Plot Holes – The Dispatch

Nemesis arrived for Elon Musk in the form of a disastrous earnings report for Tesla, one of several businesses he neglected while chasing his new passion of lighting federal agencies on fire. Musk’s DOGE work for Donald Trump was the capstone on a political journey seemingly engineered to offend every crunchy, environmentally conscious liberal in the country, exactly the sort of person who’s most likely to be in the market for an electric vehicle.

Yesterday Tesla revealed that its net income had declined by—yes, really—71 percent compared to a year earlier. “Starting next month, May, my time allocation to DOGE will drop significantly,” Elon assured shareholders in a call, noting for good measure at one point that he’s not a fan of tariffs.

Tariffs were the cause of the president’s humbling during an appearance in the Oval Office, not coincidentally. Hours after Treasury Secretary Scott Bessent told an audience that a 145 percent tax on Chinese imports is unsustainable, Trump informed reporters that the rate will be coming down. It’s unclear what sobered him up but Axios claims that the CEOs of Walmart, Target, and Home Depot warned him in a private meeting that “his tariff and trade policy could disrupt supply chains, raise prices, and empty shelves,” with consumers poised to feel the effects in as little as two weeks.

As for the president’s recent market-rattling invective about Jerome Powell, he now insists he has no intention of firing the Federal Reserve chairman. “I would like to see him be a little more active in terms of his idea to lower interest rates,” an uncharacteristically soft-spoken Trump said. “If he doesn’t, is it the end? No, it’s not, but it would be good timing.” Evidently aides like Bessent and Commerce Secretary Howard Lutnick had a word with him beforehand to explain what would happen to markets if he didn’t quit pressuring the Fed.

Good drama, all in all. The only thing missing was a paranoid, out-of-his-depth lieutenant a la Ray Liotta in Goodfellas wondering how nemesis might soon arrive for him. (But if you look hard enough, you might find a paranoid character like that inside the administration as well.)

Two things make the dramatic arc strange, though. First, we’re not even 100 days into Trump’s term. Seeing him relinquish his trade-war fantasy and Musk ditch DOGE at this point is like watching the bad guys get rounded up 10 minutes into the movie. Where does the story go from here over the next two hours?

And second: How invested can one be in this drama when the plot is full of holes and getting stupider by the day?

No president in my lifetime has been forced to retreat so soon from one of his core campaign promises.

The closest analogue is George W. Bush, who pushed hard for Social Security reform after his second inauguration. But Bush stuck with it until the summer of 2005 and didn’t concede defeat until fall, and I don’t recall entitlements figuring nearly as heavily into his campaign message as tariffs did in Trump’s. Bush was a war president, after all; the 2004 election was largely a referendum on Iraq. After he was reelected, voters could plausibly claim to have been blindsided by his interest in overhauling the welfare state.

No one can claim to have been blindsided by Trump’s interest in tariffs, which he spoke of last year in almost mystical terms. Practically any question put to him about the economy received an answer that somehow steered around to taxing imports.

Another easy comparison is to Bill Clinton’s failed effort to reform health care in 1993. But it wasn’t until September 1994, nearly two years into Clinton’s term, that the “Hillarycare” project was pronounced dead. And Clinton, like Bush with his Social Security gambit, never endured the humiliation of seeing his program backfire in practice. It was dogged opposition in Congress (and among the public) that killed his plan in its cradle, not a cascade of unintended consequences after it was implemented.

Trump made trade war the centerpiece of his economic agenda, moved boldly to follow through upon assuming office—and caused so much damage to markets so quickly as to invite comparisons to 1932. His great political strength, the roaring economy of his first term, has been smashed by his own folly: A new Gallup poll finds the share of Americans who believe their personal financial situation is getting worse to be at a 25-year high, greater than it was during the 2008 financial crisis or the COVID pandemic. A Reuters survey finds his approval on handling the economy down to 37 percent.

So now he’s backing off, even in part with respect to China. It’s as if Bush had ordered the invasion of Iraq in 2003 and then had to hurriedly turn the tanks around en route to Baghdad because his battle plan was so dumb that it left the U.S. army on the verge of being routed. There’s never been a presidential blunder like it as long as I’ve been alive, especially so early into a term.

There’s a certain dramatic element to that, I suppose, but it’s not the stuff of which great shows are made. “Hubris meets nemesis” storylines typically involve a competent protagonist whose success seduces him into biting off more than he can chew. In this story the protagonist is so idiotic that his grand economic program manages to unseat America as the bedrock of global financial stability in a matter of weeks.

It’s basically a Mr. Bean episode. It’s the economic equivalent of Trump getting his head stuck in a turkey.

But if you insist on treating it as drama, you’re left with a bunch of gaping plot holes to fill. For instance, what is the point of this trade war that’s so essential to the plot of season 2 of The Trump Show?

The president and his team have tried to retcon a rationale for their “Liberation Day” tariffs by touting the many exciting trade deals those tariffs will supposedly yield. The problem, according to more than one source, is that no one seems to understand what the American side wants in those negotiations—including the Americans themselves. Trump’s team keeps changing its demands, per Fox Business reporter Charles Gasparino.

Why, it’s as if the White House never intended to negotiate at all and was suddenly forced into it to make it seem like their leader meant to stick his head in a turkey.

Another hole: What was the point of hiking tariffs on China to 145 percent only for Trump to undermine his own position by declaring that they won’t remain at that level? Having seen him blink, Beijing and the rest of the world now have every reason to wait him out for as long as they can stand the economic pain in the expectation that he’ll retreat further. No wonder Scott Bessent is trying to incentivize nations to come to the bargaining table. The president has foolishly disincentivized them to do so, forcing Bessent to sweeten the pot.

Meanwhile, Trump is reportedly anxious that American farmers in particular will suffer from the standoff. How did he not anticipate that when the same thing happened during his first term?

Another: Why is the White House allegedly looking to reduce the China tariffs “to between roughly 50 percent and 65 percent”? Is there any economic logic to that number or is it just another half-assed formulation that “sounds right”?

Given how much the U.S. imports from China, cutting the 145 percent tariff roughly in half will still cause enormous disruption to retailers like Walmart, Target, and Home Depot, never mind the numerous small businesses that can’t weather the costs as well. And so long as the number keeps moving, companies can’t make plans; hiring and capital investments will remain frozen until the dispute with China is settled, slowing the economy even as Trump retreats.

So why is he dragging this out? He can stand firm and wage a mutually destructive trade war on Beijing or he can look weak by caving in order to calm investors. Somehow he’s managed to look weak and spook markets. That’s some trick.

Another: Why does he continue to threaten Jerome Powell when doing so is obviously a fast track to further market panic? The Fed is an island of stability in an increasingly unstable country, possibly the last American institution capable of giving investors the confidence they need to continue treating the U.S. as a safe haven. If Trump axes Powell and replaces him with a crony keen to lower interest rates regardless of the inflation risk, that pillar will collapse and the “sell America” phenomenon will accelerate, sending long-term rates spiraling.

All of which is obvious to you and me but somehow isn’t to our protagonist. It’s not even clear what Trump thinks he would accomplish by cashiering Powell: The 12-member Federal Open Market Committee sets interest rates, not the chairman acting alone.

You can’t make a good drama about hubris and nemesis when your main character is a dope because his undoing is destined to be his dopeyness, not his hubris. (You can have good comedy, but, er, hardy har.) The closest The Trump Show will get to a traditional dramatic arc in this case is the way a life of wealth, privilege, and narcissism may have conditioned the president not to consider even the most predictable consequences of his actions. He loves tariffs and hates Jerome Powell, he acted on those impulses without weighing the ramifications, and now he’s discovering that he can’t bribe or bully markets into delivering him from the Hoover-esque precipice on which he’s placed himself.

I suppose there’s some tragedy in that. Although more for us than for him.

How will the rest of this movie play out? Can Trump recover?

I think Elon Musk can—to a degree.

Musk is a more traditional dramatic protagonist than Trump, having proved his competence at Tesla and SpaceX, but he’s another guy whose fame and fortune seems to have insulated him until now from the adverse consequences of his own conduct. I don’t know how he expected consumers would react to his increasingly authoritarian politics or his callous chainsaw shenanigans except for how they have, but presumably he didn’t care. He’s Elon Musk. He can do anything he likes. And I do mean anything.

What’s remarkable isn’t that he risked squandering so much of his cultural capital by working for Trump, it’s that he achieved so little by doing so. Like the president with his misbegotten trade war, Elon went full tilt at a pet political project and ended up with a self-discrediting fiasco.

DOGE’s work has been a fiasco in every sense except as culture-war performance art. If you imagine its mission as saving the government gobs of money by ruthlessly downsizing federal agencies, it’s a failure. Musk recently predicted a DOGE dividend next year of $150 billion, more than 90 percent off of his ambitious early projections and a number that will be entirely offset (and then some) by larger deficits once the Trump tax cuts are extended. In fact, insofar as the department has hampered the IRS’ ability to pursue wealthy tax cheats, it might end up costing the government more revenue than its spending cuts will save.

Federal expenditures are actually higher this year than they were in pre-DOGE 2024.

If, on the other hand, you imagine DOGE’s mission as trimming the fat from the federal budget and leaving only lean muscle behind, it’s also a failure. Indiscriminate cuts to U.S. foreign aid programs have created a diplomatic opportunity for China and indiscriminate cuts to U.S. scientific organizations have set back medical research. DOGE was never about separating the fat from the muscle, it was about demonstrating the postliberal right’s contempt for empathy and expertise. The indiscriminateness was the point. And that point was important enough to history’s richest man to justify a 71 percent hit to his flagship company’s net income and a major dent to his own personal popularity, apparently.

But here’s the thing about Elon: People like his cars. They’re in awe of his spaceships. He’ll never be fully forgiven for throwing in with the most repulsive elements in American politics but if he stepped away from the fray for a while and concentrated on business, many of his critics would talk themselves into giving his products a second chance. They trust his competence and want to buy Teslas. They just want to feel somewhat less disgusting when doing so. It’s within his power to make that happen.

The president is different. As more Americans come to realize that he doesn’t know what he’s doing on what was supposed to be his best issue, they’ll grant him less of the benefit of the doubt on his other policies.

Don’t look now but his numbers on immigration have begun to slip despite the fact that border enforcement has been the biggest success of his presidency so far. Recent surveys from Reuters, CBS, and Quinnipiac have him either at 50-50 in handling immigration or slightly negative on balance; a new poll out today from YouGov finds him 5 points underwater, down nearly 20 net points from January. The decline is obviously being driven by the gulag-ization of immigration enforcement but I’d bet that the economic chaos since “Liberation Day” is contributing to it indirectly as well. Without a compelling financial reason to go on defending Trump from his detractors in unrelated matters, some of his softer supporters have apparently … stopped.

Who knows how that attitude might influence their reaction to other needless headaches foisted by the president on his constituents?

He’s destined to rebound at some point, if only temporarily—again, there are two hours left in this movie—but the tariff upheaval will stick to him in ways that the average scandal will not. “Trump could appoint Jay Powell Fed Chair for life, scale back all of the tariffs and go on an international goodwill tour, singing kumbaya, and it still wouldn’t completely repair the tainted perception of U.S. assets,” Spencer Jakab wrote on Wednesday for the Wall Street Journal. Why should it? Whatever the president undoes today can, and quite possibly will, be redone again eventually. Global confidence in American stability has been shaken and won’t be restored so long as the country is governed by an impulsive narcissist who plainly doesn’t understand the implications of his own signature policy. 

And even after he’s gone, it won’t return fully. Regular readers know why.

“Many of the Trump administration’s problems could be quickly addressed through the incredibly simple expedient of just not. doing. certain. things,” New York Times columnist Ross Douthat wrote today, which is true but strange advice for a revolutionary movement. As J.D. Vance said shortly before being elected to the Senate, “we’re going to have to get pretty wild, and pretty far out there, and go in directions that a lot of conservatives right now are uncomfortable with” if the right is to prevail in America’s “late republican period.” Doing certain “uncomfortable” things to punish the right’s domestic and foreign cultural enemies is the whole point of postliberal nationalism, the basic plot of The Trump Show. 

But wrecking the global economy in the process? That’s a little too uncomfortable for the president—for the moment anyway. But check back tomorrow.