Whatever one thinks of the criminal prosecutions and state “civil” suits against Donald Trump (and there are good reasons to question many aspects of them), they represent the powerful state that he has not disavowed, except perhaps in occasional and incoherent baby talk, as long as he was running it. And there is something special about the way he sells this sort of state, provided he runs it, to his followers. America was in terminal decline before him, in four years he made it great again, it’s not great anymore since the election was stolen from him, but he will quickly make it great again if the election is not rigged.
Exactly like he sees elections, he will only think the trial jury is fair if it renders the right verdict. He apparently says it with no shame (“Jury for Donald Trump’s Hush-Money Trial Takes Shape: An Oncology Nurse, a Software Engineer, a Teacher,” Wall Street Journal, April 16, 2024):
After court, Trump headed up to a Harlem bodega for a campaign event. Asked by reporters about the jurors that have been selected, the Republican nominee said, “I’ll let you know in about two months.”
Politicians and rulers are typically ordinary Joes with more dangerous incentives, and I don’t want to propose any other as a Platonic model. But on the probability distribution, there is something special in Mr. Trump’s character and the way he deals with truth and reality, as an article in the current issue of The Economist would suggest (“Truth Social Is a Mind-Bending Win for Donald Trump,” April 18, 2024). Just the article’s artwork (much better than mine with DALL-E) is worth the detour. Three excerpts from the article:
Since shares in Donald Trump’s media firm began trading publicly on March 26th, their value has slid by more than half. …
The performance of Mr Trump’s stock [in his media firm] so far represents the purest demonstration of his power not just to bend reality, but to convert illusion into reality—and also, maybe, of how Americans are coming to confuse the two. …
What Mr Trump has called “truthful hyperbole”, and others call lying, has been central to his success. When he built Trump Tower it had 58 floors, but in numbering them he skipped ten to claim 68 instead. This tactic has occasionally caught up with him, most severely in the $355m penalty imposed on him in February after a New York judge found Mr Trump had lied for years to secure loans and make deals—trebling the size of his penthouse apartment, for example, and valuing his Mar-a-Lago estate in Florida based on its potential for residential development, though he had surrendered the rights to develop it as anything but a club.
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By Pierre Lemieux and DALL-E
READER COMMENTS
Laurentian
Apr 19 2024 at 4:51pm
Show trials are okay as long as they target “reactionaries”. I mean this has been a catastrophe literally every time it has been attempted but I am sure it will work this time.
So deliverying the wrong verdict is ok? And all verdicts are just?
Jon Murphy
Apr 19 2024 at 5:27pm
It’s obvious Pierre is referring to the mindset of Trump et al that the only good verdict is the one that acquits him, regardless of justness of the verdict itself.
Pierre Lemieux
Apr 19 2024 at 5:46pm
Jon: Exactly. It seemed obvious to me too.
Mactoul
Apr 19 2024 at 11:08pm
A show trial is unjust by definition with verdict certain against the charged person.
You need to argue that it is not a show trial.
Pierre Lemieux
Apr 20 2024 at 10:32am
Mactoul: Who believes that the verdict is “certain” (predetermined) in Trump’s trial? If somebody credible does believe so, does the reason lie in the laws that are presumed to have been violated and were adopted by democratic assemblies, or in the trial rules that would systematically favor the prosecution or the defense?
Jon Murphy
Apr 20 2024 at 1:00pm
There’s an interesting question here: what evidence would you need to see that it is not a show trial?
Jose Pablo
Apr 20 2024 at 4:00pm
What’s the alternative to the actual system to decide who should stand trial? You deciding who should stand trial or when a verdict is “just”?
Wouldn’t that move us closer to the Iranian system? With you playing the role of the Supreme Leader.
“Form” is more relevant than “content” in the US system (whether we like it or not). So you should rest your case on what are, in your opinion, the “formal deficiencies” (the way judges are nominated, the procedure to decide who stands trial, etc…)
The deficiencies should be in the procedure, not in the particular results (or even the specific aplication of the procedures) in this particular case.
Jose Pablo
Apr 19 2024 at 6:18pm
And all verdicts are just?
Yes, they are, since the very definition of “just” (in a liberal democracy) is “what the right court instance decides is the right way of interpreting the law” (aka the verdict).
Otherwise, the whole system crumbles and doesn’t make any sense anymore.
This idea that what is “just” is not “content-dependent” but “procedural dependent” is, indeed, deeply troubling. It rules out the best tool to decide what is “just” (our individual moral intuition) and substitutes it with content-independent forced obedience to rules, provided they have been enacted following a legally established process and they have been interpreted by the individuals legally entitled to do so.
Sometimes the aberration of this system has been fully exposed. For instance when it made interracial marriage “unjust” or owning another human being “just” or the death penalty “just”.
Pierre Lemieux
Apr 19 2024 at 11:41pm
Jose: We have to be careful here. What you seem to describe is a majoritarian democracy where the majority sets procedures where “just” is defined as the mechanical following of these procedures.
A “liberal democracy” (see Friedrich Hayek–see his Law, Legislation, and Liberty, Volume 1 and Volume 2) or a “constitutional democracy” (see James Buchanan–for example his The Reason of Rules with Geoffrey Brennan) is different. I think these two perspectives nearly exhaust the classical liberal tradition, where what the state, even democratic, decides is not just by definition. I say “nearly” because Antony de Jasay is a bit different–and perhaps closer to Hayek, which may look strange because he was an anarchist. As you may recall, one of our recent EconLog conversations was about that–which of course does not mean that we have exhausted the topic!
In none of these theories is an individual completely unconstrained in acting about what he, at any point, considers just following his own moral intuition. Even Michael Humer, it seems to me, could only disagree with this if he assumes that moral intuitions will converge to unanimity all over the earth as civilization progresses–a heroic assumption.
Jose Pablo
Apr 20 2024 at 11:12am
Huemer’s (very interesting) position on this topic is that “the state’s legitimate powers must be highly specific and content-dependent”. The fact that a specific “power to coerce” is enshrined in the Constitution says nothing about the positive legitimacy of the government to force the compliance of the individual*.
The individual moral obligation to obey the “law” can only be content-dependent. But that doesn’t mean that this content-dependency can not follow a positive (although not easy) discussion. It would be, for instance, a valid argument, to say that “the state may coerce individuals only in the minimal way necessary to implement a well-justified plan from protecting society from the sort of disasters that allegedly result from anarchy” (Huemer). Namely laws against murder, theft, and fraud and the provision on nonrival, nonexcludable goods. So no need for “convergence of all moral intuitions“. Just a very limited common legal code of conduct and true freedom to follow individual moral intuitions out of this limited positively justified very restricted code.
One of the defining things about Trump is that he would be, very likely, convicted even under the laws enacted in this very restrictive code. The provisions against “fraud” would get him.
Even if the 10 Commandments were the whole American penal code, he could, very likely, be still convicted of 5 different charges. Namely numbers 1, 7 (a serial criminal in this particular case), 8, 9 and 10.
* As you have pointed out on numerous occasions it is a pity that Huemer fails to discuss how a Constitution “a la Buchanan” affects this basic idea of government’s legitimacy.
Pierre Lemieux
Apr 20 2024 at 12:59pm
Jose: Yours are good points. I would probably be less critical of Huemer if I were to review his political philosophy again (I haven’t read his Justice Before the Law). The real minimal-ethics political philosopher must remain de Jasay, though. He is after an ethical-political philosophy that “demands far less of our moral credulity.” If you have a chance and haven’t already read it, Chapter 8 in his Against Politics is well worth reading. It is 50 pages but easy to read and quite enlightening. Look at his three principles of liberal political philosophy. (I review the book and summarize the three principles in my hot Econlib article “Princess Mathilde and the Immorality of Politics.”)
BS
Apr 21 2024 at 12:06pm
Lawful and just are two different things.
Jose Pablo
Apr 19 2024 at 5:44pm
people don’t follow leaders that they don’t understand. (Dean Simonton).
“Truth” is a very complicated matter from a philosophical standpoint. “Appearances” are a much more easy subject. And much easier to manipulate since there are many of them and can be cherry-picked as needed.
Trump knows the “truth” he wants to build and seems to have a natural intuition to cherry-pick the “appearances” that best support “his truth”. Historically we have called people like that “charlatans”. All politicians have some of this. Trump is just off the charts.
There are appearances of almost any “truth” (enough of them to even deny the Holocaust or lunar landings). When you understand this, Trump’s behavior makes sense.
* There are enough “appearances” (if properly cherry-picked) to support the stolen elections baby cry
* He doesn’t know what “appearances” to cherry-pick now regarding the behavior of the jury. So he has to wait and see.
* “Appearances” that the Trump Tower has 68 floors (for instance the fact that there is a 68th floor there) are enough to claim it has 68 floors
* There are enough “appearances” that Mar-a-Lago has residential value
* There are enough “appearances” that Mexican immigrants are invading the country.
Mastering “Phenomenal Conservatism”, the idea that assuming that things are what they appear to be is reasonable, is a key skill for a politician (and for any other sophist wannabe). And “appearances” are even more useful, as a substitute for proper reasoning, when they have emotions attached to them.
One of the key problems of majoritarian democracy is that voters don’t have the right incentives to move beyond “appearances”. So individuals who don’t trust charlatans in their real life and don’t make decisions with skin in the game based on appearances, can very easily do so when voting for a charlatan.
Pierre Lemieux
Apr 19 2024 at 6:05pm
Jose: The point you make in your last paragraph is very important. Classical liberals and libertarians assume that ordinary people are generally competent to manage their own individual lives, and we have much evidence of that. But this does not imply that x%+1 of them (except if x=100%-1) are competent to control other people’s lives. In Capitalism, Socialism, and Democracy, Joseph Schumpeter provided an early formulation of what public choice economists (and you) say:
Jose Pablo
Apr 19 2024 at 6:22pm
The typical citizen drops down to a lower level of mental performance as soon as he enters the political field. He argues and analyzes in a way which he would readily recognize as infantile within the sphere of his own interests.
Hear! hear!
Laurentian
Apr 19 2024 at 11:27pm
The 19th century classical liberals had two rather questionable beliefs about mass democracy. First was that they assumed that wealthy educated non-Catholic urbanites would always agree with them. See any major Western City or University to see how well that worked out.
Second was that they assumed that mass democracy would cause class interests to cancel each other out and therefore keep the state from growing. Look at the US Federal debt to see how well that turned out.
Pierre Lemieux
Apr 20 2024 at 11:50am
Laurentian: I would be interested to know what is “mass democracy,” which classical liberals used this expression in the 19th century, and where “mass democracy” actually existed.
Jon Murphy
Apr 20 2024 at 1:07pm
Yeah, like Pierre, I’m going to need verification. You sound more like you’re confusing classical liberals with Marxists/socialists.
Mactoul
Apr 19 2024 at 10:26pm
Show me the man and I will show you the crime said Beria.
Mark Steyn on the Trump trials:
Jim Glass
Apr 20 2024 at 8:21pm
OK…
Allen Weisselberg, CFO of The Trump Org, in prison now after pleading guilty to 15 fraud felonies and two perjury felonies (in furtherance of financial fraud).
Michael Cohen, Trump’s personal lawyer, three years in prison after pleading guilty to an array of crimes.
Paul Manafort, Trump’s 2016 campaign chairman, sentenced to 7.5 years in prison for bank and tax fraud.
Rick Gates, deputy chairman of Trump’s 2016 campaign, pleaded guilty to conspiracy and lying to the FBI. Prison for him.
Roger Stone, Trump campaign advisor, sentenced to three years in prison in for obstruction of justice, witness tampering, and lying to Congress.
Also: Papadopoulos, Navarro, Bannon…
Weisselberg is interesting. The Trump Org’s appeal of its fraud case is based on “Weisselberg did it! We trusted him.” Which means either…
A) Trump, innocent and unaware of all wrongdoing, is such a naïf that his own #1 guy could commit all those frauds for years — bad enough to endanger the business’s very existence under state law — with Trump not having a clue. Donald is incompetent. But honest. Or…
B) Trump, master businessman manager that he is proclaimed to be (by himself!) with unquestioned control of his company, knew full well about his #1 guy’s confessed deca-frauds committed over many years, and was, QED, in it with him up to his eyeballs. (As further suggested by the fact that the guy who committed all that fraud to endanger the existence of the business **remains on the payroll**. Ah, business as “family” indeed!)
Pick one as your preference for President of the United States. Either A or B. You choose.
Most of his Dream Team above is out of jail now. He can bring them along too.
MarkW
Apr 20 2024 at 10:37am
The ‘hush money’ trial is preposterous on its face (paying hush money to keep a mistress quiet about an affair breaks no laws. They have to prove that this was not his intent, instead the motivation was to steal an election — but not in New York, which he lost by a landslide, rather in other states, but this is NY Law). The ‘overvaluing’ case was equally ridiculous. The banks the Trump organization was negotiating with are highly sophisticated. They do not take client’s word for anything when it comes to evaluations. They weren’t ‘tricked’. It’s beyond stupid. And chilling — in my lifetime, I’ve never seen legal power so flagrantly abused (and abused to interfere with presidential elections). This is truly ‘banana republic’ stuff. And I say this though I do like or support Trump and have never voted for him, etc. That said, the reaction to Trump has been a 10x greater threat to American democracy than Trump himself. People worry so much about the authoritarian things they imagine Trump might do that they cannot quite see the serious authoritarian abuses happening in front of their eyes.
Jose Pablo
Apr 20 2024 at 11:25am
The banks the Trump organization was negotiating with are highly sophisticated. They do not take client’s word for anything when it comes to evaluations. They weren’t ‘tricked’.
Your argument seems to be that Trump tricked the bank and that the bank’s officials failed to properly comply with their fiduciary duties to the banks’ shareholders. An argument not without merit but that doesn’t exonerate Trump in any way.
Even if what you say is true, Trump knowingly lied to get financial benefits. Whether or not the bank’s officials were necessary accomplices to commit this crime is irrelevant in deciding Trump’s culpability.
MarkW
Apr 20 2024 at 6:25pm
No, I’m saying the bank made an overall evaluation of the client, the assets, and determined the amount they would feel comfortable lending against them. As is standard operating procedure in the business. They were willing lenders who made a (correct as it turns out) judgement that the loans would be a good risk. The NY Gov had to come out with this crazy statement that no other property developers in NY should worry about this happening to them because, er, this is a ‘special’ situation. Special indeed.
Jose Pablo
Apr 20 2024 at 7:26pm
They were willing lenders who made a (correct as it turns out) judgement that the loans would be a good risk
This kind of “judgements” is not “correct” because they turn out “right”. They can be “correct judgements” and turn out “wrong” and can be “wrong” judgements and turn out “right”.
Whatever “judgement” the bank made was based on the false information provided by Trump. Honest, decent people don’t do that. This lack of decency is not in any way affected by the gullibility (or the lack thereof) of the bank officials.
Whether this dishonest and reprehensible conduct is or isn’t a punishable crime is up to the court to decide.
MarkW
Apr 20 2024 at 8:28pm
Whatever “judgement” the bank made was based on the false information provided by Trump.
I seriously doubt that. A bank at that level that does not perform its own evaluations of the buildings it’s accepting as collateral (not even verifying square footage or the number of floors)? Seriously?
Has any developer ever been taken to court for this kind of ‘fraud’ before? Of course not — this case (like the ‘hush money’ case) surely arose from brainstorming about how to get Trump (and how to do it in state court to make it Presidential pardon-proof).
There is no way any of this is ‘normal’ jurisprudence.
David Seltzer
Apr 20 2024 at 11:35am
Mark, well said! “The banks the Trump organization was negotiating with are highly sophisticated.” Yes again. Were the banks defrauded? Did the lenders lose money with information Trump supplied. Bankers are not stupid and have incentives to do their due diligence. The banks made their decision to lend based on their financial projections and asset valuations. I don’t believe the loans were called because of suspected fraud.
Jim Glass
Apr 20 2024 at 10:49pm
Yeah, valuation “fraud” is a victimless crime, just like Donald says. What’s more, the reverse, it’s mutually beneficial, everyone makes money.
For 20 years Bernie Madoff overstated the value of the amounts he had received from investors which he had actually invested on their behalf. They made money, he did too, year-in year-out. Win-win! In all those many years, did those investors lose any money with the information Bernie supplied to them?
Sam Bankman-Fried too for years overvalued the assets FTX had set aside to secure customer accounts. Sam made money, his customers made money! In all those years did anyone lose money with information Sam supplied to them?
And 2005, 2006, 2007, recall all those housing values shooting way up fueled by epic overvaluations all over the country. Everyone made money, the banks got rich, home buyers got rich, win-win, In all that boom time, did anyone lose any money?
Surely Trump has a point. Why should overvaluing assets be some kind of illegal “fraud” at all, much less result in anyone being punished for it, when nobody has lost any money from it … yet?
David Henderson
Apr 20 2024 at 11:44am
Very well said, Mark.
One edit, though.
You wrote, “I say this though I do like or support Trump and have never voted for him, etc.”
Given the context and tone, I’m guessing that you meant to put a “not” before the word “like.”
Craig
Apr 20 2024 at 12:35pm
“The ‘hush money’ trial is preposterous on its face”
If the left imprisons Trump, I wonder if it will result in civil war? Could it be a cudgel for #nationaldivorce? Probably not, I suppose, but you know there is a movie out.
Jon Murphy
Apr 20 2024 at 1:05pm
I doubt it. The thing about people who talk about “national divorce” and “civil war” is they are hashtag warriors: brave behind the keyboard but that’s about it.
There could be civil unrest if he is convicted, sure. But you need something a lot more important and a lot more entrenched than Donald Trump to kick off a civil war.
Craig
Apr 20 2024 at 1:13pm
I don’t see a blue/grey style civil war like the US Civil War, but I could see something akin to the Argentine Dirty War, the Troubles in Northern Ireland, things along that line.
Jon Murphy
Apr 20 2024 at 1:33pm
That doesn’t really change my comment at all.
MarkW
Apr 20 2024 at 6:27pm
Imagine the scenario where Trump refuses to report to prison and takes refuge in a red state that refuses to extradite. That doesn’t seem all that far-fetched to me. What happens then? Or Trump is convicted, reports to prison, and is then elected president. Again, what happens then?
Craig
Apr 20 2024 at 7:21pm
“Imagine the scenario where Trump refuses to report to prison and takes refuge in a red state that refuses to extradite. That doesn’t seem all that far-fetched to me. What happens then? ”
In real life if you were convicted of such an offense at the state level and were in another jurisdiction the odds are the state that convicted you wouldn’t bother to extradite you. But bottom line Full Faith & Credit is a thing, the refusing state could refuse and try to do so on ‘public policy grounds’ and at that matter the issue would become an issue for the federal courts.
“Or Trump is convicted, reports to prison, and is then elected president. Again, what happens then?”
They didn’t cover that in con law. (Pun kind’ve intended), but even if Trump were to pardon himself a federal pardon has no impact on state convictions.
Jon Murphy
Apr 20 2024 at 8:37pm
We can imagine anything. That doesn’t make it likely.
Jim Glass
Apr 20 2024 at 9:42pm
That would never, ever happen. We’re a long way from 1859. Though a lot of people seem to wish it weren’t so. Bored?
Won’t happen. All the cases except in NY are stalled until after the election, and the alleged crime in that is a Class E felony. Which means as a first offender Donald would get probation. No jail time. (Unless he is a really bad boy in court and gets the judge very angry, could happen! Even then he’d get at the most something like 90 days and be out in plenty of time.).
MarkW
Apr 21 2024 at 5:29am
That would never, ever happen. We’re a long way from 1859. Though a lot of people seem to wish it weren’t so. Bored?
I’d love to live in more boring times. And I’m not sure how anyone can be just how far we are from some kind of national breakup. I do believe that it’d pretty dangerous if half the country felt they did not have the possibility to gain political power via elections. Countries where the ruling party arrests and throws opposition leaders off the ballot are often quite stable … until they’re not.
Jose Pablo
Apr 21 2024 at 1:12pm
It is not “half” of the country and “they” have never been even close to “gaining political power through the democratic process“. Not even in 2016. They did try, though, in 2020, “gaining power through a non-democratic process”
“They” lost the popular vote by more than 7 million votes in 2020 (around 4.5% of the people actually voting) and by almost 3 million votes in 2016. (2.3% of people voting).
The only shot Trump has (and had) at the Presidency is due to the arcane system used in America to elect Presidents (why not use direct presidential elections like the rest of the world? … it is so much clearer and easy to understand! … even France abandoned electoral colleges in 1962!!)
If by “democratic” you mean “written in the Constitution”, so is too the provision that no person that after having previously taken an oath, as a member of Congress, or as an officer of the United States, or as a member of any State legislature, or as an executive or judicial officer of any State, to support the Constitution of the United States, shall have engaged in insurrection or rebellion against the same, or given aid or comfort to the enemies thereof can hold any office.
I mean …
Electing for President “Erdogan-like personalities” does no favor to American democracy. To any individual citizen no matter his political preferences.
Jim Glass
Apr 21 2024 at 11:50pm
The electorate identifies 27% Democrat, 27% Republican, 46% Independent according to the latest Gallup poll. Across the country governments everywhere at all levels are split pretty much that evenly overall. So exactly which *half the country* has no access to political power via elections? Please specify.
How about countries where a Party leader defrauds the banking system of $168 million, and when caught cries “I’m being persecuted!”, and his followers cry “You can’t apply the law to our guy, that’s persecution!”
I mean, when political mobs proclaim that their leader is above the law (anything else being “persecution”, QED), and their leader on losing the big election lies that he really won but the result was stolen, and his mobbed up followers proclaim “Yes!, Right!, True!” … how do those countries do?
MarkW
Apr 22 2024 at 9:06am
So exactly which *half the country* has no access to political power via elections? Please specify.
If states had been successful in their efforts to kick Trump off their 2024 ballots, we would have had exactly this scenario.
Jose Pablo
Apr 22 2024 at 2:23pm
If states had been successful in their efforts to kick Trump out of their 2024 ballots it would have been because the reason to kick him out was legally sound.
The provisions that prevent certain candidates from being on the ballot make sense (they are there for a democratically sound reason). What we should be asking ourselves is what are the benefits of having a Republican candidate that walks so close to the line (to say the least): the first American President to be indicted, dishonest, a liar, unfaithful (although this does seem to be a tradition among American presidents), populist and a demagogue to another level (even for a politician!)
It is not a “persecution” against “Republican candidates”. There have been 19 republican Presidents and none (none!) of them has been indicted. It is a persecution against a specific individual that either has a criminal behavior or something so close to it, that can be easily confounded with a criminal behavior.
The guy is the most unpresidential, unpresentable candidate that the Republican party has ever had. And a laughing stock out of the US (and inside).
What is the need?
Jim Glass
Apr 22 2024 at 10:24pm
“If…” 🙂
How many were? Oh, zero. Meanwhile, one party has the majority in the Senate, the other party has the majority in the House (albeit self-crippled from repeatedly being shot in the foot, leg and hip by the half of it following Trump’s masterful political instructions) and both parties have PLENTY of political power.
And *if* fish were beef, we’d all face the dangers of addiction to the keto-pescatarian diet.
Jim Glass
Apr 20 2024 at 9:02pm
Correct. And if he’d just paid her the hush money to keep quiet none of this would be happening. “Hey, baby, here’s a check/suitcase of cash for you. Enjoy.” No problem. Why didn’t he do that? What did he do instead? Why?
I’ll be generous and attribute this to emotional reasoning compounding ignorance. (If Bryan Caplan was still here he’d remind that emotional reasoning reduces IQ by 30 points.)
The ‘overvaluing’ was by as much as $2 billion total, individual assets by as much as 2,000%. That ain’t an accident. As for the banks being “highly sophisticated”, so is the Trump Organization. It has attorneys, CPAs, appraisers who knowingly prepared and signed these false valuation documents to deceive. And as they did that on the ‘up’ side, they simultaneously filed valuations of the very same properties for tax purposes on the ‘down’ side that were only a tiny fraction of the valuations used for borrowing. You approve? Its CFO has pleaded guilty to 17 counts of fraud and perjury, and is sitting in jail today. Do you imagine he pled guilty 17 times because he didn’t do anything wrong?
Correct again. We don’t take any client’s word for anything. I’ve been a NYC attorney for too many decades and for most of that time I’ve served as president or director of various real estate corporations. I’ve drafted these documents and also signed them for both sides of these deals.
We take the word not of the client, but of the client’s attorneys, CPAs and appraisers who sign documents clearly stating they do so “under penalty of perjury /fraud” — I mean, like on every other page — and who know if they actually commit fraud they can lose their professional licenses, be personally sued, and go to jail. So they take *not* committing fraud rather seriously. That’s who we trust. And they trust, us for the same reason.
Correct yet again! Fraud isn’t mere trickery. If you don’t report all your income to the IRS, and do claim too many deductions, that’s not fraud. Pull some hand-waving misdirection story in an audit and you might trick ’em. Good luck. But if you prepare false documents with intent to deceive, and pay a CPA who knows they are false to sign them, so he can swear for you in the audit that they are real, *that’s* fraud. If the IRS catches you, after your CPA pleas out to the crime (say: “Weisselberg”) he’ll lose his license and you can enjoy a criminal record too.
You seem to be imagining a world in which the norm is that “highly sophisticated” businesses assume that every other highly sophisticated business is trying to defraud them. That’s very dim. In that world every deal would need be preceded by mutual forensic audits. The economy would collapse. The need to avoid that world is exactly the reason why steep penalties for fraud exist.
In all my decades working with NYC real estate, I’ve never dealt with a firm that committed fraud, ever. In the real world, truly “highly sophisticated” firms don’t commit fraud. (And when another firm does to their cost, they may, in lieu of suing it directly, rat it out to the Attorney General. Call the cops. Hmmm…)
But Trump’s firm does commit fraud and you say that’s OK, it mustn’t be punished, because, well, committing fraud is OK, as it’s up for the other side to look out for itself! This may be some sort of paleo-libertarian ideal, but it sure ain’t economics. Or how to keep a business world functioning.
And it really doesn’t show much respect for honesty. But at least you didn’t make the very dimmest argument that some make, starting of course with Donald himself: “Fraud is a victimless crime”.
Pierre Lemieux
Apr 20 2024 at 10:06pm
Jim: I am not antipathic to your stance, but some of it must be qualified. For example, you write:
I don’t think I have ever read a libertarian, paleo or not, who argued that committing fraud is OK. Many would argue, though, that (1) fraud should not be just anything that the state has decided is fraud, and (2) there should be, for economic or philosophical reasons, or there is already as a matter of fact, much private enforcement of basic honesty rules. These are at least partly matters of economics. Have a look at Chapter 9 (“Conventions: Some thoughts on the economics of ordered anarchy”) of Anthony de Jasay’s Against Politics. I just reviewed the book at Econlib under the title “Princess Mathilde and the Immorality of Politics“–but reading the chapter just mentioned is better.
I do believe that Trump has been dishonest in the case you discuss (as in so many others), but the question remains of whether it could or should have been a private dispute or a government criminal matter. On the other hand, I am always surprised by the argument that since he repaid the loans, there has been no loss for his lenders. That ignores the concept of opportunity cost. If I lent you at 6% but would (and my competitors would) have lent you at 8% (or lent to somebody at that rate) if you had not lied about your collaterals, and you duly reimbursed me including the 6% interest, I still have lost 2% on the value of the loan.
Jim Glass
Apr 22 2024 at 11:04pm
Say the houses in your neighborhood all get burgled by a criminal gang. Does each homeowner sue the burglars individually and personally, or do they get together and go to the police?
Say the people in your neighborhood are scammed by an operator with deep pockets, top lawyers and a reputation of litigating-until-doomsday before admitting fault or paying a refund. Do your neighbors sue it individually, or go to whatever regulator in your jurisdiction polices the operator’s industry, and let it do the heavy lifting?
The “valuation” case isn’t criminal. There was a separate case in which the Trump Org was found to have committed 17 criminal acts of tax fraud. So many Trump Org cases, one needs a scorecard!
Of course. The judge found the lenders lost $168 million here. That’s a pretty real loss. Plus, Trump got loans via his false financials that the lenders said they would never have made to him if they’d known his real numbers. That sounds like fraud to me. Plus, “fraud is a victimless crime that shouldn’t be a real crime as long as everyone is repaid”, geeze, Bernie Madoff could’ve made that argument for 20 years.
Pierre Lemieux
Apr 23 2024 at 10:28am
Jim: Suppose that 99% of not only your neighbors but of the whole world have you believe some unexamined ideas. Will you get together and go to the police or will you try yourself by buying books on Amazon to see if there is something wrong with the conventional wisdom? For another way of thinking, and to see how your objections have been considered and (at least partly) countered, I recommend that you read de Jasay, as I previously said.
Pierre Lemieux
Apr 23 2024 at 10:32am
Jim: Or perhaps start with David Friedman’s Law’s Order, which is closer to your way of thinking. Then go to de Jasay. The only risk is that you change your mind at least on the methods you use to approach matters of fraud and “public goods.”
Pierre Lemieux
Apr 23 2024 at 10:50am
Jim: The gist of your argument around “That’s who we trust. And they trust, us for the same reason” is a very important point. This is one of the arguments with which Anthony de Jasay defends the private enforcement of contracts in ordered anarchy. Read the short (less than 20 pages) chapter 9 of his Against Politics.
Komori
Apr 20 2024 at 1:53pm
Just a note, but Trump is under a rather unusual (and very broad) gag order with regards to the hush money case. His comment about “let you know in two months” is because he literally cannot comment on it now without getting hit with additional penalties.
Pierre Lemieux
Apr 20 2024 at 3:06pm
Komori: I thought about that and it is not totally implausible. But it is largely implausible. (As implausible as the claim that the election was rigged under his watch in 2000!) As far as I know, what Trump is forbidden to do is to attack or harass individual jurors. In answer to the question (it would be nice to know exactly what it was), he could have repeated what his lawyers (and himself, if I am not mistaken) said before, that an impartial jury cannot be found in Manhattan, or that its choice was conducted fairly given that fact, or that it looked like an unfair jury; or of course, he could have uttered nothing especially if he does realize (late realism) that his fate is in the hands of this jury. But didn’t he recently say that to be jailed would be an honor?
Pierre Lemieux
Apr 20 2024 at 3:45pm
Komori: The orders of Judge Merchan are (of course) publicly available. You can find the second one (the previous one, I understand, dealt with Trump’s attacks on court personnel and their families) at https://www.nycourts.gov/LegacyPDFS/press/PDFs/Clarification-OrderRestrictingES.pdf. The order prohibits Trump from
It concerns particular jurors, not the jury. It seems to be only unusual in the sense that defendants don’t usually attack individual court employees or participants and their families. If you read it, I think you will agree that it aims at preventing intimidation (which is one of Trump’s specialties).
Walt
Apr 20 2024 at 2:11pm
The grotesque penalties in the E.Jean Carroll case indicate the political bias of New York City juries , a city where 90% voted against Trump. Add to that that prospective jurors in this legally ridiculous case ( two seated but later dropped) were shown to have lied about their bias—one having been previously arrested for vandalizing Republican lawn signs and one for having posted “Lock him up” on Twitter. IOW, it’s not crazy to wonder about the fairness and objectivity of this or any NYC jury.
Pierre Lemieux
Apr 20 2024 at 4:06pm
I sometimes feel sad for this poor Trump. As a populist ruler, he believes (confusedly, for sure) that he embodies “the people.” (See my article “The Impossibility of Populism,” Independent Review, Summer 2021.) So how can it be that he is prosecuted by “THE PEOPLE OF THE STATE OF NEW YORK”? See the frequent references to “the People” in Judge Merchan’s latest order. Trump is the people. Any adherent to methodological individualism knows that “the people” does not exist, but such a statement would be, for Trump, like saying that, say, real estate does not exist.
Craig
Apr 20 2024 at 4:55pm
“I sometimes feel sad for this poor Trump.”
Always remember ‘all politicians are expendable’
You can take that to the bank!
David Henderson
Apr 20 2024 at 10:45pm
See my longer response here: https://www.econlib.org/there-are-degrees-of-disavowal/
Jim Glass
Apr 21 2024 at 1:03am
Well, let’s look a the court decision, it is a public document….
That’s $168 million the lenders lost in that one paragraph. There are 92 pages of this.
So the answer is, yes. The lenders were defrauded and they lost a lot of money.
JoeF
Apr 22 2024 at 8:59am
I miss the old nerdy EconLog that was about economics.
Monte
Apr 22 2024 at 10:38am
A moment of silence out or respect for this comment.
Pierre Lemieux
Apr 22 2024 at 4:44pm
JoeF: Analyzing the behavior of politicians and its consequences is part of economics. It was an important part of classical political economy and it is a crucial part of public choice economics, itself an important part of economics for more than half a century. And note that nobody, even an economist, can make policy proposals or pronouncements without making value judgments.