The Economy

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Market mindset unravels

Illustration: Sarah Grillo/Axios. Stock: Getty Images

American political leaders on the left and right are rebelling against the market-first consensus that dominated Washington for four decades. Why it matters: The result is one of the biggest shifts in U.S. economic policy since the Reagan revolution, overturning decades of orthodoxy on trade, manufacturing, housing, health care and corporate power, Axios' Courtenay Brown and Neil Irwin write. Between the lines: The shared skepticism of the old economic consensus masks vastly different visions for what comes next. 🐘 On the right: "American economic policy on the right is now much more Alexander Hamilton than it is Milton Friedman," Vice President Vance told right-wing political commentator Michael Knowles last month. Translation: Vance believes the GOP's intellectual center of gravity is shifting away from free markets to a more interventionist government that promotes domestic industry. He joked that President Trump threatened to seize an AI company's equity and "no one protested." In practice, the pivot means that Trump has embraced tariffs and taken stakes in individual companies, among other policies. This week, the president celebrated Walmart's decision to lower prices and urged other retailers to follow suit. 🫏 On the left: Democratic socialists, including New York Mayor Zohran Mamdani, argue that government, not markets, should guarantee affordable housing, health care and other basic necessities. The movement is showing fresh political muscle following Mamdani's rise in New York, and a wave of DSA-backed victories in New York and Colorado that have establishment Democrats increasingly on edge. The new socialist candidates oppose the idea that markets should decide who gets health care, housing, child care or power at work — a close left-wing mirror image of Vance's belief that markets should serve broader social goals, not dictate them. The big picture: No single economic event explains the unraveling of the market-first consensus. Consider how slow-moving economic forces have built on each other: The China shock, the 2008 financial crisis, decades of soaring housing and health care costs, the pandemic and the inflation surge — all eroded confidence in the economic status quo. Social media amplified those shocks, giving Americans a window into how other people live, making wealth disparities, housing inequities and economic frustration feel more immediate and personal. 👀 Reality check: The shift is far from universal. Trump paired tariffs and industrial policy with traditional Republican priorities — including corporate tax cuts, deregulation and a generally business-friendly agenda. Even some democratic socialists have embraced supply-side ideas in housing, arguing that government should both build more homes and lower barriers to construction.