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March 3, 2024

Our founders saw our various states as places to experiment with governance.  Each can test ideas to see what works and what doesn’t.  Citizens can provide feedback by migrating to those places where things work the best.

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I doubt that our founders expected an experiment to see if a communist state can coexist in a capitalist country.  But New York has decided to conduct that experiment, seizing the means of production via lawsuits.

During her campaign, New York attorney general Letitia James made the Lavrentiy Beria pledge to find a crime and “get Donald Trump.”  It turns out she’s a woman of her word.

James used a 1956 law (Section 63[12] of New York’s Executive Law) to sue Donald Trump.  The law was created to enable the state to sue companies for profiting from fraudulent business practices.  Until now, it has never been used where there are no damages (i.e., nobody was hurt).  But as we know, legal traditions are expendable if they get in the way of a leftist’s objectives.

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Attorney General James found a friendly judge, Arthur Engoron, to oversee the case.  He somehow didn’t understand that his job isn’t to stick it to “the man,” but to make sure “the man” gets a fair hearing.

James argued that Trump had engaged in a pattern of fraud by describing his business assets in the most positive light when applying for business loans.  She further argued that it was immaterial that the loans were repaid, and the so-called victims of the fraud (the banks) testified on Trump’s behalf that they had not been harmed.

The judge, being the savvy real estate speculator that he is, did his own appraisal of Trump’s assets, decided that James was correct, and ruled that disgorgement was the appropriate remedy.  He ordered that the state of New York seize all profits which resulted from the loans — plus 9% interest.

Judge Engoron’s order penalized Trump to the tune of $464.5 million and prohibited Trump and his sons from doing business in New York for three years.  He also ordered that the full amount of the fine be placed in trust before the filing of any appeal.

Letitia James ran to the microphones and triumphantly announced that if Trump didn’t pay up immediately, she would start seizing his assets.  Karl Marx would be proud.  Although Donald Trump is a multi-billionaire, his net worth isn’t in the form of gold bars hidden in his closet — that’s a Senator Menendez savings plan.  Trump’s assets are in the form of the businesses he owns.  Seizing assets (whether capital or real estate) is seizing the means of production.

Businessmen invest operating capital in anticipation of a future return.  They buy supplies, build facilities, pay taxes, and make payroll, gambling that sales will provide a profit — in the future.  Judge Engoron’s order has authorized A.G. James to seize a half a billion bucks of Trump’s operating capital, with apparently no understanding of its impact on the people of New York.  Not only will half a billion dollars be taken out of the state’s economy immediately, but the future earning potential of that half a billion will also be taken out of the economy.  Such unintended consequences are actually the avoidable outcomes of foolish decisions.