Conflicts and Corruption

By James Kwak

To be clear, the idea that Donald Trump will be president while he or his children effectively own a company that does business all over the world is preposterous. (Quick primer on trust law: A trust is managed its trustees for the benefit of its beneficiaries. In this case, we know the trustees include two of Trump’s children, and the beneficiary is likely to be either Trump or his children.) If people, companies, and foreign governments want to pay bribes to the president of the United States, they need only give favorable deals to the Trump Organization. An in any of his official actions, the president will have the temptation to do what’s right for his company, not for the country.

The point I wanted to make in my Atlantic column today, however, is that this is just the most obvious and egregious example of the larger problem of corruption: government officials acting in the interests of themselves, their family and friends, or their business associates. The example I focus on is estate tax repeal, because that one thing alone would be worth more than $1 billion to the Trump family. It’s a classic example of a president doing what’s in his own personal interests and the interests of his core constituency of gazillionaires, while pretending it’s for the good of the country.

Betsy DeVos is another great example, perfectly illustrated by this graphic from the AFL-CIO:


The way American politics works is that people and organizations with money—today, largely billionaire families—invest in politicians and demand policies that favor their private interests. Donald Trump just eliminated the middlemen—not only winning the presidency, but also inviting fellow billionaires like DeVos into his cabinet. This is why, beyond the ongoing catastrophe that is the Trump presidency (which technically hasn’t even started yet), we still need to fix our democracy, so everyone has an equal say in our government.

For more, see the full article in The Atlantic.

21 thoughts on “Conflicts and Corruption

  1. I think it’s a tad to late to start fixing things, that’s what the 08 crisis was about, and permanent extension of the Bush tax cuts, these were the things needed to prevent trust abuse.
    Now all that is left is too repatriate the overseas money (currently collateralized) and pocket the profits as we socialize the losses from the lost tax revenue.
    It’s a sad state of affairs this country has become.

  2. Interesting post. I need to head to the Atlantic, read it, and get smarter on how we can effectively navigate these potential conflicts. From a perhaps extreme devil’s advocate perspective, the economy and investors are so diversified now that anyone executing a presidential decision could conceivably benefit. I recognize that Trump’s business interests take that to a whole other level, but we also can’t block businessmen from participating in politics (I know you’re not arguing for that).

  3. What Trump is saying is that, now that Americans have been so completely stripped of their own inheritances, and now that all those inheritances are controlled by Trump and his friends, NOW they want to repeal the inheritance tax.

  4. John Cassidy
    Jared Kushner’s Trumpian Divestment Strategy
    By John Cassidy
    January 10, 2017
    “….it’s clear that Kushner’s divestment strategy, far from quelling concerns, will only accentuate the glaring potential for conflicts of interest at the heart of the Trump Administration. To borrow the words of the former chief counsel to Rand Paul’s Presidential campaign, Matthew T. Sanderson, “It sounds like a shell game to me.”

  5. Why are we all so worried about Trump’s conflict, and calmly accept that people in Congress, Republican and Democrat alike, vote on bills at the behest of lobbyists who make financial contributions and against the interest of the people they are supposed to represent?

    Corruption is endemic to this nation’s governance and has been for decades. We don’t care when legislators do it, but we rise up in outrage because the wrong person is going to be able to rake in the benefits of presidential corruption for the next 4/8 years. It was supposed to be the wife of the guy who sold overnights in the Lincoln Bedroom.

  6. @Bill H: Corruption is a betrayal of public trust. Are you arguing that we should institutionalize corruption as a structural part of an acceptable government? Further, that the government in question happens to be the most powerful one on the planet and speaks in our democratic name?
    The idea that there is something Trump calls ““truthful hyperbole” is not just stretching the truth in advertising when it comes to impacting the security of our Nation and the World. The insidious corruption of money and media capture (Trump News), is a systemic “control fraud” that will not stop at truth or Democratic ideals. It is a pervasive mission to subvert democratic liberty and move the country from true freedom to authoritarian rule. All by capturing government itself.
    see: TRNN here: January 12, 2017
    The Bizarre Far-Right Billionaire Behind Trump’s Presidency

  7. Vulture Capital wants a Vulture to head our National Capital, and right now it looks like they have succeeded.
    Trump News ! The new Governments acceptable truth.

  8. “In the 1970s, John Gray was a rising star of the British New Right. An Oxford-trained political philosopher, he penned prose poems to the free market, crisscrossed the Atlantic to fuel up on the high-octane libertarianism of American right-wing think tanks, and, says a longtime friend, enthralled his comrades late into the night with visions of the coming “anarcho-capitalist” utopia. But after the Berlin Wall collapsed, Gray defected. First he criticized the Cold War triumphalism of Francis Fukuyama’s “end of history” thesis and counseled against scrapping Britain’s National Health Service. And then in 1998, from his newly established position as professor of European thought at the London School of Economics (LSE), he handed down False Dawn, a ferocious denunciation of economic globalization. Assailing the “shock troops of the free market,” Gray warned that global capitalism could “come to rival” the former Soviet Union “in the suffering that it inflicts.” Now he is a regular contributor to The Guardian and New Statesman, Britain’s principal left venues. So profound is his conversion that no less a figure than Margaret Thatcher has reportedly wondered, “Whatever became of John Gray? He used to be one of us.”
    Excerpted From:

    Volume 11, No. 1—February 2001
    The Ex-Cons
    Right-Wing Thinkers Go Left!
    by Corey Robin
    Lingua Franca
    Optimism is in the Air! Conflict and Corruption can not lead the way.

  9. SHARE : Free Press: Trump’s News / When Lies become Truth
    Orwell Rolls In His Grave – The One Thing The Media Doesn’t Like To Talk
    (edited for length)

    Full Version:
    Uploaded on Jan 13, 2012
    Orwell Rolls in his Grave (Full Length 3hr Documentary)

  10. A Baseline Scenario crisis driven theory;
    Milton Friedman’s shock doctrine is based upon dismantling government social service policies and support by pulling finance. It was a bankruptcy model that was derived in part as a replacement to the Marshall Plan which sought to build a middle class globally as a bulwark against the threat of communism in a Post World War II global reconstruction. Friedman realized that to take control over regional economies, it was not necessary to expend massive relief all over the world to build up a middle class. Instead he conceived of a plan in published in 1957 to simply collapse the lower class and support only the upper levels of an economy. In his working model the shock was essentially a crisis driven austerity plan pulling all government entitlement benefits from the subsistence base of dependents. Middle class assets are seized by existing capital and private interests become a political managerial class while the rest of society is left to a survival mode of desperation. Essentially it is a domestic colonization by market liquidation and capture. When the economy implodes and goes to hyperinflation and crisis, his famous “helicopter” drops of monetary liquidity facilitates a primer for privatization and vertical integration of the political economy. It is surprisingly much like quantitative easing in many ways. In fact, we could speculate that in America the 2008 crash and the looting of the treasury along with bailouts was a prelude to liquidity in preparation for a later economic divide. A wealth and austerity divide where all the liquidity was primarily in the banking tiers of socioeconomic upper class power relations, which is precisely what did happen.

    It is not only Trump that will want this process implemented, since it is essentially a vulture capital “free market” formula for capturing an economy that Naomi Klein documented was being executed ‘one economic region at a time’ if I paraphrase that correctly. The system was used in Russia and Poland and it would be suggestive to say it was also deliberated over Greece accidentally on purpose; so to speak. When there is a middle class to collapse and place under a lucrative and sustained permanent rentier economy, excessive debt loads seems to do the trick insidiously over a duration that is quite invisable to most of the population. Now, we might postulate that It has come home to roost in the United States by ruthless wealth that has nowhere left to extract and expand; not to mention that it is unmeasured offshore international capital that is now integrated and cares nothing about national borders per se. that needs to be put into play. Just as the free marketeer system installed crony capital autocracies, despots and oligarchs around the world as politically accommodating “middle manager” to expedite interests and simplify any resistant administration, Trump is a single pivot-puppet to accommodate interests in a similar pattern of power concentration, if inverted, as autonomous manager that expects to be well rewarded as the political intermediation that unlocks all the doors. It may well be, however, that there are rival domains feuding for power and control fraud will not be that easy against multiple wealthy interests. It is clear that he has people around him to delegate and that many political animals believe they can use him as their working political capital. Shock Doctrine, however, does not work so well with a healthy middle class and a plural arena of American wealth that may or may not align or oppose international or foreign financial interests. In any case the “deregulation” scheme will go immediately into effect before anything else; and the rest is distraction. Trump economics, meanwhile, is spend (debt) and cut taxes for the wealthy and he has already declared himself a master at working bankruptcy in his own business career, indicating he believes he can use the same indiscretions on the National Economy. Instead, in four years the country’s bankruptcy will be placed on the backs of the middle class…and voila! The result is a previously plotted helicopter supply of quantitative easing over a bankrupt middle class economy, a complete fire sale of assets and the richest country in the world now fully owned and rented out to a 1% ownership society.
    Unfortunately, that baseline scenario is all too clearly possible!

    All I keep hearing is how to stop Trump from his poisonous agenda. Again, the rest of the ruthless thugs that will benefit will be doing all the dirty work so that will not really be so easy without coordinated and informed opposition (and some serious American wealth that is not corrupt to help in support). What we can do immediately is simply say we want to see Trumps’ TAXES and that he MUST fully DIVEST convincingly and completely from all conflicts of interest (foreign and domestic) or we will not play ball at all. That should take up the better part of a year before as he tries to squirm out of compliance. That Must be an uncompromising Democratic DEMAND as terms of agreement to negotiate all the rest.

  11. PS; So called Trump Populism more AstroTurf than unified demographic, and it is more divided between polarized stereotyped ideologues against “socialism” and “liberalism” than it is against the ambiguous anti-elite characterization (which at best is a free standing anti-establishment embeddedness that has been around for decades. If there is a true “populist” dimension it is anarchist based, and it is not necessarily class specific against anti-capitalists in this country. so precisely how do we define the “elites” that are supposed to be the target of populist solidarity?
    It certainly isn’t the apocalyptic gang of billionaires now ruminating around the center of power.
    Just thinking…

  12. Very interesting post Bruce, I was thinking that’s where are just about now when suddenly, you said it. The problems may arise sooner than you believe though. One of the motivations for the emancipation proclamation was that if too much wealth was concentrated into too few hands the lower classes would revolt and the strength of the black movement would be to great to restrain, therefore whittling down their masters as a last resort of survival. Something we see with the civil war currently in the middle east, but the unrest is moving closer to US as we speak. Mexico is seeing the unrest right now as gasoline and gasoline stations are being stolen and robbed as a form of income and retribution against the unfair system. At first its organized gangs and drug cartels, but the meeker ones will act as scavengers to clean up what’s left behind and may eventually join the gangs or start their own repatriation missions. Should the movement grow it could cross borders, we don’t here anything of it because of the gvt fear factor and the captured msm desire to tow the gvt party line at any cost. But once gas prices rise here from the supply and demand theory, and the movement crosses borders, survival will be the name of the game and the gvt will then be the declared enemy, those will be interesting times indeed, a disruption of commerce here of any degree will trigger a gvt and peoples paranoia the likes of which a Russian hacking scandal could never compete with.

  13. The Shamans of Gizmology, creating a virtual system of “laws” (for everyone, but them, to follow) out of the totalitarianism of their Math God’s demands. Shaman Friedman was/is nothing but a liar, thief, and murderer backed by Shaman Union hooligans who worship at the altar of their twin whores – Greed and Cheap.

    Nihilism. Hedonism. Anarchy.

    Academia gets turned on by those virtual reality “modern” ideals and keeps mentally masturbating with them….it is sickening entertainment…akin to throwing sht at the “stupid” audience….

    “Materialism denies God, secularism simply ignores him; at least that was the earlier attitude. More recently, secularism has assumed a more militant attitude, assuming to take the place of the religion whose totalitarian bondage it onetime resisted. (195:8.5)”

    Worst priest class, yet, to deform humanity…..

  14. @ Bruce: @Bill H: Corruption is a betrayal of public trust. Are you arguing that we should institutionalize corruption as a structural part of an acceptable government? Further, that the government in question happens to be the most powerful one on the planet and speaks in our democratic name?

    It’s becoming as plain as the nose on our faces that the story of the creation of federal reserve was most horrendous thing a group of humans could have thought about doing.
    And we now know it comes from the law of human nature, if everyone was one of a million persons, since humans are “evil” by nature, the majority of them would be bad persons, wanting to do bad things to their and other “good ones” by nature, and in almost all cases, would overwhelm the “good ones”, its just a matter of time.
    They do bad things to themselves, (don’t understand it, the laws of nature do bad things to them, and then they want revenge and compensation directed toward the “good ones”) The accumulated nastyness that gets passed down to like minded thinkers need only control one person to topple the whole bunch of goodies, its worked very well for the private side of the Fed, until now perhaps. The law of numbers can be applied here and also supports this claim.

    So with the “illegal” creation of Federal Reserve to formulate the financial probate, and then an intellectual group of like minded linear institutional A student thinkers to control dissenters, all on board the same global ship of stocks and bonds, has made for a mighty satanic universal force to be reckoned with.

    All of the industrial age and worlds problems, were begun with this jeckel (The Fed) and hyde (The linear Institutionals) conception of control and conspiracy.

    Their big problem is once confronted with the laws of nature, they fall back on disbelief, denial, anger, and then war to defend their failed beliefs and ideals, this has gone on since the conception of the Fed.

    And now the proof has arrived, the Fed is always wrong, but never in doubt.

  15. While you might be right, just because he wants his children to be in charge is no reason to be too concerned. I would prefer if he put someone over his children to “manage” the ethics of his enterprise – not to make business decisions. But, I think he will be more interested in his legacy/ego than money – and to feed his ego will require him to be successful. I’m not sure what successful means in politics anymore, but I can only hope. charley246

  16. @Bruce E. Woych
    “Are you arguing that we should institutionalize corruption as a structural part of an acceptable government?”

    Yes, and no. I’m saying that corruption already is institutionalized as a structural part of a government which I find unacceptable. I seemed to be in small company, however, until Democrats lost the election and suddenly developed a moral compass. No problems with a Secretary of State and a “charitable foundation” raking in money from donors who had interests in matters of state, and no notice that once the Clintons were no longer influential in matters of state those “donations” dried up.

    So a president’s children managing the cash inflow of bribes is not okay, but a president’s husband doing so is okay.

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