What to make of the blur of news, revolutionary rhetoric, panicky fundraising texts, economic indicators, the plunging stock market, and, of course, President Trump’s address to a joint session of Congress on March 4, 2025? Are we on the brink of a socioeconomic Armageddon? Or is there—as the great Tallulah Bankhead once said, “less in this than meets the eye”?

Leaving aside the buckets called “culture wars” and “foreign policy,” we may distinguish eight distinct forces at work in Trump’s economics. They are (a) the targeted destruction of specific regulatory agencies, (b) random disruptions of the federal civil service, (c) old-fashioned Reaganism, (d) tariffs, (e) migration, (f) energy, (g) the military, and (h) the general effect of rash and unpredictable policymaking—otherwise called uncertainty and chaos.

Targeted destruction. Trump’s early days have seen the declared end for the Consumer Financial Protection Bureau and the National Labor Relations Board, crippling blows to the Environmental Protection Agency, and a start to dismantling the Department of Education, among others. These are regulatory and supervisory agencies specifically targeted by longtime adversaries, now empowered. Their demolition (in whole or part) is a political gesture that will weaken labor against business, consumers against bankers, and citizens against polluters. However, taken alone these will not have large economic effects in the short run.

In the longer run, systematic deregulation will degrade economic performance. Not all regulation is effective. But quite distinct from its social and health benefits, effective regulation serves the interests of advanced businesses, including in manufacturing, by forcing old, dirty, and unsafe technologies and low-wage competitors out. Trump’s government, like others before it, is—unfortunately for its own declared strategy—in the hands of the reactionary branch of the business elite.

Arbitrary disruptions of the civil service occur through blanket measures such as the peremptory dismissal of probationary employees, pressured early retirements, office closings, and downsizing, notably at Veterans’ Affairs, the Internal Revenue Service, the Social Security Administration, and other agencies, including the Forest Service and the National Park Service. The effect is to make those agencies less efficient at what they do. If there is a political strategy behind this, it is to deepen public frustration with the federal government, creating a feedback loop that can be exploited later. Over time, degrading the federal government will also degrade economic performance, fostering a race to the bottom as key functions are taken up, in part and inadequately, by state and local governments—or allowed to decay and disappear.

Old-fashioned Reaganism turns up in Trump’s budget: to cut spending (mostly Medicaid, if it happens), and cut taxes, while leaving defense alone. These are the most economically significant of Trump’s measures—but their effect, relative to Reagan’s, is doubtful. Medicaid now covers 90 million Americans; the program is popular, bipartisan, and may be difficult to cut. The Trump tax cuts are highly regressive—but they appear, so far, to be mainly extensions of current tax law that would otherwise expire. The Pentagon budget is already very high, which was not the case in 1981. Reaganomics did spur a strong recovery from the 1982 recession, giving Reagan his reelection boom. Trump’s version may not have the same effect this time around.

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The tariffs are the most dramatic of Trump’s economic measures, because they lie within his sole discretion, and he can impose or retract them at will. In a simple world—like the one depicted in economics textbooks—they would fall straightforwardly on consumers or producers, and either way they foster import substitution on both sides of the tariff wall. In the real world of complex supply and production chains, they are highly disruptive and could kill the profits of major American firms—a fact that seems to have dawned, a bit late, on the Trump team. So the tariffs on Canada and Mexico were on-off-on and now off again, thanks (most likely) to stiff complaints from the auto makers. With respect to those countries, our largest and closest trading partners, it’s possible that the big stick may turn into a weak reed.

Not so with China, where the tariff war is on, and China is biting back. US tariffs on China will force supply chains for many Chinese goods to divert to other Asian countries—a boon, for instance, for Vietnam. China’s tariffs will hit American farmers, who sell a large share of their wheat, corn, rice and meat to China. Both sides will adjust. A key consequence may be in the markets for high-end chips and software, as the US moves to restrict or shut down Chinese apps like TikTok, DeepSeek and WeChat, not to mention RedNote. Is this, perchance, the agenda of formerly free-trading oligarchs in the tech sector, suddenly faced with superior competition in their niche?

We do not yet know where Trump’s tariffs will settle; a general high-tariff regime is possible. What would it bring? Higher prices for American consumers, and higher profits for businesses protected by tariff walls. Will it bring back jobs and production to American shores? Probably not. Monopoly power usually brings lower output at higher prices; there is no automatic path from higher profits to competitiveness. If the government wants more (and better) production, it needs extra tools: mandatory investment directives, excess profits taxes, credit allocation and price controls, public purchase and ownership of new factories—and above all competent public supervision of private performance. That is how it was done in the New Deal and in the mobilization for World War II—creating the era of American dominance to which Trump would like to return.

Trump’s energy policy is “drill, baby, drill.” Here the US does have a big cost advantage, especially in natural gas, over most of the world. Let’s also admit that subsidies for renewable energy and electric cars were oversold. And let’s overlook the environmental consequences, for a moment. Will Trump deliver a new age of cheap and abundant fossil fuels? Apart from geology itself, drilling depends much less on deregulation than on price. So far, under Trump, the oil price is falling, and so is drilling, which peaked back in 2023. Cheap is possible; cheap and abundant, to fuel an industrial revival? We’ll see.

Trump’s military program appears twofold: to boom US arms exports to Europe, while reorienting the Pentagon toward Asia and missile defense. Sales of overpriced kit to the Europeans would help the big military contractors and permit the US military to shift missions—toward a world-ending war with China that, let’s hope, never happens. Saddling Europe with financial and manpower responsibility for confrontation with Russia would be a disaster for Europe—but one can see how it fits into a US calculus in economic and military terms. A major reset of the US military is long overdue—the bases, ships, and aircraft are all obsolete and would not withstand serious combat. But so far, it appears, Trump appears content to waste real resources on a military whose power is, to a large degree, illusory. This, too, is an obstacle to the economic transformation he purports to seek.

Migration figures large in Trump’s rhetoric but only trivially in his economics. At the present pace of deportations (about a thousand per day) a shortage of labor in the low-end services migrants presently perform is unlikely, although fear may keep many away from their present jobs. Even so, American wages will not be restored by a mere shortage of undocumented workers.

Uncertainty and chaos are the final factors in Trump’s operation. The winners, broadly, will be financial speculators with fast fingers and (especially) inside knowledge. Those in position to move quickly in and out of stocks, bonds and real estate—and perhaps even in and out of the dollar from a base in crypto—could be the biggest winners. The apex financial and tech predators, already at Trump’s feeding trough, could end up in control of the whole economy. Which may be their goal. Well, no surprise—it’s an oligarch’s world, is it not?

And what do the oligarchs want? Like all feudal lords, they want untrammeled power and insecure, obedient serfs—and for this, the vast social services operation that is the US federal government must be cut back, along with the professional classes who form the modern core of the Democratic Party. The words of Andrew Mellon (as recalled by Herbert Hoover) come to mind: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system.… enterprising people will pick up the wrecks from less competent people.” The problem the oligarchs face, and possibly do not understand, is that they cannot do this, any more now than then, without bringing the economy to ruin—from which recovery will be possible only with the competent government they are now working to destroy.

Will they push that far? For now the budget deficit remains high (about 6 percent of GDP), and this supports economic activity. Firing federal employees saves little money in the large scheme of the economy. Apart from severe Medicaid cuts, there is little in Trump’s cost-cutting plans that could reduce deficits by much—a good thing, as that would drive GDP down.

On the other hand, the Federal Reserve is keeping interest rates up—a bad thing that could be bringing on a recession even now, but given the Fed’s failure to slow the economy over three years, it’s hard to be sure. The stock market is skittish, to say the least. The New York Times has caught wind of a slowdown and naturally blames Trump—in mainstream journalism, economics and witchcraft are easily confused.

Apart from interest rates, perhaps the largest risk is the simple fact that the expansion is getting old. Some shock—a stock crash, a financial crisis, a new war, or a new pandemic—could occur at any time. But a general slowdown in business and household spending, not specifically Trump’s fault but aggravated by the chaos and uncertainty in Washington, may be the biggest single threat right now. If that happens, Trump’s reaction will tell us just how much pain his team is prepared to allow.

Over the longer term, it is hard for an old progressive, who fought against the forces of deindustrialization and financialization when they took control under Reagan in the early 1980s, not to sympathize with the stated vision of the old man now in charge. But it is one thing to yearn for a vanished past of superior American engineering, industrial strength and technological prowess—and quite another to create the conditions for revival. Handing the economy over to libertarians, monopolists, speculators, and rich reactionaries with big egos will not make America great again.