Not Business As Usual

One of the remarkable features of the Trump era is how deeply and broadly it exposes the corruption of the professional classes in this country. It’s not like that corruption wasn’t already on display. I have previously written about how the details of the 1MDB scandal implicates the cream of the financial, legal, and accounting professions in abetting perhaps the greatest fraud in financial history.

Certainly, there are plenty of lawyers who have abetted the corruption in the Trump administration and Trump’s attacks on our democracy. Clearly, both Barr and Rosenstein are clearly complicit Trump’s obstruction of justice by, at minimum, misleading the publics about the results of the Mueller investigation. Even supposed heroes like Don McGahn, who refused to follow the President’s illegal orders, did not inform the public and the authorities about those illegal orders in order to shepherd Federalist Society hacks on to the Supreme Court. In addition, the continual vouching for all these individuals as men of integrity by so many of their legal peers across the spectrum further taints the profession.

As Trump goes about dismantling the rule of law in this country, the silence and acquiescence of a broad swath of the legal and business community and their luminaries is deafening and extremely troubling. Sherrilyn Ifill had a tweetstorm calling out the members of the legal community for their seeming refusal to actually stand up to the rule of law. Ifill wrote, “There are so many outrages, but at the level of whether our democracy survives intact, this is the most important story of today, tomorrow & the forseeable future. And I cannot understand the silence of most of my profession at this dangerous, frontal challenge to the rule of law…Speaking up for the rule of law should not fall to civil rights lawyers, Democratic Party lawyers or Never Trumpers. Every lawyer who has taken the oath to defend the Constitution must speak, must stand…I have been waiting for the full measure of voices who lead our profession to speak powerfully, unequivocally & publicly. The law firm partners. The former govt. attorneys. The law profs. Our profession will not recover from the failure to fight collectively for the rule of law”. Besides a handful of former DOJ prosecutors and “law firm leaders”, Ifill has correctly found the necessary response from her profession wanting.

American business has thrived in the post-war world primarily because of the legal protections provided by the US justice system. Investors and executives have largely been protected from personal liability because of the US justice system. Foreigners have felt secure in investing their money in the United States because they felt their interests would be protected by the US justice system.

So, despite their proclivities to support Republican policies that invariably redound to solely their benefit, you would think that America’s business leaders would at least have an interest in ensuring that the rule of law remains strong and secure in this country. Apparently not. When Trump attacked Boeing even before he was inaugurated, causing the company’s stock to plummet, there was barely a tepid response from business leaders. There was similar silence when the President went after Merck&Co, Nordstrom, the NFL, and, on multiple occasions, Amazon, and, finally, attacking Bezos personally. When Trump attacks judges, the media, and law enforcement authorities, nada. When Trump trotted out a bogus national emergency to impose tariffs on steel and aluminum and, later, to build his border wall with money illegally taken from other congressionally authorized projects, crickets. When Trump imposed tariffs on Chinese imports, more silence. When Trump attacks Muslims and immigrants, nothing. When Trump is found to have at least coordinated his campaign with messaging provided by the Russians and obstructed justice on multiple occasions, silence. And now the Attorney General of the United States has been caught lying to Congress, lying to the American public, and engaging in a further obstruction of justice to aid the President, there will probably be not a sound. When Trump is now forcing a constitutional crisis in a brazen attack on one of the pillars of our democracy, the separation of powers, the deafening silence from our supposed “leaders” in the business community continues.

There are a variety of reasons for the silence and shame of our business leaders. Obviously, business has received enormous goodies from this administration. The gigantic corporate tax cut has allowed companies to boost their stock prices with enormous stock buybacks and, for many of the largest multinational companies, allowed them to avoid paying corporate taxes altogether. In addition, business leaders are loathe to be seen as political, while feverishly working behind the scenes and via lobbying to influence government policy. Business CEOs may also be afraid of a backlash from the President or even their own shareholders if they take a position seen as political. For some well connected business leaders, Trump’s policies are largely irrelevant because they know they can get waivers from the administration if they are adversely effected, as the exceptions to the steel and aluminum tariffs have shown. Whatever the reason, they are apparently willing to sit idly by while Trump undermines our democracy and the rule of the law, despite having enormous power over the Republican party because of their overwhelming monetary support.

If that wasn’t bad enough, business leaders, especially those on Wall Street, even those who are Democratic donors, aren’t really focused on Trump’s attacks on the rule of law. Instead, they live in fear of any real attempts to require them to actually pay their fair share, decrying the Democrats’ plans to do so as “socialism”. JP Morgan CEO Jamie Dimon had nothing to say about Trump’s abuses in his recent letter to shareholders. Instead he wrote, “When governments control companies, economic assets (companies, lenders and so on) over time are used to further political interests — leading to inefficient companies and markets, enormous favoritism and corruption. Socialism inevitably produces stagnation, corruption and often worse — such as authoritarian government officials who often have an increasing ability to interfere with both the economy and individual lives — which they frequently do to maintain power. This would be as much a disaster for our country as it has been in the other places it’s been tried”. Silicon Valley CEOs are similarly less concerned about Trump’s attacks on the rule of law and are instead focused on avoiding or at least massaging the necessary government regulation of their industry.

As Martin Longman writes, the real fear is that business will find the comfort in the belief that protecting their enormous compensation packages and their elite status is more important that protecting our democracy and the rule of law. As one Wall Street Democrat succinctly put it, “What matters more?…My social values or my paycheck?”. Longman posits, “I’d like to think that our business elite is different from the folks in Italy and Germany during the rise of fascism. I hope that they have enough patriotism and respect for our Constitution to see that it would be a mistake to align with Trump. But this isn’t something I have a lot of confidence in, and that’s what is keeping me up at night. I guess this is less of a prescription than a warning. If the left in this country wants to run on an economically populist platform that scares the bejesus out of our big business community, they cannot afford to lose”.

Based on the last three years of silence regarding Trump’s abuses, their palpable angst about being subjected to regulated capitalism, and their abject fear about the prospect of a Warren or Sanders presidency, it appears that business leaders do not have “enough patriotism and respect for our Constitution” and are prepared to throw their lot in with Trump. Longman continues, “instead of welcoming someone [like Warren] who understands their business and how to prevent them from ‘breaking capitalism’, they’re getting ready to move into Trump’s xenophobic, white nationalist camp in an effort to protect their status and their paycheck”. Certainly, Trump’s substantial fundraising indicates as much. As Robert Reich notes, “The corporate statesmen of the mid-20th century have been replaced by sycophantic [Jamie] Dimons of the 21st-at a time when we need statesmen more than ever”.

What is even more remarkable about this acceptance of Trump is that these leaders are well aware of the dangers that an autocracy poses to themselves and their companies. As Dimon wrote, “authoritarian government officials…often have an increasing ability to interfere with both the economy and individual lives”. While business leaders may currently benefit from the status quo under Trump’s and the Republican’s burgeoning autocracy, they have to be aware how quickly they can become the oligarch out of favor, as illustrated by Putin’s numerous victims. In addition, they must have seen the reaction from Democrats who threatened to abuse the national emergency powers to implement the Green New Deal if they gain power after Trump declared his own national emergency in order to build his border wall. The very autocratic precedents business leaders are allowing Trump and the GOP to set with little or no protest, may well be the very precedents that will be used to cut their paychecks and reduce their status. But, as the financial crisis clearly illustrated, business has always been swayed by the appeal of short term gains at the expense of longer term risk management.

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Originally published at https://thesoundings.com on May 1, 2019.

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