Is President Trump about to unleash another financial crisis?

President Trump's latest move in his bizarre combination of ideological conservatism and pseudo-populism is to deregulate Wall Street. As part of a broad attack on the Dodd-Frank financial reform, the administration is first taking aim at the "fiduciary rule," a regulation which forbids financial advisers from lying to their clients for their own profit. Populism!

Financial deregulation a mere eight years after the worst financial crisis in three generations is just the kind of thing we've come to expect from this omnishambles of an administration. Its most immediate effect will be to make it easier for Wall Street to further bleed the life from beleaguered American communities. But is also raises an important question: Are we about to experience another financial crisis?

Now, if there's anything the last year of history has shown us, it's that it is a mug's game to try to predict anything with precision, be it politics or finance. However, there are a few statements we can make about general economic structure, and future probabilities.

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Number one is that while Dodd-Frank did seem to cut Wall Street down to size somewhat, it was by no means aggressive enough. Financial activity can do one of two things, mechanically speaking: Facilitate the movement of capital, or loot value from the broader economy. In the latter case, that can be done explicit fraud, as with Bernie Madoff, or it can be fraud done through normal contracts, as in the Abacus case.

Or even more broadly, the whole of Wall Street can be turned into a giant money vacuum. As economist J.W. Mason has demonstrated, finance in general has seen a major push over the last generation to transform into a tool of extracting wealth from the rest of the economy. The "shareholder value revolution" transformed corporations from entities that worked to preserve themselves to entities that existed only to kick money out to shareholders with share buybacks, dividends, and borrowing — even if it meant destroying themselves in the process. Finance today is over twice the fraction of of the economy that it was back in the 1950s, and wildly more profitable, but actually less efficient at basic financial tasks.

That in turn is part of a broader political effort by conservatives to funnel money upwards by cutting taxes on the rich, slashing social services, and smashing unions. American income inequality is just about as bad as it has ever been, and the political system is dominated by entrenched wealth. Dodd-Frank impaired Wall Street some, but it was nowhere near what needed to happen.

So, things are looking good for banks!

And yet... an extremely top-heavy income distribution is also fragile and prone to crisis. As John Kenneth Galbraith wrote about the pre-Great Depression boom, when inequality was similarly bad: "The economy was dependent on a high level of investment or a high level of luxury consumer spending or both. The rich cannot buy great quantities of bread." But luxury goods markets are unstable, and a modern economy is based on mass consumption. The most solid investments will always be in catering to the largest possible population. If the working and middle classes have little disposable income, there will be inexorable pressure for Wall Street to gin up new fake new investments through financial and corporate chicanery, as they did during the housing bubble.

Trump's planned deregulation will enable this sort of thing. The fiduciary rule and many other parts of Dodd-Frank, such as reserve requirements (limiting the amount banks are allowed to borrow for each dollar of capital), are supposed to constrain financial products and make the ones that do exist less risky. There is every reason to think that the moment the chains are taken off, the great swindle will begin anew — if it hasn't already started. As Matthew Stoller argues, the key factors enabling a crisis are "size, fragility, and leverage," all of which will get worse faster as deregulation takes hold. Indeed, even with Dodd-Frank the biggest banks are bigger now than they were before the crisis.

That is not to say that the next bubble will be as big as the last one, or that it will happen on any sort of particular timescale. A really spectacular bubble requires a certain willful blindness that seems nearly impossible so soon after the last crisis. And timing the collapse of even a very obvious bubble is tough — as Keynes famously said, "Markets can remain irrational a lot longer than you and I can remain solvent."

But on the other hand, financial markets are at record highs. House prices in some big cities are nearly as high as they were before the 2008 crisis. And the psychotic complexity of Wall Street makes it very hard to even figure out where danger might be lying.

If history is any guide, it's a certainty that we are in for it at some point in the future. And President Trump's deregulation will only accelerate the process.