Inflation rose to 2.9 percent in September from 2.7 percent last month, and the economy produced a dismal 22,000 in the latest jobs report. Meanwhile, the imminent threat of a recession indicates a tarnishing rather than the “golden age of prosperity” President Trump promised at his inauguration.
Under normal slowdowns that any economy undergoes, such numbers would be of cyclical concern, but in in the current climate they may be precursors to large economic disasters lurking underneath the numbers.
Prices, jobs, and economic health are not just self-propelling numbers, but rest upon ever-deepening layers of an economy and their connection to a host of institutions which provide signals to investors to take risks, for consumers to buy, and for governments to spend or not spend.
The deeper malaise lies in the “wrecking ball” metaphor now regularly employed to describe Trump’s approach to economic institutions. This has played out at three levels: the direct government interventions in market behavior; the willingness to disregard the most productive sectors of the economy in favor of the least; and the disastrous approach to scientific research and innovation that the administration hails as a war on liberal elites.
Government interventions in the U.S. economy are not new. Whether we like it or not, defense has encouraged innovation from Presdient Dwight Eisenhower’s “military-industrial complex,” the DARPANET that was a precursor to the Internet, to President Ronald Reagan’s Sematech initiative that may be seen as good precursor to Biden’s Chips Act for semi-conductor manufacturing in the U.S.
Trump’s wrecking ball is unique. It’s about destroying or weakening rather than strengthening American institutions. Don’t like the job numbers? Fire the Bureau of Labor Statistics chief. Don’t like Fed’s monetary policy in the face of inflationary pressures? Fire a Fed member and make its chief’s life miserable. Don’t like something about Intel or other companies? Berate them and make them provide partial government control. Meanwhile, extol Cracker Barrel’s old logo, praise Sidney Sweeney’s blue “genes,” eat unhealthy foods in public — it’s all part of the declaration of an unprecedented cultural war with dictatorial impulses.
Trump ignores the most productive sectors of the U.S. economy and caters to the most unproductive, welfare-fed and militantly Christian rural areas of the U.S. Even his promise to bring manufacturing jobs to the U.S. is a myth. Industrial economies lose agricultural jobs; post-industrial economies lose manufacturing.
Seventy-three percent of farms now feature industrial-style farming, with upwards of 1,000 acres in each farm. The Yeoman farmer ain’t coming back. Coal jobs were awful and most West Virginians don’t want them. (Full disclosure: I have a second home in West Virginia). The Rust Belt worker whom Trump mythologizes is just that: a myth.
Almost 80 percent of the U.S. employment is in services sectors, more than two-thirds of which is information work. To his credit, Trump, with assistance from JD Vance’s Silicon Valley ties, has held a tenuous balance between his utterly vengeful political movement and the innovation- and immigration-friendly high-tech sector of America. This compact, however, is fraying at the edges, however, with leadership from the likes of Steve Bannon and Sen. Josh Hawley (R-Mo.). Growth in services was 3.0 percent in 2024, but it was only 0.9 percent in the first two quarters of 2025.
The famous international economist Fritz Machlup empirically demonstrated in the 1960s that we were in an information revolution which rests upon knowledge-work, mostly in services. And the U.S. still runs a sizable trade-surplus in services — usually around $300 billion each year — which never shows up in Trump’s charts or speeches.
Trump now champions the moribund sectors in the U.S., while the advocates for these left-behind sectors, from MAGA pastors to megalomaniacal politicians and talking heads, seek to shut down the productive sectors. I previously asked whether Trump could pull off a Bismarckian “iron-rye” coalition, combining productive and unproductive sectors in a cross-subsidy arrangement. Trump’s populism and the scarce factor’s vengeful brand of politics is getting in the way.
The post-industrial economy rests on what Machlup called knowledge workers. Trump has declared a war on knowledge in the U.S., and his sycophantic Cabinet follows with sharpened sickles. Funding for innovative scientific research is dwindling. Cuts to the National Science Foundation and the National Institutes of Health represent let him extort money from the finest universities in the world rather than assisting them in their endeavors.
The elimination of the Minerva Research Initiative, a program started by President George W. Bush, shows how far this government would go to cut funds that enhance advanced robotics and warn us about terror or threats from evolving artificial intelligence infrastructures. (Another disclosure: My own $1.39 million program on AI was eliminated).
The Trump administration’s hierarchical and dirigiste crackdown on moral, social, political and economic life is disgusting. The government wants to set prices and interest rates and tell businesses whom to hire and fire.
The reassurances that the administration has given about the necessary pain to withstand economic disruption may be the ruminations of a mad king and his minions who are willing to disregard the most basic principles of economics for political gain, much of it related to vindictiveness.
J.P. Singh is Distinguished University Professor at Schar School of Policy and Government, George Mason University, and Richard von Weizsäcker Fellow with the Robert Bosch Academy (Berlin). He is co-editor-in-chief of Global Perspectives.
