Paul Krugman, the Nobel Prize winning columnist for the New York Times, predicts an unprecedented level of corruption during the Trump years, related to Trump’s refusal to separate himself from his business empire. Will foreign diplomats reserve the $20,000 a night suite at the Trump hotel in D.C. to impress the President? Will governments grant permits expeditiously to build new Trump hotels, casinos and golf courses to curry favor? Will the President appoint members of the National Labor Relations Board to prevent his hotels from being unionized (there is a labor dispute at a Trump hotel in Las Vegas before the NLRB right now).
He writes,
Self-dealing will be the norm throughout this administration. America has just entered an era of unprecedented corruption at the top.
The question you need to ask is why this matters. Hint: It’s not the money, it’s the incentives.
True, we could be talking about a lot of money — think billions, not millions, to Mr. Trump alone (which is why his promise not to take his salary is a sick joke). But America is a very rich country, whose government spends more than $4 trillion a year, so even large-scale looting amounts to rounding error. What’s important is not the money that sticks to the fingers of the inner circle, but what they do to get that money, and the bad policy that results.
Normally, policy reflects some combination of practicality — what works? — and ideology — what fits my preconceptions? And our usual complaint is that ideology all too often overrules the evidence.
But now we’re going to see a third factor powerfully at work: What policies can officials, very much including the man at the top, personally monetize? And the effect will be disastrous.
Let’s start relatively small, with the choice of Betsy DeVos as education secretary. Ms. DeVos has some obvious affinities with Mr. Trump: Her husband is an heir to the fortune created by Amway, a company that has been accused of being a fraudulent scheme and, in 2011, paid $150 million to settle a class-action suit. But what’s really striking is her signature issue, school vouchers, in which parents are given money rather than having their children receive a public education.
At this point there’s a lot of evidence on how well school vouchers actually work, and it’s basically damning. For example, Louisiana’s extensive voucher plan unambiguously reduced student achievement. But voucher advocates won’t take no for an answer. Part of this is ideology, but it’s also true that vouchers might eventually find their way to for-profit educational institutions.
And the track record of for-profit education is truly terrible; the Obama administration has been cracking down on the scams that infest the industry. But things will be different now: For-profit education stocks soared after the election. Two, three, many Trump Universities!
Moving on, I’ve already written about the Trump infrastructure plan, which for no obvious reason involves widespread privatization of public assets. No obvious reason, that is, except the huge opportunities for cronyism and profiteering that would be opened up.
Krugman previously wrote that Trump’s proposal to rebuild the nation’s infrastructure would privatize many of our public assets and become a goldmine for the private sector.
Buckle your seat belts. The next four years will make Teapot Dome look like a tea party.
Diane Ravitch's blog 