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Your guide to what Trump’s second term means for Washington, business and the world

Tom Wolfe coined the term “masters of the universe” as an ironic description of Wall Street traders. Elon Musk takes the idea literally. He hopes to colonise Mars.

But Musk has come down to earth with a bump. After falling out with Donald Trump, the world’s richest man has discovered that he is not even the master of Washington — let alone the universe.

Musk’s downfall is part of a global pattern. Decades of globalisation have created vastly rich oligarchs all over the world. But when money power and political power clash, there is only one way to bet. Politics always comes out on top.

In countries as different as Russia, China, Saudi Arabia — and now the US — oligarchs who have developed independent political ambitions have been forcibly reminded where the real power lies.

The triumph of politics over money might come as a surprise to both Marxists and overconfident capitalists — who believe that politicians will always dance to the tune of the super-rich.

But, as Mao observed, power flows from the barrel of the gun. Control of the organs of the state — the army, state prosecutors, tax authorities — still ultimately counts for more than billions in the bank.

Of course, politicians do need money, particularly on the way up. Elections are expensive and so are the clientelist politics of an authoritarian state. Musk’s financial backing helped Trump win the 2024 presidential election.

Vladimir Putin’s rise to the apex of power in Russia was facilitated by some of the country’s richest men — who hoped that he would be the guardian of the vast fortunes they had made in the 1990s. But, once he was firmly installed in the Kremlin, Putin showed the oligarchs who was boss. When Mikhail Khodorkovsky, then Russia’s richest man, started to become an independent political force, Putin had him arrested. Khodorkovsky served 10 years in prison. Boris Berezovsky, who had also made a vast fortune in the Yeltsin years, was forced into exile and died in mysterious circumstances.

Jack Ma, then China’s richest man, got off comparatively lightly. President Xi Jinping evidently saw Ma’s high profile and sometimes outspoken views as a challenge. After Ma gave a speech in 2020 that criticised financial regulators, the share offering of his Ant Group was suspended and Ma all but disappeared from public view. The Chinese Communist party had put the country’s most prominent capitalist in his place.

Ma stayed out of jail and has begun to make public appearances again. But Jimmy Lai, a Hong Kong media tycoon who backed the territory’s pro-democracy movement, is currently serving a long prison sentence.

In Saudi Arabia, Crown Prince Mohammed bin Salman, a man much admired by Trump, also demonstrated that he can bring the richest men in his kingdom to heel. He locked dozens of wealthy businessmen up in the Ritz-Carlton in Riyadh in 2017 — ostensibly in an anti-corruption purge. Among them was Prince Waleed bin Talal, the kingdom’s most famous investor. The episode sent a message of ruthless power that has never been forgotten.

The best way for a billionaire to insulate themself from the whims of a country’s leader is to become the leader. That was the route followed by the late Silvio Berlusconi, a controversial tycoon who founded his own political party and served three terms as prime minister of Italy. Bidzina Ivanishvili, a billionaire who became prime minister of Georgia, followed a similar route. Trump himself used his wealth to fund his entry into politics

But few oligarchs make the transition. And those who operate on the fringes need to tread carefully. To retain their wealth and liberty they must understand the boundaries. In India, the fabulously wealthy Ambani family retain close ties to Narendra Modi, the country’s prime minister. But they have never sought to challenge his leadership.

Carlos Slim, Mexico’s richest man, has stayed close to a succession of Mexican presidents, while rarely expressing political opinions. Slim’s studied neutrality has enabled him to retain influence regardless of the administration in power. He even worked with the leftist president Andrés Manuel López Obrador, collaborating on major infrastructure projects.

Many Americans would recoil at the idea that the relationship between money and power in their country can be compared with how things are done in China, Russia, Saudi Arabia or Mexico.

After all, the US is a long-standing democracy with well-established property rights. The idea that the president could use the law to pursue a vendetta against the country’s richest man still sounds a bit shocking. But the president has already said that Musk could lose federal contracts and warned him of “very serious consequences” if he backs the Democrats.

Some of Trump’s most zealous followers want to go much further. Steve Bannon has suggested nationalising Musk’s SpaceX company, which plays a crucial role in federal space programmes. He has also urged Trump to investigate Musk’s immigration status with a view to deporting him.

Expropriation? Exile? It all sounds very un-American. But this is Trump’s America. Never say never.

gideon.rachman@ft.com

By calling on troops to suppress protests in Los Angeles on Sunday, Donald Trump has shown he is willing to put the country on a war footing — and test the boundaries of executive power — to achieve his goals. 

For the first time in decades, the National Guard was deployed against citizens on domestic soil against the wishes of local law enforcement, using a rarely invoked law designed to help the US fight off a foreign invasion. A US president last deployed a state’s National Guard without being asked by its governor in 1965, when Lyndon Johnson sent troops to protect civil rights demonstrators in Selma, Alabama.

Pete Hegseth, the defence secretary, even threatened to send in the marines to quell the unrest over raids against suspected illegal migrants. That would require invoking the Insurrection Act, which last happened 30 years ago during the riots that erupted in Los Angeles after the police who beat Rodney King were acquitted.

The deployment of the National Guard in the second-largest US city, one that is largely liberal, was “clearly done as an authoritarian show of strength”, said Ryan Enos, a professor of government at Harvard University.

“There is no policy reason [why the administration] should be targeting places in Los Angeles as opposed to places in red states.”

The deployment is the latest effort by the Trump administration to test the limits of presidential authority and force Democrat-run states to follow federal edicts. Some scholars warn these efforts are increasingly in open defiance of political convention and the US constitution.

In the space of a few days, Trump has ordered an investigation into his former presidential rival Joe Biden and officials in the previous administration, and threatened to stop federal funds flowing to California.

The president floated the idea of cancelling government contracts held by businesses belonging to his former ally Elon Musk, and warned there would be “very serious consequences” if the billionaire used his war chest to back Democratic candidates.

Trump’s most eager lieutenants have issued similar threats. Vice-president JD Vance suggested the spectacle of “foreign nationals with no legal right to be in the country waving foreign flags and assaulting law enforcement” could be legally defined as an invasion. 

Stephen Miller, the architect of the White House’s immigration policy, declared that the choice before the country was to “deport the invaders, or surrender to insurrection”. He endorsed a post which called for mass deportations no matter “what it costs”, and which concluded: “Nothing else matters if this isn’t handled.” 

On Fox News, border tsar Tom Homan suggested the Department of Justice would investigate Democratic lawmakers — including House minority leader Hakeem Jeffries — who called for Immigration and Customs Enforcement agents not to conceal their faces behind masks when conducting raids.

Justifying the deployment of troops in Los Angeles, homeland security secretary Kristi Noem claimed that ICE agents were merely going after the “worst of the worst” — criminal aliens embedded in otherwise law-abiding communities.

But a report by the conservative-leaning Washington Examiner last week claimed Miller had castigated ICE’s high command for merely pursuing criminals, and exhorted them to round up all undocumented migrants. ICE denied this.

The broad scope and haphazard nature of the sweeps by ICE agents over the past few days was highlighted by the mistaken arrest of a US marshal in Arizona, who officials admitted had merely “fit the general description of a subject being sought by ICE”.

The White House did not immediately respond to a request for comment.

On Saturday, White House press secretary Karoline Leavitt defended the operations as “essential to halting and reversing the invasion of illegal criminals into the United States.”

She added that “the Commander-in-Chief will ensure the laws of the United States are executed fully and completely.”

Critics of the administration’s immigration crackdown say raids are indiscriminate by design.

“Obviously they know that mass deportations are going to be incredibly disruptive to these cities that have so many immigrants living in them,” said David Bier, director of immigration studies at the Cato Institute, a libertarian think-tank. 

“They were fully expecting and hoping for this type of reaction,” he added, “because it’s good politics for them, and . . . further justifies both mass deportation and other power grabs.”

Andrew Weinstein, a lawyer who served as the Public Delegate to the UN under President Biden, said the escalation was part of a broader strategy.

“Whether it’s the unprecedented politicisation of the military, [the Trump administration’s] assault on higher education under the guise of combating the very real problem of rising antisemitism, or the expedited deportation of non-citizens without due process, it’s all a pretext to further an authoritarian agenda,” he said of recent moves by the White House.

“Each of these actions cracks the foundation of our democracy just a little bit more.”

For now, public support for Trump’s immigration crackdown appears to be holding up. A YouGov poll for CBS, conducted before the LA protests, found that 54 per cent of the country was in favour of the scheme. That figure dropped though when people were asked if they supported going after those who are not dangerous criminals.

In contrast to Trump’s first term, when defence secretary Mark Esper refused to send the military to quash Black Lives Matter protests, there has been no real opposition to the military deployment from members of the administration, or from Republicans in Congress. 

For his part, Trump on Sunday did not see any reason to de-escalate.

“We’re going to have troops everywhere,” he told reporters. “We’re not going to let this happen to our country. We’re not going to let our country be torn apart like it was under Biden.”