In Re: Trump’s Financial Fraud

But the bank got paid back" is not the defense they think it is. Letting this kind of fraud go would be worse than the wild west, the banking system would basically stop functioning. This is the example I used when explaining this to an acquaintance. Two neighbors find themselves in desperate financial conditions. Each owns a home worth $300K and completely mortgaged. Each goes to the bank and fraudulently claims their house is worth $1M and gets a loan for $500K. The bank loans each of them the half million based on a properties worth $1M only having mortgages of $300K. Both home owners go to the casino, one places their money on red, the other on black. The first home owner wins and walks out with $1M, the second home owner loses. The first home owner pays back the bank and keeps the other $500K, the second home owner obviously can't pay back the bank. What is the difference between the first home owner that paid back the bank and the second who didn't? They both committed fraud, it was only luck that let the first pay back the bank. If we let the first home owner walk away because they paid the bank back, it's not hard to see that over time if enough people engage in this behavior the bank will ultimately fail. 

In a less legalistic discussion, the system only works if everyone acts with a modicum of good faith. Part of my career was heavily devoted to contractual work. Where trust was low, agreements were long and complicated to cover as many possibilities of bad faith action by the other side. Negotiations were time and resource consuming, there was a lot of friction and business was slow. Where there was reasonable commercial trust, then the parties could agree to terms rational terms, most of the negotiation was on things like price and delivery, not how to avoid getting screwed, and generally everything was mutually beneficial. There were occasions where trust was so low, a sense that the other party would act in good faith, that it wasn't worth contracting. Nobody benefited. One-off agreements were harder, there was less incentive for either party to behave if things went wrong (or one side tried to take undue advantage even if nothing went wrong). You had to cover as many contingencies as possible. Agreements where the parties would have a continuing relationship were easier. The need to continue to work together would result in the parties working past the specific language of the agreement if things went wrong, because both sides saw a benefit in continuing. 

Ultimately norms, good faith, trust, matter. Maybe you can get away without them in the one off situations. But longer term, be it banking or legislating, they ultimately are needed for even a modestly function system. The current problems in the house of representatives can be traced to a complete lack of good faith behavior within the Republican caucus, and between the Republican leadership and the Democrats. Violating norms, bad faith negotiation, failing to keep commitments, straight up lying, are all bad for any system.

The entire system of commerce really does run on good faith. We allow that to be undermined at our peril.

OTOH, for all the public squawking about this case, nothing is being done to challenge it. Jim Jordan has not announced an investigation into Engoron; the truckers boycott turned out to be one clown on Twitter who turned tail and ran the minute someone took him seriously. Nobody gathered outside the courtroom to protest the release of the ruling. The worst of it is Trump going to court when he’s not needed so he can go out and yell at the TeeVee cameras, which always oblige him.

This case is not socialism and tyranny rising, and aside from random idiots on Twitter, nobody really thinks so.

Dude who lives in the woods in the middle of nowhere NW FL, where the nearest cultural attraction is a roadside boiled peanut stand, advises New Yorkers to leave because Trump was finally held accountable for a lifetime of business fraud. pic.twitter.com/OCJOaEbykT

— Ron Filipkowski (@RonFilipkowski) February 20, 2024

The moon doesn’t rise at Trump’s command and the sun doesn’t shine out of his ass. He may think so, but vanishingly few other people do. 

Most of “legal Twitter” is taken up with people who don’t understand the law at all, but nevertheless are constitutional scholars. The latest argument is that the Eighth Amendment bars “excessive fines,” so the fraud judgment is unconstitutional. Except it’s an equitable remedy of disgorgement, not a fine levied by the state of New York. But, you know, Trump can’t lose, so the system must be wrong.

A sentiment echoed on the other side:

The unfortunate reality is that Friday’s 355-million-dollar judgment against Donald Trump (and the E. Jean Carroll verdict for more than 80 million dollars before that), as well as his still upcoming criminal and civil trials will only serve to fuel his followers’ fantasies of persecution – which means they will further embrace even more political violence, terrorism, and thuggery as necessary means of self-preservation.

Which reasoning leads Chauncey deVega to conclude the TeeVee paced trials he’s familiar with aren’t showing up in real life, so we’re doomed!

However, I am also deeply worried that these civil and criminal trials against Trump for financial fraud, hush money and stealing classified documents are sideshows and distractions from what should be the main focus: putting him and his confederates on trial for the crimes of Jan. 6 and the larger plot to end democracy.

Not sure how the classified documents case is small beer (he goes on to fret Trump will sell some he probably still has to pay New York, which seems to make it a pretty serious crime to me). And how is any of that a “distraction” when the only question now is: how soon do the Supremes return that case to Chutkan’s docket?

By the way, Trump hasn’t been charged with “trying to end democracy.” I’m sure that will be disappointing, too.

And even those fears are not  enough:

My greatest worry and anxiety about Trump and his legal saga are that he and the MAGA movement and the Republican fascists and the other “conservatives” need to be resoundingly defeated by the American people at the ballot box — repeatedly. Putting Trump in prison and/or forcing him off the ballot does not accomplish this goal. Moreover, such an outcome may instead fuel a type of neofascist Lost Cause narrative, which in the end will be a Pyrrhic victory for America’s pro-democracy forces.

The Lost Cause is part and parcel of the racism that is as ingrained into American culture from the day Columbus first landed in the “New World” and set about making slaves of the natives. A good argument for the overarching narrative of American history is the exploitation of labor. The Constitution is a deeply racist document that we’ve only started to purge of those qualities, an effort stalled by the post Civil War courts (despite the post war trio of amendments) and the rollback of LBJ’s legislation by the Rehnquist and Roberts Courts. Democracy in America has always been for me but not for thee, and MAGA is just a pimple on the ass of that understanding. The times are no worse than they’ve ever been. DeVega just wants to make these “significant” times, so he can be a significant person in them.

But Trump is not knocking the props out from under the established order (if he was, why is he such a consistent loser, while Democrats “over perform” (meaning polls are meaningless) in every election?), and the sky is not falling, and things really aren’t any worse than they’ve always been.  Better, maybe, because Trump really isn’t ascendant, at all. And he’s soon to be broke, and a convicted felon.

And never forget it takes money to run for president. Trump complains he has to spend time in courtrooms (a sentence which has only just begun. His release on bond requires he attend his criminal trials.). He also has to spend money there, and he won’t spend his own. He can’t raise enough to pay the lawyers and run a campaign. Which will get priority? With Biden already hammering him and Trump in the dock for weeks at a time, I don’t see his popularity and his support, rising by November. Among his supporters, maybe, but most of them he can fit into one of his rallies. Arguably, he already does.

Nor is the legal system crumbling because a few idiots on Twitter think they’re Perry Mason. The system, for better or worse, isn’t noticing Trump’s attacks on it. The criminal ones (death threats), yes; the “existential” ones pundits like to wring their hands over? No. The death threats are a much more serious problem than what the pundits fear; or the legal opinions of  non-lawyers.