Last week, UK Culture Secretary Lisa Nandy met with Israeli Ambassador Tzipi Hotovely, a senior representative of a government accused by UN experts of committing genocide in Gaza. Incredibly, the meeting wasn’t about condemning the mass killing of civilians, the starvation of children, or the targeted destruction of schools and hospitals. It was about Glastonbury.

In posting a photo with Nandy on Twitter, Hotovely thanked Nandy for her “recognition and understanding of our serious concerns” about the BBC’s and Glastonbury’s platforming of artists Bob Vylan and Kneecap. In return, Nandy gave a senior figure from a government responsible for unspeakable violence a political victory, when she denounced both the BBC and the UK’s largest music festival for allowing these artists to perform. The meeting also came after the BBC shamefully refused to air a documentary it commissioned about the systematic attacks on Gaza’s healthcare system – a film Zeteo has since acquired and published globally.

It is truly astonishing that this Labour government is more concerned with kowtowing to a genocidal regime than upholding international law, let alone protecting freedom of speech. But it’s also entirely consistent with the Labour Party’s trajectory under Keir Starmer.

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Nandy’s support for Hotovely comes in the wake of the decision to proscribe Palestine Action as a terrorist organization. The bill in question designated Palestine Action as a terror group alongside Maniacs Murder Cult – a neo-Nazi organization – and the Russian Imperial Movement – a white supremacist group. This was a cynical move designed to prevent anyone from speaking out against this blatant abuse of state power.

Terrorist attacks are real and horrific, but ‘terrorism’ as a concept is notoriously nebulous, with no clearly agreed-upon definition. Authoritarian governments frequently exploit this lack of clarity to proscribe groups that threaten their authority under terror laws – and this is exactly what this Labour government has done. Alongside its proposed Crime & Policing Bill, which would make it even harder to organize peaceful protests, the Labour Party is showing itself to be a credible threat to liberal democracy.

Labour Forgets Labor Movement

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Donald Trump’s “big beautiful bill” – passed by House Republicans last month – has been marketed as a ‘tax cut for the middle class.’ In fact, it represents another round of handouts for the wealthy.

As the Institute on Taxation and Economic Policy (ITEP) has laid out in their recent analysis, this legislation is a brazen giveaway to the ultra-rich and multinational corporations, paid for by working people.

Far from delivering relief to struggling households, the bill would widen the already obscene disparities in wealth and income in the US. In 2026, the top 1% of earners will receive $124 billion in tax cuts; more than the combined total going to the bottom 60% of taxpayers. On average, that’s a $70,000 windfall per millionaire. While working-class families struggle to pay rent, billionaires will now be able to pass on up to $30 million to their heirs tax-free, thanks to changes in the estate tax.

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And it gets worse. Once you factor in tariffs, which disproportionately hit working-class households by raising prices on everyday goods, the modest tax cuts for the bottom 80% evaporate. For the poorest 40%, Trumpism will effectively result in a net tax increase. In states with less progressive tax systems, the benefits are even more egregious. In 23 states, the richest 1% will receive average tax cuts exceeding $75,000. That’s not just regressive – it's outright class warfare. (And I haven’t even touched on the suffering low-income Americans would experience to help pay for the bill, including millions losing their health insurance.)

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But the logic of the bill makes sense when you stop thinking of it as rational economic policy and start seeing it for what it really is: a consolidation of class power. At its core, this legislation is about transferring wealth from labor to capital, from the public sector to private vested interests, from the many to the few.

A Blueprint for Deepening Inequality

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Spooked by last week's Treasurys selloff (on top of the stock market meltdown), President Donald Trump backed down – at least for now – from most of the new tariffs he had threatened to implement on roughly 60 countries. But while the markets may have won this battle, the trade war is far from over.

Trump's U-turn was significant, as the market reaction shows. Having seen the largest fall in the S&P 500 since 2020, we then witnessed the largest rebound since 2008. But, behind the scenes, many investors are concerned that we haven’t seen the end of the rout. Several are still predicting recessions this year, despite Trump’s U-turn.

Part of the reason for the ongoing pessimism is that plenty of tariffs remain in place. Imports to the US are still subject to the 10% base tariff. Up to a few weeks ago, such import duties would have been considered a deep shock to the global trade system. They are still going to have a significant impact on inflation and demand in the US, as well as export revenues for many US trading partners. While Trump is hoping to make deals with different nations, it’s also unclear what will happen after the 90-day pause on reciprocal tariffs (except for China), particularly if no agreements are in place.

But the big news is the dramatic step up in the trade war with China. Trump said last week that he was upping tariffs on Chinese imports to a staggering 125% (the White House later clarified that was on top of the 20% tariffs the president had already imposed on Beijing, bringing the minimum tariff rate to 145%) after China announced reciprocal tariffs on US imports. The impact of these tariffs will be considerable. Even as tensions have mounted between the two countries, trade between the US and China has remained significant, amounting to $585 billion last year alone.

All in all, the current tariff rate in the US is the highest it has been since the 1930s. Tariffs on this scale will spell chaos for US manufacturers, which import many of the inputs used in production from China. They’ll mean lower revenues for companies that export to China and higher prices for US consumers. The Chinese economy will also be hit. Export revenues will fall, and China’s retaliatory tariffs will push up the price of imports from the US, affecting the prices of everything from smartphones to soybeans.

Trump’s team appears to have belatedly realized this. The administration slipped out a note over the weekend announcing that the single largest Chinese import to the US – smartphones – would be exempt from tariffs. Other important imports, from electronic devices to semiconductors to solar cells, will also receive carveouts (though Trump officials signaled that such exemptions may only be temporary). And other countries that have large trade deficits with the US, from Vietnam to Thailand to Malaysia to Taiwan, will benefit from exemptions.

This is a quiet, but stark, turnaround from an administration that, just last week, was claiming that it would bring iPhone manufacturing back to the US (it’s also been managed very badly, as Paul Krugman points out in a recent piece on his Substack). It is becoming clear that Trump and his core team realize they have crossed a line. By all accounts, the architect of the trade war – Peter Navarro – is now being sidelined as the administration changes its tactics.

But even with Trump’s climb down, many investors remain pessimistic. While Trump U-turned on many of the tariffs he threatened to introduce last week, the damage wrought by this latest trade battle can’t be undone overnight. Trump’s erratic behavior has led to an increase in uncertainty, greater economic fragmentation, and the collapse of faith in the US-backed global trading system.

Stopped in His Tracks

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This is Grace’s second ‘Billions’ column for us since coming on board as our new economics contributor, and it is on a topic that is of huge importance but is getting very little coverage. Is a recession around the corner? What does the evidence suggest? Please do make sure you are a paid subscriber to Zeteo so you can read Grace’s columns in full, without any paywalls, and support independent journalism. Thanks

- Mehdi

The US has been the world’s star economic performer over the past few years.

Donald Trump was lucky enough to inherit a booming economy from Joe Biden. Robust growth. Low unemployment. Strong corporate profits.

The S&P 500 has experienced significant gains since 2020, delivering returns exceeding 20% for two consecutive years in 2023 and 2024. The last time that happened was in the 1990s.

But if you take a look below the surface, all is not as it seems. The S&P 500 is more concentrated now than it has ever been. The top 10 companies account for 37.3% of the index. Twenty-six stocks now account for half of the value of the entire S&P 500.

The leaders of the pack are, of course, the Big Tech companies. Apple, chip-maker Nvidia, and Microsoft account for nearly 20% of the value of the S&P on their own.

These companies, in many ways, are responsible for keeping the US economy afloat. One analyst for the Financial Times called this situation “the world’s biggest game of Jenga.” If a few of these companies got into trouble, the results for the US economy – and the world – would be disastrous.

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So, the US economy might look like an unstoppable juggernaut, but it’s far more fragile than it seems. And it doesn’t take much political instability to break a fragile economy – just ask those of us living across the pond.

Musk and Tump’s Chainsaw Gamble

In this context, then, Elon Musk’s decision to take a chainsaw to the US administrative state, enthusiastically backed by Trump himself, is a very risky one.

Optimism around the US’ economic performance hinges on jobs. In January, the US economy created 143,000 jobs – somewhat short of expectations but still robust. This comes on the back of a bumper figure of 307,000 new jobs in December.

Trump is planning massive cuts to government payrolls, and thousands of workers have already been fired. Tens of thousands more have taken voluntary redundancy. He is also targeting the more than 200,000 government employees still working in their probationary period.

If all goes to plan, hundreds of thousands of jobs could be lost across the public sector. That would probably be enough to put job creation into negative territory.

The monthly jobs report is a very important event in the US economic calendar. Even if stock markets are booming, a poor jobs report can dampen the economic outlook.

When investors see a bad jobs report, they think that corporate executives are holding off on hiring because they’re pessimistic about the future. This can create a self-reinforcing cycle. Unemployment hits consumer confidence, which is already plummeting, so businesses hold off on investment, potentially leading to further job losses.

How Likely Is a Recession?

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One of Britain’s greatest socialist politicians, Tony Benn, once said, “If we can find the money to kill people, we can find the money to help people.” Clearly, this message was lost on UK Prime Minister Keir Starmer.

This week, Starmer announced Britain would increase defense spending to 2.5% of GDP by 2027, and 3% in the next government’s term. Starmer plans to finance this spending increase by cutting the UK’s aid budget from 0.5% to 0.3% of GNI, despite railing against Boris Johnson’s cut in foreign aid in 2021.

This is all part of Starmer’s desperate attempt to look tough ahead of an upcoming meeting with President Donald Trump, who also made headlines by destroying USAID. Trump’s isolationist stance has also upped the pressure on NATO, and Starmer’s move is likely an attempt to boost his standing among NATO members.

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To be fair, neither US nor UK aid agencies have covered themselves in glory when it comes to alleviating poverty. In recent years, an increasing share of the UK’s ‘aid’ budget has been spent on supporting refugees and asylum seekers within the UK. Another chunk goes to the World Bank and the International Monetary Fund (IMF), which have brutalized the global south over the course of the last several decades by enforcing devastating neoliberal economic policies in exchange for emergency loans.

USAID has provided billions of dollars of critical humanitarian assistance, but it’s also been a tool of American imperialism. The organization states outright that “furthering America’s foreign policy interests” is one of its primary aims and it has long worked closely with the CIA. It also relies heavily on outsourcing to a few massive US corporations. One report highlighted that 40% of the aid sent to Afghanistan between 2002 and 2008 returned to the US and other donor countries in the form of corporate profits and consultancy fees.

Nevertheless, the symbolism of the move is clear. The US and the UK won’t bother trying to justify their imperialist agenda with the language of humanitarianism; instead, they will focus on the naked exercise of military power. We can’t find the money to help people, but we can find the money to kill them.

Misguided Attempt

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Grace Blakeley, the British writer and author, is a force of nature! Informed, passionate, eloquent (have you seen her spar with Piers Morgan? Or on ‘Question Time’?), I have been a fan of hers for several years now and am delighted to announce her as Zeteo’s new contributor on politics, economics, and finance. Her column and newsletter, ‘Billions by Grace Blakeley,’ will highlight both the vast amounts of power and wealth held by the billionaires and the billions of exploited people in a position to fight back. And if you’re not yet a paid subscriber to Zeteo, what are you waiting for? Subscribe now, and read Grace’s column, in full, below.

- Mehdi

For the last several decades, we’ve all put up with increasing inequality because we believed the billionaires were creating wealth for all of us. Like manipulative partners, the super-wealthy have legitimized an extremely unequal economic model by convincing us that we’d be worse off without them.

The parasitic role of the super-wealthy became very obvious after the financial crisis, when billionaires nearly destroyed the global economy only to be bailed out by client governments who spent the next decade cutting social security and other social programs while providing handouts to the rich.

Then came the COVID-19 pandemic, when some of the largest corporations on the planet received government support while ordinary workers lost their jobs and their homes. And then came the cost of living crisis, when powerful corporations used inflation as an excuse to raise prices, delivering huge profits at the expense of consumers.

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Today, the jig is up. It’s become increasingly clear that the billionaire class – whose wealth, according to Oxfam, grew three times faster in 2024 than the previous year – is made up of takers, not makers.

As the general public has become less accepting of extreme inequality, the billionaire class has had to come up with new ways to legitimize their wealth and power. And Davos, where some of the world’s most powerful people are gathering this week, is one of the main settings in which they’ve tried to work out how to do this.

Capitalist Planning

The discussions taking place at the World Economic Forum’s annual meeting in Davos provide the perfect example of what I call ‘capitalist planning.’

As I explain in my book, Vulture Capitalism, capitalism isn’t actually a free market system – it’s a system dominated by corporate monopolies with extremely close links to the state. Far from being buffeted by the forces of free market competition, large corporations and powerful governments can work together to plan who gets what.

At Davos, the individuals and institutions with the most power within global capitalism come together to determine how best to profit from current trends in the world economy. And, in recent years, they’ve also used Davos as a setting to discuss how to sell their profit-making strategies to everyone else.

For a while, they leaned heavily on the idea of green, ethical capitalism. During the mid-2010s, when left-wing movements seeking to take on the billionaires were at their strongest, Davos’ panels had titles like ‘Safeguarding Our Planet’ and ‘Towards Better Capitalism.’

At the forefront of these initiatives were the world’s largest financial institutions. Asset managers like Blackrock, who manage trillions of dollars worth of other people's savings, sought to push the narrative that they were “responsible investors” who would enforce stringent targets around sustainability and inclusivity on the corporations in which they invested.

This narrative became institutionalized with the emergence of ‘ESG’ (environmental, social, and governance) investment principles. The capitalist planners designed a set of targets that corporations were supposed to voluntarily adhere to – and that investors were supposed to enforce – to make capitalism fairer, more equal, and more sustainable.

Needless to say, it didn’t work. It rapidly became very obvious that ESG principles were extremely easy to game. For example, while many fossil fuel companies didn’t earn the ESG badge, the banks that lent them millions of dollars did.

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The problem is that capitalist economies are built to value profit – and profit alone. The thought leaders at Davos could posture about responsible capitalism all they liked, but if ethical practices negatively affected the bottom line, any rational CEO would ditch them before long. And investors wouldn’t argue with this decision – after all, their job is to achieve the highest possible returns.

When oil prices boomed in the post-COVID period, green capitalism was out, and record profits were in.

First, the fossil fuel companies started to quietly ditch their climate goals. Then, the investors followed suit. Just this month, Blackrock exited the Net Zero Asset Managers Initiative, a coalition that requires its members to reach net-zero financed emissions by 2050.

But the end of ethical capitalism has created a problem for the billionaire class: If they couldn’t claim to be responsible stewards of the global economy, why should the world’s workers continue to accept their authority?

Enter the Far Right

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