Blain’s Morning Porridge April 25^th 2025: Bessent rages against the dying of the American Era.

 “I saw a death-head sticker on a Cadillac, but you can never go back..”

Scott Bessent shocked the World Bank gathering this week with his rambling demands for fealty to an American led financial system. But what was really asking for? A time machine to take America back to the 1950s?

I read this week wrong.

On Tuesday I wrote this week would be all escalating tensions across American assets from the Trump vs the Fed cage-fight. Nope. Trump walked away from that scrap, saying he never intended to sack Jerome Powell, and told us he’s doing a trade deal with China instead (which the Chinese denied.) The market staged another relief rally… What happens next week? What fireworks will we see to mark 100 days of Trump?

I’ve been asking myself the same questions for months now. Why is this happening? How much worse can it get? I think I finally got my answer this week after being surprised by the hectoring tone of Scott Bessent’s “remarks” to the Institute of International Finance on Wednesday – part of the World Bank’s bi-annual gabfest. We all thought Bessent was the adult in the room. Maybe not. He delivered a straight-faced demand the World goes back to playing by how America defines American rules – something we’ve grown accustomed to Trump, Vance, and now Bessent, unconvincingly deliver these last 95 days.

At first I thought Bessent’s speech was just another series of ill-judged insults, mostly aimed at China. But, given all the rumours of increasing friction between him and Trump (Bessent trying to roll back some of Trump’s worst ideas), something about Bessent’s delivery just didn’t strike true. He mouthed the words, but I don’t think he particularly believed them. I was intrigued so I watched the whole thing again on the train yesterday. Then I read his speech three times.

I think I now begin to understand… Cut through all the flip-flop news-flooding noise, Trump’s bluff and bluster, and then reread Bessent – his “remarks” have an almost elegiac quality. Bessent’s speech can be read as a plea to return to the better world that he, Trump and MAGA Republicans, fondly remember as Pax Americana.

Bessent, widely acknowledged as the smart one on Team Trump, must know you can never go back. He knows he was pleading for a world that has moved on, and is now surpassing the USA. Valar Morgulis as they say in Westeros. Yet he still said it…

Bessent described the original post-WW2 Bretton Woods agreement, financial cooperation, the creation of the IMF and World Bank, as collectively “the foundations of Pax Americana.” It is that past that Trump and MAGA is desperate to restore – when Americans had proper jobs, the economy thrived, and everyone respected Old Glory.

The Treasury Secretary went on describe how the Bretton Woods founded institutions have lost their way, and called for them to be redirected back to their original mandates to assist in the rebalancing of global commerce – which in Trump’s America means supporting America First objectives, a point Bessent tried (badly) to explain as: “America First does not mean America alone. To the contrary, it is a call for deeper collaboration and mutual respect among trade partners.” 

Respect is an interesting term from a member of Trump’s inner sanctum. Bessent then delivered the punch, saying “America First seeks to expand U.S. leadership in international institutions like the IMF and World Bank. By embracing a stronger leadership role, America First seeks to restore fairness to the international economic system.”

What Bessent really meant is “America First will ensure the USA continues to dominate and lead the global economy.”

That is a valid strategic goal for any nation. Its how you go about achieving it that matters.

I question if Trump understands why America is no longer the sole global power. If he does understand the reality of geopolitics, why is he approaching that goal so badly? The policy mistakes Trump has made in clear sight over the last 3 months have simply made America look increasingly weak and ineffectual in the eyes of allies and enemies alike – which has magnified impacts on the value of US assets including the currency, the stock market, and Treasuries.

It’s also apparent Bessent and Trump fundamentally misunderstand why America has been so successful. It was not just military might, or economic prowess that enabled the era of American exceptionalism – it was the fact America was genuinely admired by the rest of the world for its values, for justice, for freedom and its generosity of spirit – its tangible soft-power. Sure, there were always charges of Ugly American behaviours… but these could be forgiven.

Trump is not solely to blame. America began to change decades ago when creeping illiberal political perspectives, libertarians emerging within the Republicans, and the financialisation of the US economy in the naked pursuit of wealth hold from the late 1980s onwards. “Greed is Good” was Gordon Gecko’s comment on the age. In the age of tech billionaires it is even more true.

The current threats to Ukraine demonstrate Trump be about to make another catastrophic blunder that could sunder the USA from Europe permanently: his appallingly pro-Russia mis-management of the Ukraine peace process. He cares nothing for the reputational damage this could do the USA. In contrast Ronald Reagan understood perfectly that “hearts and minds” were the real power behind America’s strength.

Leadership goes with wisdom. Bluff and bluster is not wisdom.

Many times I’ve written about long-term Economic cycles in the Morning Porridge. Typically the global hegemon changes every 100-140 years; 2 Kondratieff Cycles. America has been the world’s leading power since the beginning of the 20^th Century after bloodlessly supplanting the UK.

We can probably all agree that the American Century was an unprecedented success, enabling global prosperity and peace (avoidance of global war) for the last 80-years. The post-war baby boomer generation had it exceptionally good. The American era and its’ generosity of spirit enabled other nations to rise into prosperity and power. Billions of workers around the globe have been elevated from poverty into the middle classes as a result of the expanding global economy.

Trump clings to a belief these nations should be perpetually and profoundly grateful to the USA – and most are, which is why we will celebrate the US contribution to WW2 in coming weeks.

But, Bessent must know the global economy is now much bigger than just America. Trump seeks to restore America’s previous position through disruptive politics – hence his fascination with power and the powerful – Putin and Xi, and undoing his perceptions of social weakness such as Wokery, Climate, and Gender politics. For America to remain global hegemon, he believes he has to be strong and aggressive – but its backfired; being downright rude to the rest of the world has left it increasingly sick of him and by association, the USA.

Bessent’s speech focused on China’s multiple sins against fair trade – against the notion of Pax Americana. He told the Chinese to change their economic model to conform to Trump’s vision of an American dominated global economy. He knows that is not going to happen – why would it? China knows America fears the consequences of being replaced it as the next global hegemon. They are saying little, letting Trump continue his series of missteps alienating America’s long-term allies.  (As I’ve said so many times…. Never interrupt your enemy making a mistake.)

Trump says China has risen to economic prominence by cheating, stealing American jobs, and traded unfairly. An unbiased observer would note the rising nations in today’s global economy have absorbed lessons from America and now do what the USA did, but better.

Bessent went on to describe his “blueprint to restore equilibrium” to the global financial system, but it was little more than him mouthing King Donald’s rage and fury against the dimming of the American light. His blueprint is to cajole global institutions and the global economy back into the 1950s, and force them to buy-back into America First.

The reality is Bessent was pleading for a return to Pax Americana of the Eisenhower-Regan ere… but that time that has passed. If America wants to remain global hegemon then it has to do so through global trade, influence, soft and hard power – not through protectionism. And not by insulting its competitors, and allies by horrifying them by betraying Ukraine.

Enough. Have a great weekend, and let’s see what next week brings….

Bill Blain

Author Morning Porridge

Founder Windshift Capital

Partner Shard Capital