Borrowing a Cup of Hope #16: Moral Hazard in a Time of Scant Morality

The End of the Rule of Law in the US?

I stumbled across a technical term from economics, called “Moral Hazard.” And I think it reads larger in our context than just the economic implications from whence the term arose originally.

Investopedia gives us a definition of Moral Hazard: “any situation in which one person makes the decision about how much risk to take, while someone else bears the cost if things go badly.” If you saw the excellent film The Big Short, then you saw how the collapse of the stock market happened in 2008, when a moral hazard was created. Banks and big finance companies like Lehman Bros peddled securities that were bundles of mortgages that ranged from adequate to dogshit. When the bad ones failed, each security failed, and then piles of securities failed, then these businesses failed, and finally the Federal Reserve stepped in and saved almost all the big shots who should have lost their shirts. So the banks got away with it because all the white men in the club said “Wink Wink Nudge Nudge” and bailed them out. It’s in the greatest of all American Traditions: Getting Away With It.

That’s what our culture is built on. Look at our cultural heroes, like Clint Eastwood. He plays a cop that shoots a bunch of guys, mostly Black, and his boss yells at him for “Breaking the Rules”, and he yells back that “somebody’s got to do something,” etc. He’s a Bad-Ass. And that’s what we like, the guy who breaks the rules. Well, German-American politician Donald Trump breaks all of them. He broke taboo after taboo, attacking Black people, then immigrants, then declaring bankruptcy four times and telling everyone he’s a success, then robbing his own charity for children’s cancer reserach, and finding smaller and more powerless targets like Teenage Trans Athletes so he can claim the immoral high ground, and standing on his hind legs for hours talking about the deadly threats to our country. He’s exposed by the press, and he just holds another rally, like Germany in 1934. And his followers like his style, they know he’s a liar and a crook, and they do not care. Because they like watching him Getting Away With It. They want to be on the same team, and they also are maybe a little scared to fall outside the circle and earn his vengeful blast. How many have worked for him and ended up in the trash heap like Rudy Giuliani? They take the moral hazard of working for him, expecting not to be the one stuck with the bill. Holding their breath, and not looking down, like Wiley Coyote.

And now those rules are called “Laws.” Noted Conservative Judge J. Michael Luttig says we are facing “The End of The Rule of Law in The United States.”

Luttig published a piece in The Atlantic- a Real Magazine- and concluded that “not one of his signature initiatives did the president have the support of the Constitution…. everyone in America understands instinctively that what Donald Trump is doing Is Wrong.”

Do they? Is America going to blow the whistle on this wrong-doer? Moral Hazard includes examples like these: a car that goes too fast, knowing that if there is an accident, insurance will pay for it. Or a wealthy pervert assaults a woman, knowing that he has more money to spend on lawyers than she has, and her being a survivor of sexual predation means she probably lacks the resources and the resilience to pursue justice. Or a President who carries off dozens of cartons of classified material, with the intent of selling it to foreign hostile powers, knowing that his lawyers can get the case heard by an incompetent judge appointed by that same president, a judge with no moral fortitude, who won’t recuse herself, who will do what she is told by the local magnate who appointed her. Or a president who sells meme coins to wealthy overseas benefactors, knowing he will not be prosecuted by the Attorney General, who is not independent, as the Constitution requires, but will do whatever she is told by the man who appointed her, because she has previously accepted a bribe from him in a previous post.

LBJ talked about The Great Society, which is a moral and just society, that is a society of justice, of equal protection under the law, of equal opportunity. That is a vision of a moral government, of a moral populace, that once glistened in the collective imagination. The early 1960s had “An aching utopian energy you can’t even imagine a candidate talking about now,” said Rick Perstein, author quoted in the excellent PBS documentary, “1964”.

Johnson was proposing legislation that would use the power of the federal government to advance the cause of equality, because that is the determinate function of providing justice; and justice does not occur in nature. We have to create it.

We need a return of idealism of the 60s without the naïveté that made us think we are a virtuous nation, that just because we could make a clear case to advance to a higher moral plain that people would accept being virtuous. That requires Learning, and many people will say “Ain’t nobody tell me nothin’.” We have to understand that, as the framers of the Constitution put it, “If all men were good, we would need no government.” Assume we are mostly bad, mostly unexceptional.

Trump has installed MAGA as his call to return to an imagined past, like Hitler did in Germany and Mussolini did in Italy, and that is a poignant message. It’s Nostalgia for a make-believe time where everyone was happy; but one that actually includes the subjugation of Black people, women and the LGBTQ, a time of a supposed cultural dominance of conservative Christianity; and the moral hazard of that dominance is that these subjugated populations pay the price for the prosperity of the ruling class.

I saw Don Draper on Mad Men describe this kind of nostalgia: “Nostalgia (in Greek) means ‘a pain from an old wound.’ A twinge in your heart, far more potent than memory alone. I takes us to a place where we ache to go again.” And White Nationalist Christians long for a nostalgic time when only White people were on Television, only white people were billionaires, and everyone they knew was a Christian; or if they weren’t you could ignore them because they are going to hell. They’d really like to go back to when only white men of property could vote. They’d like to go back further than that.

Gov. Tim Walz addressed the graduates of the Minnesota Law School, and he reminded us that “Without the Rule of Law, everything else crumbles away.” Listen to him, and remember what holds us together as a nation: The Constitution Alone.

I used to think we could convince MAGA people of the truth of Trump’s absolute corruption; I no longer believe that. He has a core support of only 35% of the populace, but Hitler never had more than 37%. So we have to go find those who have been apathetic, de-motivated or otherwise Sidelined, and educate and motivate them to the notion that there is a fight that needs to be made, that things look permanent, but they can fall apart and dissolve quickly.

Dr. Erica Chenoweth, is the Frank Stanton Professor of the First Amendment at the Kennedy School at Harvard, co-author of he book “Why Civil Resistance Works” tells us we only need to activate and motivate 3.5% of the population to change the course of history. It is worth doing, and it is Doable. It is worth fighting for. And we can draw strength with powerful words from another time when our rights were under threat; we are going to have to fight ignorance, and fight Trump and Trumpism to the end. We shall fight him in the precinct and in the congressional district, we shall fight him with growing strength and growing confidence on the airwaves, we shall defend our Constitution, whatever the cost may be; we shall fight him on the beaches, we shall fight him on the landing grounds, we shall fight him in the fields and in the streets, we shall fight him in the hills; We Shall Never Surrender.

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