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Trump is the most conflicted president in modern US history — and a new report highlights the dangers

Donald Trump golfing
Donald Trump golfing

(Patrick Semansky/AP)

Donald Trump is the most conflicted president in modern US history.

He handpicked his daughter and son-in-law as leading advisers, is the only modern-day president to have never released his tax returns, and continues to profit from multi-national businesses bearing his name.

His Washington hotel has become a destination for some foreign government spending, and then there's the question of how the Trump family's business ties affect foreign policies.

One tenet of his tax outline is a pass-through tax that would benefit him tremendously on a personal level. Sometimes it's even pretty small potatoes: Remember when U.S. embassies around the world briefly promoted Mar-A-Lago?

All of this has opened Trump and his family up to the criticism that they're misusing his presidency for personal gain.

Why should we care? A new International Monetary Fund analysis of corruption's corrosive economic and social effects, is instructive.

To be clear: the IMF is not suggesting the Trump administration is corrupt. That claim is surfacing more often among his political opponents, but that's not really the point here.

The point is that governments focused on the well being of government officials rather than citizens — on any scale — are particularly harmful to the poorest in society. In these places, "infant mortality and dropout rates are especially high, partly due to less spending on health and education. Reduced investment in these areas tends to hurt poor people the most, and contributes to higher inequality," the IMF says.

The Federal Reserve’s Community Advisory Committee recently released a report suggesting Trump’s budget would have similar effects in the United States.

"While capital markets have shown continuing signs of strength, recent budget proposals and executive actions by the new administration, if enacted, would severely constrain capital flow into low- and moderate-income communities," the Fed’s community council said.

In addition to hurting public trust and cutting out the most vulnerable from economic life, corruption can undermine fiscal policy itself — the ability of governments to tax and spend.

"When a significant portion of the population does not pay taxes, the entire tax system can be delegitimized," says IMF legal counselor Sean Hagan says in a video accompanying the analysis.

The report says "corrupt officials are less likely to invest in things that promote inclusive growth and benefit society—like health and education services. Instead, they may choose wasteful construction projects for their GDP."

IMF Corruption Chart
IMF Corruption Chart

(International Monetary Fund)

The Fund’s in-depth corruption study, published last year, also contains passages with echoes of the Trump administration’s first six months in office — particularly its distrust of career, non-partisan government bureaucrats.

"While building institutions is a complex and time-consuming exercise that involves a number of intangible elements that may seem beyond the reach of government policy, the objective is clear: the development of a competent civil service that takes pride in being independent of both private influence and public interference," the Fund says.

Trump has vowed to slash State Department funding by nearly a third, one of many key government functions on the chopping block in his proposed budget.

"With such dire social and economic consequences at stake, the fight against corruption is a priority for the IMF and our member countries," the multilateral lender concludes.

Keep in mind, the IMF is based in Washington, and the United States is one its most influential members. Perhaps that vigilance should begin at home.

The Fund recently issued a direct and damning assessment of Trump’s economic agenda in its latest review of the United States. A separate report, one focused on the types of conflicts and ethical dilemmas the IMF grapples with frequently in the context of borrower nations and how they might apply to lenders too, might be in order.

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