James Ellroy often tells interviewers that he has no interest in current events, but even he seems to feel that the stars are in alignment for the publication of Blood's a Rover, the closing novel of his "Underworld USA" trilogy. This vast enterprise, which started appearing 14 years ago and now runs to nearly 2,000 pages, depicts 14 years of American history – from 1958 to 1972 – with a tight focus on conspiracies, murder, madness, corruption and racial hatred.

When Ellroy launched the series with American Tabloid (1995), right-wing paranoia about the Clinton presidency added wind to his sails, and with Obama in the White House conditions are even more favourable. Racially charged hysteria and accusations of communism are the ideological small change of the power players in these books. In a note appended to advance copies, Ellroy writes that "this is a book for these times!" It's also filled, he says needlessly, "with my trademark craaaaazy shit".

Ellroy began his trilogy after finishing the quartet of Los Angeles-set crime novels that made him famous, in which plotlines concerning serial killers, police corruption and shady political manoeuvrings gradually thicken and merge and turn out to be connected by long-buried master-crimes. Two of the LA books have three main figures who take turns as the focal character, and all four of them incorporate real-life people and events into the carefully organised layers of fantasy.

American Tabloid and its follow-up, The Cold Six Thousand (2001), use similar narrative machinery to build detailed backstories to the assassinations of the Kennedys and Martin Luther King. The plots' strings are pulled by J Edgar Hoover, the Mob, Howard Hughes and the CIA, but the main emphasis is on Ellroy's beloved "bad white men" – the rogue cops, shakedown artists and conflicted Mafia lawyers who work for the main players – and the prices they all pay "to secretly define their time".

As for the "craaaaazy shit", it comes in several varieties, served up in changing proportions from book to book. Apart from the basic building-blocks of Ellroy's world – acts of extreme violence, quasi-Oedipal sexual obsessions, litanies of entertainment-world sleaze – there are two principal areas of craziness. One is Ellroy's writing style, which mixes telegraphic terseness with hep-cat "rebop", old-time cop-speak and other high-impact registers, heavily seasoned with sexual, religious and ethnic insults.

Though less extreme in some ways than Ellroy's White Jazz (1992), The Cold Six Thousand has the unusual distinction of being made hard to read by the shortness of its sentences, which mostly come in at four words – one of which is always likely to be "nigger", "cooze", "hebe", "fag" or "slope". This amplifies the other unsettling effect: the odd blend of amused relish and hardboiled blankness with which the characters' activities are viewed. Writing from inside the worldview of his killers and casual-to-committed right-wing extremists, Ellroy rarely feels a need for explicit condemnation.

Blood's a Rover initially looks like more of the same, though Ellroy has dialled the terseness back to American Tabloid levels in the interest of reader-friendliness. This time round, only one of the main characters was equally prominent in the previous book. This is Wayne Tedrow, an ex-cop, dope chemist, assassination conspirator and newly minted parricide. (The Cold Six Thousand ends with him arranging for his stepmother, with whom he's in love, to beat his dad to death with a golf club; most readers will agree that the old man had it coming.)

Wayne has landed the job his father wanted as Howard "Dracula" Hughes's right-hand man in Las Vegas, and is also in hock to both Hoover and the Mafia bosses. Despite his extravagantly justified reputation as a racist murderer, however, Wayne is a tormented soul who believes in civil rights and dreams of finding better ways of interacting with black people than killing them or selling them heroin to fund third-world coups.

Next up as a focal character is Dwight Holly, an FBI agent known as "The Enforcer" who also played a part in the MLK hit. Dwight's new job is to slip a provocateur into a minor black nationalist movement to further Hoover's plans to discredit the civil rights cause. Finally, there's Donald "Crutch" Crutchfield, a low-rent surveillance artist and "dipshit kid" with an Ellroy-like past and strong voyeuristic tendencies.

At first, Crutch – whose name and some of whose attributes have been borrowed from a real-life acquaintance of Ellroy's – comes across as merely filling the now-traditional "junior partner who'll wise up and turn nasty" role. But the centre of his operations, Los Angeles, and his peeping-tom obsession with two mysterious women, slowly introduce a fevered, personal note that has more in common with the LA novels than with The Cold Six Thousand's sometimes rather dutiful slog along the historical timeline.

This note gets stronger as the book progresses, perhaps because Ellroy is no longer constrained by the need to work up to a keynote assassination. Watergate, he's said, has been over-done, and too many of the participants are still alive and lawyered-up, so the trilogy's climax relies more on imagination. The immensely complicated and skilfully orchestrated plotlines contain most of the usual ingredients: heroin, psychopathic Cuban exiles, a cab business used as a crime hub, and a Mob attempt to replace the lost Havana casinos, this time by building in the Dominican Republic.

There are walk-on parts for Nixon and Reagan as well as more recent obituary subjects: "Bill Buckley snitched neocons. Chuck Heston snitched potheads." On top of all this, there's also the fallout from an unsolved armoured car heist and the murder of an LA hate tract magnate. Everything seems to circle back to some emeralds and a woman named Joan Rosen Klein, who gives the book's antiheroes a shot at redemption.

Joan, aka "the Red Queen", and her friend Karen Sifakis, Dwight Holly's part-time lover, turn out to be Ellroy's spokespersons for the left. And though Joan is nearly as compromised as the numerous rightwing characters, Ellroy finally makes it clear that his sympathies are with her and what she stands for. Under her influence, Dwight contemplates writing a confession that sounds a lot like Ellroy's novel: "A huge feat of exposition. A densely packed indictment. A treatise on the collusive mind-set. JFK, RFK and MLK are all dead. Let me tell you how."

In an unexpected metafictional twist, Joan and Dwight start planning a violent event that will break the story wide open, which they discuss like novelists ("It densifies every level of our subtext"). We're also offered a partial explanation for the novel's narrative idiosyncrasies, though not an especially plausible or satisfying one.

These developments make an interesting departure and help close the trilogy in a surprisingly sweet way. (Sweeter, anyway, than The Cold Six Thousand's last lines: "His father screamed. Blood sprayed the panes.") It must be said that Ellroy writes terrible diary entries for his radical left intellectuals, who all think in an interchangeable, polysyllabic voice: "Our shared world is humanly unquantifiable and ideologically confused"; "Our goals are both inimical and fully synchronous." And while it's good to know that he disapproves of "puerile Feds fucking the disenfranchised for kicks", it's still more fun to read the narrator's demented epithets for parrots ("The cocksucker bit his hand and flew off") or the Dominican elite ("light-skinned beaners" who "grooved on their Spanish roots").

The upheavals of the 60s – Ellroy's ostensible subject – are mostly presented here as an epidemic of hipsterism that has even Nixon saying, "On the QT, baby", and some readers might feel that this is as it should be.

In its serious aspects, then, Blood's a Rover can be mildly silly in comparison with the tightly controlled American Tabloid. But the serious aspects are only intermittently what's serious about Ellroy's achievement in these books. Slyly knowing about the fantasies he trades in, funny when you least expect it, and a master of private languages, he isn't in any way a conventional historical novelist. At his best – when the strong internal logic of his books takes over the history he's exploiting – he gives you the sense of being plugged directly into an entire culture's unsavoury dream life, its boasts and self-reproaches and arguments with itself.