Election 2026: Cooper headliner fails on currency asset exchange, Bessent says

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(The Center Square) – Inviting a lightning rod of a senator to spur North Carolina Democrats at their annual state convention, highlighted by support of U.S. Senate candidate Roy Cooper, is reverberating again.

This time, the thunder is from the U.S. Treasury Department, just as the G20 Finance Track gathering was to open in Asheville.

Sen. Elizabeth Warren, D-Mass., campaigning for multiple candidates backed by the Democratic Socialists of America within the national Democratic Party, drew the ire of U.S. Treasury Secretary Scott Bessent with a letter two weeks ago. Responding publicly on Thursday in letter and social media, he told the third-term senator he’d offer a Foreign Exchange for Dummies tutorial to help her understand a recent use of the Exchange Stabilization Fund in buying yen.

Bessent said Warren had it wrong “about where the money came, what the transaction was, and whether there was even a borrow.”

“No new congressional appropriation was involved, and no credit was extended to Japan,” Bessent wrote to Warren, explaining the Treasury exchanged existing ESF foreign-currency assets for yen. “Japan owes Treasury nothing. There is therefore no risk that Japan will fail to repay a debt that does not exist.”

Japan holds U.S. Treasuries, is a trading partner and a treaty ally.

“Disorderly yen markets can trigger forced unwinds, which could destabilize global markets and ultimately raise borrowing costs for American families and businesses,” Bessent wrote. “For a fuller explanation, I recommend any entry-level course in international finance for you and your staff, or I can give you a tutorial on Foreign Exchange for Dummies.”

Warren questioned Bessent’s authority on the transaction. Her answer was in a footnote to her letter, Bessent said, where Section 5302 gives the secretary with presidential approval the authority “to deal in foreign exchange in support of orderly exchange arrangements.”

Bessent also wrote, “Treasury’s legal analysis begins with reading the statute. I recommend you try the same.”

Washington and Tokyo bought yen after the currency dipped to a 40-year low. Use of the Exchange Stabilization Fund is not new; it has not been used since 1998.

Warren was the guest of the North Carolina Democratic Party for its annual convention in Raleigh on Aug. 1, delivering the Saturday night after-dinner keynote speech. It was a time to push Democrats to donate and rustle up votes, particularly for Cooper against Republican Michael Whatley and for incumbent state Supreme Court Justice Anita Earls against Republican former state Rep. Sarah Stevens.

Warren has drawn widespread attention to her support of New York City Mayor Zohran Mamdani and his socialist view for the party, saying his view represents what the party should look like going forward. Cooper welcomed her support.

Cooper was also aligned with Warren in support deep into June for former Maine U.S. Senate candidate Graham Platner despite each of them and the world already knowing of his chest tattoo resembling the Nazi-era death’s head symbol; his social media posts of a misogynistic, racist and homophobic nature; dismissal of sexual violence; interactions with antisemitic podcasts; text messages early in his marriage suggesting infidelity; and ex-girlfriends’ depictions of a heavy drinker with aggressive behavior.

The Democratic Party, on a national scale, has tension in an ideological tussle for control. Democratic socialism is on the rise, replete with a desire not only for social reforms but also restructuring, including abolishing the U.S. Senate, having Congress pick the president and U.S. Supreme Court, defunding the Pentagon, and allowing all residents, regardless of citizenship, to vote.

What's commonly called the establishment Democrats, meaning mainstream members supportive of traditional institutional norms and pragmatic changes rather than complete overhauls, are being tested in their "big tent" slogan. Not all candidates connected to the rising tide agree with all tenets, and that's no different from either main party today or in yesteryear.

On its website “about us” section, the Democratic Socialists of America say, “Capitalism is a system designed by the owning class to exploit the rest of us for their own profit. We must replace it with a democratic socialism, a system where ordinary people have a real voice in our workplaces, neighborhoods, and society.

“We want to win ‘radical’ reforms like single-payer Medicare for All, defunding the police/refunding communities, the Green New Deal, and more as a transition to a freer, more just life.”