Business
Column: Vanguard, one of our top investment firms, shuns crypto 'like the plague.' That's good for its customers
After Jan. 10, when the Securities and Exchange Commission approved the first bitcoin exchange-traded investment products, the biggest investment firms jumped into the pool with both feet, jostling one another to offer their clients, big or small, access to bitcoin funds.
All, that is, except the second-biggest private investment management fund on the planet, Vanguard Group.
The firm has made clear, most recently in a Jan. 24 message to its clients, that it has no plans to offer a bitcoin exchange-traded fund (ETF) or any other cryptocurrency-related products. Nor will it allow any such products from other firms to be offered via its brokerage arm.
While crypto has been classified as a commodity, it’s an immature asset class that has little history, no inherent economic value, no cash flow, and can create havoc within a portfolio.
— Janel Jackson, Vanguard
Vanguard spelled out precisely why it is shunning crypto despite the “headlines and buzz” the asset class generates. Put simply, it doesn’t think crypto belongs in retail investors’ portfolios.
That’s a smart and responsible policy that places the interests of Vanguard’s clientele ahead of those of the greedy promoters and scamsters infecting the entire cryptocurrency field.
Bitcoin and other crypto investments have typically spelled financial disaster for ordinary investors. Stories of life savings lost in supposedly safe crypto investments are distressingly common.
Vanguard’s executives know they’re swimming against a tide of pro-crypto propaganda from entertainment and sports stars as well as prominent authors. That doesn’t faze them.
“In Vanguard’s view, crypto is more of a speculation than an investment,” Janel Jackson, the firm’s global head of ETF capital markets, stated in the recent message, which was headlined “No bitcoin ETFs at Vanguard? Here’s why.”
Contrasting crypto with traditional asset classes, she wrote: “With equities, you own a share of a company that produces goods or services, and many also pay dividends. With bonds, you get a stream of interest payments. Commodities are real assets that meet consumption needs, [and] have inflation-hedging properties…. While crypto has been classified as a commodity, it’s an immature asset class that has little history, no inherent economic value, no cash flow, and can create havoc within a portfolio.”
These words are significant for several reasons. One is Vanguard’s size: With more than $7 trillion in assets under management as of 2023, the firm ranks as the second-largest American investment management firm, after BlackRock (more than $9 trillion). Also, more than many other such firms, Vanguard’s target market is retail investors pursuing a long-term buy-and-hold strategy.
Then there’s Vanguard’s history of viewing trendy flavor-of-the-month investment crazes skeptically and keeping them off its platform.
Before getting more deeply into Vanguard’s decision and history, a few words about the SEC’s decision to give bitcoin ETFs a green light.
Under its chairman, Gary Gensler, the agency has consistently resisted giving approval for crypto-based investing schemes. In a tweet as recently as Jan. 9, Gensler advised investors to “be cautious” about anything related to crypto assets. “There are serious risks involved,” he wrote.
The very next day, however, the SEC approved proposals from several investment firms for bitcoin ETFs after having rejected 20 applications dating back as far as 2018. What had changed, Gensler observed after the vote, was that the SEC’s hands were tied by a ruling from a federal appeals court in Washington, D.C. The court found that the commission hadn’t made the legal case for turning down the latest application.
Gensler emphasized that the SEC’s vote didn’t mean that its general distaste for crypto investments had changed. The ETF it approved was limited to holding a single cryptocurrency, bitcoin, he warned, and shouldn’t be taken as a signal that the commission would look kindly on other crypto-based investment products.
Commissioner Caroline A. Crenshaw, like Gensler a member of the SEC’s Democratic Party majority, was even more blunt in dissenting from the approval. Are the crypto markets safe? she asked rhetorically. “Substantial evidence indicates that the answer is no.”
She added that the spot bitcoin trading underlying the new ETFs “is so susceptible to manipulation, so rife with fraud, so subject to volatility, and so limited in oversight that we cannot credibly say … that there are adequate investor protections in place.”
The SEC’s approval, which covered applications for 11 bitcoin ETFs developed by firms such as BlackRock, Fidelity and Invesco, inspired a rush of hyperventilating from crypto enthusiasts, who described it as a “game-changer” for the asset class. But it didn’t quell concerns from other investment watchdogs such as Dennis Kelleher, the co-founder and chief executive of Better Markets, who called it “a grievous, historic mistake” that will suck unwary investors into “a worthless product.”
Of the nation’s top investment management firms, almost all are offering clients opportunities to invest in bitcoin and other cryptocurrencies. Some are marketing these assets more aggressively than others.
Fidelity, which ranks third in assets under management, behind BlackRock and Vanguard, started offering employers sponsoring 401(k) plans for their workers a bitcoin investment option in 2022, only a few months before Sam Bankman-Fried’s crypto scam, FTX, cratered due to fraud. (A federal jury, it may be recalled, found Bankman-Fried guilty on seven fraud counts in November.)
Fidelity’s venture raised the hackles of Democratic Sens. Richard Durbin of Illinois and Elizabeth Warren of Massachusetts, who urged the firm to back away from its 401(k) option. Fidelity plainly didn’t do so, since it still promotes bitcoin for 401(k) plans on its website.
That brings us back to Vanguard. (I’m an investor in some of its funds; since it’s a mutual — owned by its fund shareholders — technically I’m an owner of the firm, albeit a minuscule one.)
To be fair, Vanguard doesn’t promise that it will never offer bitcoin investments: “We continuously evaluate our brokerage offer and evaluate new product entries to the market,” Vanguard spokeswoman Karyn Baldwin told me by email.
But she made it plain that bitcoin ETFs will have a mountain to climb to show they belong with “asset classes such as equities, bonds, and cash, which Vanguard views as the building blocks of a well-balanced, long-term investment portfolio.”
All investment firms make a big deal about placing their clients’ interests front and center, but few were based on that principle to the extent of Vanguard.
The firm was founded in 1975 by the venerated John C. “Jack” Bogle. He built the firm around the concept of passive investing through index funds. Replicating the holdings of the major stock indexes, these funds trade relatively seldom because the components of the indexes rarely change.
That reduces commissions and other transaction costs such as taxes, which cut into clients’ returns. More important, such passive investments consistently do better than “active” fund managers, who trade frequently and pick their investment targets, hoping to capture a run-up in particular stocks or market categories.
Bogle was hostile to speculation, as opposed to investing, to the end of his life in 2019. In a 2012 book titled “The Clash of the Cultures,” he contrasted “the culture of long-term investing — the rock of the intellectual, the philosopher, and the historian — with the culture of short-term investing — the tool of the mathematician, the technician, and the alchemist.”
He lamented “the gradual but relentless rise” of the latter, “characterized by frenzied activity in our financial markets, complex and exotic financial instruments,” which came to dominate a financial system “peppered as it is with self-interest and greed.”
If you think that would make him extremely leery of bitcoin, no kidding. At an investment conference in 2017, answering a question about bitcoin, he responded: “Avoid it like the plague. Do I make myself clear?”
He explained, “Bitcoin has no underlying rate of return…. There is nothing to support bitcoin except the hope that you will sell it to someone for more than you paid for it” — in other words, the “greater fool” theory.
It’s worth noting that such skepticism doesn’t always translate into a business decision to avoid the accursed investment. After all, Jamie Dimon, the chairman and CEO of JPMorgan Chase & Co., expressed similar doubts about bitcoin around the same time, calling it a “fraud … worse than tulip bulbs.”
Unlike Vanguard, however, JPMorgan hasn’t followed the instincts of its leader: The firm has been giving clients access to crypto funds at least since 2021.
The roster of trendy investments that Vanguard has denied to its customers, almost invariably to their benefit, is a long one. A list compiled recently by Morningstar’s John Rekenthaler includes government-plus funds in the 1980s, internet funds in the late 1990s (“What artificial intelligence investing is today, internet funds were 25 years ago,” Rekenthaler wrote — fair warning) and “130/30 funds” of 2009 vintage, which held hedge fund-like portfolios mixing long and short positions, supposedly to goose returns without adding risk.
As Rekenthaler noted, all these ideas eventually “crashed and burned.” None was embraced by Vanguard, largely because every one ran counter to the interests of long-term investors.
Vanguard’s policy evidently has stuck in the craw of the crypto faithful. One claimed in a tweet that a Vanguard representative he reached “apologized profusely for management’s lack of vision, admitted they owned Bitcoin personally, and said that they’ve received literally thousands of calls from customers looking to move accounts.”
All we can say to that is: “Oh, sure.” Here’s a prediction, though: Vanguard, which has been around for nearly a half-century, will still be around long after crypto has been consigned to the investment craze graveyard, where it belongs.
Business
Crop Undercount Raises Questions About Reliability of U.S.D.A. Data
The Agriculture Department projected last July that farmers would harvest 86.8 million acres of corn in autumn. The projection was repeatedly revised upward until, in January, the department found 1.3 million more acres of corn — an area larger than Delaware — and concluded that the final amount harvested was 91.3 million acres.
“It was a miss. No other way to call it,” said Seth Meyer, who served as the department’s chief economist until leaving in December.
The 5 percent undercount may seem small, but it was the department’s worst projection in recent memory. It came as the Trump administration was cutting staff at the Agriculture Department and as President Trump’s trade war raised prices for equipment and hurt exports.
Some people in agriculture have become increasingly worried about the reliability of department data. That skepticism could lead to a breakdown of the historically close relationship between the department and farmers it serves, they said.
“U.S.D.A. always had a great relationship with its farmers,” said Mr. Meyer, who now leads the Food and Agricultural Policy Research Institute at the University of Missouri. “That seems to have weakened.”
The Agriculture Department publishes thousands of reports annually on everything from county-level sorghum planting to China’s hardwood market. But its estimates of crop size are some of the most closely read reports. Traders use information from the reports to immediately buy and sell commodities, affecting the prices that farmers receive for their crops. Farmers use the information to make decisions about how and when to try to sell their crop for the most money.
Department officials haven’t offered an official explanation for the miss, but many outside it point to staffing cuts and lower survey response rates.
The Agriculture Department lost 23,000 employees in 2025, as Elon Musk’s Department of Government Efficiency slashed jobs across the federal government. The National Agricultural Statistics Service, which produces crop reports, was one of the hardest-hit divisions; it lost 34 percent of its staff, going to about 500 employees from around 800.
The corn miss prompted Farm Journal, an agricultural publication, to ask respondents to its monthly survey whether they remained confident in department data. Most of the farmers, ranchers and economists polled responded “no.”
“People trade the reports whether the reports are true or not,” said Shay Foulk, who farms 1,500 acres and runs a seed business near Peoria, Ill. Since farmers are trading in commodity markets against sophisticated managed funds and trading algorithms, he said, “the farmer just feels they are at a disadvantage if those numbers are inaccurate.”
For years, the department has struggled with fewer farmers returning its surveys, one of the key data sources for crop production reports. The response rate for recent surveys was around 40 percent, according to the department, down from around 60 percent a decade ago.
“When farmers lose trust in the agency, they don’t want to participate as much, and so there is a direct line between low staff and low participation and incorrect data,” said Senator Amy Klobuchar of Minnesota, the ranking Democrat on the Senate Agriculture Committee, in an interview.
In March, Democrats on the Agriculture Committee wrote a letter to Scott Hutchins, the under secretary for research, education and economics at the Agriculture Department, concerned about the reliability of the department’s data. They also said the department’s proposed relocation of employees from Washington to hubs around the country “threatens to worsen the loss of key institutional knowledge and staff capacity.”
Mr. Hutchins, who was appointed by Mr. Trump last year, said in an interview that farmers still trusted the agency but had “well-founded frustrations” with the corn misestimate.
Asked whether losing employees had anything to do with the miss, he said, “Absolutely, unequivocally no.” Mr. Hutchins added that the department’s ability to develop new efficiencies had been “enhanced tremendously” by the departures, and that it was using more remote sensing abilities and artificial intelligence to collect data.
“I don’t understand what all of the additional staff might’ve been doing for us to still produce the same outcome with the current staff that we have,” he said.
Mr. Hutchins did say he was worried about the department’s entering a data doom loop if response rates continued to fall. “It is kind of a self-fulfilling prophecy,” he said. “The fewer surveys we have, the larger the standard error we will have in estimates.”
The corn miss was a major topic of conversation last week at the semiannual Agriculture Department data users’ meeting, held at the Federal Reserve Bank of Kansas City. It is normally a low-key event attended by departmental economists, academics, agricultural company representatives and others, where heads of different divisions preview new data products and answer esoteric methodology questions. But this time, there was a heavy focus on heightening transparency and increasing survey response rates.
Lance Honig, the acting director of the department’s statistics division, suggested that 2025 was an anomaly. Because of the large amount of corn planted and record yields, the normal statistical models were off.
“I would suggest that the 2025 crop season was a bit different than anything we had seen in, oh, I don’t know, what would that be — 80, 90 years,” Mr. Honig said.
The Agriculture Department recently put out a request for information for commentary and ideas about its data products. It is also planning to increase the number of farmers surveyed for its acreage reports, pending approval from the Office of Management and Budget for the higher cost to send out more surveys.
One meeting attendee, Bill Lapp, a food industry consultant, suggested that surveys be made mandatory for those receiving money from the government’s bailout package for farmers. “For $12 billion, can’t you get them to fill out a damn postcard a couple of times a year?” he asked in a question-and-answer session.
Farmers have a deep and direct relationship with the federal government, which sustains much of their business. Farmers participate in crop insurance and conservation programs, apply for grants and receive disaster assistance and ad hoc payments. The Agriculture Department projects that government payments will account for 29 percent of farm income this year.
These programs run on data obtained from farmers. They must certify the number of acres they plant with the Farm Service Agency in order to participate in income support programs. To get crop insurance, farmers must give their financial information to the Risk Management Agency. So when they are also mailed surveys asking detailed questions about their crops, some farmers get annoyed, because they believe the department has, or should have, the data.
Mr. Foulk, the Illinois farmer, said farmers were in part disgruntled with the federal government because of their declining influence. On tariffs, biofuels policy and the farm bill, farmers haven’t gotten what they wanted lately.
“We had the privilege of having this outsized voice, and now we’re not as loud,” he said.
Farmers are unlikely to stop participating in Agriculture Department programs that directly benefit them, no matter how they feel, said Mr. Meyer, the former agency economist. But their very viability is underpinned by data and analysis.
“Supporting data collection has historically and continues to support the things that directly impact them,” he said.
Business
California billionaire tax proposal attracts 1.5 million signatures. Here’s what happens next
California, home to the ultra-rich in Silicon Valley and Hollywood, is embroiled in a heated fight over whether to tax billionaires to fund healthcare.
This week, supporters of the proposed billionaire tax began submitting nearly 1.6 million signatures, nearly twice the number needed to qualify for the November ballot.
Election officials now need to verify that the signatures are valid for the initiative to land on the ballot.
The proposal would impose a one-time tax of up to 5% on taxpayers and trusts with assets valued at more than $1 billion, with some exclusions, such as property.
Supporters of the tax, including the Service Employees International Union-United Healthcare Workers West, say it would raise $100 billion, offsetting federal funding cuts to healthcare. A small portion of the funds would also go toward education and state food assistance.
If the proposal makes it to the ballot, it sets the stage for an intense, costly battle over whether the state’s billionaires should pay for services that lower-income residents depend on. Some tech moguls have pushed back against the idea and threatened to move. Some have already moved.
Voters will probably be bombarded with political ads and arguments from opposing sides as the battle intensifies.
Here’s what could happen next:
What are supporters arguing?
Supporters of the billionaire tax are tapping into people’s frustrations about healthcare and wealth inequality. They’ve pushed back against the idea that billionaires can avoid the tax by moving, noting that it applies to billionaires residing in California as of Jan. 1, 2026.
“When funding is cut, it brings a world of pain,” said Mayra Castañeda, an ultrasound technologist and a member of SEIU-United Healthcare Workers West, in a statement. “It means longer ER waits, fewer healthcare workers, rural hospitals shutting down, delayed care and lives lost that could have been saved.”
Vermont Sen. Bernie Sanders has backed the idea.
“At a time of massive income and wealth inequality, the richest people in our country must start paying their fair share of taxes,” he posted on social media site X on Monday.
What are opponents arguing?
Opponents say the tax could harm California’s economy and leadership in innovation without addressing the state’s financial woes.
“Because the state relies so heavily on high-income-earner tax revenue, this measure could lead to reduced budget revenue in the long term as highly mobile wealthy individuals leave the state to avoid this new tax,” said Rob Lapsley, president of the bipartisan California Business Roundtable.
The Legislative Analyst’s Office said last year that it is hard to predict the exact amount the state will collect because of factors such as fluctuating stock prices, which affect wealth. In a December letter, the office said the state would probably collect tens of billions of dollars from the wealth tax, but it could also lose other tax revenue.
California Gov. Gavin Newsom opposes the wealth tax proposal. Earlier this year, he told Bloomberg he had concerns about how the proposal had been drafted. He also expressed fears that wealthy taxpayers will move out of the state.
“The impact of a one-time tax does not solve an ongoing structural challenge,” he told the news outlet.
How much are opponents spending to fight the billionaire tax proposal?
Billionaires are spending millions of dollars to fund groups that are fighting the proposal or promoting other solutions they say would address wealth inequality.
In late December, PayPal and Palantir co-founder Peter Thiel contributed $3 million to the California Business Roundtable, which is opposing the billionaire tax, according to spending data filed with the secretary of state.
In March, former Google Chief Executive Eric Schmidt donated $1 million to that group. Other tech executives have contributed hundreds of thousands of dollars this year. It’s unclear how much of that money goes toward opposing the tax since the donation was made to the entire group.
Since January, tech executives, venture capitalists and business leaders have donated roughly $93 million to a nonprofit called Building a Better California, according to data on the secretary of state’s website. A large chunk of that funding came from Google co-founder Sergey Brin, who donated $57 million to the nonprofit. Executives from DoorDash, Ripple, Stripe and other companies have also contributed to the group.
Building a Better California’s website outlines policies it supports, such as expanding affordable housing and more transparency in state government. The group has told donors that it offers “near-term and longer-term protection against wasteful government spending and any and all new taxes on personal property and personal assets.”
Brin, who relocated to Nevada last year, told the New York Times that he fled “socialism” when his family left the Soviet Union in 1979, and he doesn’t “want California to end up in the same place.”
Are there other proposals that could kill the billionaire tax?
Yes. Another initiative, known as the “Improving Transparency, Effectiveness & Efficiency in California Government Act,” could nullify the billionaire tax act.
It would prevent new taxes from being exempt from a voter-approved state spending limit, in contrast to the billionaire tax measure.
Supporters of the transparency act, including Building a Better California and Inland Empire Economic Partnership, plan to submit about 1.5 million signatures to county election officials this week.
If voters approve conflicting ballot measures, the one with more yes votes would take effect.
How much have groups spent on a ballot measure in the past?
Hundreds of millions of dollars has been spent on ballot measures in the past. In 2020, a record $200 million was spent on Proposition 22.
The initiative, funded by Uber, Lyft, DoorDash and other businesses, allowed gig companies to classify their workers as contractors rather than employees.
With the battle over the billionaire tax expected to heat up, spending on both sides is likely to climb.
Times staff writer Seema Mehta contributed to this report.
Business
Rising Fuel Prices Could Force Excruciating Choices on Economic Policies
With the flow of energy through the Middle East still mostly blocked and oil prices rising, policymakers in Europe are confronting the immediate impact of higher costs and trying to decipher the potential economic damage of a prolonged conflict.
On Thursday, officials at the European Central Bank and Bank of England are expected to hold interest rates steady, but investors are betting that each central bank will raise rates at least twice later this year. Economists and lawmakers will be watching closely for signs about how the central banks will respond to jumps in inflation.
The effective closing of the Strait of Hormuz, a vital waterway for fuel and other commodities off Iran’s southern coast, has sharply increased energy prices. Brent crude, the international benchmark, has pushed well above $100 a barrel, while European natural gas prices are nearly 40 percent higher since the United States and Israel attacked Iran at the end of February.
The war had an almost immediate impact on European inflation, increasing gasoline prices at the pump, airfares and other fuel-intensive activities. In Britain, the annual inflation rate climbed to 3.3 percent in March and is expected to stay around 3 percent through the second quarter, a percentage point above the central bank’s target. For the 21 countries that use the euro, inflation averaged 2.6 percent in March, up from 1.9 percent a month earlier.
But for the central banks, the question is whether higher prices will ripple through the economy and eventually push up wages, potentially setting off a spiral of escalating prices that would warrant aggressive rate increases like those in 2022. For now, analysts say there isn’t enough information on how the war, seemingly in a holding pattern, will affect the economy. While President Trump has extended a cease-fire in the region, traffic through the strait remains sparse.
At the same time, the concern about inflation is being weighed against the possibility that the war damages economic growth. In that scenario, policymakers wouldn’t want to tighten financial conditions. Consumer sentiment in Germany, the eurozone’s largest economy, dropped to its lowest level in three years, data this week showed. This month, the International Monetary Fund said the bloc’s economy would grow 1.1 percent this year, but that assumed a relatively quick resolution to the war and the recovery of global energy markets.
“The E.C.B. will stay in ‘wait and see’ mode, at least for now,” analysts at HSBC wrote in a note. But “the risk of prolonged energy supply disruption, coupled with risks of second-round effects on inflation,” increase the probability of the central bank’s raising interest rates later.
It’s a dilemma facing central banks farther afield as well. This week, the Bank of Japan voted to hold interest rates steady, but it was a split decision with several officials preferring an increase in rates. The central bank raised its inflation forecast while warning that economic growth is likely to slow this year.
On Wednesday, the Federal Reserve also held interest rates steady. It acknowledged the war’s effect on the economy, saying inflation had ticked up because of the “recent increase in global energy prices.”
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