Normalcy Bias vs. Alarmism: Wrestling with Reality in Trump’s Second Term
How do we know when its time to break glass and go full 'alarm' mode?
As I journey through Trump’s second term, trying constantly to gauge the level of threat to ‘normalcy’ as I understand it — I find myself struggling with two competing ideas.
One is that we’re doomed—that this country is on a downward spiral into authoritarianism and it’s just a matter of time—and maybe not much time—before democracy as we know it is replaced by something far more brittle, something a lot closer to Putin’s Russia or Orban’s Hungary. Surveillance. Retaliation. Illusionary elections. Strongman culture. Loyalty oaths and forced silence.
But then I think about it some more, take a breath, look at the magnificent institutional landscape that America has developed over 250 years, and I swing in the other direction: Maybe you’re being too alarmist. The courts, the press, the states—maybe they’re stronger than you think. Maybe the worst won’t happen. Maybe America still has enough inertia, enough built-in resistance, to survive even this.
So which is it?
1. What Is Normalcy Bias—and Am I Suffering from It?
Normalcy bias is the psychological tendency to underestimate the possibility—or even the reality—of a large-scale disruption because it hasn’t happened before, or because it would be too destabilizing to believe that it could. It’s not a fringe idea; it’s a well-documented behavior in crisis psychology.
In the words of Amanda Ripley, author of The Unthinkable: Who Survives When Disaster Strikes—and Why:
“Normalcy bias causes smart people to underestimate the seriousness of a crisis. Our instinct is to believe that everything is okay, because everything was okay a moment ago.”
And here’s the thing: normalcy bias feels calm, even rational. It whispers things like: “The guardrails are working.” “Yes, this is chaotic, but it’s survivable.” “This country has survived worse.” It tells you not to panic, not to be dramatic, not to “overreact.”
And sometimes it’s right.
But sometimes it's the voice that keeps you sitting in your chair while the building burns around you. It’s what made Parisians in 1940 believe Hitler would never actually march into the city. It’s what made people keep money in failing banks in 2008.
So I ask myself: Is this what's affecting my thinking when I reassure myself that the system will hold?
Is it rational trust in institutions—or denial of the moment?
2. The Cassandra Problem: When Seeing Clearly Looks Like Losing Your Mind
The flip side of normalcy bias is what I’ll call the Cassandra problem—after the Greek mythological figure cursed to see the future clearly, but never be believed. If you’ve read history, if you understand how fragile democratic norms can be, if you’ve seen how strongmen consolidate power step by step, then the current trajectory looks frighteningly familiar. It really, truly looks like we’re headed down the road that will lead to autocracy. And so you talk about it, write about it. When you raise these concerns, you’re often met with skepticism. Or worse, ridicule. Or a bored sigh. You get painted as a doomsayer. A conspiracy theorist. Someone who “just hates Trump.” A “TDS” sufferer. You wonder if you’re going too far with your critique an3. Reconciling the Two: How Do We Know If We’re Seeing Clearly?
So how do we tell the difference? How do we know whether we’re gripped by normalcy bias—or spiraling down the Cassandra hole?
It’s easy to drift between the two. One moment, you’re telling yourself to calm down, that America has weathered worse. The next, you’re wondering whether you’re the only one still hearing the smoke alarm.
Here’s one way to think about it:
Normalcy bias downplays risk. It says, “Things will probably be fine—because they’ve always been fine.”
Alarmism amplifies risk. It says, “Things are doomed—because the trajectory is terrible.”
The goal isn’t to find a false middle between those two. The goal is to find a method—a way of thinking that gives us clarity without paralysis.
A few things I’m trying to rely on to help work through this:
Historical Pattern Recognition
Are we seeing echoes of real-world authoritarian slides? Are we witnessing the same moves that past autocrats made in the years before they fully seized control? Not the dramatic parts—after democracy dies—but the lead-up. What did Hungary feel like in 2011? What did Venezuela feel like in 2000? What did Germany feel like in 1932?
Because that’s the zone we’re living in. And the more fluency we have in those patterns, the better we can map our own moment.
Institutional Indicators
Are the courts holding? Are journalists being silenced—or just ignored? Are watchdog agencies doing their jobs—or being gutted? Are career officials speaking out—or falling in line?
This is something we can track in real time. These are the guardrails. Watch what’s happening to them.
Not just the big crashes—look for the slow corrosion. The retirements. The chilling effects. The unspoken silences.
Scenario Planning
Don’t fall into the trap of focusing only on collapse or triumph—those are cinematic outcomes. Real change often comes as erosion.
Think in terms of plausible in-betweens. What does it look like if the traditional press (i.e. “legacy media”) isn’t shut down but becomes irrelevant? If elections still happen but only one side believes in them? If the courts still exist but become performative?
This isn’t about prepping for apocalypse. It’s about building cognitive flexibility for a landscape that may look “normal” while becoming fundamentally altered. Or not. How do you know?
IV. A Pledge to Stay Awake—But Not Unmoored
So here’s where I land, for now.
I don’t want to be lulled to sleep by normalcy bias. I don’t want to mistake the appearance of stability for the presence of safety. I don’t want to convince myself that “everything’s fine” just because the lights are still on and the institutions still have their nameplates.
But I also don’t want to live in a state of ambient panic—flinching at every headline, catastrophizing every move, wearing out the alarm bell so badly that no one hears it when it really counts.
So I’m going to try—really try—to evaluate this moment with discipline. I’ll watch the patterns. I’ll track the guardrails. I’ll study history, listen closely, and compare notes with people I respect—even when they see things differently.
I’ll do my best not to scream too early. I’ll do my best not to sleep through the smoke.
Because that’s the real fear, isn’t it?
That when the moment does come—when it’s finally time to break the glass and pull the alarm—I’ll be too numb, too jaded, or too late.
So this is my pledge: to stay awake. To stay aware. And to try, every day, to see clearly—not just what I fear, but what is.
Because if I ever have to raise my voice—really raise it—I want people to know I didn’t get there lightly.
The only question, then, will be:
Did I get there in time?
Michael, I am reading your very justified doubt-filled question. It is 4am in Budapest now, and I have to leave home, but will answer your question later today what Hungarians felt in 2011. I have the exact answer, I remember those days exactly. And all the following doubts, fears and actual events year by year up to now. Wait for my answers, including the sequence of events, and the recipe how to survive sliding down on Orbán’s killer slope. 15 years have passed, but Orbán’s system is more a wreck now, than a confident example to other sinister autocrats. He is still teaching them, and hopes to survive. The fight is on here, with good hopes for the better this time. (It is about time, finally)
“If you’ve read history, if you understand how fragile democratic norms can be, if you’ve seen how strongmen consolidate power step by step, then the current trajectory looks frighteningly familiar. It really, truly looks like we’re headed down the road that will lead to autocracy.”
Great information Michael, and wonderful newsletter as always.
Agreed! We’re seeing normalcy bias daily. I worked on Wall Street most of my professional career, so I speak to others from the Industry daily. And you’re right, everyone has been thinking that authoritarianism is a bridge too far; “it’s america, it can’t happen here!” I hear it all the time, or it’s as you’ve stated; I suffer from TDS, which I originally thought stood for The Daily Show!
That said, I sold most of my marketable securities in early February, when the government purges were taken place, and I was the epitome of the Cassandra Problem. And it wasn’t me they wouldn’t take seriously; it was the belief that we couldn’t become something different as a society; we’re the greatest democracy to ever exist. Yada, yada, yada!
Additionally, the thought process I heard over and over again was that “so many of the wealthiest and smartest supported Trump, how can these people be wrong?” “If what you’re saying is true, then why is Trump so popular?” Same song; different versions! Rinse, lather, repeat!
That said, as for Hungary, and whether we’d get there, and how long will it take? I thought about this for a while. When I have discussions with friends and some former military and intelligence people, I hear different opinions. Some say two years, others say never. There is no consensus, although it appears some people are coming around to my opinion.
However, when Orban took power, he didn’t have complete control of parliament, or the courts. It took time to consolidate power, and bring the media to heel. Not so much for Trump!
The MSM pledged fealty a year before the election. The Heritage Fiundation had a manifesto, which is almost a carbon copy of Orban’s playbook for years before the election. They recruited thousands of people to replace our current federal workforce years in advance. I hear estimates of up to 15-20 thousand vetted individuals for key roles in government.
Furthermore, the Plutocrats rallied around him, and Wall Street downplayed his ludicrous stances on tariffs and other harebrained economic schemes.
Moreover, by the time Trump was inaugurated, he controlled the legislature and the courts (they slow rolled several pivotal court cases before the election), and carved out an unconstitutional immunity clause in the Constitution for one man who wasn’t even in power at the time. This movement was coordinated, and well planned.
And when you consider how quickly he consolidated power and neutered the MSM, I’d say we’re closer to Hungary, or an authoritarian kakistocracy than we think. And when our citizens finally realize what’s happening, and fight back, he’ll invoke Martial Law and game over.
Personally, as much as I appreciate these debates and newsletters, we have to consider the fact that these morally bankrupt charlatans; including Heritage, The Federalist Society, and Trump’s criminal enterprise, have already succeeded in reshaping America for decades to come. It’s just that most of Americas haven’t gotten the memo, and maybe they never will, or don’t care!
Just some thoughts!…:)