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February 24, 2017


Joseph E. Stiglitz won a Nobel Prize in economics for his work on inequality of information in otherwise free market transactions between buyers and sellers. More than two centuries earlier, Adam Smith wrote of the “invisible hand” which he thought would guide free markets to success, but he assumed an equality of information between contracting parties that didn’t exist then and certainly does not exist now in this age of specialization, as Stiglitz’s prize-winning effort demonstrates. Some of such failure is structural, that is, let’ say a doctor and patient as contracting parties have a discussion about the costs of proposed surgery. Who has the upper hand? The same applies to attorney and client and stock broker and unwary widows.  Inequality of information is built into the process; there’s no way to avoid it though there is a way to avoid its unfair consequences, as will be shown.

Thus, as Smith assumed, contracting parties will not take advantage of one another and will treat such agreements fairly as buyer or seller of goods and services as though there were no inequality of information, even if there is, all of which brings me to the point: That inequality of information is not a problem where those involved do not lie or misrepresent their side of the bargain, where the parties are ethical in their business practices and whose reputations are guarded by the old maxim that “their word is their bond.” I have often counseled clients that there is no such thing as a written contract; that all contracts are oral and that the so-called “written contract” is merely a printed memorandum of an oral agreement already reached. However, since not all contracting parties are ethical, such memoranda are wise to have in case of future disagreements.

Trump is a proven liar, at least by the standards of the universe we inhabit, so making a deal with him whether oral or in writing about anything is an exercise in hope that he will keep his end of the bargain. I heard him say that if he went to the bank and borrowed a million dollars and the bank called in the note the next day that he would offer them $900,000, which strongly suggests that he never meant to pay the face value of the note in the first place, much less accrued interest. This, of course, at least in the world in which we live, has an obvious moral component, and it is this: That he did not enter into such a hypothetical loan agreement in good faith in the first place.

That may be immaterial and not make a difference in the world of narcissistic haze in which he lives in a dog-eat-dog super-bullying atmosphere in which conscience is not a factor and where the world revolves around him and his personal success in his every undertaking and where good faith is unknown and truth is a vice rather than a virtue, but it is a far cry from the assumptions of Smith and even Stiglitz that there has to be some modicum of ethical conduct in the marketplace. Whether oral or written, we have come to expect those with whom we deal to be as “good as their word,” or subject to suit if not.

Trump does not seem to be interested in truth in either the commercial or political marketplace as evidenced by his bare-faced lying on the campaign trail (and since), his bankruptcies, his failed marital contracts, his repeated claims of how he won the election in a landslide etc. He seems to want us to live in our world by the delusionary facts he has manufactured in his, one in which he is never wrong and anything and everything that goes wrong is the fault of someone else, such as Crooked Hillary, Obama, the lying media, Democrats, or even Republicans who fail to shower him with adulation for his many attributes in the world he inhabits.

Given his record where truth is a sometime thing, there is little reason to believe anything he says or does. Other countries are rightly aghast at his reckless use of words but hopeful that he didn’t really mean what he said or did and that, for instance, long-standing policies relating to defense and intelligence with our allies will continue in place, especially our European allies, who have the Russian bear knocking at their doors with Trump’s encouragement of Putin, whom he calls “a strong leader” and whose annexation of Crimea he endorsed, the equivalent of Winston Churchill’s endorsement of Hitler’s annexation of Austria prior to WW II which, had it happened, would have brought Churchill and his Tory government down in a flash. Here we have been trained to say, “Oh, that’s just Donald.” It is not “just Donald,” of course. He speaks for all of us and I for one resent his sellout to Putin’s takeover of Crimea.

With such back-slapping of a murdering dictator as Putin, we are well-advised to keep an eye on  our so-called “president” in the event he wants to become “a strong leader” too, and with his aversion to truth as we know it in our world and a right wing extremist such as Bannon lurking in the background giving him advice and the media silenced, an internal coup is not impossible, a situation where martial law is decreed, the Constitution is suspended and we assume the status of a banana republic as our democracy vanishes into the mists of history and we go the way of Rome. Thou too, Brutus (Trump)?

The bad news for Putin is that Trump’s word is no respecter of person and that (unless Putin has him blackmailed) he can turn on Putin in an instant if Putin hurts his feelings, which seems to be the new if unspoken arbiter in our foreign relations policies. For this reason (and we have to start somewhere to stop this erosion of our democracy), I think we must have an independent investigator armed with subpoena power get to the very bottom of this Russian-Trump mystery of how we can be so friendly with a dictator who is so antagonistic to our interests and that of our allies. I hope my suspicions are wrong and that sedition and treason are not involved, but right now I am more than suspicious given (1)Trump’s aversion to truth-telling, (2) his inexplicable affection for Putin, and (3) the possibility of blackmail given his business interests in Russia or elsewhere financed by Russian banks and/or oligarchs.

Something is rotten in the State of Denmark, I think but cannot yet prove, and what we need is a heavy dose of unvarnished truth concerning Trump’s connections with Russia, both commercial and political, and soon, because this issue is not going away. So far we have a House and a Senate committee who are investigating this mystery, but I fear a whitewash, hence my call for an independent investigation of what has gone on and what is going on in this highly unusual turn of international events. I think finally that all of us should pressure our representatives to create and empower an independent investigator to look into this seeming anomaly and make such findings available to the rest of us – today.    GERALD      E






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