Tariffs and Trump - My View

A friend asked me for my view of what's going on with tariffs, and how Trump will profit from them. I wrote him:

I think his overall scheme is to remove the income tax.  If he can reduce the government's functions, as he's doing, and increase government income from tariffs, which will be like a national sales tax, or even value added tax, then to his thinking he can abolish the IRS.

Trump also glories in destruction and cruelty.  He likes it, and it's easy to do if you hire the right people.

Trump is also inspired by the mafia, whose organization resembles medieval Europe or Asia.  Lords gain land by force and acquire vassals - lesser lords - who are allowed to govern their fiefs by pledging fealty to the lord. When he has the threat of tariffs, the subservient laws of industry, or the leaders of other countries which he views as less powerful, come to him personally to beg favors, and to pledge loyalty and to give payoffs in hidden ways.

Don't worry, he is out to monetize his position, with Putin being his model.  I've heard it said that Putin demands from the Russian oligarchs a personal 50% share of their businesses, in order for them to continue alive and in business.  As a result, he might be the richest man in the world.  That's Trump's ultimate model. 

Trump's political model is Orban, who took a democracy and overturned it into tyranny.

Trump's view of national social structure is of a small number of aristocrats at the top, subservient to him as king, a reduced middle class, and a very extensive starving class.

That's all.

Budd Shenkin

Big Law Phones It In

When Trump started bullying the large law firms and Paul, Weiss and Skadden Arps and other folded, I turned to my good friend anonymous, a former longtime managing partner of a very prominent DC firm. He jotted down his thoughts, which I thought was very valuable. Here it is.

I've watched with disgust — but not surprise — as one big law firm after another has caved to Trump's extortion.  I spent decades in management in "Big Law", not only helping to run my own multi-billion dollar law firm, but spending lots of time with managers from other major firms, too.  So, again, I'm revolted, but not surprised, by what's happening. 

About 30 years ago, I heard the head of the Law Firm Division of Citibank's Private Bank give a speech in which he said, "the law firm business is fast separating into two wholly distinct industries: there's the top 20 law firms, which are hugely profitable, growing rapidly, largely impervious to economic trends and able to raise rates almost without limits, because they handle the big deals, the big financings and the big litigations, none of which are particularly price-sensitive to legal fees;  and then there's everybody else.  And the gap between these two groups is going to grow and widen indefnitely."

The term "Big Law" hadn't been invented then, but he was presciently observing that this privileged group of law firms was indeed in a different business from all other law firms, and that they were real economic juggernauts.  I rode that gravy train myself for 30+ years.

These law firms were manic about just one thing: making sure each year was more profitable than the last. That was true 30 years ago, and it's still true today.  They had (and have) the luxury of jettisoning smaller clients in favor of major corporations and private equity firms; they turned the concept of "partnership" on its head and got comfortable firing partners who had spent their lives there, but who were not able to run fast enough on the hamster wheel of business production. They admitted proportionately fewer and fewer associates to the partnership, helping the Ponzi scheme to endure forever. And they create a class of faux-partners (usually called "Income Partners" or the more boorish "Contract Partners"). while still keeping the lowest class of senior lawyers, the "Counsel", too. 

The profits the Big Law firms made over the last few decades were obscene by any sane comparative measure, and that's more true today than ever.  The rest of the legal industry struggles for profitability and endures really intense competition and rate pressure.  Not the big boys.

I share all this because Big Law is facing this unexpected assault on its domain — Trump's extortion — through this narrow, hard-wired perspective.  One needs to appreciate how sacred they hold the principle that every year's profits must go up, no matter what the social or morale cost. Only then can one understand this pathetic, irresponsible, depressing rush to pay Donald Trump his blood money. 

Big Law is in perhaps the best position of any industry to stand up to Donald Trump.  His threats to cancel their security clearances is more optics than dangerous: very few Big Law partners have security clearances, and in almost no cases are those clearances necessary for those firms to do their business.  Similarly, the threat to ban them from further government work sounds mighty scary, but most of these firms don't represent the federal government. The feds are usually represented by government lawyers within their own agencies and departments, and when they do hire outside counsel, the feds usually won't pay $1,500 an hour for a lawyer's time. 

To be sure, Big Law stands to lose some clients whom they represent before federal agencies and tribunals, and that makes them nervous. More seriously, major clients who are themselves worried about maintaining good relationships with Trump no matter how rich they are (Mark Zuckerberg, Jeff Bezos, Elon Musk, Larry Ellison and Patrick Soon-Shiong are notable examples, and there are many more)  may find that Big Law firms in Trump's crosshairs could be radioactive, and they will want to run from them.  I'm not minimizing the worry that Big Law has about such a dent in their revenues if and when major, multi-miliion dollar clients depart, but really, when you're grossing $2 billion a year on 60% profit margins, you've got a whole lot buffer to get you through.

In short, these firms are the best-protected, best-suited, strongest and most buoyant businesses in the country, and their apoplexy about  what Trump can do to them financially is based on cultural fears, not economic ones: they don't want to slip way down on the AmLaw 100 list in profitability, no matter what. So instead of leading the fight against Trump's excesses, they're complicit. 

Of course, you'd like to believe that these firms also uniquely embrace their ethical, moral and professional commitments to the rule of law. If lawyers don 't take that seriously, who will?   What Skadden, Paul Weiss, Milbank and others are doing in caving to Trump — and giving him $100 million in free legal services to boot — is a wholesale abdication of everything every lawyer should believe about his professional obligations. 

In short, I am in no way surprised at their lack of character or courage.  I'm only surprised at how short-sighted these firms are: I believe that Trump's extortion will be tossed aside by the courts (including the Supreme Court, if the cases get that far). All that will be left, then, is this indelible stain on the reputation of all these craven wussies, and I don't see that stain washing off very easily.  These firms do compete intensely for young talent, and there will be many among our best and brightest law graduates who will choose firms that did not sell their souls in this way. There will be clients, too, who, in choosing a law firm to represent them, may think twice about hiring a firm with so little backbone, when there are many others who did stand tall.

Very well said!

Budd Shenkin

Catch 22, the Movie

I just watched Catch 22 again. I had read the book in med school, I think, primed by my roommate, Ollie Korshin, who loved it. Ollie had a weird sense of humor, but interesting. He was also a prime devoté of all the Donald Duck comics, especially those featuring Scrooge McDuck. I think the common thread must be over the top characters. I don't know what the genre is, but there are movies and books where the characters are caricatures, “a picture, description, or imitation of a person in which certain striking characteristics are exaggerated in order to create a comic or grotesque effect.”

I had seen the movie before, of course, and hadn't really liked it, although I was sharp enough to realize that the repetitive flashbacks to Yossarian in the plane where Snowden is dying in his arms, feeling cold as shock sets in, and Yossarian is reduced to reassuring him that everything will be OK, is the underlying motif. But now it has just rocketed up to my number one anti-war movie – that question of what is the #1 anti-war movie recurs frequently. I think Dr. Strangelove, which shares a genre with Catch 22, whatever that genre is named, is #2, or maybe you could switch them around. Since movies stay as they are and since movies are a conversation between the print and the viewer, it must be me who has changed.

Pretty much everyone in Catch 22 is a caricature except Yossarian, the only sane and normal person, except maybe Luciana, the whore he wants to marry but who dies when the supercilious pipe-smoking Aarfy throws her out the window after he fucks her because it would tarnish his preppy image if the truth got out. In Dr. Strangelove, Mandrake is a normal human being, and maybe the President, but that might be it. The normal vs. the crazy others in the world, I guess that's the description.

Catch 22 has PTSD before PTSD had a name, or at least an acronym. That's the point of Yossarian and Snowden, how it recurs – that's PTSD. And then there is moral injury, in spades, shown but not named, because the name came in the 1990's, invented by my high school and undergrad classmate, Jonathan Shay, in his book Achilles in Vietnam. You can see the impulse to throw faux medals over the White House fence, because here in World War II the officers are doing the same obscene shit as we heard about with Vietnam, when soldiers are ordered to do unholy acts that are perversions of war, which upsets them deeply, and then they are given medals with the hope that the medals will obscure the sins.

What a strange term, perversions of war. It's OK to kill soldiers but not civilians. Why is it OK to kill soldiers? Because they will kill you if they can, or they will take important things from you. OK, OK, what's the alternative? I can't think of any. But still, perversions of war. Wow.

The irony that pervades it heightens the sadness rather than undercutting it, I think. It's the irony that lifts it above the other anti-war movies, I think. More than Paths of Glory, for instance. Such an anti-official movie, completely appropriate for the 60's. The insistence on true human relationships in one man, and the bureaucracy and of course, capitalism, and common social conventions and the ignorance of most people. All the perversions of society visited upon war.

Catch 22 has unspeakable tragedy, dressed up with irony, which is hilarious, but can you really laugh? Can you really laugh at Strangelove? The sadness, craziness. Irrational idiocy of bureaucracy. The good war, they say, WW II. Of which there is not one true example in history. Justified war, that there is. But not good. And crazy personal lives that keep going on. Crazy. Irony, irony. You have to hold the concepts in your mind at the same time. The absurdity that is both hilarious and tragic. Maybe Kafka, maybe that's the antecedent. Maybe Vonnegut, with all that craziness from PTSD, living on Titan and being watched by aliens as you procreate – Vonnegut and Joseph Heller were friends, which is so appropriate.

How can you laugh at tragedy and malignant craziness? It's more like gaping at it, maybe. I wonder if it's in Cervantes. We invent new names for things, which is good, but it was always there, lurking somewhere.

Budd Shenkin

Protesting in Walnut Creek

I took to the streets yesterday, at Walnut Creek, putting my body on the line. I was ready to be arrested, I guess – better have a lawyer lined up to call. Well, that's pretty dramatic. In fact, I grabbed a pre-made sign and joined other middle aged or older protestors, some with kids, and lined the streets of the Broadway Plaza shopping center with some occasional mild chants, no opposition, occasional car honks of support, a closed Tesla show room, and gave witness of opposition to the coup. I missed Ann, with whom I also gave witness, once in front of the Grand Lake Theater in Oakland, another time in Maui. When we were younger, we protested separately, with other partners, she in Berkeley, me in Washington, DC. Giving public witness of opposition might have some effect – it certainly did with Vietnam – and it feels good to be at least doing something. I'm preparing to do it again, this time with a sign that I will prepare at home.

There were maybe 2,000 people there – not just a handful, not just 100 – yet there was no press or TV coverage at all that I could see. (Later, I saw that the San Jose Mercury News and East Bay News covered it.) Rachel Maddow tries to highlight nationwide protests at the beginning of her shows, but it's really a minimal number of people. What'll it take? Missing a social security check would do it, maybe – it's actually amazing how important those checks are, even to people I know personally, in my social class. There have been so many outrages so far, and so little resistence. It's lamentable. But I'm out there.

I was told about this Saturday protest by my Saturday walking partner, Mary Lou. She's from a conservative family in Missouri, is surrounded by conservative friends at work, but she knows her own mind, and is given to public and private events. So we met there at noon, walked around together, I took some pictures, and I was glad my gluteous medius was recovered enough for me to endure our 2.75 mile traditional walk around the Lafayette Reseervoir, and our traditional wonderful breakfast at Millie's American Kitchen with our friends the owners, Aimee and Victor, and then to stand around and walk the protest. Then as the manifestation was coming to an end, I said to Mary Lou, want an ice cream? I thought I remembered an ice cream store near the pretzel wagon just outside Macy's and Starbuck's. Sure enough, there is was, Haagen-Daz, so I had coffee ice cream and she had chocolate. We sat outside and ate it at a table that I used to sit at on Saturday mornings while Ann got her hair cut nearby, and I would work on this or that on my computer. It was familiar.

Today I remembered “stopping for ice cream” when I was a kid, maybe early or mid teens, and for some reason I was in the car with my father driving and my mother riding shotgun and one or two of the other kids in the back seat with me. It was somewhere near Upper Darby, I think. My father said, “What about a softserve ice cream?” My mother said OK. Then my Dad said, I think there's a Dairy Queen just over this rise here. My mother looked askance at him. He was having some trouble with his weight. “You're really disgusting,” she said. Clearly, he had not been adhering strictly to a diet. He just took it and we stopped.

So, clearly, it imbedded itself indelibly in my mind. I sure didn't want a marriage where my wife would say that to me. No way.

Explains a lot.

Organizing The Democrats

I continue to think that the biggest problem the Democrats have is organizing themselves. Polls reveal that most people back the Democrats on issues. The problem remains of selling the people on the brand of the Democrats - oh so tarnished! - and finding the right messengers.

It's important to remember that the claim of a Trump mandate is false. It was not a landslide.  Given the low rating of Biden and the last minute substitution of Kamala, it's pretty remarkable.

Popular vote:

Trump -- 31.78%

Harris - 30.84 %

Third party - 1.06%

Didn't vote - 36.33%

It was a very close election.

How to organize the Democrats? Clarify roles.

There are some who are excellent at hosting local events - best are Bernie and AOC, but others do well, too, like my friend Eric Swalwell.

Others do well on talk shows -- Jamie Raskin is excellent, Swalwell, lots of others.

Others could do well making statements in congress.  Upstage Schumer and Jeffries with those who can really sell. They are there! Find them the proper stage around the halls of Congress and watch them make the case.

There are others who excel in the written word. Let them write.

Then, who can conduct this orchestra? Get a council, as I've suggested before, to get the strategy together, define the main themes, who presents them where - organize! Pete Buttigieg would be great at this, especially with his McKinsey consulting background, Pete could probably recommend a fine new organizational structure for the Democratic Party.

I continue to think of this all as an organizational problem.  Get rid of the senior dominance, remember that there is no "i" in "team," find some ways to pull together the disparate threads of the Democratic message and make it stick, find a couple of charismatic leaders, and then play the game. You can't tell who wins until you play the game.

Budd Shenkin

What Is To Be Done?

My close friend Rick responds to my first post today:

Only a madman wouldn't agree with your frustration, anger and fear about what is happening.  RFK is one thing, but the insanity is everywhere: from breathtaking conflicts of interest (the FAA today is reported to be cancelling its $4 billlion contract with Verizon — to award the work to Elon Musk!!)  to unimaginable insensitivity to human suffering (hundreds of thousands of people who depend on USAID for basic food/survival have been suddenly cut off and literally left to die. Research programs are stopped, whole departments are experiencing massive layoffs without plan or reason. Migrants are being treated like terrorists and locked up in Gitmo. Our allies are being treated like our enemies, and our enemies are being courted like allies. Tariffs will soon cut us out of all global markets, handing them to the Chinese. Musk's mission is being managed by a 23-year old and a 25-year old with no prior government experience, slashing jobs with their machetes (much like the Red Guard in China).  History is brazenly rewritten with no thought for the truth ("Zelensky is a dictator!  Ukraine started the war!"). Trump calls himself "King" and talks about a third term (although all that may be deliberate bombast from him).  The EPA is being dismantled; so is the FAA. So is the FDA.  The FBI and DOJ are now partisan arms of the presidency, positioned to pursue his political enemies with abandon. 

God help us.

But when you say that the Dems are organizing to fight, I remain very skeptical.  Lawsuits?  Sure, bring 'em. But don't count on the courts to support you. Filibusters? Sure, they can work to delay pieces of legislation here or there, but the public hates it, thinks that's a big part of the problem, and they will not reward the Dems at election time for scorched earth legislative tactics. 

Maybe there are emerging Democratic leaders who will make sense and draw support. I'm skeptical. I suspect we're going to be riding this madness for four more years and can only hope that the country holds together that long. 

I responded to Rick:

I think resistance is necessary.  Playing dead turns out to being dead.

What kind of resistance?  I think it's got to be explaining what's happening.  Understanding comes first.  Find ways to communicate.  Work hard at it.  Find out who can do it, and how.  Refuse to be suppressed.  It's necessary to fan the flames of a popular movement, and find the leaders, and the group of leaders.

BTW - In making the case, I would show what happened in Hungary, and compare it to what is happening with Trump.  It's also what happened in Putin's Russia -- the co-conspirators loot the public treasury.  That's something people can understand.

One more thing - how do you convince people?  You tell them, you tell them again, and you don't stop telling them.  Did you even hit a nail just once, and see your work done?  Nope - you have to drive it in again and again.  It's the same with public opinion.  Gotta drive it home.

Myself, I'd also do it not just with domestic issues, but with foreign policy.  I know traditionally the public "doesn't pay attention," but I don't believe that's always true.  "We are now lining up with our enemies, Communist Russia has become Oligarch Russia - and we're lining up with them!  Who are our oligarchs - name them!  What are they doing with the press - show the examples.

The problem of democracy is that it presents tools for a determined group of anti-democrats to take over the levers of power.  That's what we're seeing here.  The very last guardrail is public opinion, and that must be the aim of the resistance now.  Public Opinion.

Budd Shenkin

It Looks Like Our Epoch Really Sucks

​I looked at what RFK Jr is doing now. Might as well put the Taliban in charge, I thought, not totally logically, but that's what I thought. Put a stop to all that vaccine development - thanks, you awful twisted stupid damaged POS. And then I posted about our current condition:

Stupid, Destructive, Mean, Greedy.

Not to mention psychopathic and sociopathic.

How long, o God, how long?

This is just the start.

The worst era ever has begun.

This all happens and Carville and others, the "we have no power" crowd, say let it fall, and let people know who's responsible. I say, AYFKM?? That's such a responsible look! Don't you realize that Dems were deposed partially because they were seen as being ineffective, as "Not keeping us safe?" That's what the crime in the streets, making theft a misdemeanor, not protecting the borders is about, to some extent. It's not all just xenophobia and prejudice. Ineffective and misguided, those are the charges. Not being focused on the real problems, which is not misuse of pronouns, and then keeping a government that takes 8 years to get anything done. You really want to add more substance to the charge of "ineffective?"

So, help is coming, resistance is coming, we just don't know from where. The state AG's are coming together. The Blue State governors will be coming together. Pete Buttigieg is there, organizing and verbalizing. I hope the formal congressional leadership will have the wisdom, even if they keep their titles, to step aside and let the capable Dems come to the fore, those who know how to act, how to explain, how to persuade.

Meanwhile, how mean and stupid can they be? We're finding out.

Budd Shenkin