The New Power Grid: Who is in the Line of Fire in Washington’s New Era?
As a new administration settles into the White House, the question of who is on the inside and who is on the outs is more charged than ever. The opening months of the second term have shown a clear pattern: a powerful focus on institutions perceived as bastions of liberal ideology, while some of the biggest names in finance and tech have quietly shifted from opposition to accommodation.
The academic world, in particular, has found itself staring down the barrel of sweeping government reform.
The Great University Showdown
The heat is intense on some of the nation’s most elite colleges. The White House recently unveiled its “Compact for Academic Excellence in Higher Education,” an unprecedented set of demands sent to a group of nine high-profile schools, including MIT, Brown, and the University of Pennsylvania. Essentially, the administration is offering a deal: sign on to its vision for higher education, or risk losing preferred access to crucial federal funds.
The compact’s requirements are non-negotiable on several key points. They call for an end to considering race, gender, and other demographics in admissions, a five-year tuition freeze for US students, and the abolishment of institutional units seen as hostile to conservative ideas. This approach follows earlier actions, such as the administration pausing over $400 million in federal funding for Columbia University in a dramatic bid to enforce policy changes related to antisemitism and campus protests. Harvard, which publicly refused similar demands and filed a lawsuit, has seen over $2 billion in funding put on hold. This is not just about funding; it’s a full-scale effort to reshape the intellectual and political landscape of American higher education.
Wall Street’s Uneasy Truce
The situation in the financial world is far more nuanced. Wall Street and Big Tech executives who once expressed open alarm over the political climate have largely traded criticism for cooperation. Many prominent tech CEOs, including Sam Altman of OpenAI and Mark Zuckerberg of Meta, have gone from former critics to engaging with the White House, focusing on lucrative AI initiatives and federal contracts. Even BlackRock’s Larry Fink, a longtime proponent of ESG investing, has reportedly softened his stance on climate-focused initiatives as the administration signals a deregulatory, energy-first approach.
However, the line of fire still threatens one of the most powerful figures in finance: Federal Reserve Chairman Jerome Powell. Reports have circulated that President Trump is likely to replace the central bank chair, sending ripples of concern through global markets regarding the future of the Fed’s independence and interest rate policy.
Beyond the Ivied Halls and Trading Floors
The administration’s efforts at retribution and reform extend deep into the legal and government machinery. High-profile law firms such as Covington & Burling and Perkins Coie have been directly targeted with sanctions, including the revocation of security clearances and termination of federal contracts, due to their previous work related to political rivals. This unprecedented move has sent a chill through the legal community.
Meanwhile, the federal bureaucracy itself is a major target. The administration has reinstated a policy that strips tens of thousands of career civil servants of long-held employment protections, making them easier to fire. The intent, as articulated by the administration, is to end what it calls the “onslaught of useless and overpaid DEI activists buried into the federal workforce”.
From university presidents and federal judges to senior bureaucrats and, potentially, the head of the world’s most powerful central bank, the new administration is clearly leveraging the full weight of its executive power. The common denominator is simple: if an institution or individual is viewed as having actively opposed the administration’s policies, they are likely to find themselves caught in its crosshairs.