Return on Investment

By most accounts, President Trump is a wealthy man. His fortune – and the success it represents to the typical American – was a centerpiece of his campaign. But a president with a vast network of domestic and international business dealings presents unique challenges. The basic issues aren’t tough to understand. The President might use public resources for personal profit. In addition, and more concerning, foreign governments, banks and private corporations may try to influence US policies by penalizing (or showing favoritism to) President Trump’s many business interests. The point is simple: the public deserves a president who’s only goal is serving the people who elected him – not family, not business partners, not investors, and not banks. To use the President’s words: “America first.”

Typically, public officials take a few simple steps (called “divestment”) to eliminate these concerns. First, they tell us what they own. Then, they take everything they own and sell it. They put the proceeds in an account run by someone else. This prevents both of the problems above. They can’t make decisions to benefit their business interests, because they don’t know what their business interests are. Likewise, they can’t be manipulated. After their term, they get the account back. Again, this is simple and straightforward.

President Trump has taken none of these steps. As of this writing, the sum total of the President’s action on this subject can be summarized like this:

  1. Take everything you own.
  2. Put it in a large trust.
  3. Make yourself the only beneficiary of this trust.
  4. Do not tell the public what is in it.
  5. Have your children run it.
  6. Say you won’t talk to them about it.
  7. Say you won’t do any new foreign deals.

A lot has been written about the problems with what the president has done. Quickly: We still don’t know what the president owns, so we can’t know that when he makes decisions, he is doing what’s best for the public (as opposed to his pocketbook). His children are running the businesses and have intimate access to the President. He’s actually still doing foreign deals. He still owns everything.

We are past the point where these problems are likely to be completely remedied. None of these concerns where enough to sway the President’s supporters during the campaign. They won’t to cause supporters to change their minds now. Moreover, Republicans in Congress voted down an effort to have President Trump’s tax returns released – which would have given the public better knowledge of what the President owns. In short, the President doesn’t want to divest, and no one is going to force him to.

But there is already evidence that the President Trump is profiting from being president – and that this is costing taxpayers a lot of money.  The President invited members of his Mar-a-Lago club to participate in interviewing candidates for government jobs and held a state visit from the Japanese prime minister. Both increase the value of the membership, to the benefit of Trump himself. The President’s real estate agents are advertising Secret Service security as a benefit of renting space in his properties. Again, taxpayers pay for the security, Trump gets to charge higher prices for property. The Department of Defense is renting space in Trump Tower – literally taking public money and giving it to Trump himself. More generally, the President’s security and the security of his family is costing taxpayers a lot of money. Recently, taxpayers financed Eric Trump’s business trip to Uruguay to the tune of $100,000 – about double the amount the typical American household makes in a year.

The public is stuck on this issue. Supporters of Trump and other Republicans would probably prefer the President divest, but are worried that doing so might damage the President and their chance at enacting policies they want. Democrats, on the other hand, scream for full disclosure and divestment immediately. I doubt this reflects an inherent commitment to ethics – just as I doubt that Republican punting reflects an inherent commitment to corruption. Personally, I want the President to divest yesterday – but as I said, we seem to be stuck. As with many other issues in American politics, partisanship is creating an outcome that makes everyone worse off.

So, I propose a middle-ground: give the American people a cut of Trump’s business deals. By electing him, and tacitly accepting his refusal to divest, Americans have become voluntary investors in the Trump organization. Investors get paid – they get a return for taking a risk. Even the President’s most ardent supporters would acknowledge they took a risk in supporting him – a vote for any politician is. The least they can expect is a share of the profits.

The exact cut can be negotiated, and I think there are a few reasonable numbers. Socialists could argue that Trump should receive 1 three-hundred nineteen millionth of future profits – which would then be equally divided among the American public. A different approach would assign Trump a greater share – after all, they were his businesses to begin with. The public would then take a fair share (call it the “POTUS bump”) for loaning him the presidency, which surely adds value. The lowest cut we should accept, in my view, is enough to cover the full cost of his security, which is estimated to be more than $1 billion for this term. For the record, that’s about 25 times President Obama’s first term. We should recover this massive new investment as soon as possible.

Luckily, Trump himself has already laid the groundwork for this proposal. By placing his property in a trust and making himself the only beneficiary, he’s made the fix simple. He doesn’t even need to disclose all of his assets or release his tax returns. All he has to do is add the Federal Treasury as a beneficiary. This would likely require legislation (which may be unconstitutional, but we’ll cross that bridge when we get there). After that, Congress should pass a law requiring presidents, beginning 2024, to divest of all business holdings – that would eliminate the issue for all presidents in the future. For now,  there must be some stop-gap that – at the very least – minimizes the fiscal cost.

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