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Psalm 2 [after jump], (Psalms, Vol. 1: Psalms 1-41 (Baker Commentary on the Old Testament Wisdom and Psalms)
), is about God’s enthronement of his king on his holy hill in Zion. It is about the hybris of the pagan nations who want to conquer YHWH and YHWH’s people, Israel, and Israel’s king, the anointed one.
The anointed king now speaks (vv. 7ff): YHWH told me, as he was to tell Solomon, that I could have what I wanted. Go ahead, ask me, I’ll give you those pagan nations. YHWH promises the anointed king that he will rule the world, and once again we are to see this as idealism and eschatological hope. God wants his people, as Genesis 1 clearly teaches, to rule the world as God’s Eikons.
In light of that promise, the psalm turns to the nations and urges them to reconsider and to submit to YHWH as God and to Israel as God’s people and to Israel’s king as God’s anointed one (vv. 10-12). Amazing lines these.
If they do these things — submit and revere — they will be blessed along with Israel. But, their submission is to God [YHWH], not to the king or to the nation — and Goldingay explores this theme some.
For whom is this psalm?
For the future king? 
For Israel?
For the Church?
For all to be told that oppression and fear are not the end of the story.

2:1 Why do the nations rebel?

Why are the countries devising plots that will fail?

2:2 The kings of the earth form a united front;

the rulers collaborate

against the Lord and his anointed king.

2:3 They say, “Let’s tear off the shackles they’ve put on us!

Let’s free ourselves from their ropes!”

2:4 The one enthroned in heaven laughs in disgust;

the Lord taunts them.

2:5 Then he angrily speaks to them

and terrifies them in his rage, saying,

2:6 “I myself have installed my king

on Zion, my holy hill.”

2:7 The king says, “I will announce the Lord’s decree. He said to me:

‘You are my son! This very day I have become your father!

2:8 Ask me,

and I will give you the nations as your inheritance,

the ends of the earth as your personal property.

2:9 You will break them with an iron scepter;

you will smash them like a potter’s jar!'”

2:10 So now, you kings, do what is wise;

you rulers of the earth, submit to correction!

2:11 Serve the Lord in fear!

Repent in terror!

2:12 Give sincere homage!

Otherwise he will be angry,

and you will die because of your behavior,

when his anger quickly ignites.

How blessed are all who take shelter in him!

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