Category Archives: Public Policy and Governance

Markets And The Rule Of Law

I talk a lot about the rule of law–mostly in the context of ensuring fair play and civil peace. But as a recent essay by Catherine Rampell reminds us, the rule of law is also essential to the operation of a market economy.

A country that protects property rights; that has free capital markets; that has a stable and predictable regulatory regime; where all citizens are equal before the law; where individuals don’t fear being expropriated by the state without cause; and where private contracts can be enforced regardless of political connections is generally a better place to do business. All these features are among the reasons the United States has long been the richest country on earth. It’s also why we have attracted so much foreign capital.

When property rights aren’t protected and the justice system operates to reward friends and punish enemies, doing business is harder. People don’t have the certainty they need to invest here, or study here, or start businesses here.

Rampell is absolutely correct. Economic experts have long emphasized the importance of the rule of law to market performance. Predictability is particularly significant–it allows businesses to plan, invest and price goods with reasonable certainty that everything won’t go south without warning.

Even more important is the enforcement function. A reliable and impartial legal structure allows confidence that contracts will be enforced in accordance with their terms. When a business owner cannot rely on the courts to enforce agreements and laws mandating fair economic play, like anti-trust, companies end up depending on personal relationships– family networks, political influence, or bribery-based “arrangements”– which are both far less predictable and far less fair. (Can we spell Russia?)

Then there’s the protection that rule of law regimes provide for property rights. Critics of capitalism tend to dismiss the importance of that protection, but it is critical to the operation of the economy. Investment only occurs when ownership is secure–when clear legal title allows business-people to buy, sell, collateralize and insure property. When any property can be arbitrarily seized (either by the state or by powerful actors), capital investment gives way to defensive hoarding.

Numerous economists will also point out that the ability to rely on a fair and impartial legal system lowers transaction costs and makes markets more efficient. Rule of law systems with standardized rules reduce the need for expensive private enforcement, constant renegotiation, or the excessive premiums necessitated by increased risk. As an economist friend once told me, the rule of law obviates the need for private militias, political patrons, or corrupt intermediaries. 

 Bottom line: the rule of law makes markets cheaper to operate, and it should go without saying that lower transaction costs benefit consumers–a lesson we’re re-learning as Trump’s tariffs increase those transaction costs.

One of the most worrisome aspects of the kakistocracy we increasingly inhabit is the steady erosion of genuine market capitalism and its replacement by what is sometimes called corporatism, or crony capitalism. When power replaces the rule of law, markets devolve into corruption, uncertainty, capital flight, and monopoly power.

What defenders of capitalism often misunderstand is that markets can’t operate properly in the absence of regulation. Antitrust law, bankruptcy law, and anti-corruption laws prevent powerful folks and insiders from rigging the marketplace. Sound laws and regulations ensure that investments will flow to firms that are seen as productive, rather than to firms that are politically connected. Crony capitalism suppresses productivity and innovation.

A market economy is not self-sustaining without an adequate rule of law.

I consider myself a capitalist. I’m a fan of market economics, and accordingly, I recognize the importance of the rule of law to the proper operation of those markets. But I also understand that there are functions that markets cannot perform. Economists talk about “market failures” that require government intervention, but the simpler explanation is that, in any society, there are functions that require collective rather than competitive action. 

Government is our mechanism for those collective activities, for providing the physical and social infrastructure within which markets can operate and people can pursue their individual life goals. The rule of law is an essential part of that infrastructure.

The thorny issue that underlies our most important policy debates is identifying which goods should be provided collectively by government and which should be left to the market. (If we’ve learned anything from the failures of “privatization ideology,” it is that things like education and health care are not consumer goods.)

Tomorrow, I’ll consider that fundamental question…

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Harnessing Hate Only Goes So Far

When the Electoral College installed Trump in the Oval Office in 2016–allowing Red states to overrule his loss by some three million votes cast largely by voters in Blue ones–it seemed clear to me that his appeal rested largely on his willingness to abandon “dog whistles” for out-and-proud bigotry. The people who had been appalled by the presence of a Black man in the White House applauded Trump for “telling it like it is”–and took his “candor” for permission to express sentiments that “political correctness” had  suppressed.

Those of us who immediately made that connection ran up against the protests of (far nicer) folks who wanted to attribute Trump’s electoral success to economic distress, or other, more typical political reasons, but by the end of his first term, political science research had largely confirmed that “racial resentment” motivated most votes for Donald Trump.

 By the conclusion of 2025, the first year of Trump’s second term–there was no longer room for doubt.

As an article in Lincoln Square recently put it, overt racism and antisemitism are the defining features of what is now Trump’s  GOP.  That article listed several examples, but the one that managed to astonish me was language included in the administration’s recently published National Security Strategy.

That document said, among other things, that the NATO treaty was signed with Europe when Europe was overwhelmingly white, and that since immigration has changed the continent, the NATO treaty might no longer be valid. The strategy joined naked racism to a pro-Putin approach to Europe and appalled the entire foreign policy establishment. The publication of the strategy shined a bright new light on the ugly bigotry that had been in plain sight all along. A few weeks later, at a meeting of Turning Point USA, J.D. Vance gave a speech where he invited Nazis, Groypers, and other hate-groups into the administration’s political coalition.

I’ve previously reported on the administration’s numerous domestic efforts to turn back the clock to a time when racism and misogyny were considered “normal” and “Christian,” and I won’t repeat that litany here. Suffice it to say that most sane Americans (a somewhat smaller percentage than I’d previously. hoped, but still a majority) are now fully aware that continued support for MAGA and Trump is grounded in hate of the “Other.” 

As that awareness has grown, comparisons with Nazi Germany have also proliferated–but increasingly, with an interesting twist. Historians and pundits who previously highlighted the measures that allowed Hitler to come to power have begun focusing on the decisions that ultimately defeated him. 

I no longer recall where I read this, but one historian has pointed to a fatal error in judgment: as the tide on the battlefields was turning against Germany, the Nazis increasingly deployed their scarce strategic resources toward the destruction of the Jews. Trains that could have moved troops, for example, were used instead to deliver human beings to death camps.

The parallel is instructive.

To the best of our knowledge, Trump, Miller, et al aren’t yet establishing death camps, but they are creating horrific “holding areas” like Alligator Alcatraz, throwing humans in foreign dungeons in places like El Salvador, and spending enormous amounts unleashing ICE thugs on Americans who don’t present as lily-white.  The administration is redoubling efforts to re-legalize discrimination against women and minorities, and increasingly engaging in language demeaning those who aren’t White Christian males. Their hatreds consume them.

As the linked article noted, the administration is ramping up its cruelest race-based policies at the very moment when the forces of resistance are turning the tide.

At a time when majorities of Americans are deeply opposed to all of this–a time when polling and survey research confirm that Trump and MAGA are deeply unpopular, a time when millions of citizens keep taking to the streets in protest and Republicans have been losing election after election–the Trump administration is doubling down on the bigotry, cruelty and stupidity that have powered the resistance and been responsible for their plunging approval ratings.

I am increasingly convinced that we are at an important turning point–that 2025 was the low, and that 2026 will see the growth of a resistance that not only takes advantage of the daily missteps of a monumentally inept administration, but that –especially–rebels massively against the bigotries that fuel Trump and MAGA.

A number of pundits scorn those of us who insist that “America is better than this.” But we are better than this–and I am increasingly convinced that this is the year we will prove it.

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As I’ve Been Saying…

During a recent discussion with my two nephews–who, while living on opposite coasts, have somehow, shockingly, become middle-aged adults–one of them offered an observation that built on and combined two aspects of the MAGA movement that I have (separately) noted on this platform: racism and victimhood.

My nephew agreed with a recent quote by Sherrilyn Ifill, a law professor at Howard University, who opined that MAGA “is fueled by white supremacist ideology. That is the seductive messaging through which so many have been lured into participating in this national betrayal.” But he also attributed Trump’s appeal to the grievances of people whose lives haven’t met their desires or expectations, and who–rather than taking responsibility for that failure–prefer to see themselves as victims of nefarious “others.” 

The characteristics of those two groups are–rather obviously– closely allied, so the Trump administration’s efforts to roll back efforts to promote civic equality panders to both. It shouldn’t come as a surprise that, as Trump’s approval ratings have continued to tank, those efforts have accelerated.

Recently, Talking Points Memo described the methods the administration is employing to resegregate the workforce.The report began by citing the data: when Trump took office in January 2025, unemployment was at 4 percent overall, and at 5.3 percent for Black workers. In November, the total unemployment rate was 4.6 percent, and the Black unemployment rate had soared to 8.3 percent.

One contributing factor is Trump’s mass firings of federal employees. Black people disproportionately work in the public sector, representing nearly 19 percent of the federal workforce compared to 13 percent of the civilian workforce. And they have been disproportionately impacted by Trump’s purges: Analyses by ProPublica and The New York Times found that the administration conducted its steepest staff cuts at the agencies with the most nonwhite and women workers, like the Department of Education and the U.S. Agency for International Development.

But the federal layoffs offer only a partial explanation. What the data is beginning to reveal is the devastating cumulative effects of the Trump administration’s policies for workers of color.

The article goes on to make explicit a connection that even my graduate students tended to miss: the very real–and often immediate– impact of government’s largely unnoticed structural and regulatory changes on the day-to-day prospects of citizens.

Among other things, changes in seemingly arcane rules can change the racial composition of the workforce.

For example, among Trump’s blizzard of Executive Orders are several that  characterize longstanding, Johnson-era affirmative action mandates as “illegal DEI”  (his administration’s disfavored diversity, equity, and inclusion initiatives). Instead of requiring companies to affirm that their employment policies are non-discriminatory, and that they have taken “affirmative action” to eliminate bias from their recruitment efforts, Trump is requiring them to certify that they are not “promoting DEI.” The administration didn’t bother to define the term, “effectively discouraging companies that want to keep their government contracts from engaging in any activity that could conceivably be characterized as DEI. For reference, to date, the things the administration has decried as DEI include the Calibri font and indoor plumbing in Black neighborhoods.”

As I reported a few days ago, the Trump administration continues to dismantle longstanding legal doctrines that allow people to challenge discrimination in the workplace. As I explained, disparate impact allowed courts to recognize the reality that even policies that are neutral on their face can have a discriminatory impact, and that intentional discrimination is often hard to prove. For some 50 years, litigants have been able to prevail in discrimination lawsuits by demonstrating the real-world disproportionate effects of a particular rule or practice that doesn’t serve a necessary purpose. 

The numerous structural changes intended to shield discriminatory motives and actions haven’t been confined to doctrinal matters. The administration has also pulled back the enforcement of anti-domestic-terrorism projects–efforts that had largely focused on the White nationalist and neo-Nazi groups responsible for the majority of domestic terrorism assaults. 

The Guardian reports that the FBI has openly rerouted resources away from investigations of far-right extremists, including one called “the Base” which recruits through a Russian email and is now apparently free to pursue its “stated objective of fomenting an armed insurgency against the US government.”

As Talking Points Memo notes, these policies and several others work in tandem, making it is harder for people of color to enter the workforce and harder for them to remain there. If they are victimized by illegal discrimination, it’s now harder for them to do anything about it. 

On the other hand, it’s much easier to be a neo-Nazi terrorist.

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A Lunatic Goes To Venezuela

Where to start?

Trump’s defenses of the assault on Venezuela have been as incoherent as most of his actions. Granted, Maduro was a very bad man–but if being a very bad man justified his kidnapping by a foreign power, leaders of other countries might justifiably kidnap Trump.

More to the point, if there were sound reasons to take these actions, those reasons should have been shared with Congress, and Congress–not our would-be king–should have authorized them. Instead, as several members of that body have attested, the administration did not consult them. Worse, it out-and-out lied, assuring the appropriate committees that the administration’s previous actions (including bombings of small boats) were not in pursuit of regime change.

Indeed, the administration defended those illegal bombings, which were clearly war crimes, as part of an effort to halt drug shipments and deter “narco-terrorists.” Trump’s pardon of a major narcotics kingpin–who had been tried and found guilty of transporting massive amounts of drugs into the U.S. and sentenced to 45 years for those crimes–illustrated the extent to which that excuse was a hypocritical lie.

Call me naive, but I see very little difference between Trump’s invasion of Venezuela and Putin’s invasion of Ukraine–especially in light of Trump’s announcement that America will now “run” Venezuela, a country that (I’m sure co-incidentally) has the world’s largest reserves of oil. (That “coincidentally” was snark…) Trump is on record saying America should have appropriated Iraq’s oil when we launched an unjustified war on that country (you will recall that it was Saudis who brought down the twin towers). On Saturday, NBC reported that the U.S. will tap Venezuela’s oil reserves, and The Hill reported Trump’s assertion that we will be “very strongly involved’ in Venezuelan oil. A video posted to Instagram showed Trump announcing that he is sending American oil companies to Venezuela to “help them” upgrade their facilities…

The announcement that America will be “managing” Venezuela smacks of colonialism, which fits MAGA’s clear preference for returning us to the 18th Century. Colonial powers claimed a right—and duty—to govern others because those others were less competent–or “civilized” (i.e. White).

The international implications of this Wag the Dog effort are likely to be profound. The administration has arguably violated the United Nations Charter, which prohibits the use of force against sovereign states without Security Council authorization or a clear self-defense rationale. The Secretary-General of the U.N., António Guterres, has warned that the action sets a “dangerous precedent” for future use of force, and further weakens important post-World War II norms. Rather obviously, if the U.S. can act with impunity and without any obvious justification, other major powers like China or Russia become more likely to cite those actions to justify their own uses of force (e.g., around Taiwan or Eastern Europe), further undermining the already tenuous  international legal order.

It is highly unlikely that the incompetents in Trump’s government understand–or are prepared for– potential negative consequences of this lawless act–including escalation of civil unrest by loyalists within Venezuela and/or regional destabilization due to spillover into neighboring countries. Renewed fighting could also spur another surge in migration from Venezuela, exacerbating humanitarian and border pressures on neighboring states like Colombia and Brazil.

Needless to say, this latest example of Trump’s erratic, impulsive and unilateral behavior–not to mention the corresponding lack of legislative restraints– has deepened the already well-founded concerns of our allies, whose confidence in America’s stability and reliability has taken a huge hit since Trump’s election. That loss of confidence and respect have demonstrably weaken­ed our ability to rely on diplomatic cooperation.

In an embarrassing speech on Saturday (I mention the day so that you will know which speech I’m citing, because all Trump’s speeches are embarrassing), Trump stuck for once to the teleprompter, engaging in a halting, low-energy reading of words he clearly had neither written nor reviewed, and several of which he obviously didn’t understand. Among those was his invocation of the Monroe Doctrine, which he’s evidently been told justifies American dominance of Latin America. Trump evidently believes the doctrine is sufficient to turn intervention into “stewardship” and colonialism into security policy.

It will be interesting to see how this latest dangerous buffoonery plays with the public. A quick-and-dirty poll found 17% approving of the invasion (but only 11% agreeing that Trump could take this action without Congressional approval). MAGA folks who had been attracted by his promises of isolationism and “taking America out of wars” are furious.

That said, the political strategy was transparent–for the past couple of days, no one’s been talking about the Epstein files…

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The Utility Of “Antifa”

Lincoln Square features some of the most acute commentators I read, and I found one recent essay really profound. I will quote several observations, but I encourage you to click through and read the entire thing.

The author, Kristoffer Ealy, began by describing his reaction to a clip from C-Span, in which FBI Security Operations Director Michael Glasheen  testified that antifa represents a major domestic threat.  Congressman Benny Thompson allowed Glasheen to “fully commit” to that assertion, before asking him a series of questions: where is antifa is based? Who leads antifa? Where is its central location? Of course, these are questions that Glasheen couldn’t answer, because–as most informed Americans know–antifa simply means “anti-fascist.”

Antifa isn’t an organization–it’s a political point of view.

As Ealy points out, what made this exchange so embarrassing is the fact that, on paper, Glasheen isn’t a clown like Kash Patel, “whose entire public persona is built on grievance cosplay and unearned confidence.”  Glasheen joined the FBI in 2001, and he knows how the agency is supposed to identify and document real threats.

Which is precisely the problem. This wasn’t ignorance speaking. It was acquiescence. A conscious decision to launder a political narrative through the credibility of a badge and a résumé, because in Trump world, repeating the story matters more than whether it’s true…This man is the fucking FBI Security Operations Director, and that title should come with a baseline expectation that he understands what words like “organization,” “leadership,” and “structure” actually mean…

That is Trump administration 2.0 in a nutshell: absolute confidence paired with complete incoherence. Serious authority chasing imaginary threats while refusing to name the real ones.

In Trump world, words like “antifa” and “woke” function as formless racist dog whistles– useful precisely because they can’t be located, described or inspected.

And because [antifa] has no fixed shape, no formal structure, and no identifiable center, it becomes a catch-all that can absorb whoever is already on the margins: immigrants, protesters, students, journalists, Black activists, LGBTQ people — basically anyone who makes certain people uncomfortable. That isn’t a coincidence. That’s the utility.

These endlessly useful abstractions are examples of what scholars define as Moral Panic Theory: a strategy in which political figures exaggerate or invent threats with the intention of creating enough fear to justify expanded uses of power.

The threat doesn’t need to be real; it needs to feel urgent. History is full of examples — crime waves that don’t exist, satanic cults hiding in plain sight, caravans that mysteriously disappear after elections. Moral panics work because fear lowers the standard of evidence….

Symbolic threats don’t endanger your physical safety; they threaten your sense of identity. They’re framed as attacks on “who we are,” not on anything that can be measured, tracked, or responded to by people doing actual work. That’s why the danger always feels enormous and urgent, while remaining conveniently vague. The threat is emotional, not operational — which is perfect, because you can’t SWAT-team a feeling, but you can scare people into voting over one.

Ealy is absolutely correct– this is how the warnings about “antifa” are intended to function. Antifa is a symbol meant to trigger “anxieties about social change, racial reckoning, generational shifts, and cultural discomfort.” When the enemy is indistinct and unformed, that enemy can be whoever the moment calls for.

This isn’t simply stupidity. It’s strategy. Amorphous enemies allow governments to police thought instead of behavior. They shift power away from proving harm and toward punishing suspicion, and that’s the part we should be wary of — not because it’s dramatic, but because it’s effective.

This dynamic is what political theorist Timothy Snyder warned about in his frequently-cited book “On Tyranny,.” It explains how authoritarian regimes get people to “obey in advance.” Such regimes use the Moral Panic strategy because it results in fearful people who actually know better complying reflexively.

That’s why Trump deploys federal agents theatrically. Why immigration enforcement becomes spectacle. Why entire communities are treated as suspect. That’s why Trump can casually revive language like “shithole” and know exactly what permission structure he’s creating.

As the essay concludes,

The only genuinely surprising thing about the exchange is that it took this long for someone to ask the obvious questions Thompson asked. Antifa is not the KKK, the Proud Boys, or neo-Nazis. Those groups have leaders, structures, recruitment pipelines, and documented violence. You can investigate them because they exist.

Policing an invisible organization is MAGA’s roundabout way of policing thought. And when fear governs, democracy doesn’t last long after that.

It’s really worth clicking through and reading the essay in its entirety.

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