the crypto windfall—fits the same pattern, according to Koppl. “In a world of big players, the value of such an asset may depend on the precise actions of the big player and not on any underlying supply and demand for crypto services,” Koppl said, adding that this “looks to be what happened in the Trump case, that he was able to play on his name and on market timing as a big player to profit in a way that had nothing to do with underlying supply and demand.”

The Legal Vacuum

What makes this instance of big player behavior different from historical precedent, according to Eric Talley, a professor at Columbia Law School, is the near-total legal accountability vacuum surrounding the presidency itself. In other words, Trump’s huge income haul in 2025 is not technically illegal.

While a broad federal statute (18 U.S.C. § 208) bars executive officials—Cabinet members such as Marco Rubio or Pete Hegseth—from participating in matters where they hold financial interests, that criminal prohibition explicitly exempts the president and vice president. The likely rationale, Talley said, was to let a president act decisively in a crisis without conflict-of-interest reviews slowing him down. By the same token, though, if the president hasn’t committed to be “squeaky clean” on such an issue, that statute “provides an exception you could drive a truck through.” In this case, he added wryly, “you’ve got a truck loaded with an ornamental arch monument.”

Talley touched on the directly relevant constitutional emoluments clause — which technically bars government officials from profiting off foreign governments—citing the Qatari-gifted Air Force One as a “textbook” violation and noting the outsized role that Saudi funds played in Trump’s 2025 income statement. There’s just a problem, he added: the clause has proven “stubbornly difficult to enforce,” with first-term lawsuits mooted once Trump left office. He added that Trump’s original claim of a “blind trust” never actually passed the legal smell test, since a close relative managed it —and said he wasn’t actually sure if Trump has committed to any kind of blind trust in his second term.

One of the president’s sons came to his defense, as Eric Trump argued that his father’s investment holdings “are maintained exclusively in fully discretionary accounts managed by independent third-party financial institutions.” He denied that the president, his family and The Trump Organization has any role in selecting, directing, approving, influencing or soliciting specific investments.

That legal accountability gap has produced what Yale management professor Jeffrey Sonnenfeld calls an unprecedented breakdown in institutional response. Sonnenfeld told Fortune that the scale of the conflicts revealed in Trump’s disclosures runs “many thousand times beyond the worst suspicions ascribed to Hunter Biden,” calling the resulting “hypocrisy… off the charts” and the “degradation of public trust… unrivaled.”

What strikes Sonnenfeld most, however, is not the conduct itself but the silence surrounding it. He pointed to the Republican-controlled Senate as emblematic. His own Yale CEO caucus has famously featured executives and politicians behind closed doors expressing near unanimous disagreement with Trump’s actions, matched with on-the-record silence. On the latest disclosures, he predicted, “they’ll say it needs to be investigated … but they’re not commenting [publicly], they’re afraid of the vindictiveness of the president.”

Sonnenfeld extended that critique well beyond Washington, asking pointedly, “where are the trade unions, where are the attorneys general from the blue states? Where are the clergy?”—singling out the pope as “one of the few” institutional voices willing to speak. Trade unions, in his assessment, are “afraid of their own membership, which they think might be MAGA or some percentage of them,” and so are “showing complicity through complacency.” The influence of the big player, of course, is not just a financial phenomenon.

Implications for Bubbles and Crashes

Both Hanke and Koppl agreed that the big player dynamic increases market volatility and the frequency of bubbles. “We’re in a bubble,” Hanke said bluntly, arguing that the conclusion is undeniable by nearly every standard metric: price-to-sales ratios, price-to-earnings ratios, market-cap-to-GDP. The problem is that economists have never figured out when and why bubbles pop, with the only reliable signal being monetary tightening—which is why, in his view, Trump has pushed hard for the Federal Reserve to keep loosening policy.

Koppl’s diagnosis runs deeper—and is less reassuring than it might first appear. “People are very excited about AI, and think there’s going to be an AI bubble that bursts, and they may be right,” he said. “Many of my friends are worried that we’re in this huge bubble that’s going to burst,” he added. “I’m worried too, but I also know that we live in a world where bubbles don’t have to burst, because failing firms, if they’re big enough, will just be propped up by the state.”

The consequence, in his telling, is not stability but permanent misallocation. “These people are playing with other people’s money, ultimately—the taxpayers’ money. Heads, I win, tails, you lose. So you have a lot of risky investments that maybe don’t really make economic sense, and if they actually pan out, great. If they don’t, well, that’s why we have bailouts.”

The result is what Koppl called, coining the phrase on the spot, a condition of “augmented ignorance”—one in which the big player’s opacity makes it rational for companies to stop searching for better products and start cultivating better relationships with the federal government. He used the example of Claude to illustrate his point: “Claude doesn’t know what Donald Trump’s gonna do tomorrow any more than I do… neither Claude nor Koppl can know what Donald Trump’s gonna do tomorrow, because neither of us can somehow peer into his soul and know what his humors will lead him to tomorrow. That’s the problem with the big player. You need magical knowledge to really know what the big player’s going to do.”

“Rather than seeking out a better mousetrap,” he argued, “we’re seeking a better relationship with the federal government.” Supply and demand no longer reassert themselves the way they once did. “In my view,” he said, “that’s a great shame and a great cause of waste and misallocated resources.”

Second, and more interesting: when explaining why the big player creates “augmented ignorance,” he used Claude as the illustration. “Claude doesn’t know what Donald Trump’s gonna do tomorrow any more than I do… neither Claude nor Koppl can know what Donald Trump’s gonna do tomorrow, because neither of us can somehow peer into his soul and know what his humors will lead him to tomorrow. That’s the problem with the big player. You need magical knowledge to really know what the big player’s gonna do.”

The Paradox at the Center

The structural novelty Talley identifies is this: there have always been big players—J.P. Morgan, Henry Ford, Elon Musk. What’s different now is that the big player is also the person directly making the decisions in government. The White House disputes the characterization—Eric Trump has said the president has no role in directing specific investments, but Talley’s point is structural, like Koppl’s: whether or not Trump is making discrete calls, a president whose financial interests are intertwined with market-moving decisions removes the separation that accountability requires.

Once markets stop pricing free cash flow and start pricing a president’s next move, the bubble stops behaving like a discrete event with a beginning and an end, and starts behaving like a permanent condition. Talley’s closing caution supplies the one variable that could break the spell: “political markets can be fickle,” and those “playing along with that game could get dragged down by it” if Trump’s political fortunes suddenly shift.

A housing bubble ends when housing prices fall to meet reality. A Trump bubble, by this logic, can only be paused, deferred, or transferred to whatever object of belief comes after him—because there is simply no mechanism right now, legal or civic, positioned to force the correction.

This story was originally featured on Fortune.com