What if foreign countries could just bribe the American president?

by on November 20, 2016 at 10:13 pm in Current Affairs, Economics, Political Science, Uncategorized | Permalink

Here is a Washington Post look at a related issue.  I know bribing a president is illegal and it just…sounds so wrong…but what exactly does the equilibrium look like?


Here are a few points:

1. Presumably the wealthier countries would be willing to pay more for American security guarantees.

2. Countries whose wealth can be easily captured and controlled by hostile forces — oil exporters? — would be willing to pay more for protection.

3. Human rights would not matter so much for American security guarantees.

So far this is not sounding so different from the status quo.  Let’s continue:

4. A selfish president might capture income from hard-to-defend countries, not internalizing the higher costs for the U.S. taxpayer.  So American guarantees could extend too far and wide from an American perspective, although it is not obvious they will do so from a cosmopolitan perspective.

5. Presumably the president also could accept funds not to defend various nations.  So large, wealthy foreign aggressors could “buy out” the United States from defending say Georgia or Taiwan.  That sounds terrible, and perhaps it is from a cosmopolitan standpoint.  But is it contrary to the U.S. national interest?  Keep in mind if the United States becomes non-credible altogether, it would be less able to extract payments from Israel, South Korea, and other nations.  That means a bribed president may not “fold his hand” so quickly on all of these endangered small countries.  Alternatively, a bribed president may decide to let one of “the little ones” go just to prove a point to the others.

You’ll notice that #4 and #5 counteract each other.  I suspect this balance would be worse than the status quo, but that doesn’t follow a priori.

6. You could imagine an American president who allows foreign countries to fall into especially precarious situations to increase his budgetary intake from bribes.  The return to pre-emptive peace initiatives might be strongly negative.

7. An alternative perspective is that the American government already collects such bribes in the form of trade agreements, use of military bases, and so on.  The real problem is not bribery per se, but rather concentrating so many of the returns in the hands of the president.  Tariffs on American exports might go up, for instance, if the president is pocketing the bribes himself.

8. A worry is that bribes collected by a president would not lead to as much stability of policy as what might be generated by the decisions of “the foreign policy establishment.”  Perhaps commercial arrangements are intrinsically less stable than bureaucratically-generated policies.  A president’s utility function and game-theoretic behavior is probably harder to forecast than the wishes of the bureaucracy.  The resulting uncertainty would limit global trade and investment and also probably increase nuclear proliferation.  This strikes me as a major concern.

9. A related worry is that nations are so very large relative to the avaricious desires of the president.  After a small number of payments, the president might act fairly arbitrarily, as extra bribes wouldn’t matter much and the foreign policy establishment already has been cut out of the picture.  (Oddly it becomes less important if America has a truly greedy and rapacious president where the MU for money doesn’t much decline with presidential wealth.)

It is worth thinking through the dynamics on all this a little more clearly than what I am seeing so far.

1 Matt Waters November 20, 2016 at 10:25 pm

The simpler reason to be fearful of bribes is that countries willing to personally bribe the President are going to be the more corrupt countries with. worse democracies and human rights. US law doesn’t allow private companies to bribe foreign officials specifically to encourage human rights. See the Wal-Mart and Seimens cases.

Now the US may have the official who is bribed. The money for favors direction is reversed but the net effect is the same. Corrupt foreign governments only participate if it enhances their personal well-being, which is not usually the same as the well-being of their country.

2 Tyler Cowen November 20, 2016 at 10:30 pm

That is a good point, and I thought about it quite a bit, though the experience of the “neutral” nations during WWII makes me think it may not be so important…

3 JC November 21, 2016 at 2:52 am

Good point. It’s the human nature, bad guys (or “bad hombres” in Trumpland) will turn up in force and do-gooders will avoid such approach. It’s like giving people the opportunity to bribe the police and DOJ. The next day you’ll have a line full of representatives (presumably lawyers) of criminals with bags of cash outside the “Federal Bureau of Bribes”.

4 EB November 21, 2016 at 6:16 am

Sorry, do you mean that foreign governments and companies have been using the Clinton Foundation to bribe the police and DOJ?

5 JC November 21, 2016 at 6:43 am

I mean making bribing legal will only attract more bad guys than good guys.

6 EB November 21, 2016 at 6:55 am

So you mean that the new Obama Foundation will compete with Clinton Foundation.

7 Jose November 21, 2016 at 6:27 am
8 anon November 21, 2016 at 12:38 pm
9 Mark Thorson November 20, 2016 at 10:32 pm

Is this a secret bribe or a public bribe? Is there a bidding market? What happens if the President takes the money but welches on the deal?

10 mulp November 21, 2016 at 11:21 am

Why focus on “bribes”?

Saudi Arabia orders Trump to nuke Iran or else Trump’s assets in Dubai, et al, will be confiscated? Maybe when one of Trump’s family members are at the Trump property on business, and will be beheaded if Trump has not carpet bombed Iran with nukes by midnight?

11 derek November 20, 2016 at 10:34 pm

Amazing. Would this post have shown up if Hillary was president? She was selling influence already as Secretary of State.

The question isn’t who buys protection, it is what is in the interest of the US to protect. Many of the commitments stem from facts on the ground that no longer exist. Saudi oil is not as important as it was, I think the third and eleventh largest economies can maintain their own security, Europe is intent on making itself indefensible and probably beyond redemption. China is going to be self absorbed for a while. A black president managed to avoid paying any attention to a multi country conflict in Africa with no ill effects. The Democrat ‘Rubble makes no Trouble’ foreign policy seems to have some merit and probably will be continued.

12 BC November 20, 2016 at 11:16 pm

Hillary’s conflicts and influence peddling were widely discussed during the campaign. Indeed, *many* people cited those conflicts as reasons for voting against her. So, the real question is whether ethical concerns and conflicts of interest matter for the actual President too, or just when talking about candidates that might hypothetically become President.

13 Aaron Luchko November 21, 2016 at 1:07 am

Errr, people were donating to the Clinton charity, with the hopes of gaining access to her as the Secretary of State and potentially influence her decision.

a) It’s not at all clear the access was granted.

b) It’s even less clear that any decisions were influenced.

c) Even if a & b were true it’s arguably less bad than the standard practice of exchanging campaign donations for access/influence.

d) Trump’s potential influence selling is already far worse than a, b, or c. Foreign diplomats are already booking rooms in Trump’s Hotels in the hopes that by directly benefiting his business they’ll get more favourable treatment. And his extensive, and largely undisclosed financial holdings, means there are numerous opportunities for multiple groups to affect his wealth without disclosure.

14 NTrust November 21, 2016 at 9:10 am

“a) It’s not at all clear the access was granted.

b) It’s even less clear that any decisions were influenced.”

Watch this, then get back to us. This was made before some new pieces of evidence came out of Podesta’s email. We’re still waiting to know what was in the missing 33,000 emails, but the Podesta email indicate that it was incriminating enough that they were in a hurry to delete them.

15 Bill November 21, 2016 at 9:55 am

There are too many four pinocchio claims in this to cite to many other findings, including Comey’s, that it is not worth responding to. But, for the lazy, here is a piece from ABC News:

“In late 2014, the State Department asked Clinton and other former secretaries of state to hand over any work-related emails they may have.

By then, Clinton had already “deleted some [emails] over time as an ordinary user would,” FBI Director James Comey told lawmakers at a July congressional hearing.

And she tasked her legal team to determine which of the roughly 60,000 emails still on her server were work-related.

“Clinton told the FBI that she directed her legal team to provide any work-related or arguably work-related emails to State; however she did not participate in the development of the specific process to be used or in discussions of the locations of where her emails might exist,” the FBI concluded in its investigative summary of the case.

Comey testified that the FBI “didn’t find any evidence of evil intent and intent to obstruct justice.”

To determine which emails were work-related, a member of Clinton’s legal team did four things: she automatically deemed any email sent from or to a .gov and .mil address as related to work; she searched the tens of thousands of emails for names of senior State Department officials, lawmakers, foreign leaders and other government officials; she conducted a keyword search for work-related terms; and she looked at the sender, recipient and “subject” of every email for other potentially work-related emails, but she did not read the contents of those emails.

In December 2014, Clinton’s legal team provided about 30,000 emails — totaling 55,000 pages — to the State Department.

“[Clinton] then was asked by her lawyers at the end, ‘Do you want us to keep the personal emails?’ And she said, ‘I have no use for them anymore.’ It’s then that they issued the direction that the technical people delete them,” Comey told lawmakers.”

16 MikeP November 21, 2016 at 10:44 am

Right. And make sure you bleach-bit the lot because it would be terrible if any yoga routines got out.

17 chuck martel November 21, 2016 at 11:48 am

“the FBI “didn’t find any evidence of evil intent and intent to obstruct justice.”

Doesn’t seem to work with speeding tickets or failure to pay taxes.

18 Bill November 21, 2016 at 11:52 am

Mike, of course you know that it was a State Department employee who did this as he was supposed to have done this earlier before any investigations. You also know the FBI investigated this as well. But, then, you like the less informed so that they can form false beliefs.

Unless you are one of the less informed.

Here is the material from Fact Check . org

“Trump is referring to 31,830 emails that Clinton’s lawyers had deemed personal. These emails did not have to be turned over to the State Department, which in the summer of 2014 requested all work-related emails that the former secretary of state had in her possession. (See “A Guide to Clinton’s Emails.”)
The department’s policy allows its employees to determine which emails are work-related and must be preserved. “Messages that are not records may be deleted when no longer needed,” according to the State Department’s Foreign Affairs Manual (5 FAM 443.5). (See “Trump on the Stump.“)
That means Clinton was within her right to delete these emails, so that’s the first thing to know.
Now, Trump is right that these emails were deleted about three weeks after Clinton received a subpoena on March 4 from a Republican-controlled House committee investigating the 2012 deaths of four Americans in Benghazi. However, there is no evidence that she knew that the emails were deleted after the subpoena was issued.
According to the FBI’s investigative notes, Cheryl Mills, Clinton’s former chief of staff, in December 2014 told Platte River Networks that Clinton had preserved her work-related emails and “no longer needed access to any of her e-mails older than 60 days.” At that time, Mills instructed a PRN employee “to modify the e-mail retention policy” on Clinton’s server “to reflect this change.” That would automatically delete the old emails. But the PRN employee told the FBI that “he had an ‘oh shit’ moment” after learning about the subpoena sometime between March 25 and March 31, 2015, which is when he deleted Clinton’s emails. Clinton told the FBI that she was not aware that PRN deleted her emails in late March 2015, and the FBI did not say when she learned that they were deleted. (See “The FBI Files on Clinton’s Emails.”)”

19 Boonton November 21, 2016 at 6:40 am

“was selling influence already…”

Two years from now we will be looking back at the prosecutions and convictions, marvel at how shocked we were when all the truth came out?

There is a huge incoherence with Trump and his supporters. The slightest imperfection on one side is cause for great alarm and indignation while it feels as if they almost expect and want Trump to just do the extreme version of what Hillary and others are accused.

20 anon November 21, 2016 at 8:54 am

The double standard has been obvious, but only Trump zealots will stick with it. A few, a year from now, will still think “Clinton Foundation” excuses anything.

But by then most people will be judging Trump as Trump.

21 Mark Thorson November 21, 2016 at 10:45 am

Why the double standard? Why do we cut Trump a break that we would never give to the Clintons? It’s because we got what we wanted. We smashed the old Republican and Democrat established power structures. If Trump turns out to be a great President, that’s just a bonus. If he turns out to be a terrible President, that’s too bad but to us the important thing has already been achieved, and the consequences of a Trump Presidency are just part of the cost of our great victory.

22 Boonton November 21, 2016 at 10:57 am

And again it is two years because there’s no excuse. The Executive controls law enforcement on a Federal level. If there’s clear evidence of crimes they simply need to be investigated and presented to a grand jury by a Federal prosecutor. He doesn’t need Congress to pass anything or to get a justice appointed tot he SC. He simply has to do the job he swore he was going to do.

23 TMC November 21, 2016 at 7:41 pm

” “Clinton Foundation” excuses anything.”

Another reason to prosecute the Clinton Foundation. The Clintons are basically the only remaining crime family left in the US. Why not kill the last of the breed?

24 derek November 21, 2016 at 10:26 am

Two years out? So this is a meme going around and Tyler fell for it.

How much of Obama’s time was consumed with raising money? I wonder what they bought for their money.

Oddly the question was never even mentioned.

This is gearing up to be one of the best presidencies we have seen in our lifetime. Politicians act wisely when they feel the rope around their neck. Maybe that is why Democrats can’t seem to make anything work because their sycophants are so busy trying to suck on their toes in admiration that they let them get away with murder.

I don’t like corruption. I’m pleased at the new found insistence on purity and good governance among Democrats. Hopefully it sticks.

25 Boonton November 21, 2016 at 10:33 am

Two years is quite fair. If Hillary was very corrupt (and lots of others too), then what possible excuse will there be two years from now and nothing has happened?

Same thing happened with Bush. If Clinton really was so corrupt why didn’t Bush prosecute them? He had the White House for 8 years, a Republican Congress at the beginning. The predictable response from Trumpkins….Bush was in on it, they all protect themselves, all part of the conspiracy, drain the swamp etc.

OK so now you got Trump, he doesn’t owe anything to any party or power broker. So two years from now if there are no prosecutions what will the excuse be? Did he not promise to ‘drain the swamp’? Or was it all bullshit all along and not only did Trump know that but so did his loud, loutish, and self-righteous followers?

26 Harun November 21, 2016 at 2:08 pm

There is a tradition of not prosecuting the guy before you. This helps democratic transition a lot.

That said, the way Obama slow walked everything, I think that tradition may need to change. Its an arms race between institutional rules and politicians gaming them, and Obama gamed them very, very well.

The media protecting him was probably a decisive factor. This is why media bias is very, very dangerous.

27 mulp November 21, 2016 at 11:25 am

Clinton using influence to pay for treating an added 100,000 African for HIV is obviously far more corrupt than Trump nuking Iran to stop Saudi Arabia confiscating his Persian Gulf real estate….

28 The Original D November 21, 2016 at 5:32 pm

Given that many similar posts about Hillary have been made dozens of times on such niche web sites as CNN and the Washington Post, to say nothing of Fox News, I think your concerns have been addressed.

29 Jeff November 20, 2016 at 10:41 pm

The main counterargument in my view is that the POTUS is not a dictator and can’t promise results. Even when the legislature is controlled by the same party, individual legislators have their own constituencies that must be satisfied.

For example, suppose President Trump decides now is the time to demand that Europe shoulder more of the expense of Pax Americana. He will quickly be reminded by the Senator from wherever that thousands of jobs from his district depend on protecting Europe.

30 Art Deco November 20, 2016 at 10:56 pm

No, but in a certain sort of administration, the Department of Justice will look the other way if told to do so.

31 prior_test2 November 21, 2016 at 12:03 am

‘but in a certain sort of administration’

Yes, it is about time to refresh younger people’s memories of the Nixon Administration.

32 JWatts November 21, 2016 at 12:49 am

Didn’t the Nixon administration use the IRS to go after its enemies too?

It’s a good thing that could never happen again.

33 Jan November 21, 2016 at 5:26 am

“Lock her up.”

34 derek November 21, 2016 at 10:27 am

Yes Jan. We finally agree on something.

35 Art Deco November 21, 2016 at 11:02 am

No. Nixon’s people had plans on the drawing board for tax audits of about 2 dozen people (per John Dean, these were on the core ‘enemies list’; the bulk of the enemies list consisted of people the social secretary was directed not to invite to White House functions). . The Commissioner of Internal Revenue (Randolph Thrower) told them no dice.

36 Thor November 21, 2016 at 1:03 am

Or, one could refresh the memories of current Europeans about a more recent case (by arguably the most Nixonian candidate since, well, Nixon).

37 Fazal Majid November 21, 2016 at 2:59 am

The Saturday Night Massacre shows otherwise. Of course, the standard of integrity in the Republic may have degraded considerably since.

38 Art Deco November 21, 2016 at 11:06 am

The director of the Criminal Division during the Nixon Administration was a career prosecutor (and registered Democrat) named Henry Petersen. He had a conversation with John Dean in 1971 in which Dean passed along the desire of John Ehrlichman that a particular investigation be shut down. Petersen tells dean that in his (20+ year) tenure at the Department of Justice, no investigation once opened had ever been shut down on White House orders, “The lawyers in this division would walk out”. Dean says, “I know, Hank, but none of them have ever worked over here”. Dean passed on Petersen’s message to Ehrlichman.

Robert Bork was of the opinion that the special prosecutor law led to abusive investigations (e.g. Lawrence Walsh’s), and that it was not needed. He was remembering Petersen’s Criminal Division, not the one run by Eric Holder’s minions.

39 Ray Lopez November 20, 2016 at 10:44 pm

Not sure what equilibrium TC is looking for. A simple real world experiment is the Philippines, which has widely been assumed to have been bribed by China to give up claims to certain islands in the South China Sea (West Philippines Sea) believed to possibly harbor gas and oil. The net effect is to have prevented a possible confrontation between China and the USA; the drawbacks is that if in fact gas or oil is found under the disputed seas in the future, the Filipino people would lose out. A similar scenario might be in play in Hong Kong and Taiwan (bribes in exchange for those countries giving up claims of independence from the PRC). So bribing is good, in that the strongest party wins (similar to the US justice system, where usually the best financed side wins, even in torts, corporations usually win 67% of the time cases go to trial, and keep in mind only the ‘hard cases’ go to trial, so corporations win much more than 67% of the time). Bribing works is one reason why a Rand or similar institute suggested in the 1980s bribing the Warsaw Pact leader, the USSR, to give up Poland, which was with the Catholic Church and Solidarity clamoring for freedom, I think the amount bandied about was $100B, which back then was a lot of money. Money to be paid to either the Polish leaders or USSR leaders or both. As for individuals bribing in foreign countries, which I’ve done, it generally produces the same result as not bribing, but just speeds up the process (pushes you to the head of the line) and lubricates business. For example, I needed to launder some money in Greece. Like in the USA, I could have ‘smurfed’ 10k euro in small amounts every day or couple of days (to avoid suspicion) and taken forever, given the size of my wad, waiting in line, but instead I opted to bribe a high ranking bank official for a reasonable fee (1%) and they laundered my money in one transaction. Well worth the money, but the equilibrium (getting my money laundered) was the same. For me, time is money and it was well worth it. For others ‘more honest’ it may not be worth the money but the net result is the same, money flows to the strongest hands, like in poker with chips. Nuff said…Enter.

40 Matthew Moore November 20, 2016 at 10:52 pm

Always best to ask, what’s the analogy?

I can think of two. Tribute payments in the classical world and protection payments to organised crime.

In both cases, payment does cover a degree of protection from external aggression. But it’s more important function is to prevent aggression from the principal.

I would expect an occasional bloody American-backed regime change, plus large payments from everyone else not credibly able to resist.

41 Art Deco November 20, 2016 at 10:55 pm

Bribe the President? See Lewis Amselem: the function of the 1st lady is to launder the bribes. A man in that role would have done just as well.

42 Art Deco November 21, 2016 at 10:23 am

Shorter me: I want to be Trump’s next wife

43 msgkings November 21, 2016 at 11:08 am

I’m the model for the ghastly toothless hooker in 1984.

44 chuck martel November 20, 2016 at 10:55 pm

Although not the king, John Churchill, Duke of Marlborough, was in charge of the English military operations in continental Europe during the early years of the 18th century and was supposedly regularly given vast amounts of money by Louis XIV not to attack the French forces or lay siege to French cities.

45 Sam Haysom November 21, 2016 at 12:24 am

In which case Louis got almost no return on his investment. The allied coalition in the WofSS was sustained almost entirely by Churchill’s skill.

46 Thomas November 20, 2016 at 10:58 pm

This is marginal revolution contrarian trolling at its finest.

Next post: I know segregation is illegal and just…sounds so wrong….but what exactly does the equilibrium look like?

Is there any social practice we are allowed to dismiss before ‘thinking through the dynamics a little more clearly’?

47 MPL November 20, 2016 at 11:12 pm

“Is there any social practice we are allowed to dismiss before ‘thinking through the dynamics a little more clearly’?”


You can immediately and unabashedly dismiss any social practice as long as you use the words “Racist”, “Sexist”, or “Bigoted” to describe that practice.

Suggesting otherwise would signal naivety or outright devotion to nazism.

48 Gorobei November 21, 2016 at 9:59 am

Agreed, this is superb trolling.

The ability to bribe does not affect what the bribing nation wants, or is willing to pay. So why even bring those elements up?

The whole point is that it lowers the briber’s net cost, the president benefits, and the president’s country pays the cost. That’s the only interesting first-order effect of bribery.

49 RustySynapses November 21, 2016 at 10:31 am

I think that’s exactly right, and I’m not sure why it took so many posts for someone to say it.

50 Hazel Meade November 21, 2016 at 10:08 am

Is there any social practice we are allowed to dismiss before ‘thinking through the dynamics a little more clearly’?

51 Bill November 20, 2016 at 11:04 pm

Given that our intelligence agencies probably monitor the givers communications traffic, and the President knows it, it would be highly unlikely for a President to knowingly accept a bribe as such from a foreign power.

52 Bill November 20, 2016 at 11:12 pm

Moreover, there is a long tradition of the Presidential candidate turning over his tax return, and, once President, doing so annually. http://www.bloomberg.com/politics/articles/2015-05-15/what-a-presidential-candidate-s-financial-disclosures-do-and-do-not-reveal

53 Barkley Rosser November 21, 2016 at 3:09 am

Are you being sarcastic, Bill, given that Trump not only has not made public his tax returns but apparently has made it clear he will not do so, on top of his children showing up in diplomatic meetings without any security clearance when they are supposed to run his businesses, and we are already getting these reports of diplomats staying in his new DC hotel to curry influence? Does Trump know or even care about US intel agencies listening in? I mean they reported the Russian hacking to help get him elected, but who gave a hoot? The focus was all on Hillary’s unimportant emails, actually charitable foundation, and nothing-there Benghaz (although the newly appointed CIA director thought it was just terrible of her that she had not had Ambassador Stevens over to her house).i.

54 EB November 21, 2016 at 6:53 am

Thanks for your fresh insights about Hillary as Mother Teresa, but let us wait to see what happens to Clinton Foundation’s financing from “good” donors. Well, it may also suffer from Obama Foundation’s unfair competition. Yes, it will be great to watch the two foundations compete for dirty money.

55 Bill November 21, 2016 at 9:46 am

Let me guess. You get your TV “News” from Fox, and your online “News” from Breitbart or InfoWars. And, you read books indirectly sponsored by the Mercer’s.

56 derek November 21, 2016 at 10:30 am

Well, there is at least one person in the US who believe the Clinton’s are clean and above reproach.

You should get a plaque or something.

57 TMC November 21, 2016 at 7:52 pm

Bill, ‘not MSNBC’ should be adequate enough to write such a comment.

58 Tom P November 20, 2016 at 11:04 pm

As usual, the problem with Coasean solutions is that they create incentives to produce more of the externality.

In this case,Trump would have trillions of new reasons so threaten countries with “regime change.”

59 BC November 20, 2016 at 11:12 pm

Maybe, it’s hard to discern the equilibrium because the conflict-of-interest is so high that there has been so little research for this class of previously unimaginable principal-agent problem. Are there any research results for scenarios in which the CEO of a firm can receive personal payments from any outside entity, including competitors, suppliers, and customers? I could imagine an equilibrium emerge where the CEO’s compensation is specially designed to align interests with shareholders and/or compensate shareholders for costs arising from principal-agent problems. However, no special constitutional amendments, alternative division of powers, etc. have been negotiated especially for Trump, so I doubt that we have reached such equilibrium.

Ironically, Trump’s anti-immigration, anti-trade, nationalist campaign message at least in part was an argument for less foreign influence on American life. Now, it appears that foreigners may actually have unprecedentedly high influence on the Presidential office itself. By the way, here is an article about China’s totally coincidental granting of trademark rights to Trump a few days after his election, after years of rejections: [http://www.wsj.com/articles/donald-trump-scores-legal-win-in-china-trademark-dispute-1479169494]. Here is a totally unrelated article about Trump’s on-going efforts to win approval for a real estate project in Taiwan (includes two funny tweets too): [http://shanghaiist.com/2016/11/18/trump_taiwan_expand.php].

On the plus side, it is obvious that Trump never thought he would become President and has no real desire to assume all of the associated obligations and duties. Perhaps, these conflicts of interest provide the face-saving path for Trump to return to his more desirable life as Manhattan celebrity multi-billionaire. He can claim that, after careful review by his legal team, it turns out that there is no arrangement that both removes conflicts of interest and doesn’t leave his huge business empire in peril (because he and his childrens’ business acumen are essential to his businesses’ success). Also, his election has already Made America Great Again as he has already made great progress in draining the swamp and changing the conversation in DC. His mission accomplished, he can safely return to Manhattan, leaving the presidency in the hands of his VP Pence because Trump did such a terrific job in his pick. He hires the best people after all. Believe him.

60 Art Deco November 21, 2016 at 2:22 pm

On the plus side, it is obvious that Trump never thought he would become President and has no real desire to assume all of the associated obligations and duties.

It isn’t at all. If the fiction helps you feel better, I suppose that’s harmless. Just don’t bother the adults with it.

61 Brian November 20, 2016 at 11:18 pm

How about the simple equilibrium of a president & House & Senate (assuming bribery is totally normalized) mostly disinterested in U.S. interests but extremely interested in the interests of foreign check books.

Things that foreigners might pay politicians for:

1) preferential access to U.S. intellectual property
2) . . . to U.S. physical property & raw materials
3) . . . to U.S. federal reserve policy
4) . . . to U.S. dollars
5) . . . to U.S. foreign aid
6) . . . to U.S. military might
7) . . . to U.S. markets
8) . . . to U.S. regulation

Of course the electorate would object to having the country looted in this way so to keep the revenue stream rolling there’d be high incentives to do away with such niceties as elections, free press, rule of law, etc.

The equilibrium of allowing foreign countries to bribe our leaders is il-liberal kleptocracy. How could it work any other way?

62 The Free Market Is Not God November 20, 2016 at 11:32 pm

The worst case scenario is that we will all be needing to learn to speak Russian within the next year. An unscrupulous president could easily accept bribes to sell all Americans into subjugation. We could end up like Eastern Europe in the former Soviet Empire. Although if Trump did that, perhaps he would be found out and impeached before he got this completed.

63 Steve November 20, 2016 at 11:54 pm

Even a true Manchurian candidate with the support of a large fifth column in America wouldn’t be able to sell all Americans into subjugation. The US is too big and too far away from our rivals for an invasion to succeed, much less an occupation. The unscrupulous president might be able to throw the opening stages of the war, but an impeachment or coup would be organized in plenty of time to preserve our independence.

Alternatively, it would all end in nukes.

64 chuck martel November 21, 2016 at 12:11 am

Dream on. All any would-be interloper would need is the federal checkbook. As long as the public employees get paid, it doesn’t matter who’s in charge. Many of them have guns and enforce bureaucratic mandates now. How would it be any different if the mandates were issued by a clandestine agent? The government goal is to remain in power, not defend the American way of life.

65 Steve November 21, 2016 at 2:04 am

The scenario you outline is plausible. It is also entirely different than the scenario outlined by TFMING that I responded to.

So I’m not sure what your point is . . .

66 Hazel Meade November 21, 2016 at 10:12 am

A Russian attempt to occupy the US would fail hilariously.
Half of the Russian army would defect, and the other half would be out getting drunk with Patriot militias and selling them weapons.

67 Steve November 21, 2016 at 12:03 am

Surely the gains from a stable international order are vastly larger (i.e. measured in the trillions) than any individual country would be able muster for bribing purposes?

Granted those gains currently accrue to Americans in general, as well as foreigners, rather than the president specifically. However, democratic accountability (likely) or Coasean bargaining (unlikely, due coordination/transaction costs) ought to restore something like the current equilibrium pretty quickly.

68 Andre November 21, 2016 at 12:16 am

How much would selling out a US agent in Russia or Iran go for? 100M or so? I think Trump would go for far less really.

You’d have to match the bribe payments to the cost of getting a stray nuke to defend yourself I suppose. If China could bribe the US into not defending Taiwan, how much would Taiwan pay North Korea for a bomb?

69 stephan November 21, 2016 at 12:50 am

It seems ironic that in polls close to the election, voters thought Trump more honest than Clinton by 8 points but now reasonable people say that he may be bribed right and left and will run a “ what have you done for me lately” foreign policy.

It’s not asking for bribes or extortion to ask countries for payment for services rendered in defending them against a third party. The British pay France to keep migrants from reaching England. No one calls it extortion.

70 TMC November 21, 2016 at 7:55 pm

8 point difference is that Trump *might* be bribed. Hillary already has a track record.

71 JDF November 21, 2016 at 1:01 am

“Bribe” is not a standard economic concept. This post would benefit from a definition

72 Just an Australian November 21, 2016 at 1:02 am

I can’t believe that no one has talked about the secondary consequences of this kind of corruption. It cannot be done secretly. It’ll be as open as can be; and the consequence will be an erosion of trust that will take at least a generation – and probably a war or two – to reverse

73 Li Zhi November 21, 2016 at 4:57 am

What is your point? That we SHOULD trust government so it would be a bad thing or that we SHOULDN’T place our trust in our government, so it’s a good thing?

74 Rodrigo November 21, 2016 at 1:27 am

This seems to me an interesting and worthy question, but the reasoning is incomplete. A nesessary conditon for any country to be willing to bribe the Presient is that he or she will carry through with the commitment, Given that the President already proved to be completely unscrupulous and unreliable by asking for a bribe, I wonder what mechanism could be put in place to assure countries paying the bribe that the President would follow through. It cannot be the evidence of the bribe itself, for if there is to be one then the President would be at the mercy of these countries. If any of the countries were to reveal the existence of the bribe, the President would surely be impeached, and if the country which revealed the bribe (correctly) guessed they were not the only one to have payed one, then no country would suffered reputation all consequences. Not clear bribes can be maintained in equilibrium.

75 Just an Australian November 21, 2016 at 1:40 am

Don’t need to be sure that the commitment will be followed through – a bribe is only one of a spectrum of things you try. Also, the president is only at the mercy of a bribee if he fears being impeached. I’m not sure what about this president would make you think he would fear that

76 Dan Lavatan-Jeltz November 21, 2016 at 1:59 am

I’m not sure how you can have foreign bribes without domestic ones, and the logical thing would be for the locals to bribe the Pres to gut defense and split the tax money with him. I’d let Trump keep every dollar he cuts from the defense budget; it would save us several more in vet benefits over time. Not sure why this hasn’t worked yet.

77 arun November 21, 2016 at 2:42 am

Talleyrand ran his Ministry on bribe money but secured Frances’ best interests.
Suppose the President was an infinitely greedy absolute Monarch of a Mercantilist type. He might demand that every country pay a bribe equal to the effect of the worst executive action he could take with respect to them less his own loss of Revenue as the result of that action. They would form a coalition to minimize this bribe subject to the costs of so doing. He would respond by trying to maximize coalition costs by executive action. They would respond by trying to maximize his revenue loss by the same executive actions. Presumably, the threat points of both sides now gain salience and this leads to a bifurcation in the coalition depending on credible threat points and tolerance of the same…Actually, you’d just end up with what is predicted by realist I.R models. It doesn’t matter if the Executive is greedy- it is sufficient that Foreign Policy is realist and mercantilist.
This doesn’t really answer the question as posed. What if an actual President took bribes? I suppose this would just add uncertainty. It wouldn’t necessarily mean that the prediction of the realist model was controverted because bribes might cancel each other.

78 Fazal Majid November 21, 2016 at 3:05 am

Why the hypothetical? Isn’t the lecture circuit a legalized form of bribery? An explanation is that a combination of bureaucratic inertia and checks & balances makes presidential power not as valuable as one could think for potential bribe suppliers.

79 anon November 21, 2016 at 8:51 am

Doing well while doing good isn’t corruption. Corruption is doing well by being bad.

If someone is a good public servant and then goes on the lecture tour, I see nothing wrong with that.

On the other hand, a quid pro quo that harms public interest is bad, and in many cases, criminal.

80 anon November 21, 2016 at 9:07 am

Oh, note that most people do not consider a Nobel Prize to be a bribe.

81 Art Deco November 21, 2016 at 11:19 am

To a degree it is, but it’s really more of an ‘other people’s money’ problem. Ca. 1985, George Will was able to charge $15,000 a pop for a lecture to a trade association (a contextually similar sum today would be $55,000). His secretary was interviewed by The New Republic and tells them he’s booked solid and they’d have to raise the fee to $20,000 to clear the market (“he doesn’t want to seem greedy”). Morton Kondracke and Robert Novak were getting tidy sums for having McLaughlin style debates for these sorts of trade associations. Morton Kondracke couldn’t have gotten your parking ticket fixed in DC. George W. Bush gets six figure sums for his speeches. He could likely arrange introductions for you, but that’s it. (The Clinton’s fees likely do contain pre-paid bribes. Bush’s retired and they haven’t been).

82 Li Zhi November 21, 2016 at 5:10 am

I’m finding it difficult to believe that no POTUS has ever acted in a way which benefited both him (or his immediate family) and some foreign country. Is someone making that claim? Second, I’d like to see net worth of all of our presidents both immediately before entering office and immediately after leaving it (including immediate family). Third, if a foreign country can bribe POTUS, why not a foreign based firm? Fourth, if an entity can bribe POTUS, why shouldn’t the US Treasury be open for payments for “services rendered” (by the US Federal Govt). Fifth, I see no clear evidence that Foggy Bottom produces results better than chance (“better” meaning more beneficial to US interests), why should we assume that actions based on “financial incentives” would be worse? Sixth, only ~60 countries have GDPs over 100 billion U$D. The pool of bribers seems to be quite limited, if bribes in the 100’s of millions is being discussed.

83 Jan November 21, 2016 at 5:27 am

Welcome to the kleptocracy. It will be worse than everyone thinks.

84 rayward November 21, 2016 at 6:49 am

What’s described is no different from the Mafia selling “protection” to business. One could argue that such “protection” is a net plus, since it reduces crime and thereby increases business (and output). When America offers to provide “protection” to (for example) the Philippines in return for favors (e.g., a military base, trade, etc.) is that any different? If the country rejects the offer (as the Philippines did after the end of the Spanish American War), America can do what the Mafia does and teach the rejecting country/business a lesson in what happens in the absence of “protection” (in the case of the Philippines, the Philippine American War). If Trump profits personally from selling “protection”, is that really any different? He’s just a salesman collecting his commission, not unlike the capo collecting his share of the premium for “protection”.

85 rayward November 21, 2016 at 7:08 am

I chose the Philippines as the example in my comment for several reasons: First, America eventually got the government in the Philippines that accepted America’s offer for “protection”. Second, Rodrigo Duterte: after insulting President Obama (and America), Duterte has apparently decided Trump is someone Duterte can work with. http://www.cnn.com/2016/11/10/asia/duterte-trump-military-exercises/

86 anon November 21, 2016 at 8:59 am

I find the uncommented Trump University settlement to be amazing. Literally everyone knows that it is an admission of guilt, a few people try to faintly protest otherwise, as we all buckle ourselves in for a bumpy ride.

We have just elected an admitted fraud as President of the United States.

(a non fraud would have fought the case to prevent this obvious conclusion, a non fraud would have an integrity to protect)

87 chuck martel November 21, 2016 at 10:09 am

Trump University is fraudulent in the same sense as any other of the many educational rackets in the country known as universities, where grad students and assistants teach courses, required texts are sold at exorbitant prices and faculty composition is designed to match political ideology.

88 anon November 21, 2016 at 10:16 am

Ridiculous. You may find fault with conventional education, but none have so acknowledged their failings as to return half of all tuition to past students.

Nor are past students conventionally called “victims.”


89 derek November 21, 2016 at 10:35 am

None? I talked to a young man three days ago who considers himself a victim. He owes $70k for a teacher’s certificate and sold me some flooring at the building supply. He was going to northern BC to hopefully find an apprenticeship for a trade, and make enough money to pay off his debt.

They are legion.

90 anon November 21, 2016 at 10:58 am

You are talking Canada? $70K seems like really a lot for a teaching certificate.


If we have a problem, Canada has a bigger one.

91 Moo cow November 21, 2016 at 10:42 am


92 Art Deco November 21, 2016 at 11:32 am

No. About 25% of the manpower in higher education (and 25% of the time investment) is for the fulfillment of distribution credits. This is a vestige to a core curriculum of a sort which hasn’t been the mode in American higher education for a century. Allan Bloom complained about the waste of the students’ time and effort with distribution credits and synthetic courses, but otherwise the issue gets no attention. Bloom thought as long as we had no true core, we had no justification for baccalaureate degree programs lasting longer than two years.

Another problem you have would be inane paper-hoop degrees which are unfocused and padded and inane but necessary for certain sorts of employment. These are mostly post-baccalaureate programs. The worst are in teacher training, social work, and library administration.

93 Art Deco November 21, 2016 at 11:25 am

North of 40% of those attending baccalaureate-granting institutions are at teaching institutions which have few graduate students and none undertaking a research project which would take longer than six months. At the remainder, many departments have no doctoral program or only a notional program. I’ve attended both research universities and teaching institutions. If you have a large introductory course at a research institution, the grading will be outsourced and supplementary seminars (1 a week) will be taught by doctoral candidates. I’ve taken two courses which were taught by graduate students and a third course wherein the graduate assistant was a vastly better lecturer than the professor he was working for. A more serious problem one place I attended was local to the engineering school: supplementary seminars ‘taught’ by graduate students who did not speak English.

94 anon November 21, 2016 at 11:38 am

To follow this line of idiocy, if conventional colleges are EQUIVALENT to Trump U., it looks like time for trial lawyers to pile on.

Tons of contingent fees to be made. Not to mention billions in tuition to be refunded.

95 Art Deco November 21, 2016 at 12:31 pm

Some scams are sanctioned by law and custom and some are not.

96 Bob from Ohio November 21, 2016 at 10:56 am

” Literally everyone knows that it is an admission of guilt,”

There was no admission of guilt. Companies settle litigation all the time.

“a few people try to faintly protest otherwise”

You do not understand litigation. A settlement occurs when the company feels that the cost benefit of settling is in its favor. Trump as private citizen may feel that the benefit is not enough but as president elect might feel differently.

Cases get settled all the time, even for what a regular person might consider a very large sum. 25 billion for Trump is like $500 to $2000 for a regular person.

97 anon November 21, 2016 at 11:02 am

I think people who make that argument have to be liars or idiots.

If Trump genuinely tried to deliver for students, there is no possible outcome of a trial that would be worse than this.

It is ONLY if you assume guilt that settlement becomes the less bad option.

98 Bob from Ohio November 21, 2016 at 1:05 pm

“I think people who make that argument have to be liars or idiots.”

Hah, but its spelled “lawyers”, not “liars”.

Large companies are always afraid that a jury will decide not on the law or facts but on envy, sticking it to the rich.

99 msgkings November 21, 2016 at 3:21 pm

So Bob, you really think Trump U. was legit and not a scam/ripoff?

100 John Smith November 22, 2016 at 1:52 am

I am a Trump supporter, on the basis that he is extremely anti-liberal. And I fully agree that he is completely guilty. Pretty damn obvious.

Support for him should not make you resistant to truth. You can rightfully support him, *AND* also rightfully see the truth. The two are not exclusive.

101 Art Deco November 21, 2016 at 11:36 am

It’s not an admission of guilt and nearly all that’s been said about it has come from plaintiff’s lawyers. Still, what has come out does make it sound like a reel-in-the-suckers operation, even though some customers were satisfied with the instruction they’d received. IIRC, the instructors were people who’d worked in promotion and sales, not in real estate specifically.

102 Brian Donohue November 21, 2016 at 9:20 am

I don’t get it. Is the idea that Trump did all this in order to line his own pockets?

103 anon November 21, 2016 at 9:41 am

FWIW, I don’t believe so, but Trump’s particular reluctance to releasing his taxes and his seeming (it is early) reluctance to distancing himself from business affairs means to me that we are in for some murky years.

And so far at least, Trump supporters accept the murk.

104 msgkings November 21, 2016 at 12:52 pm

Brian, here’s what probably happened. There’s some evidence for this in a leaked memo to his campaign from Trump before the primaries. Trump started out running to build his brand with free publicity, and wanted to come in maybe second in the primary with 15% of the vote or so. Once he started running and saw he had a real shot he then said OK let’s win this thing. And he did.

Same thing with the presidency, his attitude was if I win I win, if I lose I take a big vacation and get back to my real life (he said this publicly, Kellyanne Conway had to tell him to knock that off). But now he’s won, and now as always it’s all about Trump. The brand building happened of course (or brand shifting, his brand is now hated by some that didn’t before, and loved by some new people too). But now he is indeed very interested in lining his own pockets. Some obvious tells are him having his assets run in a ‘blind trust’ by his kids LOL. His policy preferences are also telling: repeal the estate tax, cut taxes sharply for high income earners, etc. How any of this helps the white working class who got him elected is hard to see.

You don’t think Trump gives a damn about anything but himself do you? Why shouldn’t he line his own pockets, he won the presidency, he just pulled off a magnificent deal for himself.

105 Brian Donohue November 21, 2016 at 1:49 pm

Maybe. His own ego may actually be a corrective here. Losing may have been about monetizing losing, but winning… we’ll see.

I got no problem with the press hounding him about this stuff every step of the way, although they have shown themselves recently to be pretty toothless.

If the Trump program is standard Republican “spend a fortune on the military, slash taxes on the wealthy” with a healthy side of “and debt-financed infrastructure for EVERYONE! You get a new road, you get a new water treatment facility, you get new high-speed rail.” then, by all means, sand in the gears all the way round, please.

106 msgkings November 21, 2016 at 2:00 pm

Agreed, too soon to say. But you don’t need a weatherman to know which way the wind blows as a Nobel laureate once wrote.

107 Art Deco November 21, 2016 at 2:17 pm

If the Trump program is standard Republican “spend a fortune on the military,

Back in the world we actually live in, the ratio of military expenditure to domestic product is 0.04. The post-war peak was reached during the Korean War, after which it declined with scant interruption for 25 years. It declined during the VietNam War. There was an increase from 5.5% to 7% during the period running from 1978 to 1985, and liberals were jabbing about a ‘war economy’. I declined almost without interruption for the next 16 years, to 3.7% of domestic product. It increased a tad for a number of years, then began to decline. It’s the one major component of federal spending that is sensitive to external events.

108 Brian Donohue November 21, 2016 at 3:20 pm

Here are some real world numbers: the US government spent $815 billion on defense this year, about 4.4% of GDP. Every Republican candidate that took the stage last fall (excluding Rand Paul but including Trump) vowed to rebuild the military that Obama had so thoughtlessly ‘eviscerated’ (Rubio’s word, but the sentiment was general.)

109 The Free Market Is Not God November 21, 2016 at 6:36 pm

Thanks, Brian. Always good to find someone in touch with the real world.

110 Hazel Meade November 21, 2016 at 9:57 am

1. Presumably the wealthier countries would be willing to pay more for American security guarantees.

2. Countries whose wealth can be easily captured and controlled by hostile forces — oil exporters? — would be willing to pay more for protection.

I think you are confusing “bribe the US” and “bribe the US president”.
Bribing the president personally would probably involve a lot more things like favorable regulatory and tax treatment in US markets. Getting the president to pull strings at the IRS and the EPA and so forth.

111 Not A Communist November 21, 2016 at 10:26 am

This is essentially a good argument for limiting the scope of activity of the military to defending the US.

112 Art Deco November 21, 2016 at 2:18 pm

No, people fancy that a priori and grab at any excuse.

113 John Lux November 21, 2016 at 11:03 am

Wait a sec – what payments does the US extract from Israel, exactly? We just signed a 25BB military aid deal with them.

Overall, the problem with your argument is that it incorrectly applies private arguments to the public sphere. Taken to an extreme, why not let all levels of government accept bribes? Cops, judges, etc? The results are obvious. The logic of self-interested capitalism is supposed to be far removed from the public sphere… where it spills over, it perverts what’s there.

114 Mondfledermaus November 21, 2016 at 12:10 pm

That’s the point, an American President might demand payments from Israel in order to keep the money flowing. That would be in the best interest of Israel, and in the best interest of the American President.

115 John November 21, 2016 at 12:59 pm

What’s limiting the bribe to protection?

Moreover, (and perhaps this might have relevance to our supposed role as world’s police force) if we do see ourselves largely as mercenary or define the relationship with the external world through the military lens then what stop the slide into our becoming a war culture society?

116 Harun November 21, 2016 at 2:09 pm

L’etat, c’est moi.

117 Bill November 21, 2016 at 4:46 pm

What if this post is looking at the problem the wrong way.

Instead of bribing a president the foreign government threatens the property of a president.

Wake up in the morning with a horse’s head in your bed is just as persuasive as a $1000 bill under your pillow.

118 The Original D November 21, 2016 at 5:28 pm

This seems to conflate bribing the president with bribing the USA and in any case it’s fraught with agency problems. You could bribe the current occupant for security guarantees, but what’s to force the next occupant enforce it? Or what if the current occupant makes a guarantee that, if push comes to shove, Congress won’t appropriate funds for?

119 anon November 21, 2016 at 5:46 pm

If this is true, WTF America?


I think we might end up wishing Trump was a rational agent accepting rational incentives.

120 The Free Market Is Not God November 21, 2016 at 6:33 pm

Wow. Amazing. The new normal craziness. Trump acting like he was elected king.

121 Ryan Langrill November 21, 2016 at 7:16 pm

This year’s Nobel winners might have some insight… Bribing qua contract. Contingencies that can be easily paid for +, those that can’t -. I reckon incomplete contracts are a bigger problem for ‘defense’ than ‘offense.’

Bribes differ from ‘indirect bribes’ because the latter depend a lot more on the relationship between countries, which is an emergent combination of culture, immigration etc, that the president has little power over.
I’m having a hard time articulating this. Imagine if immigration slots were auctioned to the highest bidder. Imagine, also, if immigration slots were distributed based on how comfortable the voting public felt about ‘those’ people. How would immigration slots be distributed differently? (How quickly could this arrangement change under each scheme?)

I think, always, of Jane Jacobs’s book, Systems of Survival. Morality has two modes. One mode, that promotes exchange, competition, and diversity, reinforces commercial systems (e.g., businesses). Another mode, that promotes loyalty, sacrifice, and shuns trading, reinforces guardian systems (e.g., military). When one mode of morality is used to govern the other type of system, the system unravels. If the president can take bribes, why not individual soldiers? A military with that ethic would need to spend more resources combating internal dissent and treason.

122 jorod November 22, 2016 at 8:15 pm

It’s called Hillary and Bill.

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