The Deep State 2.0

A view of the Washington Monument from the west lawn of the Capitol. (Photo By Tom Williams/Roll Call)

The Deep State 2.0

How President Trump’s fake populism bails out the 1 percent.

The prospect of four years of Donald J. Trump's nonstop rants about imaginary conspiracies against his daughter, wholesale slander against the judicial branch and attacks on the press as enemies of the people has caused some Americans to slip into a comforting form of denial. He will be a blip in our history, they say, because our formal institutions, and the American people, will ultimately prevail against a rogue disruptor.

Others, more hard-boiled, appeal to the powers-that-be that they believe actually run the country regardless of electoral results: the Wise Men, the Power Elite or what I have called the Deep State. These informal power groupings, according to speculation, will attempt to gently but firmly pry Trump's tiny fingers from the wheel before he sails the ship of state into an iceberg.

A third camp sees Trump as a lesser evil than the Deep State. Some of these voices are are more restrained warnings, while others, mostly Trump defenders on the right, become nearly hysterical in attributing the demise of Gen. Michael Flynn as national security adviser to the Deep State's revenge against the president. This odd hypothesis has culminated in one of Fox News' ankle-biters, Andrew ("Judge") Napolitano, depicting Trump and Flynn as innocent snowflakes beset by the dark, remorseless forces of the state-within-a-state.

As I have described in greater detail elsewhere, a far more reasonable case can be made that Gen. Flynn's downfall was caused by his own reckless bad judgment and misleading of Vice President Pence rather than by the machinations of an invisible government.

There is little evidence that America will be saved by concealed and powerful forces in the manner of the shadowy Caped Crusader rescuing Gotham City from the deranged Joker, or, alternatively, that the rough-hewn populist good guy Trump is in mortal combat with the Deep State. It is true that he ran as a populist against elite institutions: the power centers of the 1 percent -- Wall Street, Silicon Valley and the military-industrial complex -- mostly supported his opponent. But his actions so far have strongly reinforced rather than weakened their position.

A glance at the membership of the president's Strategic and Policy Forum shows they are flocking to his side, with masters of financial buccaneering like Stephen Schwarzman of the Blackstone Group and Jamie Dimon of JPMorgan Chase, along with Doug McMillon of retail giant Walmart. There is even an ex-governor of the Federal Reserve Board, Bush appointee Kevin Warsh. This is hardly a populist revolution of the kind preached by John Steinbeck's Tom Joad.

Trump's senior government appointments reinforce this impression: his Cabinet, filled with moguls from Big Oil, mega-banking, investment and retail, makes George W. Bush's Cabinet look like a Bolshevik workers' council. Even Steve Bannon, Trump's "alt-right" Svengali, is an alumnus of Goldman Sachs, whose stock has surged 38 percent since the election. The fact that America's premier corporate raider, Carl Icahn, will be special adviser on regulatory reform, and that Treasury Secretary Steve Mnuchin was a Goldman executive for 16 years, does not inspire confidence that economic management will be different from that which piloted us into the 2008 crash.

Trump's $6.2 trillion in planned tax cuts are the Bush policy on steroids, and are potentially three times the magnitude of the 10-year cost of Bush's cuts. Because they are heavily targeted at the rich -- 47 percent of the cuts will go to the top 1 percent -- they will exacerbate income inequality, which is already at its highest level since the 1920s. The tax-relief crumbs for low-income earners will be nullified or made worse by an assault on the minimum wage. Assistance to the poor and near-poor could be further eroded by a reduction in Medicaid benefits (already in the works, courtesy of Speaker Paul Ryan and the Republican Congress). These actions will exacerbate the ongoing trend toward jobs without benefits.

Despite their windfall from Trump's tax policies, the rich will only be able to consume so many filet mignons, Sub-Zero refrigerators and Patek-Philippe watches before reaching satiation. The rest of their tax cut dividend will go into lifting the equities market to stratospheric levels or building palatial monuments in Glen Cove, Palm Beach or Palo Alto. Since the tax cuts will be much greater than Bush's own prodigious fiscal mismanagement, the potential equities and real estate bubble could be a thing to behold. This is anything but a populist economic policy.

Candidate Trump's criticism of the invasion of Iraq and promise of better relations with Russia also appealed to the growing populist backlash against the foreign policy elite's practice of military intervention. He was regarded as less hawkish than his opponent, Hillary Clinton, which led some to regard him as the default peace candidate of the two major-party nominees. One peace activist and former Democrat even said in correspondence to me that "[f]or my grandchildren, Trump's my only realistic hope." This premise was spectacularly mistaken and ignored what lay in plain sight.

Trump had always claimed, in line with conventional Republican dogma, that America's military was "depleted," and that he would increase its budget to "rebuild" it. No matter that this was a myth, as DOD in 2016 spent, in constant dollars, comfortably more than the Cold War average. And, sure enough, after the election defense stocks rose in the expectation that he would open the money spigot even wider. This expectation is bolstered by the fact that Congress is controlled by Republicans, whose reflex is to throw money at defense. The military-industrial complex, a core component of the Deep State, will grow even fatter, as his request for a 10-percent Pentagon budget increase plainly telegraphs.

After denouncing foreign policy activism, the president and his team are now on a collision course with Iran, threatening to tear up that country's nuclear agreement with ourselves and five other world powers, engaging in bellicose rhetoric about putting it "on notice," and even fantasizing a Gulf of Tonkin-like incident between US and Iranian warships. His bluster about reinstating torture appears to have subsided -- for now -- but Trump is reportedly considering reopening CIA "black sites," one of the Deep State's sinister symbols.

Donald Trump will not dismantle the extra-constitutional power structures that have grown more influential in the last decades of near-perpetual war, increasingly intrusive surveillance, financial deregulation and widening inequality. He will further entrench them. This has confounded those in the media, who once regarded him as a vulgar but basically harmless jackass who probably wouldn't win but who in any case increased ratings and circulation, as well as those Americans desperate for silver linings who saw him a change agent that would shake up a polarized political system and slaughter a few sacred cows.

The powers-that-be probably never liked Trump's vulgarity, but they had in any case a hedged bet during the campaign: Hillary Clinton, a firm friend of Wall Street, was denounced as such by an opponent who was an even bigger friend of the Street. It was a no-lose proposition.

In the post-2008 age of populism the elites have flexibly adapted to the angry rhetoric of anti-establishment politics while expanding the very same policies that led to that populism in the first place. Trump's tastelessness and complete lack of qualifications, which at first seemed like serious defects, may in retrospect have been his tactic to save their political agenda by masking it in a facade of fake populism and reality-TV stage management.

The Deep State is an outgrowth of the illiberal tendencies in liberal democracy, tendencies which have given disproportionate influence to a militarized foreign policy, secrecy and surveillance at home and entrenched disparities of wealth. But, while it has been a grave defect of our governmental system, it was not the worst thinkable permutation of that system. What is now evolving in the West Wing under the troika of Donald Trump, Steve Bannon and Jared Kushner is something much more sinister.

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