I have spent much of my career studying what happens when governments overleverage — when leaders borrow against institutional credibility, judicial tolerance, and public patience simultaneously, assuming the bill will never come due. I have watched it unfold in Southeast Asia in 1997, in Argentina in 2001, across many other economies, including the UK during successive oil shocks. The pattern is always the same: the deterioration is gradual, then sudden, and by the time it becomes visible to everyone, the structural damage is already done.

That pattern is now playing out in Washington. The question being asked from Wall Street to Westminster is deceptively simple: are we at Peak Trump? I believe the data says yes. Not because of a single catastrophic failure, but because of something more structurally damning — the simultaneous collapse of every major thesis on which this presidency was built.

The Supreme Court as Margin Call

On 20 February 2026, the Supreme Court delivered what can only be described as a constitutional margin call. In Learning Resources, Inc. v. Trump, a 6–3 majority — including two of his own appointees — held that the International Emergency Economic Powers Act does not authorise the president to impose tariffs. Chief Justice Roberts was unsparing: IEEPA “contains no reference to tariffs or duties,” and the two words upon which the administration had built its entire trade architecture — “regulate” and “importation” — “cannot bear such weight.”

This was not a technical correction. It was a structural demolition. The ruling invalidated an estimated $175 billion in tariff collections accumulated since early 2025, and Penn Wharton projects that future tariff revenue will be halved unless replaced. The administration scrambled to invoke Section 122 of the Trade Act of 1974, imposing a 15 percent surcharge — but Section 122 carries a 150-day sunset, expires in July, and requires congressional approval for extension. Trump had been leveraging executive authority far beyond its constitutional capital base. The Supreme Court has called in the debt, and the collateral is gone.

For anyone who studies emerging markets — as I do — there is something grimly familiar about a leader who governs by decree, gets overruled by the judiciary, and immediately reaches for the next legal workaround. It is a pattern I have documented in countries from Turkey to Argentina. The difference is that when it happens in the United States, the shockwave is global.

The Hormuz Shock: When Fat Tails Materialise

Operation Epic Fury — the US-Israel military campaign against Iran launched on 28 February — has delivered the kind of fat-tailed shock that risk managers warn about and policymakers ignore. Brent crude surged from roughly $67 to above $110 per barrel within days. The effective closure of the Strait of Hormuz has disrupted approximately 20 percent of global oil supplies — the largest supply disruption in the history of the global oil market.

The numbers are staggering, but let me make them human. A single mother in Ohio filling her car twice a month is now paying $20 to $40 more than she was four weeks ago, depending on what she drives. Multiply that by 140 million American households and you get over $300 million in additional costs every single day — a war tax levied on people who were never consulted about it. Diesel has surged to nearly $5 per gallon, which means the truck that carries groceries to her local Walmart costs more to run. Jet fuel is up 85 percent, which means the spring break flights she cannot afford were already priced beyond reach. And fertiliser — one-third of whose global supply transits the Strait of Hormuz — is next in line, which means the food on her table will cost more by summer.

The strategic irony is bitter. Trump entered office promising cheap energy. He now presides over an oil shock of his own making, having neglected to refill the Strategic Petroleum Reserve before launching operations. The International Energy Agency was forced to announce its largest-ever coordinated release — 172 million barrels from the US reserve alone. The administration went to war without hedging the energy exposure. In any other domain, we would call that reckless.

The consequences extend far beyond America’s borders. Across the Gulf, the war has shattered the carefully constructed narrative of regional stability that underpinned decades of foreign investment and labour migration. South Asian workers — the backbone of Gulf economies — are checking flight prices home. Sri Lanka has reintroduced fuel rationing. European natural gas prices nearly doubled after Qatari production was halted. The Hormuz closure is not a localised shock; it is a systemic event, and Washington lit the fuse.

The DOGE Debacle: A Masterclass in Transaction Costs

The Department of Government Efficiency was meant to be the administration’s signature innovation — Elon Musk’s Silicon Valley disruption applied to the federal bureaucracy, promising $2 trillion in savings. What it delivered instead is a case that will be taught in business schools for decades: a masterclass in how the transaction costs of institutional destruction dwarf the savings they are meant to produce.

Over ten months, DOGE eliminated more than 317,000 federal jobs and claimed to cancel over 13,000 contracts. Yet federal spending increased during the period. Read that sentence again. The organisation created to cut spending presided over an increase in spending. The depositions of former DOGE staffers — now viral, and damning — reveal that OpenAI’s ChatGPT was used to identify grants for cancellation and that staff had little experience in government. Even Musk himself, in a December interview, conceded the initiative was only “somewhat successful” and said he would not do it again. A more candid assessment would note that the Partnership for Public Service puts the transition costs — firing, rehiring, paid leave — at roughly $135 billion, and that Yale’s Budget Lab estimates IRS staff reductions alone will cost $8.5 billion in lost revenue this year, snowballing to $198 billion over a decade.

Congressional Republicans enacted just $9 billion in DOGE-related cuts — less than half a percent of the promised $2 trillion. As Coase and Williamson would have predicted, the transaction costs of dismantling institutions vastly exceeded the savings. But the political costs may be larger still: raucous town halls, furious constituents in Trump-voting districts, and a string of vulnerable Republicans heading into November with DOGE around their necks like an albatross.

The Polling Arithmetic: Correlation in Crisis

In financial economics, we speak of “correlation in crisis” — the phenomenon whereby assets that appear diversified under normal conditions become suddenly and dangerously correlated during a downturn. This is precisely what is happening to the Trump political portfolio.

The Silver Bulletin average puts Trump’s net approval at a second-term low of -15.3, roughly three points worse than the equivalent point in his first term. Quinnipiac recorded 37 percent approval against 57 percent disapproval in early March — a net of minus 20, the worst of his second term. Pew Research found that only 27 percent of Americans now support most of Trump’s policies, down from 35 percent at inauguration. Among true independents — the cohort that decides elections — just 24 percent approve. Sixty-five percent do not.

What makes these numbers ominous rather than merely bad is the absence of any countervailing force. The Iran war has produced no “rally around the flag” effect; the conflict remains broadly unpopular and the approval needle has barely moved. Gas prices — the single most visceral economic indicator for ordinary voters — are at $3.88 nationally, nearly a dollar higher than a month ago, and Nate Silver’s team has flagged them as the metric most likely to break Trump’s remaining support. The tariff agenda has been judicially capped. DOGE is dead. Manufacturing shed 68,000 jobs over the course of 2025, losing ground every month after the tariff shock hit in April. Health insurance premiums have spiked after the expiration of enhanced ACA subsidies. Every pillar that was supposed to be independent is now failing simultaneously. The diversification has collapsed.

So is this Peak Trump? I am going to do something unusual for an academic and give a direct answer: MAYBE!

Not because the man himself has changed — he remains the most formidable retail politician of his generation, and his base is loyal to a degree that baffles conventional political science. But because every structural support for his presidency is now weaker than it was three months ago, and none of them show signs of recovery.

The tariff architecture has been judicially demolished, with only a temporary, capped substitute that expires in July. The energy picture has inverted from asset to catastrophic liability. The efficiency programme has been abandoned by its creator and buried by its would-be executors. The economic data is moving against the administration on every front. And the midterm margin call is eight months away, with Democrats energised and Republican incumbents in swing districts already looking over their shoulders.

In my career studying emerging market crises — from the Asian financial crisis through the Argentine default to the Gulf’s periodic oil-driven convulsions — I have observed a recurring pattern. There is always a moment when the accumulated weight of policy error, judicial constraint, economic deterioration, and public disillusionment reaches a critical mass. The system does not collapse overnight. But it stops being able to recover from individual shocks, because there is no remaining buffer to absorb them. Each new blow lands on bruised tissue.

That is where the Trump presidency stands in March 2026. The buffers are spent. The reserves — political, legal, economic, institutional — have been drawn down. What remains is exposure without hedge, leverage without collateral, and ambition without capacity.

Peak Trump is not a prediction about the future. It is a diagnosis of the present? MAYBE.

© The Times of Israel (Blogs)