Understanding Trump’s Fiscal Shock Doctrine: How He’s Manufacturing an Economic Crisis & How We Fight Back

If it feels like the economy is spiraling, that’s because it is, but not by accident. We are witnessing a deliberate strategy known as Fiscal Shock Doctrine, where leaders engineer economic crises to justify radical policy changes that benefit corporations and the wealthy while leaving everyday people struggling. 

This isn’t a conspiracy theory—it’s a well-documented authoritarian tactic. From Chile to Russia to Hungary, economic chaos has been weaponized to dismantle public services, gut worker protections, and consolidate corporate power under autocratic leaders.

In this post, we’re breaking down: 

• What Fiscal Shock Doctrine is and how it works 
• How Trump is actively using it right now to justify massive cuts and privatization 
• How we fight back before this crisis is used to permanently reshape the economy in favor of billionaires 

What is Fiscal Shock Doctrine? 

The term “Shock Doctrine” was popularized by journalist Naomi Klein, describing a strategy where governments exploit or manufacture crises to implement extreme policies the public would never accept under normal conditions (2).

How It Works

Create or worsen an economic crisis and defund essential government services, destabilize markets, and force public panic. 

Historical example: Reagan & Bush’s deficit manipulation 

• During the Reagan administration, massive tax cuts for corporations and the wealthy—paired with deep budget slashes to social programs like Medicaid and food assistance—created a manufactured budget crisis, later used to justify cutting even more public services (4). 
• George W. Bush mirrored this strategy in the 2000s, enacting major tax cuts for the wealthy while increasing military spending, leading to skyrocketing deficits. The resulting budget strain was then used to push for privatization of Social Security (3). 

Trump’s playbook today: 

• Defunding the EPA, DOJ, VA, and Medicaid to create backlogs and dysfunction. 
• Mass federal layoffs to ensure public agencies “fail” and lose credibility. 
• Using tariffs to disrupt supply chains and fuel inflation while blaming global markets.

The real goal: 

• Make the public believe that government “doesn’t work” so they support privatization.
•  Weaken agencies that regulate corporate power so deregulation can continue unchecked. 
• Create desperation so the public accepts extreme economic policies.

Use the Crisis to Justify Radical “Fixes” 

Claim the only solution is deregulation, privatization, and austerity. 

Historical Example: Putin’s post-soviet economic shock

• In the 1990s, Russia’s economic collapse under Boris Yeltsin paved the way for Vladimir Putin’s rise, where he consolidated control over industries by selling off state resources to oligarchs (1). 
• Once in power, Putin’s government manipulated further economic crises—such as the 2014 oil price collapse—to justify expanding state control over the economy while dismantling opposition networks (6). 

Trump’s playbook today: 

• “Government shutdown” threats are being used to justify deep agency cuts.
• Trade wars are creating inflationary pressure that allows billionaires to profit. 
• Expanding corporate influence over federal contracts (via Musk & DOGE) under the guise of “efficiency.” 

The real goal: 

• Make Americans desperate for financial relief so they accept austerity measures.
• Use tariffs as a political weapon while pretending they benefit the economy (10).
• Shift economic power to billionaires who benefit from deregulation.

Implement Permanent Changes While the Public is Distracted 

Exploit the crisis moment to make permanent structural changes. 

Historical example: Hungary’s “emergency” reforms 

• Hungary’s Viktor Orbán used economic panic in the 2010s to pass sweeping constitutional changes, reducing judicial oversight while transferring wealth to government friendly businesses. (5)
• These “temporary” emergency measures became permanent, locking in one-party control over the economy while suppressing dissent.

Trump’s playbook today: 

• Merging the DOJ & FTC Antitrust divisions to eliminate oversight of corporate monopolies. (7)
• Shifting more public funds into defense contracts & privatization. (8)
• Weakening labor laws to ensure corporations dictate worker rights. U.S. (9)

The real goal: 

• Ensure that economic power remains concentrated within Trump’s inner circle of billionaires. 
• Eliminate regulatory guardrails permanently. 
• Use future economic crises to further consolidate control.

How We Fight Back – Economic Resistance Strategies 

Stopping Fiscal Shock Doctrine requires direct action, public awareness, and economic disruption. 

Expose the lie of “government inefficiency” 

• Educate people on how Trump is actively sabotaging public institutions. 
• Highlight working examples of effective government programs (like how the Inflation Reduction Act successfully cut costs). 

Disrupt the privatization pipeline 

• Call out Congress members enabling these policies. 
• Pressure state & local governments to reject federal austerity measures.
• Expose which corporations are profiting from privatization efforts. 

Targeted economic disruptions & boycotts 

• Expand No Buy, Nothing Corporation campaign to weaken corporate enablers of Trump’s policies. 
• Redirect spending to local businesses, credit unions, and cooperatives to weaken billionaire control over the economy. 
• Boycott industries benefiting from Trump’s economic policies, like defense contractors, fossil fuel companies, and monopolistic tech firms.

Final Call to Action: 

Economic resistance is one of the most powerful tools we have against authoritarianism. 

• Stay informed. Share this post & expose how Trump’s fiscal policies are a scam.
• Organize your spending. Participate in targeted economic resistance.
• Put pressure on Congress. Demand accountability and block further budget cuts.

Sources

1. Gessen, M. (2012). The Man Without a Face: The Unlikely Rise of Vladimir Putin. Riverhead Books. 
2. Klein, N. (2007). The Shock Doctrine: The Rise of Disaster Capitalism. Metropolitan Books.
3. Krugman, P. (2007). The Conscience of a Liberal. W. W. Norton & Company. 
4. Phillips-Fein, K. (2009). Invisible Hands: The Businessmen’s Crusade Against the New Deal. W. W. Norton & Company. 
5. Scheppele, K. L. (2013). “The Rule of Law and the Frankenstate: Why Governance Checklists Do Not Work.” Governance, 26(4), 559-562. 
6. Snyder, T. (2018). The Road to Unfreedom: Russia, Europe, America. Tim Duggan Books.
7. Godoy, J. Elon Musk throws weight behind merging FTC and DOJ antitrust units. (02/27/2025). Reuters. https://www.reuters.com/world/us/elon-musk-throws-weight-behind-merging-ftc-doj-antitrust-units-2025-02-27/
8. CNN Transcripts. (02/03/2025). President Donald Trump Signs Executive Orders. https://transcripts.cnn.com/show/cnc/date/2025-02-03/segment/08
9. Niedzwiadek, N. and Ng, A. (02/11/2025). Trump administration submits regulations to weaken federal worker protections. Politico. https://www.politico.com/news/2025/02/11/trump-administration-federal-worker-protections-00203598
10. Fact Sheet: President Donald J. Trump Imposes Tariffs on Imports from Canada, Mexico and China. (02/01/2025). https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-imposes-tariffs-on-imports-from-canada-mexico-and-china/