Trump Railroaded: Will Investors Flee?

by | Feb 21, 2024

Trump Railroaded: Will Investors Flee?

by | Feb 21, 2024

us president donald trump.

July 9, 2018: President Donald Trump in the Supreme Court of the United States, serious angry look during a speech, black and white.

You’ve surely heard about Justice Arthur Engoron in New York imposing a ludicrous $455 million in fines and interest on Donald Trump and his corporation.

Kathy Hochul, governor of New York, obviously approves of the decision, but somehow wants to punish Trump in this way without spooking all New York real estate investors. The best she’s been able to do is to assure them that they “have nothing to worry about”—presumably because their names are not Donald Trump.

But who wants to invest in a climate in which your name and/or your lack of popularity among the state’s political elite can generate this kind of kangaroo result?

Kevin O’Leary (you will know him from Shark Tank if from nothing else) gave a blistering response to the whole thing:

I would never invest in New York now, and I’m not the only person saying that.

And here’s a real-time situation in development and real estate right now. The hottest asset class is very high-end data centers. They cost anywhere from two and a half to $3.5 billion each. They’re very expensive…But most of the major institutions in the world need more data centers. And that’s why developers like me are doing this now.

You need power. New York has Niagara Falls. Normally you would consider that to put in one of these facilities, create 400 jobs, five more jobs for each of one of those for auxiliary services.

I can’t go to New York, so I’m going to Oklahoma, North Dakota, West Virginia…

Do you think any foreign institution or any private equity firm or any pension fund would touch New York? No. And that’s why New Yorkers should be concerned. The fine people of New York should ask themselves, why are we such a loser state? How are we going to attract business? It’s not just the existing businesses that are fleeing out to Texas and Florida. What about new money like this? I’m talking about like a $4 billion data center. Not a chance I would put that in New York. Zero probability. Never.

Jonathan Turley, a professor at Georgetown University Law School, writes in the New York Post:

The New York statute has been on the books for decades and has always been something of an anomaly in not requiring an actual victim or loss to justify disgorgement or fines.

Even the New York Times agreed that it could not find a single case in history where this statute was used against an individual or a company that did not commit a criminal offense, go bankrupt, or leave financial victims.

The judge, continues Turley, “disgorged hundreds of millions in a case where not one dollar was lost by anyone. Indeed, the ‘victims’ wanted to get more business from Trump and are now being prevented from doing so by Engoron.”

Here’s what makes it worse: Trump cannot appeal this travesty without depositing the full amount demanded by the court, plus interest, and a liquid $455 million is challenging for even a Donald Trump to come up with.

“If you are unpopular,” writes Turley, “you could be looking at not only unprecedented actions and fines, but a need to virtually liquidate your assets just to be able to appeal a decision.”

This is 2024 America—at least the blue-state version.

I’m not always a fan of Kevin O’Leary, but I was happy to see that blistering statement of his.

Here’s a line from O’Leary’s statement that I neglected to add above: “There are many loser states because of policy, high taxes, uncompetitive regulation.”

When you criticize regulation like that, you’re treated like a fool, and a dangerous one. Why, don’t you know regulation keeps us safe, and without it we get things like the 2008 financial crisis?

We need to be able to smash that argument good and hard.

Thankfully for you, ol’ Woods has a free eBook called The Deregulation Bogeyman.

This article was originally featured as part of the Tom Woods newsletter and is republished with permission.

About Tom Woods

Thomas E. Woods, Jr., is the 2019 winner of the Hayek Lifetime Achievement Award from the Austrian Economics Center in Vienna. He is a senior fellow of the Mises Institute and host of the Tom Woods Show. Tom holds a bachelor’s degree in history from Harvard and his master’s, M.Phil., and Ph.D. from Columbia University.

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