The first quarter of 2025 has been a rollercoaster for investors, with the market reacting to the ever-evolving and often conflicting changes implemented since the new administration took control. For the quarter, large-company stock declined by 4.3 percent, small-company stock fell 9.5 percent, while foreign stock grew by 6.9 percent. Countering trends in the domestic stock market, bonds are up by 2.6 percent in the first quarter. As of February, the rate of inflation is 2.8 percent.
The new administration’s lack of clear direction and extreme policy implementations have resulted in a resurgence of inflation and an extremely volatile stock market. March ended 5.8 percent down, the steepest monthly decline since December 2022 (when the Federal Reserve began its first rate increases since the pandemic) and the worst first quarter of a president’s term since the 2008 recession.
Despite this administration historically being viewed as probusiness, the uncertainty of its haphazard leadership in its second term has curbed the market’s enthusiasm and expectations for a more pro-corporatist and growth-focused environment. In addition, due to changing economic indicators—such as an anemic 0.3 percent GDP for the quarter and increasing unemployment to over 4 percent, and the ever-present concern of the administration’s tariff regime—consumer sentiment about future economic growth is down 11.9 percent from February and 28.2 percent from a year ago. This has resulted in a 0.4 percent decrease in the yield of the 10-year Treasury note.
Despite his professed desire to support economic growth, the current President’s policies and executive orders are threatening to push the U.S. economy into a recession, something that the President himself has admitted is a possibility and that he believes may be necessary. Though this may seem counterintuitive, there is historic precedent for economic distress allowing administrations to implement more extreme ideological policies.
In her 2007 book Shock Doctrine: the Rise of Disaster Capitalism, Naomi Klein argues that neoliberal policies championed by the likes of Milton Friedman and his ideological acolytes have been most effectively implemented during times of political, social, and economic chaos. Throughout his career, Friedman prescribed “shock therapy” as a means of implementing massive social changes that more directly aligned with his theory of economics, namely an extreme form of free market capitalism without regulation and with high levels of privatization. In numerous historic examples, Klein shows how political leaders exploit the chaos and uncertainty created by natural disasters, wars, and other environmental and manmade crises to push through sweeping changes that would otherwise be extremely unpopular. When people are concerned about their day-to-day survival, they do not have the time or resources to effectively organize against such policy changes.
The new administration’s efforts to sow chaos—massive layoffs and firing of federal workers by the so-called Department of Government Efficiency, the specter of crippling tariffs and the backlash from impacted trade partners, along with a wholesale attack on immigrant populations across the country—are creating an environment ripe for exploitation in the same vein as illustrated in Klein’s book. However, when citizens work together to obstruct and oppose governmental or corporate exploitation, maintaining or expanding our rights is possible.
From the women’s suffrage movement at the turn of the 20th century and the Civil Rights Movement of the 1960s to the fight for marriage equality in the 21st century and the many movements between, the power of collective action to create long-lasting change and to transform the general consensus of the day is obvious. In many cases, the government will be the last to change, so societal realignment must come from the people and our collective push for the ideals of a “city on a hill.”
Collective action is the only way to keep our political leaders in check— whether through direct action in the form of protests or through voting with our dollars to make sure our investments support the values we hold most dear. It’s critical, especially in times of chaos, that we citizens remain vigilant against malignant governmental and nongovernmental actors and put our faith instead in local action to protect our communities and neighbors.
