The terrifying reality of Trump's second term: Your job, savings and freedom are at risk

Robert Reich
01 January
Donald Trump gestures at Turning Point USA's AmericaFest in Phoenix, Arizona, U.S., December 22, 2024. REUTERS/Cheney Orr/File Photo

As we come to the end of a difficult year, it’s important to establish a baseline for seeing how much worse Trump will make the American system starting January 20. Here are 20 current realities for where we are now — some brought on by Trump’s first term:

1. First, forget politics as you’ve come to see it as electoral contests between Democrats and Republicans. Think power. The underlying contest is between a small minority who have gained power over the system — really, an oligarchy of extraordinarily wealthy and powerful white men — and the vast majority who have little or none. Starting January 20, the oligarchy will be far more powerful.

2. Forget what you may have learned about the choice between the “free market” and government. A market cannot exist without a government to organize and enforce it. The important question is whom the market has been organized to serve. Starting January 20, it will serve the oligarchy even more than it already does.

3. Forget the standard economic goals of higher growth and greater efficiency. The issues are who benefits from more growth and efficiency, and how we define growth and efficiency. Starting January 20, the major beneficiaries will be Trump, Musk, and other oligarchs. Growth will be defined to exclude climate change and wars over ever-decreasing arable land and fresh water. Efficiency will be defined as eliminating anything Musk and Ramaswamy define as wasteful, potentially including social spending that many Americans depend on.

4. Don’t be fooled by claims of “corporate social responsibility.” Most of it is public relations. The oligarchy is opposed to what it calls “woke”ism, or efforts to make corporations more diverse, equitable, and inclusive. But much of so-called “corporate social responsibility” is a sham anyway. Corporations won’t voluntarily sacrifice shareholder returns unless laws require them to.

5. Even then, be skeptical of laws unless they’re enforced and backed by big penalties. Large corporations and the super-rich ignore laws when the penalties for violating them are small relative to the gains for breaking them. Fines are then simply costs of doing business. Musk and Trump are Exhibits A and B.

6. Don’t assume that we’re locked in a battle between capitalism and socialism. We already have socialism — for the very rich. CEOs today earn more than 300 times what their typical employee earns (up from 60 times in the 1970s). CEOs who are fired by their boards nonetheless get golden parachutes worth large multiples of their giant yearly compensation. Meanwhile, 60 percent of the wealth of the nation is in the hands of heirs who never earned it. Most Americans are subject to the harshest capitalism of any advanced nation.

7. Don’t define “national competitiveness” as the profitability of large American corporations. “American” corporations are now global, with no allegiance to America. This includes Musk’s SpaceX and Tesla, which have major factories in, and sales to, China.

8. Real national competitiveness lies in the productivity of the American people. This depends on their education and health and the infrastructure linking them together. But we spend relatively little on the education of poor kids. We spend more per person than any other advanced nation on health care but with the worst results of any advanced nation; our infrastructure still lags way behind that of China.

9. Look at the structure of the economy, not the ups and downs of the business cycle. Economic reporting focuses almost exclusively on the business cycle: the dangers of inflation and recession. The focus should be on systemic, structural changes that have caused the wealth and power of a few to dramatically increase over the last 40 years at the expense of the many — such as labor laws and antitrust laws. Starting January 20, labor laws will discourage workers from organizing, and antitrust laws will allow monopolies to flourish.

10. Forget the old idea that corporations succeed by becoming better, cheaper, or faster than their competitors. They now succeed mainly by increasing their monopoly power, leaving consumers and workers with fewer alternatives. Expect far more mergers, acquisitions, and monopolistic practices after January 20.

11. Forget any traditional definition of finance. Think instead of a giant gambling casino in which bets are made on large flows of money, and bets are made on those bets (called derivatives). Trump and Musk can be expected to further deregulate finance. Keep your eyes especially on crypto and private credit. Both are likely to endure major crashes under Trump.

12. Don’t assume that the billionaire financial titans who run hedge funds and private equity funds have better means of predicting market movements than anyone else. They have better access to inside information than anyone else. The Securities and Exchange Commission has steadily allowed them to benefit from access to inside information. Expect the SEC to allow even more of this under Trump.

13. Don’t confuse attractive policy proposals with systemic changes. Even if enacted, attractive policies at most mitigate systemic problems. Solving those systemic problems requires altering the allocation of power. Starting January 20, the biggest systemic challenges — climate change, nuclear proliferation, and artificial intelligence — are likely to become far more threatening.

14. Don’t assume the system is stable. It moves through vicious spirals and virtuous cycles. We are already in a vicious spiral in which great wealth has morphed into political power to change the rules of the game — taxes, labor, antitrust, bankruptcy, and finance — in ways that make the wealthy even wealthier and often harm those who are not wealthy. Expect far worse after January 20.

15. Don’t believe the system is a meritocracy in which ability and hard work are necessarily rewarded. Today the most important predictor of someone’s future income and wealth is the income and wealth of the family they’re born into. Over the next 15 years, as wealthy boomers die off and leave their fortunes to their millennial children, America will witness the largest intergenerational transfer of wealth in its history. Trump’s pending tax cuts will make all this worse; the oligarchy will become an aristocracy.

16. Don’t separate race from class. Racial discrimination is aggravating class divides, and wider inequality is worsening racial divides. But class is critical, and most Americans are in the working class — with no job security and wages only slightly higher than they were 40 years ago, adjusted for inflation. Starting January 20, the divide will widen. The middle class will shrink even further. The oligarchy will get even richer.

17. Forget the old distinctions between “blue-collar” and “white-collar” jobs. A four-year college degree, especially from a prestigious college or university, is now the most important marker of real opportunity. Don’t expect this to change under Trump, despite his populist rhetoric.

18. Think systemically. As noted, the incomes of most people are stagnant, and their jobs are becoming less secure. Combine these realities with climate change that’s intensifying competition for arable land and potable water around the world, generating larger flows of refugees and immigrants. This is allowing demagogues like Trump to fuel bigotry by blaming immigrants for the stagnant incomes and economic insecurity. After January 20, Trump has promised to deport at least 11 million people in the United States who are undocumented.

19. Understand the nature of power – who possesses it and why, how it is wielded, and for what purposes. Power means not being accountable for actions that hurt others but that increase your own power and wealth. Today’s most powerful include Trump, Elon Musk, Peter Thiel, David Sachs, Rupert Murdoch, Jeff Bezos, Stephen A. Schwarzman, Jamie Dimon, Samuel Alito, and Clarence Thomas.

20. Don’t treat power and wealth as separable. Great wealth flows from great power; great power depends on great wealth. Wealth and power are intimately connected to one another. After January 20, they will become one and the same.

***

I don’t intend for these 20 realities to make you more cynical about the system or resigned to its intransigence.

To the contrary, the first step toward changing the system is to understand it. We need to see where the system is today in order to have a baseline for measuring how much worse it will become under Trump and his lackeys in Congress and the Supreme Court.

Seeing the system for what it is and what it will be under a second term of Trump will empower you to join with others to resist Trump, and eventually change the system for the better.

NOW READ: The devastating truth about the GOP's war on education

Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/.

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