The Trump administration will seek vengeance against any state that tries to resist the spread of crony capitalism.
Donald Trump walks onstage for a campaign rally on October 12, 2024, in Coachella, California. (Mario Tama / Getty Images)
Last week, New York Times columnist Paul Krugman warned of the encroachment of crony capitalism into every corner of Trumpified America. It’s easy to imagine companies cozying up to Trump and the GOP to curry favor and be exempted from tariffs, economic powerhouses indulging in pay-to-play agreements (organizing conferences in Trump resorts and so on), and corporations asking immigration detention squads to turn a blind eye to their particular group of undocumented workers.
And that’s not to mention the conflicts of interest involved in putting Elon Musk and Vivek Ramaswamy—the Abbott and Costello of inflicting pain on federal workers (Who’s on first? Nobody’s on first, you fool. We cut that base. You can only play if you’re born on third base)—in charge of a regulation-cutting and government-budget-slashing effort from which this billionaire duo stands to benefit handsomely. Witness Musk’s opposition to extending the $7,500 federal credit for the purchase of electric vehicles, and his stated belief that eliminating this subsidy will hurt Tesla’s competition far more than it will hurt Tesla.
In a normal political moment, such explicit conflicts of interest wouldn’t even begin to pass muster. But in this moment, with the Department of Justice about to be tamed, the regulatory agencies soon to be neutered, and congressional oversight reduced to something between a joke and a prayer, nobody’s going to step up to the plate to block such self-dealing.
The same day as Krugman’s column was published, the news broke that one of Trump’s close aides, Boris Epshteyn, was being investigated for a shakedown scheme in which he demanded hefty “consultancy fees” from would-be administration nominees in exchange for pushing their candidacies with Trump. It would almost be comical if it weren’t so utterly depressing.
Then, in the middle of the night, Trump announced on social media that on day one of his presidency, in clear contravention of the free trade deal that his previous administration negotiated, he would impose a 25 percent tariff on goods coming into the US from Canada and Mexico. This will assuredly set off a scramble for exemptions, most likely involving backroom deals between individual companies and Trump’s team—since, if policy with global repercussions can be announced by diktat, surely exemptions from that policy can also be decided by diktat. And since the Supreme Court, in its infinite wisdom, has preemptively granted Trump immunity for breaking the law in any way that can even remotely be linked to “official acts” of the presidency, it’s not exactly a leap to see how favors could easily be channeled the Trump syndicate’s way as part of the boss’s “official actions” in negotiating the new regime of international tariffs.
All of this is exhausting, and we’re still the better part of two months out from Inauguration Day. Apart from Trump’s absurd desire to return US economic policy to 18th-century mercantilism and the bidding wars for high office, MAGA-man’s pre-Thanksgiving blitz of cabinet nominations gives every indication of tipping large and critical parts of the US government into perhaps terminal dysfunction. These include the Department of Health and Human Services, which now looks set to cannibalize its own public health assets just at the moment when avian flu is looming as the next pandemic threat—roughly one-third of California’s dairy farms are now reporting its presence amongst their herds, and the virus was recently found in raw milk sold in the state—and the EPA, which will be neutered just as Trump pulls the United States out of the Paris climate change agreements for the second time and when climate scientists estimate that global temperature increases will soon reach the point of no return. We are careening toward disaster here.
At the same time, Trump’s team has made it clear that a massive onslaught against immigrant communities is their top priority and that they will be barreling into blue states and cities as they try to neutralize all opposition to this agenda. Incoming border czar Tom Homan has mused aloud about arresting Denver Mayor Mike Johnston if he doesn’t allow his police to cooperate with these plans. If the Trump team succeeds in these goals, they will cause massive economic dislocation across the country—and, in states like California, will leave the agricultural economy desperately short of workers. Disruptions to the food supply chain will almost certainly lead both to shortages and price spikes.
An awful lot of people voted for Trump because they believed in his grift; they bought into the fantasy that he would magically bring grocery prices and gas prices down, that he would somehow rewind the economy to pre-pandemic days and overnight sort out the glitches and complexities in all our complex political and economic systems. Yet already the indications are that instead of the good times coming back, Trump’s second presidency will be overwhelmingly chaotic. Trump appears set to usher in an era of startling government austerity for the programs that benefit the poor and the middle class. It is also set to be an era of bursts of inflation tied to excessive tariffs and draconian immigration enforcement.
No part of the country will be immune from the destructive impact of these policies. While it’s tempting, living in California, to look at this train wreck and assume that the worst impacts won’t be felt deep in blue country, I’m not so sure that’s the case. Yes, California’s social safety net is strong, its environmental policies are second to none, its expanded healthcare system is approaching universal coverage, its public health investments, while still too little, are better than those of many states, and its well-resourced Department of Justice is willing to go toe to toe with the feds over the coming years. But the state is also in Trump’s sights. He wants to bring California’s independent politics to heel. He is determined to eviscerate the state’s waivers that allow it to craft its own environmental standards. And he is set on using the federal government’s fiscal levers to punish California and its cities if and when they don’t cooperate with his extreme agenda, especially around mass immigration sweeps and deportations.
As if this weren’t already clear enough, late last month Marjorie Taylor Greene—who come January will, gulp, be in charge of the House Oversight Committee for the Department of Government Efficiency—went on Fox News and said that she wants to use congressional powers to bottle up federal money owed to states and cities that embrace sanctuary policies.
However strong California’s safety net is, it still needs federal dollars. If the Trump administration tries to, for example, withhold Medicaid dollars from California, the state would, of course, sue, and would almost certainly win in the courts. But in the meantime, tremendous damage would be inflicted on programs that rely on the certainty that dollars will continue to flow from DC to the states.
And, even if Trump doesn’t specifically target California in this way, if the Project 2025 goal of massively cutting Medicaid by turning it into a block-grant program becomes reality, California might find itself in the unenviable situation of either letting millions of its residents fall off of the Medi-Cal rolls or having to raise huge amounts in additional state tax revenues to make up for the federal shortfall. Currently, 70 percent of California’s Medi-Cal budget comes from the feds. Those tens of billions of dollars would be almost impossible to recover simply through tweaks to the state’s tax code or budgeting process.
The same goes for the large-scale cuts to SNAP that Project 2025 and the incoming administration envisions. With or without California’s being specifically targeted and penalized by the Trump administration, across-the-board cuts to a program that currently serves more than 5 million Californians would devastate low-income families in this high-cost-of-living state.
All by way of saying that no matter which part of the country you reside in, this is going to be a rough ride. The country is heading into a period of gangster governance; it will be part corrupt, part clownish, and part authoritarian, and states that try to push back are likely to have a fire hose of punitive, or simply financially and economically destructive, policies directed their way.
Sasha AbramskyTwitterSasha Abramsky is The Nation's Western Correspondent. He is the author of several books, including The American Way of Poverty, The House of Twenty Thousand Books, Little Wonder: The Fabulous Story of Lottie Dod, the World's First Female Sports Superstar, and most recently Chaos Comes Calling: The Battle Against the Far-Right Takeover of Small-Town America.