The country has entered a dangerous period. The president-elect is the least qualified man to ever hold high office. He also operated the least transparent campaign of the modern era. He gave succor and voice to bigoted elements on a scale not seen in two generations. He openly praised dictators — not as allies but as dictators — and threatened to use the powers of his office to discipline the media.
He also has a long history of corrupt behavior, and his business holdings pose staggering conflicts of interest that are exacerbated by his lack of financial disclosure. But while most journalists and members of the opposition party think they understand the threat of Trump-era corruption, they are in fact drastically underestimating it. When we talk about corruption in the modern United States, we have in mind what Andrei Shleifer and Robert Vishny define as “the sale by government officials of government property for personal gain.”
This is the classic worry about campaign contributions or revolving doors — the fear that wealthy interests can give money to public officials and in exchange receive favorable treatment from the political system. But in a classic essay on “The Concept of Systemic Corruption in American History,” the economist John Joseph Wallis reminds us that in the Revolutionary Era and during the founding of the republic, Americans worried about something different. Not the venal corruption we are accustomed to thinking about, but what he calls systemic corruption. He writes that 18th-century thinkers “worried much more that the king and his ministers were manipulating grants of economic privileges to secure political support for a corrupt and unconstitutional usurpation of government powers.”
We are used to corruption in which the rich buy political favor. What we need to learn to fear is corruption in which political favor becomes the primary driver of economic success.
Many American administrations have featured acts of venal corruption, and Trump’s will likely feature more than most. The larger risk, however, is that Trump’s lack of grounding in ideological principles or party networks will create a systemically corrupt government. Such governments, Wallis writes, “are rent creating, not rent seeking, governments” that operate by “limiting access to markets and resources in order to create rents that bind the interests of the ruling coalition together.”
This is how Vladimir Putin governs Russia, and how the Mubarak/Sisi regime rules Egypt. To be a successful businessman in a systemically corrupt regime and to be a close supporter of the regime are one and the same thing.
Those who support the regime will receive favorable treatment from regulators, and those who oppose it will not. Because businesses do business with each other, the network becomes self-reinforcing. Regime-friendly banks receive a light regulatory touch while their rivals are crushed. In exchange, they offer friendly lending terms to regime-friendly businesses while choking capital to rivals. Such a system, once in place, is extremely difficult to dislodge precisely because, unlike a fascist or communist regime, it is glued together by no ideology beyond basic human greed, insecurity, and love of family.
All is not lost, but the situation is genuinely quite grave. As attention focuses on transition gossip and congressional machinations, it’s important not to let our eyes off the ball. It is entirely possible that eight years from now we’ll be looking at an entrenched kleptocracy preparing to install a chosen successor whose only real mission is to preserve the web of parasitical oligarchy that has replaced the federal government as we know it. One can, of course, always hope that the worst does not come to pass. But hope is not a plan. And while the impulse to “wait and see” what really happens is understandable, the cold, hard reality is that the most crucial decisions will be the early ones.
Trump’s first 100 days could also be the last 100 days in which America’s system of republican government can be saved.
The risk of Trumpism
As Tyler Cowen wrote several months ago, “If there were a President who wished to pursue vendettas, the regulatory state would be the most direct and simplest way for him or her to do so. The usual presumption of ‘innocent until proven guilty’ does not hold in many regulatory matters, nor are there always the usual protections of due process.”
And Trump is certainly a vengeful man. As he wrote in his 2007 book, Think Big And Kick Ass, “When someone intentionally harms you or your reputation, how do you react? I strike back, doing the same thing to them only ten times worse.”
Trump is not going to crush the free media in one fell swoop. But big corporate media does face enough regulatory matters that even a single exemplary case would suffice to induce large-scale self-censorship. AT&T, for example, is currently seeking permission from antitrust authorities to buy Time Warner — permission that Time Warner executives might plausible fear is contingent on Trump believing that CNN has covered him “fairly.” A Federal Trade Commission investigation charging Amazon with predatory pricing would be viewed favorably by many competing retailers, but would also be seen in other quarters as Trump making good on his promise to punish Jeff Bezos for critical coverage in the Washington Post.
Independent media is less vulnerable to this tactic but more vulnerable to financial damage via harassing lawsuits — lawsuits that Trump could mount personally or perhaps have subsidized by his friend Peter Thiel or other big business allies.
Even more pointedly, racist and anti-Semitic harassment of journalists by white nationalist Twitter users operating under the banner of Trumpism has already become a daily fact of life. So has “doxxing” — the publication of addresses and phone numbers — of Trump critics. The anti-Semitic propaganda that was mailed to Vox contributor Lee Drutman also made its way to the homes of several other Jewish Vox writers, including me, as well as to my upstairs neighbor, also Jewish, who is an editor at a different news organization.
The vast majority of these harassers are almost certainly numbskull teenagers, bored office drones, or all-around nutters who would never act on their threats. But it would only take the murder of a single opposition activist or journalist to chill dozens of others.
The risk is not that Trump becomes a dictator, but that civil society simply withers and dies. We all like to think we would stand up and do the right thing under difficult circumstances. But to be honest with ourselves, we are all susceptible to the push and pull of fear and greed — especially those of us with spouses and families to think of. A suborned regulatory state could easily quiet mass media criticism, defund opposition activity, and enrich politically friendly actors.
The Brookings Institution’s Federica Saini Fasanotti and many other Italian experts have drawn the parallels between Trump and Silvio Berlusconi, who, in the end, wrecked the country. Under his rule, “bad fiscal policy and the absence of (promised, and much-needed) reforms paralyzed the country, leaving it worse off than when he started.”
The crucial difference is that Berlusconi’s Italy was a full member of the European Union, with many critical economic policy decisions made in Brussels, its citizens protected by the European Court of Human Rights, and Angela Merkel and the European Central Bank eventually able to bully the Italian parliament into booting him from office. If Merkel could somehow induce Congress to dump Trump in favor of Mike Pence, she almost surely would — but this is the United States of America, and nobody can save us from ourselves.
It’s worse than people realize
Early media reports on the conflicts of interest inherent in Trump’s dual roles as a business titan and a president are showing a lack of imagination about exactly how bad things can get.
Eric Lipton and Susanne Craig of the New York Times, for example, note that President Trump “will oversee the National Labor Relations Board while it decides union disputes involving any of his hotels.”
Realistically, Trump and any owner of just about any business could expect anti-union rulings from any Republican president’s NLRB. Besides which, this is just an unusually close loop of an ordinary form of venal corruption — rich business people may use their influence to purchase anti-labor policy concessions from the government.
The risk under Trump is of a systemically corrupt NLRB that will selectively not crush unions that have leadership willing to abandon principles and offer political support to Trump. Those that resist will be crushed, but those that collaborate could conceivably share in the money stream that will flow from the government to Trump-controlled enterprises.
Right now, Facebook is belatedly taking an interest in the problem of fake news on its platform. But it’s easy to imagine a year from now Mark Zuckerberg realizing that it’s in his interest to ensure that Facebook’s opaque algorithm treats pro-Trump propaganda sites “fairly” in order to ensure that US trade negotiators and financial regulators treat Facebook “fairly.”
Rob Pegoraro, reporting for USA Today from a conference for technology startups, writes that “first there was shock” at the election result, and then “the inevitable search for an upside.”
It will not take very long for venture capitalists to realize that one good way to maximize the “upside” possibilities for the companies they own in the age of Trump would be to sell an equity share at a discount rate to a partnership controlled by the Trump family. Nobody except Eric, Ivanka, and Don Jr. would need to know that the Trumps are now silent partners in Startup X, Y, or Z. But it would be an easy and relatively cheap way to ensure favorable regulatory treatment.
Of course, the loot won’t flow exclusively into the pockets of the Trump family. Everyone will come to understand that you also need to hire a brother or cousin or son of the key regulators themselves to make sure that everyone is taken care of. Back in the 1970s and ’80s when the New York construction industry was mobbed up, Trump did deals with the mafia and understands how it works.
Commitment to ideological principles normally serves as a form of restraint on a presidential administration — there are some deals a Barack Obama or George W. Bush simply wouldn’t cut. But Trump has no particular ideological fixed points, and has time and again showed his willingness to be creative and make up new policy positions or rationalizations for old ones on the fly.
As Anthony Scaramucci, who got rich peddling terrible investment products with sleazy sales pitches before becoming one of Trump’s biggest fans on Wall Street, wrote at the Financial Times, “Trump is a different type of leader not burdened by rigid ideology.”
He will be free to operate in a much more opportunistic manner than recent presidents, rewarding friends and supporters and punishing foes without regard to logic or consistency. Kleptocratic government and autocratic government will serve as mutually reinforcing tendencies — businesses that align with Trump will prosper while those that do not will fail, creating a compromised business-political elite that cannot afford to lose power.
It would, obviously, take years to fully suborn the bureaucracy; it is full of career professionals who have their own principles and values. But Trump will have years. Most incumbent presidents are reelected, and a president who’s willing to cast professionalism to the wind and install a partisan Federal Reserve can all but guarantee a temporary economic boom calculated to ensure a second term.
A shameless president
Past presidents have been restrained from behaving in such a manner by institutional checks and balances that are eroding under the pressure of rising partisan polarization.
But most of all, past presidents have simply been restrained by restraint. By a belief that there are certain things one simply cannot try or do. Yet Trump has repeatedly triumphed in circumstances that most predicted were impossible. As Ezra Klein has written, he operates entirely without shame:
It's easy to underestimate how important shame is in American politics. But shame is our most powerful restraint on politicians who would find success through demagoguery. Most people feel shame when they're exposed as liars, when they're seen as uninformed, when their behavior is thought cruel, when respected figures in their party condemn their actions, when experts dismiss their proposals, when they are mocked and booed and protested.
Trump doesn't. He has the reality television star's ability to operate entirely without shame, and that permits him to operate entirely without restraint. It is the single scariest facet of his personality. It is the one that allows him to go where others won't, to say what others can't, to do what others wouldn't.
Trump lives by the reality television trope that he's not here to make friends. But the reason reality television villains always say they're not there to make friends is because it sets them apart, makes them unpredictable and fun to watch. "I'm not here to make friends" is another way of saying, "I'm not bound by the social conventions of normal people." The rest of us are here to make friends, and it makes us boring, gentle, kind.
Trump does not care if normally conservative newspapers’ editorial pages denounce him, if media fact-checkers slam him, if GOP operatives furiously tweet against him, or anything else.
He cares about hard, objective obstacles. And that’s where hope lies.
America must insist on qualified appointees with integrity
Eight years ago, absolutely everyone in Washington thought that Tom Daschle was going to be the next secretary of health and human services. He had close ties to the president-elect via their shared senate chief of staff, Pete Rouse. As a former senator, he was well-regarded on both sides of the aisle. He was knowledgeable about health policy as a senator, and deeply immersed himself in the issue in his post-Senate years, writing a book on health reform. Both progressive groups pushing universal coverage and industry groups anxious about the details knew him and trusted him.
But when Daschle turned his tax returns over to the vetting team, a number of problems emerged — most notably that a business associate had loaned him the use of a car and driver that had not been reported as taxable income.
After a bit of controversy and criticism from both sides of the aisle, Daschle withdrew his name from consideration.
It was a bit of a shame. Kathleen Sebelius, who took the job instead, was a fine HHS secretary. But a former governor of Kansas simply couldn’t play the same role on Capitol Hill that a former Senate majority leader could have. And though Democrats eventually steered the Affordable Care Act into passage, it was a very long, messy process that conceivably could have been improved had a Daschle-like figure been at hand.
That said, the principle at work was that members of the Cabinet should be people of high integrity. Daschle forgetting (or “forgetting”) to treat a loaner car from a business partner in the influence-peddling game as taxable income was not the biggest deal in the world. But it was sleazy, and running a low-sleaze administration is a worthy goal.
And it’s a goal that senators should insist on in the age of Trump. Between the 48 Democrats and the dozen or so Republicans who said they weren’t going to vote for him, a supermajority of senators are aware that Trump is not an especially trustworthy or high-character individual. More remarkably, one of the senators who did vote for Trump publicly called him a “con man.” Another called him a “pathological liar.” One assumes there are a few more out there who swallowed private doubts in the interest of beating Hillary Clinton.
Whatever the precise details, the point is that a critical mass of Republican senators has given us reason to believe that they understand Trump appointees need to be held to an unusually high bar for qualification and integrity — not an unusually low one.
The Senate will have to take a stand
Thus far, Trump has hired two people. One, Reince Priebus, is well-liked by Republicans but not really qualified to be chief of staff. The other, Steve Bannon, ran a website that trafficked in racism and anti-Semitism and before that was involved with a sleazy nasal spray business.
For his Cabinet and his independent regulatory agencies, Trump should be held to a higher standard than that. Obama’s top-tier Cabinet posts included a secretary of state who ran against him in the primary, a secretary of defense who was a lifelong Republican, and a Treasury secretary who was a largely apolitical technocrat. Attempting to hold Trump to that bar of independence and integrity may sound like a fool’s errand. But it’s of course precisely because Trump does not seem like the kind of high-minded individual who would value independence and integrity in public officials that the Senate must insist on it.
Even with an absolutely first-rate group of Senate-confirmable executive branch appointees, the practical problems with having elected a president with no knowledge of or interest in public policy will be considerable.
But if Trump is allowed to stack the Cabinet with yes men, cronies, and sycophants, then the danger becomes severe.
The main thing that people already tapped for key administration jobs — Steve Bannon, Michael Flynn, Jeff Sessions — have in common is that they backed Trump. We cannot allow personal loyalty to Donald Trump to be the decisive factor in staffing the executive branch. Personnel is policy, and if fealty to Trump determines the personnel, then fealty to Trump will also be the policy.
I don’t want to live in a world where personal loyalty to Donald Trump is the sine qua non of every policy decision. And my guess is that if they think about it, neither do Marco Rubio or Ted Cruz or Lisa Murkowski or any number of other Republicans from outside the Trumposphere who will be inevitably ground down if he is able to make his will prevail.
Above all, senators from both parties who know in their hearts that we are living through a dangerous moment need to avoid falling prey to wishful thinking. Because Trump is a vengeful and irrational man, picking a fight with him over an SEC commissioner or an assistant attorney general feels unpleasant, and many would simply rather duck the issue. But that vengeful and irrational nature is precisely why the fights must be picked and must be picked now.