Donald spends an enormous amount of energy trying to
get people to believe he’s someone he’s not. And trying to
protect himself from the knowledge of who he really is,
and that he’s never been the person he claims to be.”
Mary Trump explaining Uncle Donald after the Debate (FastCompany.com, 10/1/20)
You’d think that someone seeking the highest office in the land, with tax returns that are exceptionally likely to generate dedicated scrutiny, might have preferred a lower profile. Someone whose past is littered with several major corporate bankruptcies and over 3500 lawsuits: business litigation, personal sexually related claims, and defending governmental administrative charges… just might want to duck below the horizon for a while. And even if Mr. Trump can somehow pardon himself from federal crimes – like tax evasion and fraudulent loan applications to federally insured banks – that does not relieve him of a. any state crimes (New York is zealously investigating the obvious) or b. paying any back taxes, interest or related fines to the IRS. Former Trump lawyer Michael Cohen tells us Trump truly fears huge potential IRS demands based on his inaccurate tax returns.
All the attention focused on Mr Trump after the debates – and I am guilty as anyone – has been over his initial bully-assault on Joe Biden, and both his presentations laced with a whole lot of lies and more than a few clearly fabricated facts and statistics, his unwillingness to agree to adhere to the election process and his refusal to dissociate himself from potentially violent white supremacists. Polls still give Trump the edge over Biden on restarting the economy, as voters fail to miss the fact that his failed leadership on containing the pandemic was singularly the biggest factor in slamming the economy. No economy on earth has positive growth numbers unless it also has contained the coronavirus. That the President still does not have credible answers suggests that our future economy, at least under Donald Trump, has a whole lot more bad in it than good.
The has been a convenient memory lapse that the Obama administration, in its last 12 consecutive quarters, enjoyed steady and significant economic growth. Obama had been saddled with the Great Recession that arose during the term of the preceding Republican G.W. Bush administration. Trump rode an Obama-initiated recovery wave that would have been there to any successor president, took credit for the continuing uptick (as if he were the cause), trashed Obama and simply ignored that it was the last President who actually ignited and sustained the beginning of the recovery.
A diehard adherent to the most clearly and consistently failed economic “supply side, trickle down” economic theory, which has never worked, Trump gave the richest in the land one of the biggest tax cuts in American history. That was supposed to be the great instantaneous job creator, ignoring the fact that rich people don’t just randomly spend money to hire people when the get a windfall like that. Trillions of dollars worth. What actually happened? Not a lot of new good jobs, for one. But lots of stock buybacks and dividends, shoving money into the pockets of those who did not need it. What the rest of us felt was a massive deficit that every taxpayer in America now has to repay. Did loopholes go? A few, but not many. The pandemic then exploded. As too many Americans lost their jobs, faced layoffs and as small business closed by the thousands, the richest in the land profited wildly.
Nothing screams Mr. Trump’s blissful misunderstanding of macro-economics like his nominee, Judy Shelton, to join the Board of the Federal Reserve. Shelton is a know-nothing, mythology- driven right wing populist nutcase who has embraced bizarre and ancient theories that were discredited over a century ago. Reluctantly, she was forced during confirmation hearings to relinquish her strange belief that the United States should return to backing its currency with gold. Reliance on that standard amplified the damage we experienced during the Great Depression of the 1930s. It is clearly inappropriate for the 21 st century, to say the least.
Or her belief that the independent Federal Reserve, one where sophisticated markets can rely on neutrality and immunity from political interference – a necessary stabilizing force – should instead coordinate the its policies with both Congress and the President. Thus, when a popular wind blows, Fed polices would change, not to solve economic crises, but to cater to populist desires with a rather dramatic absence of economic expertise.
Shelton won committee confirmation on a purely partisan basis, but facing even some GOP opposition, there is no currently scheduled full Senate floor vote. For most Americans, the Fed is an unfathomable mystery, but the impact on macro-financial crisis management and our overall economic well-being is profound. But she remains Trump’s choice, and he has repeated his confidence in her abilities.
Expert on the Federal Reserve (author of books like “America’s Bank: The Epic Struggle to
Create the Federal Reserve”), Roger Lowerstein, took a careful look at Shelton in the October 1 st
Los Angeles Times. In addition to chastising her archaic and discredited theory about the gold
standard, Lowenstein adds: “[She] he embraces anti-establishment sound bites that have been
debunked by painful experience.
“Although she has been writing on the fringes of monetary policy, forecasting doom and runaway inflation since the 1980s, she has made no contribution to economic thinking. Milton Friedman, the late economics Nobel laureate, at the time Shelton’s colleague at the Hoover Institution, wrote in 1994 of a Shelton op-ed, ‘It would be hard to pack more error into so few words.’…
“She also wants [an inflexible] ‘rules-based’ Federal Reserve policy — the seductive theory that a formula or computer should set interest rates. But formulaic rules cannot anticipate unforeseen events, which sooner or later will occur… Indeed, such rules would have prevented the Fed’s emergency rate cuts during the 2008 crisis. Those cuts — which Shelton vigorously denounced along with Fed bond purchases — played a major role in ending the recession in less than two years, in contrast to the Great Depression, which lasted for the better part of a decade.
“In the midst of the 2008 crisis, Shelton, in Trumpian fashion, denigrated the Fed, calling it equivalent to ‘the old Soviet State Planning Committee.’ No wonder that more than 100 economists, including seven Nobel winners, have signed a letter urging Shelton’s rejection. I asked one of them, Alan Blinder, a former Fed vice chairman, how he rated Shelton on a scale of 1 (the worst) to 10. Blinder replied, ‘1.’
“As improbable as it might sound, Shelton’s screwy ideas are perhaps only her second-most serious disqualification. Understand, first, that the Fed Board has only seven governors. They try to work by consensus, because their policies are more effective when the public senses they are broadly supported… Remarkably, even in this day and age, the Fed has generally avoided accusations of partisanship. Ben Bernanke’s recession-fighting policies were the same under George W. Bush as under Barack Obama. If investors and others feared that the Fed was playing politics, the result would be chaotic and destabilizing.
“After Obama took office, in the wake of the mortgage crash, Shelton repeatedly criticized the Fed’s low-interest rate policies. In 2016, prior to the presidential election, she attacked the central bank’s ‘meddling’ for doing ‘more harm than good’ and praising candidate Trump for taking aim at the ‘political’ Fed. Some people have no sense of irony… In office, Trump has relentlessly pushed for low interest rates and threatened to fire Jerome H. Powell, the Fed chair and one of his best appointments, first for raising rates and then for not cutting them as quickly as Trump would like.”
As the numbers reflect, Trump’s notoriety on “The Apprentice” opened up desperately needed economic opportunities that had eluded him. Reality television was his odd salvation. Having walked to the edge of total insolvency more than once, Trump has overborrowed repeatedly, making statements of massive underlying asset wealth to poo-poo what can easily be gleaned from looking at the trial records for some of his biggest real estate litigation. His net worth climbed after ascending to the Presidency, even though purportedly he was no longer involved in the management of his affairs. His paying even marginal taxes to foreign governments that are the subject of US foreign policy matters should trouble us all.
It should be abundantly clear by now that Trump’s reluctance to show his tax returns is not driven by a desire to maintain modest privacy. It is beyond obvious that what we might learn from those returns is critically import in determining his fitness for political office. He can deny the New York Times’ description of the paucity of tax payments all he wants with vague and unsupported claims as he did in the debate. But the only truth can be to release those returns immediately. By asserting his bully-based overconfidence, telling how brilliant he is and alluding to his “stable genius” financial ability, he has conned too many Americans about his economic prowess. Let’s look at facts and the truth, probably two words that defy all things Trump.
I’ll end this blog with a continuation of the interview that generated the opening quote from Mary Trump: FastCompany Interviewer: “Do you believe that there’s some point where he’ll stop? If he’s looking out at the country and seeing that we’re moving into authoritarianism and the possibility of civil war, is there any limit where he realizes he has to do something to heal the country before it breaks apart completely?” Mary Trump: “No.”
I’m Peter Dekom, and I suspect that a truly objective analysis of Trump’s purported financial wizardry would produce a stunning picture of misrepresentation, raw and malevolent manipulation, mistakes, extreme narcissism, a sociopathic lack of empathy and blithering incompetence… so let’s look and see for ourselves.
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