The Uneasy Oligarchy

Only a few months into the second Trump administration it looks like some in the moneyed class are suffering from buyer’s remorse. The president’s fixation on trade imbalances threatens to upend long-set patterns of commerce and investment, sowing anxiety among investors with international ties whose wealth depends on a climbing stock market. Whether one looks to the East Coast and the old money of Wall Street, or the new money of Silicon Valley and its techno-supremacist religion, or the big-box barons who rule the American hinterlands, the creatures of the corporate realm appear united in opposing the Trump trade war. Thus the pattern: Trump announces tariffs; his corporate patrons complain; he announces carveouts and rollbacks, leaving an uneven, patchy landscape of enforcement—a kind of rule by retraction.

The administration’s on-again, off-again tariff campaign has whiplashed markets and confounded many of Trump’s wealthy backers and hopeful admirers. Billionaire investors like Bill Ackman join multinational corporations like Apple and Walmart in their complaints. JPMorgan CEO Jamie Dimon, figurehead for the big banks, has warned that Trump’s erratic policies are going to hurt U.S. growth—that is to say, they will hurt corporate profits. Even Elon Musk, who managed to sell a Tesla to Trump in March, wants lower tariffs and has, at least for the moment, broken with Trump’s Republican Party. Trump’s dithering over trade policy poses a real risk for the profits of America’s multinational businesses and billionaires. 

The president’s mafia-like attack on the rule of law is just as worrisome for big business. Trump’s Department of Justice is investigating major law firms who work or have worked with his political enemies, demanding an end to government dealings with any companies that would hire them. In March, both Trump and Musk called for the impeachment of judges who’ve ruled against the administration, leading Republicans in Congress to introduce articles of impeachment against several federal judges. Trump appointees have interfered with prosecutions—like that of New York Mayor Eric Adams—and fired government lawyers en masse. Overall, the current government pushes away from a business climate where the rules are clear toward legal cretinism, an ad-hoc arrangement favoring whoever will do the regime’s bidding.

At first glance it all might seem like a clash between big corporations and an overly activist Trumpist state. But for businesses there are always benefits to balance the costs. The Department of Government Efficiency wields the axe of austerity against the federal bureaucracy as part of a larger agenda of corporate deregulation long dreamt of by the conservative business elite. And, of course, massive tax cuts for the rich are included in the thousand-page bill that emerged from Congress on July 3. Trump has speculated that tariff revenues could allow federal income taxes to be abolished entirely; of course, those revenues diminish if he cuts deals to lower tariffs, or if the tariffs push consumers to buy fewer imported products.

Through these very contradictions Trump’s second coming can make him appear to be everything to everyone: a populist “America First” firebrand to the MAGA base; a staunchly pro-business, typical Republican with a mania for deregulation that pleases the corporate sector; and a bold innovator practicing the kind of personalized rule idealized by Valley megalomaniacs. Right-wing influencers hail Trump 2.0 as a based crusade delivering the country from the “woke” mob. Maybe the new regime could even rebuild the country’s industrial base while they’re at it. But there are fault lines visible in the oligarchy. Trump’s public comments threaten steep tariffs for companies like Apple and Mattel, while his “One Big Beautiful Bill Act,” a “disgusting abomination” in Elon Musk’s words, prompted the disillusioned billionaire to skulk away from the challenges of decimating the federal government. While tech moguls like Musk and crypto operators imagine radical changes, powerful forces in the Wall Street world prefer a return to the corporate status quo.

We can trace these tensions by looking at the evolution of finance over the last fifteen years. From the Great Financial Crisis of 2008 to the return of inflation in late 2021, the U.S. Federal Reserve favored a policy of easy money. More than a decade of low to zero percent interest rates and a flood of newly printed dollars made funding cheap and abundant. A great deal of it flowed into the curiosities that get most of the media attention: cryptocurrencies, NFTs, memecoins, and other alternative assets that thrive in the personalized app-world of “fintech.” But beneath the surface a tectonic shift unfolded within the financier class from publicly held companies to a nouveau riche of private owners.

A tsunami of cheap loans and free-flowing investment capital minted tens of thousands of new millionaires across the country. It fueled an explosion in privately held companies and high-net-worth individuals. One of its main effects was to further concentrate wealth and incomes at the very top of American society in the hands of its most self-flattering ignoramuses.

Consider again Bill Ackman, CEO of the hedge fund Pershing Square Capital Management and one of the prominent plutocrats backing Trump. Part take-over artist of the classic Wall Street mold and part new-money upstart, the one-time supporter of Democratic candidates and Harvard alum rose to prominence in the recovery from the 2008 meltdown. The “big bad ‘alpha wolf’” of hedge fund guys, to use the Washington Post’s term, distinguished himself with one of the most disastrous hedge fund investments of all time in the pharmaceutical company Valeant, losing nearly $4 billion by the time his fund sold its remaining shares in 2017. Later, the activist investor took another embarrassing L to the tune of a billion dollars in a big, highly publicized bet against the dietary supplement company Herbalife.

Yet, like Trump, he’s mastered the art of failing upward. Ackman embodies a long-term trend in American finance. Over time, more and more money has pooled in the hands of private financiers like him, while the number of publicly listed companies has fallen. Some of that decline came from a spike in corporate mergers and acquisitions. But as a general tendency, fewer investors and owners are opting to take their companies public, while private equity firms convert many thousands of publicly traded companies into privately held assets. This “privatization of the private sector,” as Doug Henwood describes it, has empowered a new generation of financiers who shirk responsibility to shareholders or the regulatory concerns that come with them. It’s little Trumps everywhere.

The “private funds” industry is emblematic. Private funds is a catch-all term for venture capital, hedge funds, and private equity firms—the petty tyrants of finance capital. These interests grew explosively during the Biden years. Assets held by these funds grew 34 percent to nearly $28 trillion, almost matching the $31 trillion held in public mutual funds—historically the much bigger type of ownership. The number of private funds grew at an even faster rate, from about 63,000 in 2020 to almost 101,000 in 2024. Company founders and investment partnerships multiplied by the thousands. They form the financial shock troops of the new American gentry, the upper-class backbone of Trumpism. This base tends to be less complacent than the older financial establishment, which not only wants order and stability in international markets but also—at least for a time—publicly supported the ideals of diversity, equity, and inclusion. 

In the reptilian cortexes of so-called “disrupters” like Musk, woke capital is led by its standard-bearer, BlackRock. As the globe’s largest asset management firm, BlackRock has historically worked closely with the U.S. Federal Reserve and the Treasury to carry out policies and engineer bank bailouts on the government’s behalf. It is especially close to the Democratic Party—its CEO, Larry Fink, was prepared to accept a role as treasury secretary in the Hilary Clinton administration before the demise of that campaign in 2016.

With its close connections to the federal bureaucracy, BlackRock is seen as a prime commercial and ideological enemy of right-wing finance. For example, its association with “environment, society, and governance” (ESG) guidelines, which are just an investment scheme to secure returns like any other, prompted Musk to label BlackRock’s policies as “communism rebranded.” Slogans aside, the real target of investors like Musk is the $10 trillion in managed funds currently invested through BlackRock, and the lucrative government partnerships supporting its profits and power.

Likewise, in his “Techno-Optimist Manifesto,” the ovaline venture capitalist Marc Andreessen also identifies sustainability as one of the enemies of progress, “derived from communism.” Andreessen adds monopoly and regulatory capture to his list of enemies. He alludes to the same state-corporate complex that Musk and other radicalized right-wing capitalists see as the real villain: a bureaucracy devoted to central planning, which restricts the “techno-capital machine, the engine of perpetual material creation, growth, and abundance.”

A whole financial Freikorps of private investors, fund managers, and activist shareholders see the Trump administration as a battering ram to smash the regulatory walls guarding the big money, i.e., the enormous pools of savings managed by government-connected fund managers and banks. This includes, for example, some $8 trillion in invested retirement accounts, as well as a bigger share in the roughly $6.1 trillion pool of public pension assets. Even Trump’s Treasury Secretary Scott Bessent complains about alleged central planning under Democratic governments and talks about the need to increase competition and reduce the power of market incumbents—by which he means opening the door to this vault for him and his colleagues. For the financiers backing Trump a raid on big finance could yield a jackpot of billions.

Of course, all this is presented to the public eye as a holy war on the left. As is often the case, the most debased episodes of the culture war are actually spasms of a profits war. One faction of the ruling class feels frozen out and sees an opportunity to weaponize the state against its enemies within the ruling class. On the outs are Democratic elites like Larry Summers, and the university he once presided over—Harvard. Faces of the state-finance establishment like Larry Fink and Jamie Dimon are sidelined, while a new team of opportunists is called to the field. This is not the takeover of government by oligarchs; it is an aspiring oligarchy overthrowing an old one by seizing government power. 

Trump’s alignment with insurgent finance and tech monopolists has opened up a broader cold war in the capitalist class. His economic base has afforded him the freedom to act with dubious policies both at home and abroad, including the tariffs, tax cuts, and reckless slashing of government agencies. But his support is bound to shrink if his policies unleash a new round of inflation or if an economic downturn results in bankruptcies and plunging corporate profits.

Naturally, this creates an irresistible opportunity for the Democrats to do what they do best: inching closer to the Republican positions while selling themselves as less “extreme.” The more chaotic Trump 2.0 is, the more Democratic moderates will push to position the party as the responsible, stable party of business, and the more appealing they will be in the eyes of that class. Big finance in particular will be keen to quash the techno-optimists’ revolt. And they probably won’t be able to do that through the Republicans—the party is too committed to the chain-saw demolitions set in motion by Musk and the techno-libertarianism advocated by Andreessen.

This sets up a vicious political circle: MAGA radicalizes the Republican Party with the support of an insurgent faction of the corporate class, prompting the more status-quo oriented business interests to align with the Democrats; the Democrats are further lobotomized by the influence of these interests, their campaigns made even more torpid, bereft of content; and the working class is left without any representation besides Republican appeals to America First economic warfare and delusions of industrial grandeur. Workers continue to exit mainstream political life. Politics is reduced to a raw corporate battle for spoils, with the state as its terrain. Emptied of democratic or working-class meaning, mass politics evolves into mass conspiracism. 

That means governing becomes more difficult, no matter which party controls the White House. Stable government requires an understanding between the corporate world and state institutions. With the corporate elite mainly focused on business and competitive priorities, it is usually up to government actors to try to organize them into a coherent class, whose interests can then be aligned with the longer-term, strategic view of the state.

Trump’s mixed messages are scrambling this project. The ruling class is not just at odds with the state; it is at war with itself, with separate factions vying for dominance over the class as a whole. Trump has let a genie out of the bottle, as it were, that may prove difficult to contain. This will intensify the breakdown of mainstream politics. Between the accelerating corporatization of the Democratic Party, the berserker nationalism of the Republicans, and a deepening legitimation crisis of political institutions, the basic task of governing the country becomes secondary to the Trump administration’s higher goals: indiscriminate cruelty toward disfavored groups and revenge on any remnants of the Democratic Party’s liberal wing—all while enriching themselves as a privileged clique of insiders at the public’s expense. How does the larger business sector benefit from it?

The situation is fluid, with a confluence of class forces swirling around Trump’s return. Different industries may break in different directions. A closer look at the MAGA 2.0 business coalition offers clues as to how things might shake out.

Unholy synergies characterize the new regime’s corporate alliance. Its marquee policy, mass deportation, is a massive payout to the private prison and security industries. Next-gen defense technology contractors like Anduril are primed to profit immensely from a massive expansion in AI-based surveillance platforms like UAVs and autonomous sentry towers. AI-based facial recognition software will turn wrongful arrests into profits for companies like Clearview AI. A technological dystopia awaits that will make the wildest imaginings of William Gibson or Philip K. Dick look like a children’s bedtime story.

For a tech-entrepreneurial elite out of ideas, Trump arrived just in time. Their reactionary turn was born of desperation. After years littered with failed Next Big Things—web 3.0, the “internet of things,” the Metaverse, NFTs, and now, potentially, AI—Silicon Valley investors threw aside the pretense that they stood for something more noble than the mindless pursuit of profit. Compounded with the risks of regulation, Chinese competition, and foreign taxes on their hated platforms it was easy for these champions of the free market to find their statist savior in Trump. In this we find the real reasons behind their late political awakening.

But an even bigger prize awaits. Trump holds the key to the promised land: the federal defense budget. By the 2020s, the peerless innovators of American capitalism were desperate for government handouts, literally begging the Pentagon to let them in. Now, with partnerships between upstart defense tech firms like Anduril, Thiel-founded Palantir, SpaceX, and ChatGPT creator OpenAI making a play for government payouts with a receptive Department of Defense, the Valley is poised to cash in on national defense, where profits fall from the sky like rain. Displacing the military’s prime contractors—an entrenched oligopoly that includes names like Lockheed, Boeing, and Raytheon—to grab a share of the ever-growing spend on national defense may even solve generative AI’s main issue: profitability. OpenAI, for example, spent $9 billion to make $4 billion in 2024. The AI revolution remains a costly, unprofitable solution in search of a problem. But maybe the habitual optimists of the Valley will find their salvation through militarization. They, too, will get their government bailout. 

It gets worse: planet-destroying, Trump-supporting oil and gas companies will naturally profit from the administration’s fossil fuel fanaticism, but it’s unclear whether they will be able to push extraction and production much past the record levels already reached by the Biden administration. Just in time an exciting new opportunity presents itself: skyrocketing energy demand from the insane overbuild of AI data centers, the bulk of which will go to fossil fuel suppliers.

At the end of the day, Trump is a real estate magnate not likely to forget his roots in that sector. With former private equity executive William Pulte at its head, the Federal Housing Finance Agency is preparing to deliver a huge payday to the Finance, Insurance, and Real Estate (FIRE) sector by privatizing the Federal National Mortgage Association and Federal Home Loan Mortgage Corporation (Fannie Mae and Freddie Mac), the government-sponsored agencies that guarantee 70 percent of mortgages in a $50 trillion housing market. Such changes will likely drive mortgage rates even higher, delivering fat profits for the industry while making life even more unaffordable for the majority.

As Trump aims to deliver big for these parts of his coalition, there will be losers in the business world too, especially if he remains fixated on his hobbyhorse of trade imbalances as the way other countries are victimizing America (he will). U.S. carmakers are heavily dependent on North American supply chains and are keen for a new trade deal with Canada and Mexico. Without it, Trump’s trade policy exposes them to severe risks. With no deal or carve outs that exempt imported parts from tariffs, the U.S. auto industry, or what’s left of it, will quickly lose any enthusiasm they may have for Trumponomics.

The outlook for agriculture is equally murky. While Trump’s policies have the support of a big slice of independent farmers and agribusiness, his first term hurt small farmers significantly. Now, tariffs are decimating the very family farms Trump claims to love. Firming up support will require the administration to strike more deals opening new markets for U.S. agriculture—and, more to the point, avoiding foreign retaliations that close them. Typical of Trump’s priorities, he’s already moved against several programs that are meant to help small farmers, while pushing cuts to food stamp programs that help the poor as well as food producers.

For health care, one of the country’s biggest and most complex industries, deregulation is the order of the day. Still stung from their failure to repeal the Affordable Care Act in Trump’s first term, the regime wants to cut wherever else they can—especially with new measures to push millions of people off Medicaid. This will be devastating for hospitals—especially in rural areas—and other providers that depend on government funding for their existence. The cuts in Medicaid will endanger the health of the poor, as well as the health care sector that serves them. It may firm up the industry’s traditional place in the Democratic business base.

But the political terrain is molten, shifting as the economic magma churns beneath it. Trump 2.0 could yet solidify a stable investor coalition if it manages to secure a new trade regime that calms the stock market—but that would require something Trump seems to dislike: stability.

It all adds up to a mess of intensifying right-wing radicalization with worsening government dysfunction, complemented by an equally vacuous center. The journalist Cory Doctorow has provided a fitting, all-purpose metaphor with his “enshittification” thesis: the rapid degradation of the information environment into unusable, bot-infested trash as the companies that own it metastasize into cancerous monopolies. Likewise, the journalist Ed Zitron has extensively covered the “rot economy,” in which hyper-financialized internet services exist to make as much money as possible for a handful of billionaires by delivering the worst, most unusable product.

A similar logic of enshittification has overtaken the two major parties. The Democrats evolved into a state-party bloc whose main purpose was to deliver growth in the asset values of its most powerful business partners while trying (and failing) to pass it off as a program for general prosperity; Trump’s kleptostate has openly dispensed with the pretense that modern government is for the good of the majority, literally fleecing its own crypto-bro supporters for easy money. They resolve the legitimation crisis of the U.S. state by simply discarding the notion of legitimacy.

Neither party is much of a mass party, anymore. They don’t represent the diverse interests of the people to forge a compromise with big business; they present the diverse interests of corporations and investors to the people. They are more like shambolic blobs of campaign staffers, advocacy organizations, political action committees, media personalities, think tanks, dark-money 501(c)s, billionaire donors, small contributors, and hordes of consultants competing to siphon off some of the money flowing through it all. The whole thing is more akin to a buzzing swarm of insects gnawing away at some dead animal—although this may be unfair to the bugs.