🏦 Trump is Really Broke, and The Military Industrial Complex At Work

Good Morning,

Got a few things for you on this lovely President’s Day:

🏦 An Update On Trump’s Civil Fraud Penalties

💣 A Case Study on our Military Industrial Complex

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An Update From Last Week: Trump is Really Broke

Last week I wrote about the anticipated several hundred million dollar civil penalty Judge Engoron would likely impose on Trump and his business organization in the New York State civil fraud trial. This past Friday, that penalty was announced: $355 million dollars (plus interest).

In the past I have written about the legacy media playbook around elections. The CNN’s and MSNBC’s of America are incentivized to cover stories in a way that stoke angst and outrage, as that is what keeps consumers engaging and reading content.

Case in point, despite Trump now owing half a billion dollars that he almost definitely does not have, facing an additional 91 criminal indictments across his other upcoming other trials (one about to start next month), the mainstream press remains focused on the fact that Biden is just too old.

And you know what? Biden is definitely way too old (81), but Trump is also nearly as old (77), and will be a broke convicted criminal when November rolls around. Already over 50% of polled Republicans in swing states say they will not vote for Trump if he is convicted, and that’s before all these other trials even ramp up.

Yet the mainstream press continues to play up Trump’s chances in the general election, as if these two elderly candidates are somehow on equal footing.

My political bias is of course fairly evident in these newsletters, but I stand by what I’ve predicted previously as I believe it be the objective take:

We already did this dance with Biden and Trump in 2020. The only difference now is that they are both nearing retirement home age, yet one of these candidates has been found liable for rape, owes $500m+ dollars in civil penalties, faces 91 criminal indictments that he will likely be convicted of, and is directly responsible for overturning Roe vs. Wade; an issue that has swung every election towards the Democratic party since 2022.

The media will continue to make 2024 seem like a close race, despite on paper it being anything but that.

(Also, please turn off the news)

The Military Industrial Complex at Work

After weeks of debate and public pressure, the United States Senate voted 70-29 to pass a $95 billion dollar aid package for Ukraine, Israel and Taiwan. The bill is now with the House, where pressure is on Speaker Mike Johnson to bring the bill to floor; something he and the “MAGA” caucus within the House of Representatives are vehemently against doing, as the bill does not include any border security provisions.

We should care about providing financial aid to our allies, particularly Ukraine. Funding Ukraine’s defense is not only much MUCH cheaper than if the US was involved directly on the ground, but it also continues to weaken Putin, an authoritarian oligarch who seeks to re-establish Russia’s fascist control of eastern Europe. If you are for democracy, you should be for supporting Ukraine's defense.

So it is an entirely good thing that Senate leaders are standing up for allies and voting through aid. At the same time, it does shine a spotlight on the ridiculously profitable nature of our military industrial complex.

These military aid packages for Ukraine you routinely see in the headlines (a few billion here and there) come in two forms:

1) Direct financial aid, typically earmarked for humanitarian purposes.

2) Physical equipment aid, e.g. the US is basically giving a bunch of older equipment, valued at several billion dollars, to Ukraine.

Number two is what I want to highlight. By donating older equipment to Ukraine, the US effectively is clearing out our inventory of less-contemporary military equipment. This creates new demand, as the US now seeks to refill its stockpiles with modern technologies. And that’s when military contractors come swarming.

In an attempt to get a bill passed in the House, some representatives also drafted a narrower version of the Senate’s bill. Earmarked is this interesting tidbit:

“$13.4 billion would go to the Pentagon to replace weapons sent to Ukraine from U.S. military inventories.

So the bill is also calling for several billion dollars to be appropriated to buy new weapons from private industry to refill our stockpiles. That on its surface is not surprising. But then you couple it together with these facts:

• The Pentagon has never once successfully passed an audit. Meaning we never actually know for sure if the money the Pentagon spends is going to the areas they agreed to spend it on.

• It was reported in May of 2023 that defense contractors routinely inflate the prices of weapons sold to the US Government.

So if you are a Lockheed Martin, or a Boeing, you are thrilled right now seeing the US empty its aging stockpile of equipment, because you know on the other side the US Government is going to come to the table to chock over billions of taxpayer dollars, at a premium, which are directly appropriated for the purpose of refilling the government’s stockpile.

When I think about the Military Industrial Complex, the above is a particularly tangible case study for understanding what it looks like in practice: an intricate web of perverse incentives, (making and selling weapons of war for governments) to make a bunch of money.