The Economics of Faltering Fascism

Unfortunately for Trump, and fortunately for us, he didn’t inherit an economic crisis

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When Adolf Hitler came to power in 1933, Germany’s economy was in dire straits. Under Chancellor Heinrich Brüningthe German government had clung dogmatically to economic orthodoxy in the face of the Great Depression, staying on the gold standard and imposing ever harsher fiscal austerity. The result was economic devastation and extremely high unemployment.

Hitler broke with the economic orthodoxy, enabling him to preside over a rapid economic recovery. The popularity he gained from the economic revival allowed him to consolidate power.

When Vladimir Putin came to power in 1999, Russia had just experienced a devastating financial crisis. The crisis precipitated a severe recession, forced the Russian government to default on its debt, and led to a plunge in the value of the ruble:

Source: FRED

Putin brought stability and presided over a strong economic recovery. And, as with Hitler, the upswell of popular support enabled Putin to consolidate power.

Donald Trump’s return to power in January 2025 was largely thanks to public dissatisfaction with the Biden economy. However, there was no economic crisis: unemployment was low and inflation had declined sharply from its peak in 2022. In 2024, the widely cited “misery index,” the sum of unemployment and inflation, was low by historical standards:

Source: FRED

And because there was no crisis when he regained the presidency, Trump — his bombastic lies in the State of the Union notwithstanding — hasn’t been able to preside over a clear economic improvement. Indeed, his approval on economic issues has plummeted:

Disclaimer: I am not saying that all was well with the Biden economy. I don’t want to revisit the vibecession debate at length today. Suffice it to say that, as Mike Konczal documents, there were reasons American families felt stressed despite good conventional numbers, although the depth of their discontent remains startling. But because America wasn’t suffering a Germany 1932 or Russia 1998-type crisis, it was impossible for Trump to deliver rapid economic improvement – that is, it would have been impossible even if he were competent (which he isn’t). So his efforts to consolidate power aren’t succeeding the way he and his fellow authoritarians expected.

On Wednesday the historian Tim Snyder, who is an expert on the grim history of Central and Eastern Europe, published a post titled Fascist Failure about the Trump administration’s lagging attempt to bring fascism to America. For now, I willbe more cautious and say that American fascism is faltering rather than failing. But the power grab is clearly not going according to plan. Why?

First and foremost, the determination and courage of ordinary Americans — in utter contrast with the craven surrender of much of the elite — has been crucial. But there are also structural factors that have helped the resistance.

Snyder emphasizes the lack of a good enemy against whom Trump can mobilize the nation. It’s a fair point. Trump spent more time in the SOTU bragging about his triumph in Venezuela than he spent talking about affordability, but the public was utterly unimpressed by his Maduro adventure. And there is no appetite at all for a confrontation with Iran.

Yet in my view that’s secondary to the fact that Trump can’t credibly claim to be an economic savior. Although I haven’t done a systematic study, I believe that most successful authoritarian takeovers occur in the aftermath of economic crises — crises that the newly installed dictator can claim to have solved. In an ideal world people wouldn’t accept tyranny just because the tyrant appears to deliver a higher standard of living. In the real world, however, they often do.

But that tactic is unavailable to Trump. While he can and does lie about the Biden economy, claiming that it was catastrophically bad, while touting the current economy as the greatest ever, people aren’t buying it. A plurality of Americans now say that Biden was a better president than Trump, and a majority say that the economy under Biden was better. Trump simply can’t gaslight Americans into disbelieving their lying eyes and wallets.

Could Trump possibly adopt policies that win broad public approval, thereby greasing the rails for his demolition of democracy? Maybe, but he would have to become a genuine populist. Trump would have to implement policies that actually help working families while at the same time taking on the plutocracy. He would have to genuinely address affordability issues, especially the cost of housing and health care. He would have to rescind policies that increase the cost of living, such as deportations and tariffs. He would have to break with Heritage Foundation conservatism that pushes tax cuts for the rich and extreme benefit cuts for the poor and working class.

But we know he isn’t doing that; he won’t do that; and he can’t do that, given how dependent both his political machine and his program of personal enrichment are on support from billionaires. Furthermore, he just can’t stand the humiliation of backing down.

Make no mistake, MAGA is a fascist movement:

But can a fascist movement that controls many but not all of the levers of power achieve total control when most people see that it is making their daily lives worse, not better? Hitler established total control against the backdrop of an economic boom. So did Putin. Even Hungary’s Viktor Orban — whose regime now looks mild compared with Trumpian violence — was able to consolidate control in large part because during the early 2010s Hungary’s economy was recovering from high unemployment caused by austerity policies.

So the answer to that question is probably not. In the end, if Trumpist fascism is indeed defeated, I believe that there will be three sources of that defeat. First is the courage and basic decency of the American people, who refuse to bow down. Second is the egomania and malign incompetence of Trump, who tried to bludgeon and gaslight Americans into submission. And last is the weakness of a fascist movement that just can’t deliver the goods.

MUSICAL CODA