Newsletter Twenty Five
Re-balancing democratic capitalism 2. Donald Trump's "great moving right show"1.
A warm welcome to the second of the four newsletter concerning the re-balancing of democratic capitalism that complete this series on “The Life and Times of Democratic Capitalism”. It’s the first of a triad on Donald Trump’s second term as US President and focuses on his governing style. Newsletter 26 considers Trump’s signature tariff policy and his re-ordering of geopolitics. The final newsletter (no. 27) poses the question: “is Trump 2.0 a watershed?”. Enjoy.
“THE GREAT MOVING RIGHT SHOW”1
“Alice laughed. There’s no use trying”, she said, “one can’t believe impossible things”. “I dare say you haven’t had much practice,” said the Queen...”Why, sometimes I’ve believed as many as six impossible things before breakfast” (Lewis Carroll, Alice Through the Looking Glass, chapter V, Wool and Water).
In some ways it would have been appropriate to end these newsletters on the life and times of democratic capitalism with only the briefest of forays into Trump 2.0. That would more or less have fulfilled my main purpose in writing them, which is to document how and why democratic capitalism has mutated so profoundly over the course of my lifetime. But such is the scope and scale of the Trump 2.0 administration’s policy ambitions that many commentators believe that some kind of watershed has been reached that will result in the further re-ordering of the global economy and domestic and international politics over the next few years 2. For that reason, I believe there is value in setting out in somewhat greater depth the arguments for and against this ‘watershed’ thesis. Any such assessment is necessarily speculative, of course, especially one made early in Trump’s second term, and it would be foolhardy to predict precisely how Donald Trump’s return to the White House in January 2025, courtesy of the strength and depth of the MAGA movement, will impact domestically and on the world at large.
The detail of these various policy ambitions is complex and in constant flux. This holds across the whole gamut of domestic and foreign policy considerations, leaving observers such as myself with a series of unanswered questions, not definitive outcomes. What, for example, are we to make of the twists and turns in US-China and US-Europe trade relations? And could Donald Trump resolve the issue of the US government’s growing debt by defaulting (just as he has done for his private businesses)? This is what was proposed by Stephen Miran (who is now a member of the Board of Governors of the Federal Reserve) when chair of Trump’s Council of Economic Advisers, should tariffs fail to re-order the global trading system 3.
I consider some of that policy detail as it relates to tariffs and geopolitics (how geographical factors such as resource endowments and strategically important locations influence international politics) in the next newsletter (no. 26), holding back consideration of the “watershed” thesis to the final newsletter (no. 27). I’ll start by focusing in this newsletter on Trump’s governing style and the way it shapes policy delivery.
Trump’s governing style
In my view, the first, and most important, thing to bear in mind about Donald Trump, a man of messianic self-belief, is that he is a populist politician par excellence, given to grandstanding, conspiracy theories such as birtherism 4 and a performative style of politics as spectacle. Remarkably, Trump was able to convince his MAGA base that the 2020 presidential election had been stolen from him by a ‘deep state’ involving security, intelligence and law enforcement agencies, the judiciary, the Internal Revenue Service and the federal civil service, resulting in thousands of his followers storming the Capitol in Washington DC on 6 January 2021 in the name of ‘Stop the Steal’ (Dunt and Lynskey, 2024, pp 112-13). ‘Politics as spectacle’ is perhaps best exemplified by the President’s remark at the end of his and Vice-President Vance’s meeting with (or rather ambush of) Ukraine’s President Zelensky in the Oval Office in February 2025 that “this is going to be great television”5.
As with all populists, complexity is reduced to simplicities, Eric Edelman, former US ambassador to Finland and Turkey and under-secretary of defence during the George W. Bush administration, argues that Trump’s antagonism towards Europe and antipathy to free trade are among a series of ‘core biases’ which he has articulated with remarkable consistency over his decades in public life (Trump the businessman and TV celebrity contemplated making a presidential bid in 1987 and did so in 2000 and again in 2012). “The first is that (our political leaders) are stupid. Two, our allies have been taking us for suckers. And three: the terms of international trade have been very unfair to America, and we ought to put up tariffs. In his view, trade is zero-sum, and if we have a trade imbalance with anyone, then they’re stealing our money” (cited in Stallard, 2025).
But there is a certain ‘Alice in Wonderland’ quality to what is going on in President Trump’s second term, too. I am referring here to Trump’s belief in, and stated desire to achieve, seemingly impossible things such as ending Russia’s war with Ukraine in 24 hours; his land grab for Canada and Greenland (and the Panama Canal); and his vision for a reconstructed Gaza. It’s not easy to make sense of these ‘Alice in Wonderland’ pronouncements. The way forward, I think, and this applies to the daily storm of social media posts and press briefings emanating from the White House as well, is to appreciate that such confusion and attention-seeking is calculated, and a key part of Trump’s governing style. That said, a close reading of the Trump 2.0 administration ‘s National Security Strategy (The White House, 2025) suggests that Trump is serious about achieving these land grabs. More on the NSS in the final newsletter (no. 27).
But it’s also important not to overestimate the distinctiveness and novelty of Trump 2.0. As I made clear in the previous newsletter and as we’ll see in the next newsletter in the context of Trump’s tariff policy, there is considerable continuity with the policies of the Biden administration. Indeed, a bi-partisan consensus of sorts can be traced back to 2016, when both presidential candidates supported protectionist policies.
Some additional comments are in order before I take a closer look at Trump’s tariff policy in newsletter 26. One is that Trump, the first billionaire to hold presidential office, appointed several more plutocrats to his administration, many without government experience 6. Also, and this is a significant difference from Trump 1.0, following years of preparation the president is now surrounded by an intensely loyal team that broadly shares his ‘core biases’.
Perhaps the most notable appointee is, or was, Elon Musk, the world’s richest man, whom Trump appointed as his efficiency advisor charged with spearheading the President’s ‘war on woke’. The context for this appointment was a speech that President Trump made to a joint session of Congress in March 2025, where he took direct aim at diversity, equity and inclusion (DEI) policies across the entire federal government, the military and indeed the private sector, pledging to reverse the “woke capture of corporate America” and threatening to withhold billions of dollars in federal funding and grants from ‘woke’ (progressive or liberal) universities such as Harvard.
DEI policies are the least of it, as far as federal government employees are concerned. Some 300,000 of them have lost their jobs as a result of the efficiency drive. The following excerpt from an article on national security policy by US academics Henry Farrell and Abraham Newman (2025) clarifies why this is a cause for concern, as well as revealing a good deal about Trump’s governing style.
“In Trump’s eyes, all institutional restraints on his power are illegitimate....The National Security Council, which is supposed to coordinate security policy across the federal government and agencies, has cut its staff by more than half…..The State Department has been decimated by job cuts, while the traditional inter-agency process through which policy gets made and communicated has virtually disappeared…..Instead policy is centred on Trump himself and whoever has last talked to him in the uncontrolled cavalcade of visitors streaming through the Oval Office….This is leading to pushback from allies” (a point I’ll develop in the final newsletter).
There are similar concerns about the way the president has compromised law enforcement by firing experienced federal prosecutors and hand-picking unqualified loyalists to staff the Department of Justice. Critics allege that the DOJ is being used to target perceived enemies of the president and to settle scores with public figures he has a grudge against, such as the former Director of the Federal Bureau of Investigation (FBI) James Comey (Pallone, 2025).
Border control is another of the Trump 2.0 administration’s most controversial policies, featuring a blitz of executive orders to detain and expel illegal immigrants. Launched in May 2025, “Operation at Large” is a nation-wide, ICE-led (Immigration and Customs Enforcement) plan involving the arrest and mass deportation of unauthorised immigrants. It is reshaping federal law enforcement as officials and resources, including up to 21,000 National Guard troops, are shifted to immigration-related cases (Ainsley et al, 2025). Aggressive enforcement has resulted in record low border crossings but there are widespread concerns that the methods used to implement Operation at Large – relating to family separation, detention conditions, asylum restrictions and the militarisation of border enforcement – are inhumane and degrading, There has been a slew of legal challenges, particularly relating to the use or misuse of executive orders 7. I revisit ICE in my final newsletter, in the context of the killing of two US citizens by ICE officers in separate incidents in the city of Minneapolis in January 2026.
Another, more structural feature of the Trump 2.0 administration is the fusion of ‘big tech’ and state power: an alliance which, in return for a few hundred million dollars’ of contributions to Trump’s re-election campaign, has been described as bestowing three “amazing gifts” on the ‘broligarchy’. These are (1) massive government contracts; (2) the elimination of data protection regulations in place in other jurisdictions, notably the EU, whose model of regulated capitalism is anathema to Donald Trump; and (3) immense state-sanctioned bargaining power in Big Tech’s dealings with workers, suppliers, competitors and users (Varoufakis, 2025) 8.
Taken together, it’s entirely reasonable, in my view, to frame the cumulative impact of these features of the Trump 2.0 administration’s governing style as marking the ascendancy in the US of a plutocratic version of illiberal democratic capitalism.
End notes
1. This phrase was first used by the sociologist Stuart Hall to describe the shift to the right in British politics under Mrs Thatcher.
2. A re-ordering characterised by Schropp (2024) as a “New” Washington Consensus that replaces six decades of trade liberalisation with protectionist trade and industrial policies.
3. There is no provision in the US bankruptcy code for the federal government to seek protection, but Trump could order the Treasury secretary to abstain from paying interest and/or repaying the principal on the federal debt. Missing a payment would put the US in default (Silber, 2025).
4. Birtherism is the claim that Barack Obama was not born a US citizen and so had no legal right to be president.
5. Arguably, the abduction and indictment in a US courtroom on drug trafficking charges in January 2026 of Venezuela’s ousted president Nicolas Maduro and his wife runs the Zelensky ambush a close second as spectacle.
6. For details, see Abby Schultz “Trump’s team is stocked with billionaires. Why the super-rich are taking over Washington”, Barron’s.Jan 16, 2025.
7. There has been some notable judicial pushback, particularly in connection with the Trump administration’s use of wartime powers to deploy National Guard troops in Democrat-led cities like Los Angeles and Chicago. The National Guard is part of the US military and can be called upon by state governors, or in certain circumstances the president using wartime powers. A US District judge – a Trump appointee – found that the president’s use of wartime powers in Portland, Oregon was “untethered to the facts” and ordered the troops to be withdrawn. When the administration tried to circumvent her order, the judge wrote that “this country has a long-standing and foundational tradition of resistance to government overreach, especially in the form of military intrusion into civil affairs”. Stephen Miller, Trump’s senior adviser, called the ruling “legal insurrection” and stated that “the President is the commander-in-chief of the Armed Forces, not an Oregon judge”. (Labbott, 2025). See also Rosenberg and Trevizo (2025).
8. I am writing this some time after Musk’s resignation as Trump’s efficiency adviser, seemingly jeopardising an election-winning alliance built around Musk’s promotion of the president’s priorities to 219 million followers of his X feed. This brought MAGA to a wholly different audience: the young guys who like crypto-currencies and cyber trucks (electric pick-up trucks manufactured by Tesla) (Kapadia and Cadwalladr, 2025). I’ll touch on the reasons for Musk’s resignation, which reflect an underlying tension in the MAGA movement, in the final newsletter, but the important point to make in the present context is that a group of ‘tech barons’, specifically a coterie of Silicon Valley venture capitalists and former Pay Pal associates, are still very much represented in the corridors of power. J.D. Vance’s election campaign for a seat in the Senate in 2023, which launched the vice-president’s political career, was in large part funded by Peter Thiel, a co-founder of Pay Pal and also co-founder and co-owner of Palantir Technologies, a data analytics company that develops software for defence, intelligence, military and law enforcement agencies (Ingram, 2024).
References
Ainsley, J., Reilly, R., Smith, A., Dilanien, K., and Fitzpatrick, S. (2025) ‘A sweeping new ICE operation shows how Trump’s focus on immigration is reshaping federal law enforcement’, www.nbcnews.com.
Dunt, I. and Lynskey, D. (2024) Conspiracy Theory, London: Weidenfeld and Nicolson..
Farrell, H. and Newman, A. (2025) ‘The weaponised world economy’, Foreign Affairs, September/October: foreignaffairs.com.
Ingram, D. (2024) ‘Mapping ties to right-wing tech barons’, www.nbcnews.com
Kapadia, A and Cadwalladr, C. (2025) ‘New leaders will rise from this, but they’re going to come from within the culture’, Byline Times, April, 18-19.
Labott, E. (2025).’The President’s new war powers, and where they lead’, guest post in The Preamble, 7 Oct, sharon.mcmahon.substack.com
Pallone, F. (2025) ‘Pallone files brief challenging Trump’s weaponization of DOJ in Comey case’, October 28 Press Release, pallone.house.gov. Frank Pallone Jr is a Democrat who represents New Jersey’s 6th Congressional District in the House of Representatives.
Rosenberg, M. and Trevizo, P. (2025) ‘Four years in a day: the new immigration’, www.propublica.org.
Schropp, S. (2024) ‘International trade policy under Biden: the “New” Washington Consensus and its discontents’, Mercatus Center Policy Brief, mercatus.org.
Schultz, A. (2025) ‘Trump’s team is stocked with billionaires. Why the super-rich are taking over Washington’ www.barrons.com.
Silber, W. L. (2025) ‘William L.Sibler says more’, Project Syndicate, June 3.
Stallard, K. (2025) ‘The return of America first’ The New Statesman, 14-20 March.
The White House, (2025) ‘National Security Strategy of the United States of America’, November: www.whitehouse.gov.
Varoufakis, Y. (2025) ‘Elon Musk, Donald Trump and the Broligarchs’ novel hyper-weapon’, diem25.org.