Or, it’s an international oligarchy of the superrich which is systematically dismantling the ability of sovereign states to determine their own economic policies.
I recall reading that after he’d won the election, the price of cocktails at Trump Tower went from $14 to $25, a premium that was justified by the fact that important political and business figures were spending more time there to meet with Trump and his associates. This is small time grifting, though. The tax cuts are big time, as will be his so-called “infrastructure” initiative, which will throw taxpayer money at his associates in the construction industry and, I’m sure, his own holdings, however obscure they might be.
I suspect the real money, at least as far as Trump is immediately concerned, will be in money laundering. There is reason to believe, as suggested by the findings of Fusion GPS, that Trump’s worth is ( as usual ) greatly overstated, and as Don Jr. has openly said, Russian money is a large part of their portfolio. It may well be the case that Trump has been floated by Putin ( who is thought to have forty to eighty billion US$ ). The IRS has a financial crimes unit attached to Mueller’s FBI investigation, and they have furnished the FBI with what they’ve been able to discover of Trump’s financial dealings, not least of which is his tax returns.
So Trump has something to hide in his tax returns, appears to be worth less than claimed and may have made false statements to the IRS. We know he has ties to the American mafia, to Russian oligarchs ( and therefore quite likely the Russian mob as well ), and he seems intent on making the world safe for Putinism. But what’s in it for Putin?
The damage done to Russia’s economy by falling oil prices and economic sanctions has been severe, and Russian oligarchs would be at risk of seeing their worth diminish simply through foreign exchange rate losses. The Ruble collapsed as a consequence of these twin pressures, and anyone whose savings were denominated in Russian currency would have quickly lost their shirt in terms of international buying power. They – Putin foremost among them – need a means of moving money out of Russia. They had already bought off the financial sector in Cyprus, which would’ve allowed them to hedge the fall of the Ruble by loading up Euros. But with the financial crisis, the Cypriot financial sector became a ward of the Eurogroup, and it became more difficult to launder cash into Europe for the Russians.
I suspect the highly regulated European financial sector made things more costly for Putin than he’d like, and the US financial sector is, in terms of oversight and taxation, laissez-faire by comparison. No country on earth has access to more markets, or more money, than the US. Most importantly, given the fall in the value of the Euro, the oligarchs need a hedge against further depreciation. The US Dollar is the “gold standard” of currencies, and hedging against it give Putin some degree of protection from US led economic warfare.
Warfare which, ironically, was critically weakened by the collapse in the Bretton Woods agreement and the subsequent abandonment of capital controls. Not only did this facilitate the continuation of neoliberalism, the growing indebtedness of the American working class, and the Great Global Recession, but it fundamentally defeated the restraining feature of capitalism as Adam Smith saw it. This restraint he called “the hidden hand”, by which the interests of capitalists would align with the working class as each had a stake in the other’s interest, and thus left to their own devices, their investment and spending decisions would in aggregate be in the best interest of that economy. Smith’s model was that of the nation state. The effective end of capital controls means that capitalists are no longer bound to the interests of a single state economy, and they are free to use their enormous resources to promote economic policies which may well damage a single economy, even one as large as the US, because their financial interests are no longer grounded in that economy.
We have, in my view, witnessed the rise of a new global political economy, which has abandoned the traditional role of nation states and has created in its stead a transnational oligarchy with no vested interest in the nations whose markets made them wealthy.
So when the US led the international sanctions against Russia, it imposed capital controls not on itself, but on Russia. Money was free to flow to all its usual destinations outside of Russia. Including Cyprus. The sanctions are only as effective as the sanctioning body’s knowledge of who and what it is targeting, and just as Trump has obfuscated his financial dealings for the IRS, so too have people like him, like Flynn, like Manafort, and yes like the Clintons, hidden the complex web of terminals through which Russian money flows to Europe and the US. What might’ve been an existential problem for Putin becomes just another job for lawyers and accountants.
At first glance I think this story should be falsifiable through its predictions about capital flows from Russia in context of Trump’s elections and the sanctions. A high level test will provide some basic validation of the idea, but since the real test is at the level of international intrigue and money laundering, it’ll be impossible to get a strict test. So, not only am I interested in what you, dear reader, think of this little story, but also in any ideas you might have for falsifying it.
Thanks for reading.