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Kleptocracy:   a government or state in which those in power exploit national resources and steal; rule by a thief or thieves.

 

Damn the torpedoes, full speed ahead.  David Glasgow Farragut

 

It’s been brewing for a generation but under Trompudo the acceleration toward kleptocracy has been breathtaking.  In a recent book review, Kleptocracy in America (review of Robert Rotberg: The Corruption Cure), Sarah Chayes asks and partially answers whether it is too late to stop kleptocracy in America:

 

 

If firm leadership from the top is so critical to reform, is it even possible for a democracy that has grown systemically corrupt to change course?

The United States has become a testing ground for that question. The country’s slide into a kind of genteel kleptocracy began many years ago, arguably in the 1980s, when deregulation fever hit. The lobbying profession exploded, and industries began writing legislation affecting their sectors; public services such as incarceration and war fighting were privatized; the brakes on money in politics were released; and presidents began filling top regulatory positions with bankers. An economy of transactional exchanges took hold in Washington.

Last year was a watershed in this process. In June, the Supreme Court dramatically narrowed the legal definition of bribery when it overturned the corruption conviction of former Virginia Governor Bob McDonnell. Meanwhile, supporters of the Democratic presidential candidate Hillary Clinton—including many progressive advocates of campaign finance reform—could be heard defending the propriety of questionable foreign donations to the Clinton Foundation. Although Trump’s supporters may think otherwise, his victory and ascent to the White House did not represent regime change; they represented very much more of the same, with a president who has invited top corporate executives not merely to provide advice or draft legislation but also to actually join his team. Such a presidency will only cement the system rigging Trump once decried.

For Americans, as for the people of so many of the countries Rotberg discusses, the expulsion of one individual at the top will not be enough to repair the damaged republic. Americans should not fool themselves into thinking that all they must do is see Trump impeached or get out the vote for a standard Democratic or Republican alternative in 2020. The network that Trump is anchoring in Washington is exploiting a system that Americans have all allowed to evolve and from which they have averted their eyes. That network is empowered now and will prove resilient.

 

With the Republicans in firm control of both houses of Congress and the presidency the signs of the American Kleptocracy can be seen everywhere we look. (Note Ms. Chayes does not restrict her criticism to Republicans. Democrats are equally to blame. It is true that Republicans have recently upped the ante tremendously under Trompudo.)

Not everyone agrees that America is a kleptocracy or becoming one.  The Chicago Tribune in an article on Five Myths on Kleptocracy has this to say in America’s defense.

 

Few would argue that corruption doesn’t exist in the United States, but fewer seriously believe that it is the sole purpose of their government. Unlike the average Russian, Americans haven’t watched their president’s friends loot 5 percent of GDP in the past decade. Unlike a quarter of Ukrainians, the average American hasn’t had to pay a bribe to get officials to do their jobs. And unlike the Chinese, Americans don’t feel impelled to send trillions of dollars overseas illegally.

The United States has strong constitutional safeguards that guarantee democratic participation, free speech and, most important, rule of law. Prosecutors wield a robust set of mechanisms to address official corruption when it does occur. The United States is far from perfect, but despite the uproar on alternative and social media, it is not a kleptocracy.

 

Okay, maybe it’s a matter of degree, maybe I’m exaggerating to make a point.  But, consider these few observations.

Anyone who wonders why stock prices are rising into the stratosphere need only look at the relentless reduction in regulations of all sorts that untie the hands business to do anything to anyone anywhere anytime with no restriction at all. With interest rates near zero punishing small savers, businesses also have unlimited money available to pursue their interests.

This should be no surprise considering how many in the Republican camp believe that government policies should be based on the Christian scripture. The Christian Bible makes it quite clear that, as Shakespeare put it (Henry IV Part 2), the world is an oyster to be plucked and sucked at will.

 

And God said, Let us make man in our image, after our likeness: and let them have dominion over the fish of the sea, and over the fowl of the air, and over the cattle, and over all the earth, and over every creeping thing that creepeth upon the earth.

So God created man in his own image, in the image of God created he him; male and female created he them.

And God blessed them, and God said unto them, Be fruitful, and multiply, and replenish the earth, and subdue it: and have dominion over the fish of the sea, and over the fowl of the air, and over every living thing that moveth upon the earth.

Genesis: I:26-28

 

 

The secular version of this commandment has unfortunately been interpreted as a license to steal, pollute and deplete the world’s resources. One of Trompudo’s most notable acts, one he campaigned on, was to withdraw from the Paris Climate Accord. More recently the appointment of Mick Mulvaney as director of the Consumer Watchdog Agency (Federal Financial Protection Bureau) put business on notice that they can go back to business as usual even when that requires screwing the individual consumer, borrower, and investor.

In a similar vein, the U.S. Department of Labor has issued an 18-month-delay for key provisions of the fiduciary rule, which will now go into effect July 1, 2019. The extension will give the department time to review public comments received in recent months and satisfy President Trump’s request to review the cost the rule poses to the wealth management industry and investors. For those who don’t know, the fiduciary rule requires that brokers and financial advisers act in the best interest of their clients. You would think such behavior would be obvious to financial professionals, but they prefer to act in their own self interest.

 

 

Nothing new here.  Trompudo himself is being sued for acting in his own best interest rather than the best interest of the country.

 

 

We are now witnessing kleptocracy on an unprecedented scale in America. And there’s barely even a fig leaf of cover. Trump has openly enmeshed his private financial interests in national policy. To say that this creates an appearance of corruption would be far too polite. This is the real deal: sketchy dealings all the way down.

 

The kleptocracy includes moving money and income offshore to avoid taxes on a massive scale as recent news reports such as the Panama Papers document.

 

 

And then there is the business tax giveaway law currently being proposed by Congress.  Economist Larry Summers has a recent letter to his colleagues who support the tax giveaway in which he ends with this:

 

The legislation would increase the after-tax cost of R&D, would increase asymmetric penalties on corporate risk-taking and would raise effective marginal tax rates for many individuals through the repeal of the state and local tax deduction. Do you think your analysis of a highly simplified hypothetical plan that is different from the actual legislation before Congress should serve as a substitute for the Joint Committee on Taxation (JCT) and the CBO producing analysis? Do you think it is responsible for Congress to vote on technically complex legislation in the absence of hearings or complete analysis?

 

 

I’m afraid he’s barking up the wrong tree. Trompudo and his merry band of pranksters do not want hearings or complete analysis. They simply want to push this law through to line their pockets and the pockets of their friends. Pure kleptocracy in action.

 

If we dare look at the plain facts of the matter, we have to conclude the U.S. is a kleptocracy not unlike Greece, only on a larger and slightly more sophisticated scale.  Charles Hugh Smith

 

Sadly Trompudo’s supporters who are already scraping the bottom of the barrel are going to get further bruised and battered. They won’t know why or how because they have been instructed by their new Moses to ignore the “fake news” which is any news that says anything in conflict with the best interests of the American Kleptocracy. This post caused me to remember a favorite refrain of an old friend, Paul Sutterly: “Ain’t life a kick in the ass!”