Economics And The Rule Of Law

One of the multiple failures of the not-very-bright people who are currently running/ruining our government is their inability to connect the dots, to understand that when they set out to undermine X, the consequences of that assault aren’t just limited to X. We live in a complex and interrelated world, and failure to understand those complexities can lead to unanticipated damage.

The Trump administration consistently displays enormous ignorance of the way the world actually works. That ignorance–that disdain for pesky things like expertise and evidence–is particularly evident in Trump’s approach to economic policy. It isn’t just his insane belief in tariffs (a belief shared by no economist, conservative or liberal). It isn’t just his echoing of longstanding Republican insistence that tax cuts for “job creators” will grow the economy–despite ample evidence to the contrary. (Of course, even if those tax cuts don’t lead to economic growth, they do lead to the growth of generous political contributions…)

It isn’t even the GOP’s failure to understand the dire economic and civic consequences of further impoverishing citizens who are already struggling in order to fatten the wallets of the already wealthy, a failure once again demonstrated by Trump’s “Big Beautiful Bill.”

The most dangerous failure to connect the dots is the less-noted but even more consequential failure to understand the economic importance of the rule of law, or to recognize how Trump’s assaults on the law will dramatically and inevitably undermine the nation’s economy.

I’ve previously explained why widespread obedience to the rule of law is an essential underpinning of liberty and civic equality–why it is at the very basis of what I call “the American Idea.” But it is equally important to understand why the nation’s economic health is absolutely dependent upon a government that respects the rule of law.

Trump’s autocratic attacks on–and utter disregard for– the rule of law are a direct threat to the willingness of foreign investors to buy and hold American  stocks and bonds. When those investors see Trump and his administration unilaterally defaulting on contracts, arbitrarily withholding funds that have been properly and legally appropriated, ignoring court decisions and attacking judges, deporting people without even the pretense of due process–while at the same time providing special treatment for donors, favored companies, and White immigrants– those investors re-think the safety of their investments.

Why should we care?

Among other things, foreign investors inject capital for increased production and economic expansion. They create new employment opportunities and facilitate technology transfer. Foreign investors often bring in advanced technologies and expertise, fostering innovation and boosting productivity in local industries. When foreign businesses generate profits, they contribute to U.S. tax revenues, providing American government with resources to fund public services.

That investment is at risk. As one economist put it,

The erosion of the rule of law under Trump can have enormous economic significance for a foreign government, investor, or company with stakes in our economy. They now know that the U.S. government may ignore its contracts with them or decide not to enforce their agreements with others when it serves the political or personal interests of the president. That’s the way the world works in the kleptocratic dictatorships in Russia and Venezuela, and virtually no one invests in their stocks and bonds.

By following their lead, Trump and his apprentices risk devastating capital flight that could leave many of our leading financial institutions insolvent. In addition to his deeply destructive tariffs, Trump’s sweeping campaign against the rule of law in the United States has raised the economic stakes from a rocky business cycle to a potential financial and economic meltdown with terrible consequences.

America’s respect for the rule of law is the reason foreign investors have felt safe parking their money here, and all Americans have benefitted from our role as a safe place in the global economy.

Anyone who has taken Economics 101 understands that the rule of law is fundamental to business and investment. It creates the predictable, stable, and fair environment that economic activity depends upon. Without predictability and stability,
businesses and investors are unable to make long-term plans and commitments. Unless laws governing commerce are clear and consistently enforced– and not subject to arbitrary changes– companies can’t assess risks and returns.

You would think the Republicans who fancy themselves protectors of private property and capital would understand that it is the rule of law that protects that private property from seizure or infringement, and that investors–foreign or domestic– are highly unlikely to put money into an economy where assets can be seized or destroyed without due process.

When the GOP was a party, and not a cult, it understood that.

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The Victim Card

Along with the dread I feel with every Trumpian assault on the Constitution and rule of law is a constant, nagging question: how can the MAGA base ignore the threats to their own liberties and livelihoods? How can they look at this pathetic, corrupt,  mentally-ill man and his bizarre collection of incompetents and conspiracy theorists and say “Yes! Those are the people I want in charge of the economy and country?”

I’m not the only person who has mulled over that question, and–while there is never one simple answer to a complicated reality–I’m pretty sure that grievance (along with a healthy dose of ignorance) is a major factor. By “grievance,” of course, I mean the extensive racism encouraged by the Christian Nationalists who constantly play the victim card.

White Christian Nationalists are constantly told by their leaders and pastors that this country was supposed to be theirs by right–that America was supposed to be a Christian nation. Not just any Christians, of course–White male fundamentalist Christians. MAGA’s devotion to Trump is rooted in his permission to hate those “others” who have infringed upon their rights, upon his obvious agreement that equal treatment for Brown and Black folks, Jews, Muslims  and “uppity” women constitutes discrimination against White Christian males and simply cannot be tolerated.

What the MAGA base supports is the administration’s frantic efforts to stamp out DEI and purge official websites of evidence that non-Christian, non-White, non-male individuals have served the country with distinction. MAGA applauds the replacement of competent minority folks with embarrassing and grossly unfit Whites. It cheers the assaults on education, and especially Trump’s attacks on the universities that turn out those hated and increasingly diverse “elites.”

The irony is visible to anyone not in the cult. The aggrieved Whites who used to complain that women and minorities were “playing the victim card” are the ones now playing victim. 

A recent article in The New Republic gives the game away, reporting on the first meeting of Trump’s “Task Force to Eradicate Anti-Christian Bias in the Federal Government.” As the article noted,

Those attending didn’t seem to be bothered by the fact that no evidence of such widespread bias exists. That’s because they weren’t there to solve a problem but to create one. The Task Force claimed to be standing up for “religious liberty,” but its real goal is to amplify the persecution complex of the Trump administration’s Christian nationalist allies and base—and then to use groundless claims of religious discrimination as the basis for the suppression of dissent.

Lest we miss the real purpose of this charade, an incident the following week illuminated the fact that–as the article put it–“the Trump administration has zero interest in promoting “religious liberty.”

As the Reverend William Barber and other faith leaders opposed to Republican budget cuts gathered to pray at the Capitol Rotunda, they were swiftly surrounded by Capitol Police officers, one wearing a “crime scene” vest. The press was expelled from the building, and the pastors were arrested.

You would think that a Task Force concerned with anti-Christian bias would take an interest. But the administration appears to have nothing to say. The problem for the Reverend Barber and his fellow pastors is that they would seem to be the wrong kind of Christians. Right-wing pastor Sean Feucht has “filled the US Capitol Rotunda with worship time and time again for the last 4 years,” in his own words, and yet he has never been arrested or detained. He, apparently, is the right kind of Christian.

As most sentient Americans know–and as the article pointed out– attacks on Christians in the U.S. are infrequent– unlike attacks on other religious groups. Assaults on Jews, Muslims, and Sikhs have always been far more numerous, and their incidence has climbed dramatically during the Trump years. “The Task Force’s exclusive focus on Christian victims exposes its rhetoric about defending “religious liberty” as transparently insincere.”

As the essay points out, for members of the MAGA cult, “anti-Christian bias” is indistinguishable from efforts to protect individual rights against discrimination by people who identify as Christian. In other words, efforts to prevent these particular “Christians” from discriminating against people of whom they disapprove is labeled anti-Christian bias. To MAGA, “religious freedom” now means “privilege for conservative Christians alone, including the freedom to harass or discriminate.”

Equality before the law is seen as anti-Christian.

When Christian Nationalists are prevented from dictating the terms of the civic culture, they consider themselves victims. And so long as Trump feeds their perceptions of victimhood, so long as he supports their theocratic aspirations, nothing will shake their loyalty.

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The Fine Print

As Trump’s “Big Beautiful Bill” (more accurately called the MAGA Murder Bill) is winding its way through the compliant and spineless “public servants” (note quotation marks) in the House and Senate, a great deal of the public’s attention will be focused on the bill’s main thrust, which is to rob the poor to further enrich the obscenely wealthy. In order to achieve that goal, the GOP–which used to portray itself as the party of “fiscal sanity”–proposes to add 3.6 trillion dollars to the deficit over the next ten years.

But the overall cruelty of the measure shouldn’t preclude a look at the fine print–the nasty culture-war provisions that Republicans in Congress slipped in, in hopes that discussions of the major elements would shield them from view. Robert Kuttner of The American Prospect recently listed several of them. 

Perhaps the most egregious is an effort to cripple the courts. A provision would prohibit any funding from being used to carry out court orders holding executive branch officials in contempt. It would enable Trump and his officials to defy court orders at will. It is almost certainly unconstitutional—but then, so are most of the actions of this appalling administration.

The bill protects the tax preparation industry by repealing the Direct File measure sponsored by the Biden administration. That program allowed taxpayers to save money by using a free IRS tool to file their tax returns, relieving them of the need to pay commercial tax preparers.

The bill also adds to MAGA’s savage attacks on migrants, adding $45 billion for construction of immigration jails. (This is more than 13 times ICE’s current detention budget.) In addition to the money, the provision would allow for the indefinite detention of immigrant children, and would charge families $3,500 to reunite with a child who arrived alone at the border. Asylum seekers will have to pay an “application fee” of at least $1,000. (Because people fleeing horrific circumstances are presumably flush?)

Just in case some non-profit organizations in civil society have the nerve to criticise our would-be king, the reconciliation bill gives the administration the power to label nonprofits as “terrorist-supporting organizations,” a designation that can be used to terminate their tax status. Giving the administration such authority would be an open invitation to our demented autocrat to suppress the free speech and activism of climate and civil liberties organizations, among others.

Other bits of “fine print” more directly support the major goal of the bill: protecting the extremely wealthy against efforts to get them to pay their fair share of taxes–basically, exempting the rich from paying their dues to the country that made their accumulation of wealth possible. As Kuttner reports, the bill would gut an Estate Tax that is already massively favorable to the top 1%..

As if the current exemptions were not enough, the bill raises the no-tax floor to a staggering $15 million for single people and $30 million for couples in 2026. So a couple could leave $29.99 million to their heirs, tax-free. As recently as 2001, 2.1 percent of estates paid some tax. With this change, the percentage falls to less than 0.08 percent.

There’s much more. The bill weakens the Child Tax Credit, by lowering the eligibility income threshold. Millions of children will suddenly become ineligible. It expands school vouchers–continuing the GOP effort to destroy public education and shift tax dollars to religious institutions, in violation of the First Amendment. It includes what Kuttner calls “Stealth Cuts’ to the Affordable Care Act, with a provision that will increase out-of-pocket costs and make insurance more expensive.

And speaking of despicable: One bit of fine print supports gun silencers. “Buried deep in the bill is a provision that repeals the $200 excise tax on the sale of gun silencers, which have no lawful purpose other than concealing shootings.”

Several of these measures ought not survive the rules governing the budget reconciliation progress, which require that measures in a reconciliation bill be limited to budget and spending. Under those rules, ordinary legislation is not permissible. Kuttner notes that the Senate rules on germaneness are tighter than those in the House, “thanks to the Byrd Rule, which holds that “extraneous” matters may not be included in a budget bill.” Given the cravenness of the Republican Senators, those rules are a thin reed, but we can hope…

The real merit of the “Big Beautiful Bill” is educational. It is a road-map, an “up-front” admission of where MAGA Republicans want to take America. Like Project 2025, it is a candid statement of purpose, an acknowledgement of their determination to remake the United States into a medieval  country characterized by corruption, chaos and cruelty.

We can’t let that happen.

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Memorial Day

Monday was Memorial Day. In my city of Indianapolis, Memorial Day concludes a “big deal” weekend that features the City’s famous 500 Mile Race and numerous attendant festivities. The original meaning of the holiday tends to get buried in the weekend’s hustle and bustle, as thousands of visitors descend on the city to drink, eat and watch the race.

I hope that–in the midst of the festivities–at least some of us stop to remember that Memorial Day is intended to honor those who have lost their lives serving in the U.S. Military.

In The Contrarian, Jennifer Rubin recently issued that reminder. Memorial Day was intended to “memorialize” the sacrifices of the American soldiers who fought to preserve democracy around the globe. Writing from Spain, where she is traveling, she noted that but for America’s military and financial sacrifices, the world we inhabit today would look very different. If not for the young men and women who were ready to lay down their lives for others, Europe today would not be free.

It’s an appropriate time, as Donald Trump and his MAGA know-nothings throw aside American values (e.g., empathy, selflessness, ingenuity, inclusion), to appreciate the sacrifice of all those who have served. In the midst of debates about Medicaid cuts, debt, and tax cuts for billionaires, we should not lose track of honoring our veterans, whom Trump has nonchalantly kicked to the curb…

While he cuts billions from the Veterans Affairs Department and lays off tens of thousands of vets, Trump wants to throw away tens of millions on a cringeworthy military parade on his birthday, which also happens to be the US Army’s 250th birthday and Flag Day. Rather than honor others’ service by keeping our commitments, he preens amid military pomp like every two-bit dictator on the planet.

Trump cares not one wit about those who, unlike him, risked their lives. Quite the opposite: he has made life notably challenging for vets. Thanks to some masterful Washington Post reporting on the trauma he intentionally inflicted on tens of thousands of government workers, we have learned about the inexcusable toll on veterans in particular, who disproportionately serve in the federal government. Sadly, “Phone operators for the Veterans Crisis Line said they’d seen a rise in calls from federal employees and others worried about cuts to the VA.”

Given that Trump considers those who serve to be “losers and suckers,” it’s hardly surprising that concern for veterans is nowhere on his “to do” list. And the damage isn’t limited to the reckless and illegal DOGE cuts. As Rubin notes, almost every part of the horrific MAGA budget will hit vets especially hard. From the federal personnel firings (vets make up 30% of the federal workforce) to the draconian cuts to Medicaid and VA spending, to the layoffs at the Department of Veterans Affairs, to the petty purge of the Pentagon archives that documented diversity in the military, veterans have been disproportionate targets of Trump’s cruelest actions. 

That cruelty has prompted the emergence of veterans’ organizations challenging the administration and the MAGA Republicans who are complicit–even enthusiastic–in the Trumpian assault. Vote Vets has proved to be a particularly effective voice for the nation’s veterans, but there are many others.

One wonders how those lawmakers who actually served–Senator Todd Young comes to mind–rationalize their support for the constant assault on veterans’ well-being. During the Memorial Day recess (ending June 2), constituents should ask them.

As Rubin concludes,

Veterans and their families have remained undaunted in military service and in the face of grotesque betrayal by the MAGA ingrates. They deserve better than this president, his cronies, and MAGA flunkies have offered. During their Memorial Day recess, Republican lawmakers who have enabled Trump’s cruelty should take a moment to reflect on what it truly means to put country above self.

Unfortunately, putting country above self is a concept absolutely foreign to MAGA and to the racist madman who occupies–and routinely desecrates–the Oval Office.

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Why It Matters

A recent newsletter from Charlie Sykes really resonated with me. Sykes began by exploring why he focused on political reporting–why he didn’t turn his face from the disastrous dismantling of the American Idea to more pleasant concerns. Why is he reporting on Trump and his merry band of morons and psychopaths, rather than listening to music, or learning a new language, or spending more time with his grandchildren?

As he wrote,

I’m at the age now when every twinge or ache makes me think: is this the thing that’s going to kill me? So why am I devoting so much of my time to writing about the stupid, the inane, and the futile? How many years do I have to squander on Donald F’ing Trump?

I really related to that question. Like Sykes, I’m at a “certain age.” And I am one of the very fortunate–I still really, really like my spouse of 45 years; my children (who have evidently overlooked my deficits as a parent while they were growing up) are attentive and caring; my grandchildren are perfect (okay, maybe I’m a bit over-fond…); our blended family is loving and compatible, and–at least until Trump destroys the robust economy he inherited from the Biden administration–we have enough money in our retirement funds to live comfortably. I should be happy all the time.

Instead–as regular readers undoubtedly recognize–I’m routinely livid. Like Sykes, I sometimes wonder why I allow the country’s fraught political situation to displace the good fortune for which I should be grateful, so I was interested in his conclusion, which rested on an essay by former political pundit Charles Krauthammer.

A man of Renaissance sensibilities, Krauthammer could have written about literally anything, but he chose to write about politics, because he knew that was the one thing we had to get right.

“In the end,” he wrote, “all the beautiful, elegant things in life, the things that I care about, the things that matter, depend on getting the politics right. Because in those societies where they get it wrong, everything else is destroyed, everything else is leveled.” Krauthammer was echoing John Adams who wrote: “I must study politics and war, so that our sons may have liberty to study mathematics and philosophy.”

But Krauthammer had the added benefit of our own grim history.

“You can have the most advanced and efflorescent cultures,” he wrote. “Get your politics wrong, however, and everything stands to be swept away. This is not ancient history. This is Germany 1933.”

Sykes quotes Krauthammer for his observations about the extreme importance of governance and politics, pointing to examples like North Korea, “whose deranged Stalinist politics has created a land of stunning desolation and ugliness, both spiritual and material,” and to China’s Cultural Revolution, which he labeled a “sustained act of national self-immolation” that aimed “to destroy five millennia of Chinese culture.”

“The entire 20th Century with its mass political enthusiasms is a lesson in the supreme power of politics to produce ever-expanding circles of ruin. World War One not only killed more people than any previous war. The psychological shock of Europe’s senseless self inflicted devastation forever changed western sensibilities, practically overthrowing the classical arts, virtues, and modes of thought. The Russian Revolution and its imitators (Chinese, Cuban, Vietnamese, Cambodian) tried to atomize society so thoroughly — to war against the mediating structures that stand between the individual and the state — that the most basic bonds of family, faith, fellowship and conscience came to near dissolution.

“Of course, the greatest demonstration of the finality of politics is the Holocaust, which in less than a decade destroyed a millennium-old civilization, sweeping away not only 6 million souls but the institutions, the culture, the very tongue of the now vanished world of European Jewry.”

I think it was Santayana who said “Those who don’t learn history are doomed to repeat it.”

Those of us who did learn history–or at least a great deal of it–can choose to do one of two things. Those of us who have the option can burrow back into our comfortable lives and ignore the current fascist takeover, or we can join together with others who are determined to fight the malignant forces that threaten all of us, but especially those whose lives are more precarious.

When you think about it, unless you are a very self-engrossed person, it isn’t much of a choice.

I’ve been working with Central Indiana Indivisible. I hope those of you in the area will join me. If you can’t attend protests and participate in other resistance activities–and even if you can– you can support them financially here.

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