Mr Brightside: Fascism, Coming soon to a town near you? 

 

“End up like a dog that’s been beat too much 

‘Til you spend half your life just coverin’ up, now” 

 

 

This whole court of King Donald has the look and feel of the last days of pre-revolution France and Russia. Neither ended well

 

 

And now, after the supreme court ruling last year, King Donald now possesses absolute immunity for any official acts. As liberal justice, Sonia Sotomayor, said, this made the president “a king above the law”. 

Such is his self-belief, that, he along with his cabinet of yes-men believe they can marshal “the vast powers at [my] disposal to defeat what was record inflation and rapidly bring down costs and prices.” Yeah, right! How? 

Perhaps his “drill, baby, drill” policy will allow him to slash energy price by flooding the US with new fossil fuels, Maybe, but at the cost of knocking out marginal producers as prices fall below their production costs.  

There has, however, been no shortage of showmanship, including the signing of a multitude of executive orders in public, providing some fantastic moments for MAGA voters to go into raptures about.  

Trump started his presidency with a flurry of orders that will, amongst other things, accelerate the climate emergency, defy the US constitution over birthright citizenship and reduce the scope of legal protections. 

His proposal to “take back” the Panama Canal from China highlights an intent to reshape the global order through force if necessary. 

 

‘Trump started his presidency with a flurry of orders that will, amongst other things, accelerate the climate emergency’

 

All of this is little more than rhetoric based on reclaiming national greatness to tap into frustration with their lot that is felt by some of the electorate. 

However, all may not be well; fault-lines are beginning to emerge between the warring factions within Trump’s administration. MAGA. Trump is happy to divide and conquer, letting the tensions fester and develop. If his court are fighting each other: Bannon vs Musk, Musk vs Altman, Evangelicals against the Church, then they aren’t a threat to him. 

With the extreme wealth of the likes of Musk and Zuckerberg, we are seeing is a new phenomenon, and this increasing concentration of wealth and power is now plainly toxic to democracy. It’s what happens when countries tolerate extreme wealth, wealth and activities that exist beyond borders and control.  

A survey of more than 2,000 millionaires across G20 countries published by the Patriotic Millionaires group has found more than half believe extreme wealth concentration is a threat to democracy. About 70% agreed that the influence of those with extreme wealth is leading to a decline in trust of the media, the justice system and democracy. 

“The super rich are buying themselves more wealth and more power while the rest of the world is living in economic fear,” said the activist and co-founder of “Taxmenow”, Marlene Engelhorn, an heiress whose wealth comes from the medical technology company Boehringer Mannheim. 

In a letter to world leaders they warn that “the phenomenon of concentrated and extreme wealth” is hurting the world, urging them to “draw the line”. 

The letter was is signed by more than 370 millionaires and billionaires spanning 22 countries, said: “Wealth is no longer simply about worth. It is about control. If you, our elected leaders, continue to neglect the crisis of wealth extremism, the fractured foundations of our hard-won democracies will face further harm.” 

Speaking in Davos, Phil White, a member of Patriotic Millionaires UK, said the influence of super rich owners of social media companies was extremely concerning. 

“We used to worry about the rich controlling the printed media, the newspapers and so on. But actually, social media is such a more powerful tool nowadays. And now we have Zuckerberg removing factchecking from Facebook.” 

White warned that the Covid pandemic had shown the dangers of “trickle-up economics”, where the money “trickles up to the top and it stays there”. 

The question to be asked is, is this populism or an oligarchic takeover?  

 

“The super rich are buying themselves more wealth and more power while the rest of the world is living in economic fear”

 

Trump has duped ordinary voters into believing he’s their champion while framing Democrats as out-of-touch elitists. Despite this, he is continually facing conflicts of interest. Prior to his inauguration, he made billions through a branded crypto token, a windfall tied to regulatory decisions he controls.  

In terms of US politics trump is quite unique. A narcissist who craves flattery, disdainful of his critics, and ready to wield government power for personal gain and revenge. Hopefully we won’t see his like him again. 

Although he scored a clear victory, the 2024 election highlighted how thin US political divide is. Republicans securing power by a narrow margin, highlighting a deeply fractured electorate. 

The depth of division is such that Joe Biden, in a dramatic final act, wielded his pardon powers to shield members of his family, and a number of current and former public servants, from Trump’s retribution. 

America is the worlds richest, most powerful country, therefore it is often seen as an indicator of the future. 

 Trumps first term in office proved a shot-in-the-arm for right-wing parties, particularly in Europe, something this column highlighted in December 2023 with an article entitled “Europe and the New Right”. To date, with the exception of  Giorgia Meloni and her Brothers of Italy party, other western European countries had, until this year,  kept the hard-right away from absolute power. 

This January, the Austrian president, Alexander Van der Bellen, reluctantly granted FPO leader Herbert Kickl the mandate to form a coalition government after a centrist bid to assemble one without the FPO collapsed unexpectedly. In common with Hitler,  Kickl is referred to as “the people’s chancellor” by his party. 

 

‘A narcissist who craves flattery, disdainful of his critics, and ready to wield government power for personal gain and revenge’

 

The far-right Freedom Party (FPO) was founded in the 1950s by a man who had been a senior officer in Hitler’s SS. 

The FPO achieved 29% of the poll, the highest of any party, in the September, they are now in talks to form a coalition with the centre-right Austrian People’s Party (OVP). 

Other than the FPO, this was not a preferred outcome for any Austrian faction. Like all other major parties, the OVP had entered the election on a promise to never form a coalition government with the party with Nazi roots. Yet after it became clear that a non-FPO alternative could not be agreed, the OVP swiftly changed its leader to walk back on this promise and participate in coalition negotiations. 

One point that might easily be overlooked is that an FPO government in Austria would be a significant win for Russia. Since 2017, the FPO have had a “‘friendship agreement’ with Vladimir Putin’s United Russia party. As interior minister, its current leader, Herbert Kickl, used his powers to order a raid on the country’s own domestic intelligence service, which caused European security services to freeze out their Austrian counterpart. 

This was only the first in a number of spy scandals,  all of which underlined how the Austrian government paved the way for Russia to deepen its infiltration of and influence over European politics.  

The FPO has admittedly refrained from engaging in the same level of overtly pro-Putin politics since the beginning of Russia’s full-scale invasion of Ukraine, but the ties between the far-right party and the Kremlin still run deep.  

 

‘the Austrian government paved the way for Russia to deepen its infiltration of and influence over European politics’

 

Austria has a strategic importance, being home to one of Europe’s largest natural gas storage hubs, Baumgarten, which has historically been a key distribution point for Russian gas going west, but also serves Norwegian and other more northerly imports. As Eastern Europe will require more supplies from outside Russia for the foreseeable future, this strategic hub coming under the control of a government friendly to Putin is a significant risk to the continent’s gas markets. 

Next up is the German  general election day on 23 February. 

One scenario shows a win for the Christian Democrats (CDU), who are currently polling at C.30%. The far-right Alternative für Deutschland (AfD) comes second, with an impressive vote share of between 20% and 25%. Nevertheless, it is excluded from coalition negotiations thanks to the “firewall” established several years ago by the mainstream parties to keep extreme groupings at bay. 

The CDU leader and probably next chancellor, Friedrich Merz, will be required to open talks with either the Social Democrats (SPD) or the Greens. Both parties of the centre left, however, are predicted to suffer a drubbing, seeing their vote share cut to the mid-teens. 

The big question is can these three parties work together? In years go by, yes. However, today, as they are beset by the rush towards populism, and the collective panic engendered by the rise of the hard-right, has seen previously cordial relationships disintegrate into acrimony. 

There have been open arguments between Scholz, his finance minister, Christian Lindner, of the free-market Free Democrats (FDP), and the Greens’ economics minister, Robert Habeck. This has carried over into the the election campaign, with the parties stressing their differences on issues ranging from borrowing and spending, to climate and welfare payments. The CDU and SPD are each trying to sound tougher than the other on immigration. 

This, as highlighted above, is exactly what has happened in Austria. 

As we have seen at home in the past six months, it does not take long for a government, even one with an enormous majority, to fall out of favour. Whether the electorates dissatisfaction with Starmer’s government is real or concocted, whether it is recoverable or not, a clear path has emerged for Reform UK to grab power at the next election. The same applies across Europe. One electoral term now provides ample opportunity for opposition parties to see their popularity surge and for governing parties to collapse as they struggle with deep-seated problems that require more than one term to fix. 

 

‘a clear path has emerged for Reform UK to grab power at the next election’

 

However, there was one piece of good news for the government this week. 

In the last 10-days a number of commentators seized on rising Gilt yields as being due to the many failings of the government, and that Chancellor Reeves was even more destructive than Liz Truss,  who is, and was, a misunderstood genius. 

10 days later and the Gilts and Global Bond panic is yesterday’s chip paper dimly remembered. Gilt yields are down in-line with a fall in line with global bonds. 

Our Debt Management Office – which runs the Gilts Market – scored a stunning success with its first syndicated deal of 2025; an £8.5 bn reopening of the UKT 4.375% Gilt due 2040, which received orders of £120 bn – another record oversubscription – with close to 300 accounts placing orders. Thirty percent of the issue went to overseas buyers demonstrating there is no buyers strike on the UK. 

For a final thought we return to populism whose protagonists, as we know, like nothing better than draping themselves in the flag, dripping faux patriotism.  

 

‘a tax of just 2% on assets of more than £10m would generate £24bn a year. It would affect only 20,000 people and would raise an incredible sum that would help us to invest in a fairer, more sustainable society’

 

In yesterday’s Guardian, Dale Vince, a green energy industrialist and campaigner, defined what patriotism is: “It’s about wanting your country and all the people in it to succeed. It’s about investing in a healthy, well-educated workforce, in decent, sustainable transport, in stable legal systems and in our National Health Service. It’s about opportunity for everyone – not just the wealthy few. And remember, the money of the very rich is made in our economies, built and paid for by our taxes.” 

He went on to say: “Here in the UK, a tax of just 2% on assets of more than £10m would generate £24bn a year. It would affect only 20,000 people and would raise an incredible sum that would help us to invest in a fairer, more sustainable society.” 

 

“So we bought a pack of cigarettes and Mrs. Wagner pies 

And walked off to look for America” 

 

‘Obviously, the week’s big news was the inauguration of President Trump.

It started with the launch of his own cryptocurrency which made him billions, followed by his wife pulling the same scam. A clearer case of insider trading will never be seen or tolerated.

There has been much action, none of it good. Added to this are territorial ambitions

Where it goes, who knows. What is apparent is that the court of King Donald is full of political in-fighting which seems to suit his divide and rule style.

Looking to Europe, Austria is close to having the hard-right FPO as part of a coalition government, and could be followed by the AfD in Germany. This column has long warned of the rise of the hard-right, something that being right about gives me little pleasure.

Another regular is inequality. This week, in Davos, the usual well-meaning group of uber-rich were decrying the increasing influence of their contemporaries, and talking about wealth taxes to offset dwindling government budgets.

Unfortunately, they are distant voices without the reach or influence of the Musk’s, Zuckerberg’s, et al, who seem hellbent on feathering their own nests.

Lastly, there was, finally some good news for the government as Gilt yields declined along with other sovereign issuers. Noticeably, the same newspapers who 2-weeks ago were blaming the government and telling anyone who would listen that the country was going bust, forgot to mention this!

The PM announced two new, law and order based initiatives, but he droned on in such boring fashion that anyone listening quickly stopped!

Lyrically, we start with the “Boss”; Springsteen and “Born in the USA”. We finish with Simon & Garfunkel’s “America”.

Enjoy!

Philip.’

 

@coldwarsteve 

 

 

 

 

 

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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