America the unstable

What a victory for America First in 2024 would mean for American business and political stability.

The 2024 election may well lead to a major period of unrest and lawfare. A victory for America First would have a major impact on corporations, increasing their legal costs, raising tariffs on China, targeting media and technology firms perceived as pushing a radical left wing agenda and increasing legal uncertainty in the energy industry.  

Ed: I had said in a previous piece that I expected political instability in the United States to intensify following the Ukraine war. I wanted to clarify what I meant and elaborate on the business implications.

Republicans plan regime change

According to this apparently thoroughly sourced Axios report, allies of former President Donald Trump, who is almost certainly considering running for the 2024 elections, intend to put into effect a new executive order that would permit an incoming president to place up to 50,000 senior, policy-making positions of the civil service at risk, and strip off any employment protections that they have. They are also building a database of thousands of loyalists whom they can place in key positions across the intelligence community, the justice department, the national security apparatus, the homeland security department, the state department, and the Pentagon. I believe that the aim would be to rid American institutions of senior personnel who support gender theory, critical race theory, open door immigration, free trade, green energy and offshoring of manufacturing jobs. This would be nothing short of regime change and would break what American dissidents variously describe as the uniparty, the permanent state or the deep state.

It is worth noting that the Axios story claims that Trump’s PAC had more money than the DNC and RNC put together. In America’s electoral system, money does not always win elections, but it strongly correlates with winning them. Furthermore, Trump’s endorsement is one of the most powerful political weapons a Republican candidate could have, and the perception of the GOP is that the nomination is Trump’s if he wants it. According to the Axios story, much of the establishment that surrounds the GOP has been moving away from what I would describe as the liberal interventionist and economically libertarian policies of McConnel, Bush and Reagan to favour those of Trump. It is also noteworthy that popular alternatives to Trump, like Ron DeSantis, only have a chance to win the Republican nomination because they are seen as more effective and capable than Trump in executing an America First agenda. As such, any Republican who wins the presidency in 2024 would probably implement the plan detailed by Axios and attempt a thorough purge of the executive branch. Furthermore, it is increasingly clear that the base of the Republican Party identifies with America First and with Trump, not with the more mainstream Republican political figures. It is unclear how much of the Congressional Republican Party will sign onto an America First agenda, but a future America First Republican administration will have much greater authority over the party than the first Trump administration did. 

Democrats can and will fight back

The Axios story itself reflects an intensive intelligence collection effort on the part of the Democrats. Clearly, the Democrat establishment and their media allies are highly concerned about the return of Trump. It is worth recalling that prior to the 2020 election, mainstream media and the tech companies (Meta, Alphabet, Twitter) had prevented the spread of various damning stories emanating from the Hunter Biden laptop, which has shown conclusively that the now-President’s son had had highly suspicious dealings with China and with Ukraine. Perhaps burned by the impact of their coverage of Hillary Clinton’s emails in 2016, the media and technology oligopoly chose instead to push the false narrative that the Hunter Biden laptop was Russian disinformation.  It is also worth recalling that, in the run up to the 2020 elections, the Democrats had put in place an operation to ready significant street protests if Trump had won, and to and pressure CEOs to get them to push Trump to concede if he lost. A similar operation is probably in the works for the 2024 elections, with the dual aim of rallying business leaders against Trump and readying street protests as a fall back option. Furthermore, an America First agenda would threaten the interests of various big businesses that rely on offshoring, cheap imports, H1B visas and other practices to cut costs and increase their profits. Such businesses would almost certainly finance Democrats in their opposition to America First. Tech companies, for their part, would also view the rise of America first as a threat. Firstly, America First would threaten their ties with China, undermining their profitability. Secondly, America First would seek to punish them for their perceived overt bias against Republicans, their support for radical ideas about race and sexuality, and for their willingness to use technology to harm the well-being of Western youths to increase their profits. As such, tech companies will probably also support the fight against Republicans. It is worth recalling that in addition to Facebook suppressing the story about Hunter Biden’s questionable dealings with China and Ukraine in the 2020 election, Mark Zuckerberg personally gave USD300 million to “protect election integrity” which was seen by Republicans as an attempt to support Democrats. He will likely double down on this bet, despite his worsening relations with American progressives who demand that Facebook exercise more censorship. It is true that various companies are increasingly intimidated and frustrated by the woke fringe of their own staff. I do not believe that this is enough to get them to accept an America First administration, even if the nominee is not Trump. And so, we are likely to see an alliance of some major businesses, social media companies, traditional media and far left activists that seek to disrupt the agenda of an America First administration through a combination of lawfare and unrest. Unrest can easily rise to the scale seen during the summer of 2020 following the death of George Floyd.  

Commercial implications

It is certain that tech companies will have to spend billions to appease America First, should the movement emerge victorious from the 2024 elections. Furthermore, companies like Amazon and Alphabet are likely to need to spend considerable sums to fight off anti-trust lawsuits that an America First administration would probably bring against them. Companies with a high reliance on China, like Walmart, Target and Amazon, will also probably be impacted by even stiffer tariffs and trade disruptions. Green energy will probably see its subsidies cut or threatened, while oil and gas stand to benefit from a more favourable regulatory environment. That said, energy investors in America will be hesitant, as they fear that the Democrats would emulate precedent that America First is planning to set, meaning that regulations risk swinging back and forth in a highly unpredictable manner. Investors will probably require higher returns to deal with this risk. Furthermore, it is likely that a populist America First administration would target pharmaceutical companies, trying to force them to reduce the cost payable by both the state through Medicaid and Medicare, and by the public. Healthcare will likely be a battleground issue. America First will use against the pharma companies their support for the mutilation inherent in transgender conversion. America First will also probably shine a light on pharma companies stock buyback policies, which cost them far more than their R&D.

That said, an America First movement will likely continue with tax cutting policies, high defence spending and probably greater infrastructure spending. There is, however, a risk that companies that wish to benefit from contracts with the US government will have to abandon controversial, radical policies on abortion, race and sexuality. The question the populists will face is how to finance their ambitions, given America’s soaring debt to GDP ratio and already high budget deficits. Furthermore, the base is sick of endless wars, but the America First movement may well end up escalating the confrontation with China, without reaching any compromises with Russia.

The civil service and the Democratic Party will confront an America First administration on each of the issues. Their resistance will take the lawfare, with blue states’ attorney generals coordinating lawsuits to stop a new Republican administration. The risk here, however, is that the Trump administration worked with Senate Republical leader Mitch McConnel to fill thousands of judicial positions, as well as to turn the Supreme Court to the right. Democrats could easily turn to deligitimse the court system, creating undermining the stability of the republic and of the rule of law. The Democrats’ and civil service’s resistance will also include media leaks intended to undermine a new Republican administration. The Democrats will also use their various activist outfits to organise protests, including in Washington DC, New York, California and other jurisdictions that are soft on crime. In places such as Austin, TX, where there is a Democratic majority in a Republican state, the risk of violent confrontations with police will be much higher. Throughout the US, I expect rioting and arson attacks to increase. The deep state will not allow America First to rein it in without putting up a serious fight. Given how high the stakes are, the tactics used will be harsher than ever.

Ed: In a previous edition of this article, I mistakenly said that the Trump camp was preparing lists of 50,000 loyalists. They are preparing lists of thousands, but the application of Schedule F would place 50,000 federal government jobs at risk. I apologise for the error.