Things have already gotten ugly. Donald Trump He hasn’t even made it to the White House, and his rowdy court of advisers have clashed with each other. In the last few days, Elon Musk and others tech moguls have traded insults with the MAGA crowd over high-skilled immigration. What seems like a minor dispute over visas is, in fact, a sign of a much deeper rift. For the first time, tech giants are coming to Washington, and their worldview is the opposite of the movement. MAGA. How these tensions are resolved, and who takes the lead, will profoundly affect the U.S. economy and its financial markets over the next four years.
As in his first term, Trump has assembled an economic policy team with disparate, sometimes contradictory, objectives. The big heads behind MAGA, like Stephen Millerwho is Trump’s choice for deputy chief of staff, are anti-trade, anti-immigration and anti-regulation, and have the support of a energetic base. Mainstream Republicans, such as Scott BessantTrump’s nominee for Treasury Secretary, and Kevin Hassetthead of the National Economic Council, are primarily low-tax and small-government enthusiasts. This time, however, there is a new faction that makes the mix even more volatile: the tech bros from Silicon Valley. David Sacksa venture capitalist, has been named Trump’s crypto and AI czar. He will hope to relax restrictions on the cryptocurrency industry and, along with other Silicon Valley newcomers, loosen controls on the artificial intelligence to encourage faster progress. But the influence of technology experts goes beyond technology policy. Musk has been charged with leading the newly created Department of Government Efficiency (DOGE). Marc Andreessena well-known venture capitalist, says he has been spending about half his time at Mar-a-Lago as a “volunteer.” Scott Cooperwho worked for Andreessen, will take charge of the Office of Personnel Management, which oversees public sector hiring. The former employees of Palantirthe Thiel Foundation y Uber They have been appointed to positions in the departments of state and health and the Pentagon, respectively. At the time, the revolving door between Wall Street and the Treasury was spinning so fast that Goldman Sachs He received the nickname “Government Sachs.” Trump, on the other hand, is trying to introduce the tech giants into the technocracy.
This is new for American politics. For years, Washington was a place that tech chiefs avoided unless Congress summoned them to scold them. Now, technology companies see the government as something they can influence and change. In theory, this could bring benefits to the United States. Like the rest of Trump’s team, the tech bros They want to sharpen America’s economic and technological advantage by reducing bureaucracy and driving innovation. Bringing in experts to advise on artificial intelligence is a good idea, given its likely economic and strategic importance. And everyone knows that government could be made more efficient.
However, achieving all this in practice is another matter. One problem is that, when technology companies and MAGAs say they subscribe to America Firstthey mean different things. While the MAGA movement restores a vision of the past, including an impossible return to a golden age of manufacturing, the technology movement looks forward. He wants to accelerate progress and change society, leaving the world more and more behind than MAGA.
These contrasting visions will translate into political disputes. Those who claim to be MAGA fear that immigrants will take jobs that Americans should be doing; The technology movement wants the best talents regardless of nationality. The tech movement has a libertarian bent that distrusts government; MAGAs hate corporate power. Both groups see China as a rival (aside from Musk, for whom it is a place to make and sell cars). But while MAGAs think foreigners exploit commerce to deceive the United States, the tech movement has benefited from flows of talent, capital and customers. Even if the tech movement is safe from a first round of tariffs on goods, an all-out trade war could ensnare the services it provides. Such contradictions and clashes will make it difficult for the tech team to achieve its goals.
Trump will make the backdrop even more confusing. Instead of resolving tensions among your team and setting clear direction, you’re likely to act as an agent of chaos. He craves conflict and intrigue and will enjoy the power he has over the various factions in his court.
The tech contingent could also disappoint itself. Consider the reduction of the State as an engineering problem. But the history of failed reforms in Congress suggests it’s more of a political problem, and one that technology has little experience with. Worse still, after having gained the president’s trust, Tech moguls may be tempted to seek crony favors. That’s what investors hope: The value of Musk’s companies has skyrocketed since the election, outperforming the market and making him at least $150 billion richer. A combination of infighting, botched implementation and profit peddling could provoke a backlash that hampers Trump’s second term.
But that gloomy scenario is not predestined. Instead of fighting each other to a stalemate, the factions of Trump’s team could moderate each other in some ways and reinforce each other in others, perhaps with good results for the United States. For example, traditional leaders and tech bosses could limit the worst instincts of war tycoons against protectionism and immigration, while smart tech ideas for reform could be implemented in a politically astute way. Meanwhile, everyone’s agreement on America’s need to deregulate and innovate could give the program a useful boost.
That may seem implausible. However, the stock market could help guide management toward this commitment. Trump is sensitive to stock prices and will not want to jeopardize the roaring rally that has followed his re-election. By providing a real-time indicator of whether investors believe that Trumponomics will help the economy, the stock market could influence your decisions. If so, the administration could test the path toward policies that boost growth. The arrival of technology in Washington carries a high risk, but it could also be very beneficial.
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