Collusionism Part IV: Advanced Institutional Necrosis
The Second Trump Administration has been a breathless speed run toward the death of democracy and capitalism in America.
This is the fourth part in an ongoing series devoted to Collusionism, a political-economic system governed by principles radically different from capitalism and socialism. Part I sketched the broad outlines of the Collusionist system. Part II analyzed how job creation legitimizes and reproduces Collusionism. Part III explored how Collusionist wealth is accumulated by actively suppressing the freedom of information and choice required for markets to function. While not necessary, it may be helpful to reference those previous articles while reading this week's piece.
It’s not about timing the market, it’s about time in the market. Anyone invested in the stock market has likely heard this tried and true adage from their financial advisor any time political clouds darken and the economic waters become choppy. Rather than panic selling to unload stocks before the market drops, advisors remind their clients that the transaction fees and tax hit from selling will often eat away profits that could accrue if they just stood firm on a buy-and-hold strategy. Despite all the ups and downs of the previous decades, those who have kept their money in the market have been rewarded handsomely. A diversified portfolio tracking the S&P 500 will have yielded over 600% returns for anyone who bought in 30 years ago and resisted the urge to sell.
Over these past two weeks of tariff-induced market turmoil, the urge to sell has been strong. This past Wednesday morning as major stock indices were cratering into bear market territory and even the bond market looked wobbly, another voice whispered in the ear of investors, a voice more powerful and reckless than the typical level-headed financial advisor. “THIS IS A GREAT TIME TO BUY!!! DJT,” Donald Trump announced at 9:37 AM on his Truth Social Platform. Traders who opened bullish call options on the S&P 500 around the time of Trump’s post would be rewarded generously when a 90-day moratorium on most tariffs was announced and the stock market roared back for its largest single-day gain since 2008. In just a few hours, the “timing the market” holders of the call options would see a 2,100% return on their investment, triple that of the “time in the market” investor who bought and held stocks for the past 30 years. The age-old adage It’s not about timing the market, it’s about time in the market might need to be revised in an age when the sitting President of the United States can trigger double-digit swings in the market in the blink of an eye.
If there has been one unifying theme of the second Trump administration it has been institutional necrosis, the cellular death of the public and private institutions that allow American democracy and capitalism to function. First, it was the administrative state, government agencies, and executive branch departments like USAID, NOA, and the Department of Education getting chopped to bits by Elon Musk’s DOGE chainsaw. Then it was the courts - their independence and credibility undermined by the Trump administration's refusal to comply with court orders and threatening non-cooperative judges with impeachment. Over the past two weeks, the American stock market has been the latest institution struggling with the rapid onset necrosis inflicted by Donald Trump’s unhinged and erratic tariff announcements. “He made two and half billion today and he made nine hundred million. Not bad,” Trump announced while pointing to two executive friends during an Oval Office visit immediately after the historic stock rally triggered by his backpedaling on the signature policy of his presidency. Democratic lawmakers condemned Trump’s actions as flagrant cronyism, vowing to investigate possible insider trading and market manipulation. Whether those charges would stick is highly unlikely, even if DOGE cuts hadn’t left the SEC and IRS in tatters and the judiciary was not under ideological assault by the Trump Administration. Congress members across the political spectrum from Nancy Pelosi to Marjorie Taylor Greene have made outsized gains on curiously timed trades without facing any consequences. The one sure thing is that the Stock Market, the beating heart of American capitalism is reaching a state of institutional decay where we must question whether it is primarily a vehicle for long-term investment or a goodie bag for short-term political favors.
In the previous articles in this series, I have used the term Collusionism to describe this decayed state of our political and economic order. While maintaining the outward form of capitalism and democracy, Collusionism is an entirely different order that takes hold when corporate and political elites collude to insulate themselves from the bottom-up accountability mechanisms that allow both capitalism and democracy to function properly. In idealized capitalism, the creative destruction of market competition holds elites accountable through the decisions of informed and empowered consumers who punish companies that do not meet their needs in a cost-effective manner. In Collusionism, political elites reward their corporate benefactors by passing laws that restrict consumer choice and information, while simultaneously protecting “too big to fail” corporations from entrepreneurial losses, the risk that serves as the primary disciplinary mechanism of true capitalism. Similarly, while in idealized democracy the political elites are held accountable by informed and empowered voters who can punish elected officials who do not serve their interests, in Collusionism, ultra-wealthy donors protect compliant politicians by filling their campaign coffers with donations while using Super PACs to spread misinformation through the airwaves and social media platforms, keeping voters ignorant and enfeebled.
Without the flows of accountability to keep capitalism and democracy healthy, the necrosis of Collusionism sets in. Just like in the human body where necrosis results from restricted blood flow caused by tumors or obstructions, the institutional necrosis of Collusionism is caused by the malignant tumors of concentrated wealth that obstruct the flow of accountability from the people to the elites. Sensing this institutional decay, Americans voted for the outlandish miracle cures hawked by Trump in 2024 over the out-of-touch reassurances by the Biden and Harris campaigns that our economy and administrative state were perfectly healthy. It was a grievous mistake. Rather than remove the tumors of accumulated wealth blocking the mechanisms of accountability, Trump has begun blood-letting the patient until it is dependent on him and him alone.
Trump is our first unabashedly Collusionist president, wearing his transactional self-aggrandizing grift as a badge of “Art of the Deal” sophistication. Every action taken by Trump since Inauguration Day has only accelerated the Collusionistic rot. Trump’s approach is justified by the notion that American greatness will only be restored when all power and trust is vested in him rather than the institutions that led us to become the most powerful country on earth. In the name of saving American “capitalism” from so-called Marxists, Trump is hollowing out every institution that makes capitalism work. The “Liberation Day” reciprocal tariffs amount to a self-imposed embargo, isolating America from world trade more rapidly and recklessly than any policy of autarky proposed by the most anti-imperialist left-wing dictatorship. The fanciful notion that Americans could just start manufacturing iPhones and Nintendo Switches within months brings to mind Mao’s disastrous Great Leap Forward that required Chinese peasants to install backyard blast furnaces to begin producing steel. The point of the tariffs is not the reinvigoration of American capitalism but the concentration of power in Trump’s hands. Trump will use his emergency tariff powers to wall out foreign competition, keeping subservient American companies within his gated kingdom, desperately jockeying for his favor. His shameless manipulation of the American stock market will only destroy its institutional credibility as a stable haven for long-term investment, as it increasingly degrades into a roulette wheel that Trump can spin or stop on a whim. Trump’s assault on judges and law firms that have opposed him in the past will undermine the rule of law that gives foreign and domestic companies the confidence to invest in America. Like the absurd idea that “free speech” on campus requires the extrajudicial kidnapping and extradition of legal resident student activists, Trump’s actions to save American business will only accomplish the opposite, hastening the decay of our economic system into corrupt and unproductive Collusionism. The American Body Politic is rapidly succumbing to necrotic Collusionism. Trump’s cure for the disease is to kill the patient.
Democratic resistance must be built on the realization that the only cure for Collusionism is an active and immediate attack on the tumors of concentrated wealth insulating our political and corporate elites from accountability. Yet Congressional leaders like Chuck Schumer and Hakeem Jeffries seem content to let Trump have his way, assuming that the disastrous policies will be punished by voters in 2026 and 2028. Instead, Schumer and Jeffries themselves have been punished by historically low approval ratings for Congressional Democrats, as average Americans have an even better understanding that unchecked institutional rot under Trump might undermine the very elections that are supposed to save us. An even worse approach is the signaling by some Democrats of agreement with Trump’s deranged tariff plan like Michigan Governor Gretchen Whitmer’s awkward Oval Office photo op and Senator Elise Slotkin’s attempt to out-Trump Trump by introducing a bill banning the sale of all Chinese automobiles. Passively letting the Collusionist disease run its course or trying to find silver linings in the affliction will only empower Trump and accelerate our nation’s decline. The peril of the moment is only being recognized by immediate mass resistance and mobilization through movements like Bernie Sanders’ Fighting Oligarchy tour and the 50501’s Hands-Off protests. Sadly there are forces within the Democratic Party hellbent on snuffing out these left populist grassroots efforts. Derek Thompson, co-author of the New York Times bestseller Abundance took to CNN to criticize Bernie Sanders’ tour because he believes America needs the oligarchy to stand up to Donald Trump. With Democratic leaders from Cory Booker to Kamala Harris getting behind this corporate-friendly Abundance Agenda, it is becoming frighteningly clear that the party of supposed resistance is drifting yet again toward a party of appeasement that it has been for the past decade.
Trump’s return to the White House was paved by so many Democrats thinking that letting him be punished at the polls, co-opting his anti-China bombast, or cozying up to “good billionaires” would save us. The necrosis killing American democracy and capitalism cannot be cured by just fighting the Collusionist-in-Chief Donald Trump but also by attacking all oligarchic concentrations of wealth that insulate our elites from accountability. Until the Democrats muster the courage to take a scalpel to the tumorous growths of wealth concentration killing our democratic institutions, Donald Trump will only be the latest and not the last billionaire threat to the United States of America.