The White House Watch newsletter is available for free, providing insights into the implications of the 2024 U.S. election for both Washington and the global stage. An upcoming book titled Hayek’s Bastards: The Neoliberal Roots of the Populist Right is authored by the writer of the following piece.
For many years, right-wing populist parties have leveraged forms of direct democracy to achieve their objectives, exemplified by referendums such as those banning minarets in Switzerland and the Brexit vote. These efforts aim to bypass the establishment and directly engage with popular will. In the U.S., the Maga movement is experimenting with a different approach: direct economics.
Direct economics, akin to plebiscites and referendums, aims to circumvent experts and incumbents, communicating directly with individual citizens and voters. It attempts to simplify processes traditionally represented by stock market indices, interest rates, and fiat currency, unveiling them as tools used by elites to oppress the populace.
This approach can be seen in three main ways. Firstly, the centralization of executive power is evident in former U.S. President Donald Trump’s tariff policy. Though many criticize the arbitrariness of his tariff announcements, direct economics sees this very unpredictability as a strength. For instance, when European traders must wait for Trump’s daily decisions to gauge market flows, it underscores U.S. omnipotence and the president’s ability to effect global change.
The second form involves cash transfers, which Trump distributed during the pandemic. The presence of his signature on stimulus checks underscored a direct benefit from the state, bypassing traditional systems like the Social Security Administration or Medicare. This transformed public good into a direct benefit for private accounts.
Elon Musk, a Trump megadonor and Maga advocate, has embraced this method in his electoral influence attempts, such as giving away large novelty checks to supporters of his preferred candidates. In a recent Wisconsin election, despite giving away two such checks, Musk’s preferred candidate lost. Frustrated, Musk attributed the loss to judicial corruption purportedly orchestrated by the left, highlighting the potential for direct economics—where financial incentives align with voting—as a form of corruption.
The third aspect of direct economics is more complex, focusing on gold. Since private gold ownership was restricted in the 20th century, some economic thinkers suspect the U.S. government of hoarding gold to prevent self-sufficiency following a predicted monetary collapse. Skeptics argue that the U.S. gold reserves might be depleted, citing parallels to historical doubts about gold storage.
Elon Musk has called for an audit of U.S. gold reserves, echoing former Texas senator Ron Paul’s longstanding proposal. In 2012, a similar campaign in Germany led to the Bundesbank publicly displaying repatriated gold, a movement initiated by Peter Boehringer, now a representative for the Alternative for Germany in the Bundestag.
Direct economics represents a significant challenge to institutions that mediate between citizens and their leaders. Its impact on conventional markets remains uncertain. Currently, interest rates on U.S. Treasury bills are declining, and consumer confidence is faltering. Whether the approach of direct economics can endure despite its disruptive effects will become clearer in the coming weeks and months.
