27 Dec

2025 In the Rearview Mirror

“How did TLR do?” – The Lonely Realist

TLR conveyed its perspective for 2025 shortly after Election Day in “Trumpian Disruptions.” Domestically, TLR predicted that “Donald Trump will transform Federal power by greatly expanding the prerogatives of America’s Executive [in reliance on the ‘unitary executive theory’ articulated in Project 2025]. He will impose tariffs on foreign goods in ways reminiscent of the Smoot-Hawley Tariffs of the 1930s, unilaterally ‘suspend the entry’ of various categories of immigrants and slow the visa approval process for others, reinstitute the spoils system by sidelining (or firing) current government employees and replacing them with supporters, friends and relatives, fulfill his campaign promise to pardon those convicted of felonies including for the January 6, 2021 assault on the Capitol, award to allies patronage grants, and eliminate Executive Branch enforcement and financial support for regulations, programs and supporters…. Although Congress is unlikely to enact supportive legislation, it will not object…. However, even greater disruptions await with respect to the Trump Administration’s approach to AI, crypto and climate change.”

From a foreign policy perspective, TLR added that “the Trump Administration will ‘set Europe free’ by removing America’s defense guarantees that for the past 80 years have shielded European governments and economies from foreign threats and created a Pax Americana that ensured European freedoms. Threats from Russia and its allies will be a European problem. If Europe wants peace, European nations will be compelled to budget for war…. European trade with China will increase and do so at America’s expense as tariffs become cost determinative…. [T]he Trump Administration also will pro-actively ‘protect’ Greenland from Russian and Chinese aggressions.”

Trump 2.0 has done all of that.

Where TLR’s predictions fell short was with respect to the extent of the Trump disruptions. As The Economist explains, “The first year of Donald Trump’s second term turned domestic and international politics on its head.” It adds that “[t]he President withdrew America from the Paris accord on climate change, deployed the armed forces to crack down on migration at the border, ordered the National Guard into cities to help arrest illegal migrants, scrapped all diversity programmes in government, cancelled policies supporting renewable energy, attacked judges he disagreed with and renamed the Defense Department the Department of War. Mr. Trump also instigated tough trade policies, though the world economy remained remarkably resilient and is forecast to grow by around 3% in 2025 [a repeat of the 3% growth in 2024]. His big-bang ‘Liberation Day’ tariffs in April led to the biggest fall in stockmarkets for the year, [although] many tariffs were eventually lowered or postponed, leading stockmarkets to bounce back.”

From a political perspective, Trump 2.0 abandoned traditional conservative policies advanced by the Republican Party these past 100+ years. As TLR highlighted, America has withdrawn from free trade, renounced fiscal prudence, reversed its strong Dollar policy, abdicated Rule of Law leadership, and abandoned adherence to the separation of powers mandated by America’s Constitution. The Trump Administration has focused on maximizing Presidential power and authority and elevated Statism over free market capitalism (that is, the laissez faire version practiced by America these past 200 years) so that today’s Federal government favors centralizing Federal power over incentivizing private enterprise and manufacturing, encouraging the private practice of law, and promoting independent university education, etc. As TLR summarized this past August, “President Trump has masterfully engaged in what political scientists refer to as ‘state capture.’ He has defenestrated Congress, adroitly sidelined judicial authority, and exercised unilateral autonomy over all levels of America’s government, military and law enforcement agencies and, at the same time, imposed his will on America’s media, businesses, law firms, and educational institutions, and is redefining health, rewriting history, etc.”

Although the Trump Revolution has been radically transforming America’s government and American institutions, the Administration nevertheless insists that it is simply continuing to execute core Republican programs as both the successor and standard-bearer of Reagan Republicanism. Secretary of War Pete Hegseth accordingly has echoed the President by invoking the Reaganite slogan of “Peace through Strength” to assert that “Donald Trump is the true and rightful heir of Ronald Reagan.” The WSJ (and others) have disagreed, noting that the Administration “doesn’t get the Reagan history right. Reagan negotiated from strength because he first built up that strength, both military and economic. We wish President Trump’s policies were as similar to Reagan’s as his slogan.” The WSJ’s perspective  echoes TLR‘s longstanding and recently repeated observations. TLR moreover has cautioned that the risks of the Administration’s abandonment of Pax America significantly outweigh the benefits of “America First,” the same conclusion reached in recent analyses by Andreas Kluth in “Dismiss the Doomsday Clock at your Peril” and Alex Alfirraz Scheers in “The World Goes Nuclear.”

Thies past year indeed has been “Everything, Everywhere, All at Once,” the title of the three-part forward-looking series TLR wrote in November 2024. The hope is that the Trump Disruptions of the last 11 months continue to couple with 2025’s strong economic growth, stable inflation, rising stock prices and Trump peace initiatives to create, on balance, a positive – albeit ongoing revolutionary – 2026.

Finally (from a good friend)