When financial markets shudder and bubbles burst, it is tempting to reach for the nearest villain. For many, especially among liberal commentators, Donald Trump fits the role conveniently. His brash rhetoric, disdain for multilateralism, and flirtation with protectionism are seen not merely as symptoms of a larger malaise but as its source. Yet this diagnosis is misleading. The tremors rattling the American – and global – economy go deeper than one presidency. They stem from structural imbalances baked into the foundations of modern capitalism, long before Mr Trump ever entered the White House.

The evidence of economic dysfunction is plain. In 2024, credit card delinquencies surged to record highs, and corporate bankruptcies reached levels not seen since the wake of the 2008 crisis. But these are not aberrations introduced by a rogue administration. They are the culmination of decades of over-financialisation, where artificially cheap money and ballooning debt replaced productive investment and wage growth. American equity markets, capitalised at $64 trillion – or half the world’s GDP – no longer reflect the health of the real economy, but its decoupling.

The result is a fragile equilibrium: household consumption propped up by credit, public finance yoked to bond markets, and a central bank increasingly cast as both arbiter and hostage of global capital flows. Meanwhile, wealth and risk have become more concentrated. The top 10% of Americans now drive 50% of consumption – a striking indicator not just of inequality, but of economic dependence on a narrow elite.

The overextension of credit and the concentration of both wealth and consumption are not anomalies, they are symptoms of a malign economic order. In this system, the average citizen, once able to attain a modest standard of living through wages alone, now turns to credit simply to put food on the table. It is an economy that has enriched the few while quietly extracting from the many.

It is in this context that Mr Trump’s economic instincts – often chaotic, occasionally self-defeating – deserve a second look. His attempts to reindustrialise America, to disentangle supply chains, and to use tariffs as tools of leverage rather than punishment, reflect an intuition that something fundamental is broken. He may lack the refinement of an economic theorist, but the broad outlines of his critique – namely, that the American economy has become dangerously detached from production – are not without merit.

Indeed, Mr Trump’s ambition, now focused on refinancing nearly $28 trillion in federal debt, coincides with a long-overdue reckoning. Unlike his predecessors, who benefited from decades of falling interest rates, he faces a tightening landscape. Investors are wary. The Federal Reserve, under Jerome Powell, remains cautious. And the bond market, unmoved by slogans, demands credibility. Yet Mr Trump is not content to simply roll over the liabilities. He sees in this moment an opportunity: to shift the economy away from debt-fuelled consumption toward domestic capacity, industrial revival, and what his advisers call "economic sovereignty."

This is hardly a new idea. In fact, it harkens back to the 19th-century vision of Alexander Hamilton, who championed public debt not as an indulgence but as a strategic instrument – one that funded infrastructure, incentivised industry, and consolidated national strength. “Public funds answer the purpose of capital,” Hamilton wrote. Today, that purpose has been corrupted. Federal borrowing now feeds an economy whose most dynamic sectors – finance, insurance, real estate – produce little tangible value and extract much in return.

Mr Trump’s critics call this a return to mercantilist nostalgia. But nostalgia for what, exactly? A time when debt financed bridges, not buybacks? When central banks supported nation-building, not asset bubbles? The real risk lies not in Trump's attempt to reassert political control over economic destiny, but in the complacency of a technocracy that clings to a broken model. The Fed's independence is sacrosanct, we are told – yet its decisions often track political cycles as closely as inflation data. Rate cuts in early 2024, suspiciously timed to lift markets ahead of a contentious election, only reinforce such cynicism.

At its core, the Trumpian challenge to economic orthodoxy is not just about tariffs or interest rates. It is about who governs the economy: elected officials or unelected central bankers, capital markets or the public interest. The President cannot remove the Fed Chair, but he can still attempt to set a new direction– one that prioritises production over portfolios.

In this, Mr Trump stands less as an innovator than a reluctant inheritor of a broken system. The bubble did not burst because of him. It burst because it was a bubble. His break with liberal economic orthodoxy may be erratic, even opportunistic. But it gestures toward a deeper truth: that the post-1980s consensus – globalisation without guardrails, deregulation without discipline, monetary stimulus without reform – is running on fumes.

The question is no longer whether change is coming. It is whether that change will be managed with foresight or allowed to unfold in chaos – whether it will be strategic, drawing on a sober reassessment of the economic model, or reactionary, driven by political desperation and short-term incentives. In the ruins of financial excess – of credit-fuelled consumption, inflated asset markets, and widening inequality – there lies an undeniable opening. But this is not a moment for nostalgia, for reaching back to a golden age that may never have existed. It is a moment for reinvention: of policy, of purpose, and of the role the state should play in shaping markets rather than merely serving them.

Whether Trump becomes the architect of that reinvention or merely the unlikely messenger of its urgency remains to be seen. His economic impulses, though often inconsistent and blunt, point to a broader recognition that the old order is no longer viable. The consensus forged in the post-1980s era – anchored in globalisation, deregulation, and the primacy of capital – has lost its grip not only on the economy but on public trust. The real contest of the coming years is not just political or financial – it is conceptual. It centers on how the illness afflicting modern capitalism is diagnosed, and more crucially, on what kind of medicine will be prescribed: more of the same, or something fundamentally different.