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The economic mind of Trumpism — 2: Scott Bessent, the American Dream, and the beauty of the private sector

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In his first major economic policy speech as US Treasury Secretary, Scott Bessent outlined what he saw as the Trump administration’s plan to free the American economy from “dependence on the state” and steer it towards “private sector-led growth.”

Speaking at the Economic Club of New York last March, Bessent, a former Soros Fund manager, made it clear that President Donald Trump intended to pursue deregulation, implement permanent tax cuts, and use tariffs as a strategic tool to strengthen American industry.

With this shift, Scott Bessent aimed to reverse what he described as the previous administration’s “overreach.”

According to Bessent, previous governments pursued an overly “statist” economic policy, which hindered innovation and productivity. Therefore, and predictably, state intervention in the economy needed to be reduced.

Pointing to data showing that over 95% of job growth last year was concentrated in the public and government-adjacent sectors, Scott Bessent argued that these sectors offered slower wage growth and lower productivity compared to private sector jobs.

From ‘bureaucracy’ to ‘risk-based’ regulation

Bessent claimed:

“The American economy has been artificially propped up by government spending and public sector job growth. We are focused on returning to a private sector-led economy where businesses drive job creation, investment, and innovation.”

To facilitate this transition, the administration planned to suspend the Corporate Transparency Act, which Bessent claimed imposed unnecessary reporting burdens on small businesses.

Bessent also reiterated Trump’s commitment to permanent tax cuts, reduced corporate tax rates, and expanded small business deductions to encourage investment and entrepreneurship.

The Secretary also announced that they would make a “comprehensive and ambitious effort” to liberalize the financial sector to enable banks to play a more active role in driving economic growth.

The administration was particularly focused on overhauling how financial institutions are supervised, aiming to move from what Bessent described as a “bureaucratic checkbox” approach to a more “risk-based” regulatory approach.

According to the Treasury Secretary, tariffs have three goals

The core of the speech was Scott Bessent’s defense of an aggressive trade policy, stating that tariffs were not just about protectionism but about creating a “more competitive and resilient US economy.”

Dismissing concerns about potential inflationary effects, the Secretary argued that tariffs served three main purposes: generating revenue, protecting American industries and workers from unfair practices, and serving as a strong negotiating tool in trade talks.

“As President Trump has said many times, ‘Tariff is my favorite word’,” Bessent said. “If trade partners retaliate, they will face even higher taxes. But if they want to negotiate, we are happy to talk.”

Bessent also dismissed criticism of this policy, emphasizing that Trump’s trade policies were designed to re-establish the US’s economic power on the global stage.

From ‘Lehman moment’ to ‘let the markets sort it out’

Addressing investor concerns, Bessent also made it clear that the administration had no intention of intervening in the stock market to prevent declines. This position indicated that the American government was not considering a “Lehman moment” as in the 2008-9 crisis, but rather relying on the “markets will sort it out” logic.

Indeed, Bessent, referring to the Trump administration’s focus on bond yields rather than stock prices as an indicator of “economic health,” simply stated, “Trump’s upward call is simple: if we have good policies, then the markets will rise.”

Bessent also suggested that Trump’s economic policies, particularly the “re-privatization” of the economy, would contribute to lower interest rates and increased long-term market confidence.

One of the goals the Trump administration set for itself was to convince investors that market-determined interest rates should fall. High-level members of the American economic administration particularly want to lower the yield on ten-year Treasury bonds.

Bessent argued that the Trump administration could lower yields by reducing energy prices and easing regulations. The Secretary also downplayed the sell-off in US Treasury bonds after the tariff shock, saying it was not a “systemic problem.”

“There’s one of these deleveraging tremors going on in the markets right now,” Bessent said, adding that he had witnessed them frequently in his decades-long hedge fund career: “There are very large leveraged players who are experiencing losses in this fixed income market and are being forced to deleverage.”

The obstacle to the American Dream: Workers’ access to cheap goods…

“Access to cheap goods is not the essence of the American Dream. The American Dream is based on the concept that every citizen can achieve prosperity, upward mobility, and economic security. For too long, the designers of multilateral trade agreements have overlooked this.”

The natural consequence of this claim would be to push the “fight against inflation” program to the back burner. This is indeed the case: Bessent indicated this in his speech at the Economic Club of New York, saying, “On a continuum, I am not worried about inflation.”

“Wall Street has done great things, Wall Street can continue to do good things. But this administration is about Main Street.” These words of Bessent are a goal that Trump also frequently expresses: “Main Street” means focusing on production, shopkeepers, stores, and retail sales. Bessent repeats this “polish” of Trump’s as it is.

Time for an economic ‘detox’: The rebalancing account

When tariffs were first announced in March, Trump was asked if there was a risk of recession, and the President acknowledged in response that there would be a “transition period” in his policies.

Speaking after Trump, Scott Bessent suggested in an interview with CNBC that the bottom 50% of American workers were “dead,” and that the top 10%’s share of consumption was close to 40%, 50%, and spoke of ending this imbalance:

“Look, there will be a natural adjustment as we transition from public spending to private spending. The market and the economy have become hooked, and we have become dependent on this government spending, and there will be a period of detox. There will be a period of detox.

(…)

Look, there is an adjustment. We’ll see if it’s painful. What we’re trying to do, I talked about this yesterday at the Economic Club of New York. We’re trying to move from the public sector to the private sector. I talked about how we will have safe and sound regulations to get our banking system working again. So banks should lend to private companies. Employment should come from private companies, not the government. I’m confident that if we implement the right policies, it will be a very smooth transition.”

Scott Bessent always emphasizes that this is an “adjustment process.” Referring to Ronald Reagan and Jimmy Carter, he acknowledges that there were some turbulences during that period (which we will address in the next part of the series), but he emphasizes that these presidents “stayed the course,” and that they too will stand by the course they are following.

Bessent told the CNBC host that “this unsustainable system has been built for years,” adding that the previous “unsustainable system” of trade was also responsible for today’s economic uncertainties:

“Our trade partners have taken advantage of us. We can see this in large budget surpluses. We can also see this in large budget deficits.”

An elegy for globalization?

In an article published in The Economist in October, Scott Bessent stated that globalization had triggered rising inequality in the US, leading to growing social and economic disparities.

“Western middle- and working-class populations are becoming increasingly wary of globalization,” wrote the financial executive who would later become Treasury Secretary, “The only way to preserve the benefits of the international trading system is to question some of the system’s flawed assumptions and update it for the current situation.”

Starting the same article, Bessent’s call for strong links between international economics and trade policies and security will not be surprising to those who read the first part of the series. This idea, that national security and the economy and trade are inseparable, is not unique to this period; in the “neoliberal” era, American national security was also tied to the international economic system. People like Stephen Miran and Bessent want to emphasize this more strongly, highlighting that the old configuration no longer works in favor of American national security. Bessent writes:

“The United States must play a more active role in reshaping the international economic order. Abandoning the international trading system entirely would be a disaster for the American people and our allies. However, the current situation creates security vulnerabilities, and the total economic benefits for the United States are uncertain. America’s next generation of international economic policy must more closely link security relationships and economic relationships to deliver the benefits that truly free trade can bring. Adjustments are needed, but they must be carefully calibrated and consciously accelerated.”

Because of globalization: 1) China has risen, 2) the structure of the American economy has been disrupted, changing the balance of power with US adversaries. These are Bessent’s theses. While international economic integration, open markets, and globalization helped curb inflation by significantly increasing the short-term efficiency of the global economy and reducing the cost of goods, the effects of trade liberalization on “distribution” were ignored, and inequality in America worsened.

The adjustment process largely did not happen, leading to persistent imbalances in the global economy. “The desired balance,” Bessent wrote, “has been hindered by the deliberate policy choices of foreign governments, particularly China, but also Japan, South Korea, and other export-dependent economies.”

Seeking an update to the international trade and security system

As we mentioned above, Scott Bessent advocates for reorganizing, not abandoning, the international trade system.

According to him, despite its many flaws, abandoning the international trade system would be a major economic and strategic mistake. Instead, the US will adopt policies aimed at correcting the sources of “imbalances” in the international economy.

Needless to say, these measures must, of course, “act on a global basis,” as bilateral actions largely circumvent the underlying source of imbalances rather than addressing them.

Bessent therefore finds the discussions about “industrial policies,” which are a hallmark of the Joe Biden era, misplaced, seeing them, of course, as “statist,” and writes:

“Macroeconomic interventions, such as broad-based tariffs, will be more effective than microeconomic interventions, such as industrial policy, which often rely on the government picking winners and losers.”

The US should also intervene with its allies in this direction: moves that will close the American current account deficit. America’s security guarantees and market access should also be linked to allies’ commitments to spend more on “common security” and structure their economies in a way that reduces imbalances over time; this is Bessent’s proposal:

“Such a linked system of security and economic alliances must be dynamic to incentivize behavior consistent with American interests. Countries can move closer to or further from the center of this system of relationships based on the choices they make.

A clearer compartmentalization of the international economy will provide more effective leverage to confront the underlying sources of imbalances than the currently dominant bilateral approach. Furthermore, the cost of remaining outside the periphery will be high. Without access to US markets, China’s excess capacity will threaten the viability of domestic production in other countries. Moreover, it is unlikely that hegemons outside the US-led region will be as benevolent as the US was in the post-war period.”

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Israel looks to Latin America as Isaac Accords seek to expand regional partnerships

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23/06/2026

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As ties between Israel and Latin American countries continue to deepen, the newly launched Isaac Accords are emerging as a framework for expanding cooperation across the region.

The initiative formed the backdrop to a panel discussion on opportunities for Israel in the Western Hemisphere at the 2026 JNS International Policy Summit in Jerusalem on Monday.

The panel, titled “The Coming Isaac Accords: Israel and Latin America,” brought together diplomats and regional experts to discuss developments that could encourage participation in the Isaac Accords, the strategic framework announced in April by Argentine President Javier Milei and Israeli Prime Minister Benjamin Netanyahu during Milei’s visit to Israel.

Moderated by JNS correspondent Etgar Lefkovits, the discussion featured Panama’s Ambassador to Israel Ezra Cohen, former US Ambassador to Costa Rica Fitzgerald Haney, and Leah Soibel, founder and CEO of Fuente Latina, which provides Middle East news coverage to Spanish-language media outlets.

Soibel said:

“What we need to understand is that the Isaac Accords have an impact that extends far beyond diplomacy. Twenty percent of the US population is Hispanic. By 2050, that figure is expected to reach 30% of the population. This is the demographic group with the lowest levels of antisemitic sentiment.”

The panel also celebrated the victory of pro-US and pro-Israel candidate Abelardo De La Espriella, who defeated his left-wing rival in Colombia’s presidential election on Sunday.

De La Espriella had made the restoration of relations with Israel and the relocation of his country’s embassy to Jerusalem central elements of his campaign platform.

Cohen said that when he looks at a map of Latin America, only four countries are currently governed by left-wing, anti-Israel administrations.

Referring to an earlier panel discussing what participants described as a bleak future for Jews in Europe, Cohen remarked: “When one window closes, another opens. Come to Latin America.”

Haney argued that “Israel’s friends keep winning” and predicted that “we are going to see a lot more positive developments coming out of Latin America.”

He said a colleague in Colombia had sent him a text message promising: “On August 7 at 5 p.m., we will restore relations with Israel.”

Haney noted that this was the date and time when Colombia’s new president is scheduled to take office and predicted that another announcement regarding the relocation of Colombia’s embassy to Jerusalem would follow.

He described Colombia as the latest in a series of Latin American countries turning toward Israel in pursuit of “shared values, shared prosperity and shared security.”

Haney also said that the Israel Allies Foundation, a pro-Israel advocacy group that works with lawmakers, would bring together representatives from 11 legislative bodies across Latin America in Buenos Aires over the weekend to sign a joint declaration of principles.

He noted that the organisation had successfully worked with Brazil’s legislature despite the position of President Luiz Inácio Lula da Silva, whom he described as anti-Israel.

According to Haney, Brazil’s legislature has developed a plan to deepen relations with Israel over the next nine months.

Soibel said that 12 Latin American countries had renewed or strengthened their friendships with Israel and that interest in Israel among Spanish-language content creators, influencers and journalists continues to grow. Her organisation has brought 300 non-Jewish Hispanic journalists to Israel.

The panel also highlighted the launch of a Panama-based Spanish-language edition of JNS. Soibel said the work of pro-Israel organisations remains vital because so few such groups operate in the region, while, in her words, “Iran, Qatar and Hezbollah are conducting propaganda campaigns in Spanish throughout Latin America.”

She continued:

“You could probably count on one hand, perhaps two, the number of organisations and leaders operating across the Spanish-speaking world. That makes this work extraordinarily strategic. Its impact is enormous. Israel and the Jewish people should invest more. There is a large Hispanic-Israeli population in Israel, and many of them were victims of the October 7 attacks. We have stories to tell. What we need now is investment and distribution channels to spread those messages and information.”

The panel concluded on an optimistic note, with participants expressing confidence that Latin America will become an increasingly important pillar of Israel’s global diplomatic strategy in the years ahead.

Milei and Netanyahu launch new accord

Argentine President Javier Milei and Israeli Prime Minister Benjamin Netanyahu announced the launch of the Isaac Accords last Saturday.

The initiative establishes a new strategic framework aimed at strengthening cooperation among Argentina, Israel and like-minded partners across the Western Hemisphere, described as “the descendants of Isaac and nations rooted in the Judeo-Christian tradition,” in defence of freedom and democracy and in the fight against terrorism, antisemitism and drug trafficking.

Participating countries will seek to strengthen coordination against what the agreement describes as terrorist organisations, with particular emphasis on “Iran’s efforts to expand terrorist networks and operational presence throughout the Western Hemisphere.”

The initiative also seeks to promote coordination and alignment in international forums while creating a framework for expanded cooperation in innovation, technology, trade and economic openness.

Speaking alongside Netanyahu at a joint press conference, Milei said:

“We expressed our unwavering support for the United States and Israel in their struggle against terrorism and the Iranian regime, not only because it is the right thing to do, but also because our countries are united through shared suffering.”

Milei referred to the 1992 bombing of the Israeli embassy in Buenos Aires and the 1994 attack on the AMIA Jewish community centre.

Although Argentine courts have attributed both attacks to Iran, Tehran has consistently denied any involvement.

Netanyahu praised the Argentine leader for demonstrating what he called “moral clarity” by standing with Israel and said he hoped other Latin American governments would join the Isaac Accords, which both leaders described as being inspired by the Abraham Accords.

The Abraham Accords, brokered by Washington in 2020, triggered a wave of normalisation in Arab-Israeli diplomatic relations.

US Ambassador to Israel Mike Huckabee attended the signing ceremony and described Milei and Netanyahu as “President Trump’s two closest friends.”

Huckabee added: “I do not think there are two other world leaders whom our president respects as much and with whom he has such a personal relationship.”

During the visit, the two sides also announced the launch of the first direct commercial flights between Buenos Aires and Tel Aviv, scheduled to begin in November.

Milei said the new route would create an “unbreakable bond” between the two countries and reiterated his intention to relocate Argentina’s embassy from Tel Aviv to Jerusalem.

“As soon as circumstances permit, we once again reaffirm our commitment to moving the Argentine embassy to Jerusalem,” he said.

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Iran team leaves thank-you message in Los Angeles locker room after World Cup draw

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22/06/2026

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Iran’s national football team left a message in its locker room at SoFi Stadium, thanking Los Angeles for its hospitality during the World Cup.

The players said they were leaving the city with honor after keeping their hopes of reaching the knockout stage alive with a 0-0 draw against Belgium.

In the handwritten note, published by the Iran Football Federation, the team wrote:

“From the ancient land of Persia thousands of years ago to the civilized Iran of today, the spirit of Iran remains alive and unshaken. Los Angeles, thank you for your hospitality. We arrived in Los Angeles with pride, competed with honor and leave with dignity.”

The note also thanked Iranian supporters who gave their “hearts, voices and souls” to the team throughout its two matches and concluded with a call for peace, respect and friendship among all nations.

Los Angeles hosted both of Iran’s Group G matches, while the team returned to its training base in Tijuana between games.

Iran has been based in Tijuana throughout the tournament and has had to travel back and forth to the United States for matches because of restrictions related to its stay in the country. Entry bans were also imposed on some members of the national team’s coaching staff and officials.

US authorities said the team’s travel arrangements remain under review, while discussions continue over the possible easing of some restrictions.

Iran head coach Emir Ghalenoei has repeatedly criticized the travel restrictions, saying his squad has faced challenges that no other team in the tournament has been required to endure.

After drawing 2-2 with New Zealand in its opening match at SoFi Stadium, Iran will play its final Group G match against Egypt in Seattle.

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Colombia’s de la Espriella claims narrow presidential victory in runoff election

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22/06/2026

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The first results from Colombia’s presidential runoff election showed that right-wing candidate Abelardo de la Espriella, backed by Donald Trump, had narrowly won the vote.

The victory of de la Espriella, who has no prior political experience, signals a fundamental shift in the government’s approach to tackling the country’s long-running internal armed conflict and rising violence.

Throughout the campaign, de la Espriella pledged to intensify military pressure on illegal armed groups, drug trafficking networks and criminal organizations. He succeeded in defeating left-wing candidate Iván Cepeda, a close ally of incumbent President Gustavo Petro.

Speaking after the initial results were released, de la Espriella said: “Today marks the beginning of a new era for our country. This era is built on the free and democratic will of millions of citizens who chose to believe in a great, secure, prosperous Colombia full of opportunities.”

Cepeda says he will await official results

According to the preliminary count, with more than 99% of ballots tallied in the runoff election, de la Espriella secured approximately 49.7% of the vote, while Cepeda received 48.7%.

Cepeda, who has not yet conceded defeat, said the preliminary results were neither official nor binding.

“When the official count is completed, the final results are known and the necessary verification procedures are finished, we will recognize the official outcome produced by that process,” Cepeda said.

Reuters reported that the verification process showed very little variation from the preliminary counts recorded during the first round of voting on May 31.

De la Espriella, who grew up in Colombia’s Caribbean region, drew particularly strong support from that part of the country. Addressing a large crowd gathered in the coastal city of Barranquilla after the first results emerged, de la Espriella, who has adopted the nickname “El Tigre” (The Tiger), declared: “Tonight is the beginning of a new story for the nation. Tonight a new era begins, a change of order begins.”

He said he would govern for all Colombians, including those who voted for his opponent, and pledged loyalty to and protection of Colombia’s 1991 constitution.

At celebrations in Barranquilla, supporters wore Colombia’s yellow national football jersey and waved Colombian flags.

With images of de la Espriella projected behind the stage, supporters chanted “Stand firm for the homeland” and “Petro out!” as fireworks lit the sky. Some supporters wore hats bearing the slogan “Make Colombia Great Again,” echoing those worn by supporters of US President Donald Trump.

Trump reacted to the results in a Truth Social post, writing: “BIG won!”

One supporter, Patricia, told reporters: “We are tired of the murders in this country and of this government’s bureaucracy. Now we finally have a president from the coastal region.”

Another supporter said: “We are proud of the Tiger. We hope he transforms the country and, above all, creates a new nation where we will have jobs and greater security.”

Supporters of Cepeda, who narrowly lost the election, also voiced concerns on the streets of Barranquilla.

Catalina La Grande, a student and activist who supports Cepeda, told the BBC: “There is a visible sense of unease in the air. Such a narrow margin worries us because it reflects how divided the country is and the enormous challenges we face in defending democracy, peace and human rights.”

Another young voter backing Cepeda, Maria, said the results showed a divided country but noted that the public had remained peaceful.

“Given the level of polarization we are experiencing, the absence of violence in the streets is a positive development,” she said.

The sharp divisions between the candidates have fueled concerns that unrest could emerge if some opposition groups refuse to accept the outcome.

Late on Sunday night, clashes were reported between protesters and police in Cali, Colombia’s third-largest city. Demonstrators reportedly burned US flags, while police used tear gas to disperse large crowds angered by de la Espriella’s victory.

President Gustavo Petro is also reported to be considering challenging the result. In a post on X, Petro said that based on the preliminary count, “no one can be declared president” and alleged that the security of some polling stations had been compromised. He called for an audit of the voting software but provided no evidence to support the claims.

Who is Abelardo de la Espriella?

De la Espriella, who has no political background, is a lawyer and businessman. During his legal career, he represented clients including Alex Saab, an ally of former Venezuelan President Nicolás Maduro who has faced money laundering charges in the US, and David Murcia Guzman, one of Colombia’s most notorious fraudsters.

De la Espriella says he handled those cases in his capacity as a defense attorney.

Often compared to El Salvador’s President Nayib Bukele because of his security policies and distinctive beard, de la Espriella and his supporters frequently wear Colombia’s national football jersey at rallies and on social media. Critics accuse him of politicizing the national team shirt.

He is also known for regularly addressing campaign crowds from behind bulletproof glass panels.

Colombia’s internal armed conflict has persisted for decades, but violence has intensified in recent years. Armed groups and criminal organizations, including dissident factions of the FARC, the ELN and the Clan del Golfo, have doubled their membership over the past five years.

Competition for control of lucrative cocaine trafficking routes and illegal mining operations has further escalated the violence. Fighting along the Colombia-Venezuela border last year displaced tens of thousands of people. Cocaine production in the world’s largest cocaine-producing country has reached record levels.

Critics of President Petro argue that his “total peace” strategy, which prioritizes negotiations with armed groups, has failed, claiming that such groups have used ceasefire arrangements to expand their territorial control and influence.

De la Espriella has pledged to cancel all negotiations with illegal armed groups and increase military pressure to restore order.

As part of that agenda, he has promised closer cooperation with the US, the construction of massive prisons in Colombia’s forests, a smaller state apparatus and reforms to the healthcare system.

Having lived and worked in Miami for many years, de la Espriella has held US citizenship since 2023. During the election campaign, he received support from Donald Trump, who said de la Espriella would “stop illegal migration, fight crime and drugs, and restore law and order.”

Before the election, Trump also said de la Espriella would feel “the full support and strength of the United States” behind him.

Although Colombia has historically been one of Washington’s closest allies in the region, relations have become strained in recent years due to sharp disagreements between President Trump and President Petro over migration policy, tariffs and military intervention in Latin America.

De la Espriella’s election also aligns with a broader trend across Latin America, where security concerns have pushed politics to the right. His victory was welcomed by other conservative leaders across the region.

Argentine President Javier Milei said Colombians had “chosen the path of economic freedom, prosperity and uncompromising security” and had declared that enough was enough to transnational organized crime and drug trafficking.

Chile’s José Antonio Kast said: “A new era of freedom is beginning for Colombia, one that will allow the country to regain security and prosperity.”

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