The Heist

By Nick Catoggio

Friday, May 15, 2026

 

Yesterday Xi Jinping warned Donald Trump to his face about a “Thucydides trap” potentially unfolding between our two countries.

 

Like everyone else, my first thought when I heard the news was, “There’s no way Trump knows what a Thucydides trap is.”

 

A “Thucydides trap” refers to the rising probability of war when a long-dominant power is at risk of being usurped by a rising one. America is in decline and everyone knows it, Xi was implying, and the White House should take care not to let its anxiety about that lead it to foolishly assert itself in defense of Taiwan.

 

Someone must have explained that to the president following the summit. “When President Xi very elegantly referred to the United States as perhaps being a declining nation, he was referring to the tremendous damage we suffered during the four years of Sleepy Joe Biden and the Biden Administration,” Trump clarified afterward on Truth Social, not at all defensively.

 

That was cute spin, but it ain’t Joe Biden whom Chinese nationalists have been moved to publicly thank for destroying U.S. global supremacy. Trump’s “tariffs, attacks on allies, anti-immigration policies and assaults on the American political establishment had inadvertently strengthened China while weakening the United States,” the New York Times reported earlier this week, summarizing the analysis of one Beijing think tank.

 

That analysis was published in January. Since then, the president’s war in Iran has created additional new opportunities for China to increase its influence.

 

I thought of Xi’s point about American decline last night while reading about Trump’s scheme to create a taxpayer-supported slush fund for himself and his political cronies, looting the federal Treasury in plain sight.

 

In saying that, I don’t mean to suggest that Xi would frown on the president’s corruption. Chinese communists aren’t known for their moral rectitude, needless to say. They’ve been committing atrocities against the Uyghur minority in Xinjiang for years; the father of the party died with a body count that may well exceed Hitler’s or Stalin’s. The CCP is fit to sit in judgment of precisely no one, Trump included.

 

The slush fund vindicates Xi’s point about American decline not because it proves the United States is less ethical than China but because it proves the United States is grossly less ethical than it used to be. A country in which the leader is free to write himself checks from the national checkbook in public view is a banana republic, full stop. For all its historical faults, America wasn’t one of those until very recently.

 

Let’s talk about the latest tawdry civic travesty that the disgraceful people of this declining country can’t manage to get worked up about.

 

Slush fund.

 

My editor told me this morning that our site hadn’t yet covered the new slush fund, which surprised me. After all, The Dispatch doesn’t share Americans’ apathy about Donald Trump’s ethical outrages.

 

But as I began sketching out this piece, I realized that the news isn’t very amenable to commentary. A writer’s value lies mostly in their ability to provide insight, and there’s nothing insightful to say about a politician contriving a way to pay himself and his friends out of the public till. It is what it is. It bothers you, or it doesn’t.

 

The new slush fund originated the same way Trump’s de facto bribe from Paramount did, in the guise of a lawsuit. In January, Trump sued the IRS in his personal capacity for $10 billion because an agency contractor leaked his tax returns in 2019. It fell to the Justice Department, which now functions like a mafia don’s consigliere and displays a giant banner of its boss’s image over its entrance, to oppose that lawsuit.

 

That’s like Dracula suing Renfield. How vigorous do you suppose the DOJ’s defense will be?

 

The federal judge presiding over Trump’s suit has wondered whether there’s a real “case or controversy” in the matter, given that “he is the sitting president and his named adversaries are entities whose decisions are subject to his direction.” There can’t be a lawsuit if the parties aren’t adverse. And in postliberal America, where the people in charge of law enforcement are gutter henchmen whose top priority is carrying out the president’s personal vendettas, the parties here really, really aren’t adverse.

 

The judge ordered the two sides to submit briefs addressing the issue by May 20, which apparently got them to thinking: What if we settle the lawsuit instead? That would solve the problem of ensuring that Trump extracts a big fat payout despite the fact that he “filed the suit too late and that his request for at least $10 billion was far too large,” as alleged in an amicus brief filed by former DOJ and IRS officials.

 

So that’s what the parties are going to do, it seems.

 

ABC News reported Thursday that the president is expected to drop his suit in exchange for the Justice Department creating a $1.7 billion compensation fund for victims of the Biden administration’s “weaponization” of government. Trump would be barred from receiving money from the fund for his legal claims—but “entities associated with” him wouldn’t be. He would also have the power “to remove members of the commission running the fund without cause, and the commission would be under no obligation to disclose its procedures or decision-making process.”

 

That’s similar to the authority he wielded over the board of the Kennedy Center. And you know how well that turned out.

 

Prime beneficiaries of the fund are expected to be the 1,600 or so people charged over January 6, a group that includes dozens who’ve been implicated in other crimes—including child sex offenses. If the commission wishes to, conceivably it could divide the settlement amount equally among them and make every one of them a millionaire.

 

There’s also been talk about the IRS agreeing to drop any audits of Trump’s tax returns, which are supposed to be mandatory for presidents per agency procedures. He might not get a stack of cash directly from the DOJ under the settlement, but if he’s let off scot-free for any tax cheating he’s done, that’s just as good.

 

Then again, what would it matter if the audits continue? Do we think Renfield will be bringing tax evasion charges at some point against the Count?

 

There are many things to say about all of this, but very few that you haven’t heard before.

 

You already know.

 

As news of the slush fund made the rounds on Twitter, I saw someone speculate that not only is Trump’s administration the most corrupt in American history, it might be more corrupt than every previous administration combined.

 

That’s hard to quantify, but a historian should take up the question. Measured by dollar amounts and the sheer variety of graft happening, there’s at least a prima facie case that it’s true. Bribes, influence peddling, pay-for-play pardons, foreign emoluments, oligarchical cronyism, and self-dealing via the new slush fund that’s shameless enough to make a third-world generalissimo blush: Few con artists have ever pulled off a scam worth billions, but the president and his family are artists of rare talent.

 

Anyone predicting this degree of looting and graft before January 20, 2025, would have been accused of Stage IV “Trump Derangement Syndrome.” We’ve now seen it all play out, a mere 16 months in, and we will see much more.

 

But you knew that already, just like you also already knew that systematic corruption is an inevitable byproduct of postliberalism. Postliberals perceive no distinction between the public interests of the state and the personal interests of the nationalist messiah who directs it, and they believe state power should be wielded to benefit their friends and punish their enemies.

 

That’s what the slush fund is all about. Trump is using executive authority to divert money from the federal Treasury, where it was deposited to fund public programs, into the personal accounts of, ahem, “entities associated with” him. It’s simple theft packaged in the argle-bargle of “weaponization” and “compensation” to make it palatable to populist dimwits searching for a way to excuse it morally. Even the mechanism is postliberal to the core: Trump’s habit of using flimsy lawsuits to squeeze money out of parties that he knows won’t dare refuse him reduces law—ostensibly an instrument of justice—into a vehicle of extortion.

 

How does he get away with it? You already know that, too.

 

The president behaves with impunity because he believes most of his party will unthinkingly defend anything he does, and he’s correct. The Trumpist base is a mix of degenerate postliberals, hyperpartisan zombies, and people who might object to his corruption if they heard about it, which the right-wing news outlets they patronize will ensure they don’t. The traitors to the constitutional order whom we know as “congressional Republicans” act according to the incentives that that base creates for them.

 

It can’t be overstated: The mission of the GOP in 2026 is to insulate the president from all forms of accountability as completely as possible. (That’s also the point of the civically poisonous mid-decade redistricting push, not coincidentally.) No matter how badly he behaves, he’s assured of a roughly 40-60 split in opinion at worst—and any Republicans in the latter group are apt to rationalize his actions, however indefensible, as not quite indefensible enough to justify withholding their votes. The modern right is an abomination to constitutional democracy.

 

And then there’s the “chaff” problem. You already know that, too, even if you don’t get the reference.

 

It comes from a piece that Leon Wolf wrote for RedState back in 2015, two months after Trump became a presidential candidate. The sheer volume of nonsense in his press conferences works to his advantage by overwhelming the media, Wolf observed, leaving reporters unsure of which outrageous lies they should cover and which they should ignore. There’s no way to do justice to all of his inanity. To cover him, one needs to prioritize, and that necessarily means overlooking things that really shouldn’t be overlooked.

 

Wolf compared Trump’s rhetoric to “chaff,” small pieces of metal that fighter jets disperse in the air to confuse the enemy’s radar about their position. Others have made similar points in the years since, even arguing that American media is functionally pro-Trump because the prioritization problem compels it to chronically understate the extent of his depravity.

 

That’s also why the newsletter you’re reading now is The Dispatch’s first bite at the slush-fund story, of course. It’s not that we don’t care, it’s that we’ve been too busy covering the decline of American power around the world to worry about his latest heist. One simply must prioritize.

 

It’s true for the average joe too, I’m sure. Even if you care about the president’s corruption, even if you make a meticulous effort to follow news about it, you’re destined to lose track and end up exasperated by having to keep it all straight. You might eventually stop paying attention altogether. There’s too much chaff on the radar; the position of any single piece is unclear.

 

All you know is that there’s an awful lot of it in the air.

 

Truth and reconciliation.

 

The closest I can get to finding something novel and interesting to say about all of this is to note the timing. This is a weird time politically for Donald Trump to decide that taxpayers owe him $1.7 billion to dispense as he sees fit to assorted MAGA parasites.

 

Gas prices are north of $6 per gallon in Southern California and are approaching $5 in other parts of the country. Some analysts are bracing for 6 percent inflation in the second quarter, with the producer price index having already touched that mark. A CNN poll published this week found no less than 70 percent disapprove of how the president is handling the economy. Even a politician who transparently has never cared about the cost of living should want to avoid antagonizing voters on the subject any further right now.

 

Instead Trump has decided it’s a fine time to cook up a 10-figure slush fund to line his and his courtiers’ pockets. The January 6 cretins will soon be buying Rolexes while “the forgotten man” switches from beef to beans at the supermarket to cope with what the Iran war has wrought. Even for the president, it’s an audacious provocation, the next best thing to a “let them eat cake” moment. Why would he do it?

 

Two reasons, I think. One is that he’s as much a consumer of right-wing propaganda as he is a producer. When he babbles about how terrific the economy is, how strong his polling numbers are, and how Democrats’ attacks on him over affordability are a “line of bullsh-t,” consider the possibility that it’s not just spin. He might honestly believe it, drunk as he is from imbibing an endless stream of people telling him what he wants to hear.

 

The other is the Supreme Court’s decision on majority-minority redistricting, which cleared the way for red states in the South to erase House seats traditionally dominated by black Democrats. Between that and Trump’s successful campaign to make an example of Republican state lawmakers in Indiana who opposed his demands for gerrymandering, he’s paradoxically feeling less accountable to angry voters when he should be feeling more so.

 

Between the “fake polls,” the extra House seats the GOP is likely to pick up, and his very justifiable faith that his base will swallow any scandalous sh-t sandwich he serves them, the president likely sees no reason not to plow ahead with his slush fund. He spent the morning after his China summit posting about how jealous he is of Xi’s ballroom and celebrating the grotesque golden statue of himself at Mar-a-Lago; why wouldn’t he shake down the DOJ for a billion or two while he’s at it?

 

There’s one more interesting wrinkle to his “settlement” with the IRS, actually: It poses a potential political problem for … Democrats.

 

Not in the short term. Trump looting the Treasury while Americans struggle to make rent can only help the out-party, assuming they can get swing voters to notice and care. But if the left takes back the House this fall, they’ll face a conundrum next January. How much political capital should they spend on punishing the president for what has to be the most egregious case of self-dealing in the history of the U.S. government?

 

Americans will have returned them to power expecting them to take urgent action on the cost of living. Any early deviation from that agenda—particularly if it involves partisan mud-slinging with Trump, justified or not—risks squandering public goodwill, which a party as broadly disliked as Democrats can’t afford to do.

 

Yet to ignore it would mean tacitly consenting to out-and-out robbery of the public fisc by the chief executive. Impeachment is a fool’s errand when the Republican Party is populated by civic perverts, but there’s no question that the circumstances here require it. Bribery is one of two offenses specified as a “high crime” in Article II’s impeachment clause; by ordering the Justice Department to fork over nearly $2 billion, the president isn’t just accepting a bribe, he’s functionally compelling the people themselves to pay it.

 

Democrats will need to figure out how to balance their political mandate on affordability with their civic duty not to treat the mafia-zation of the presidency as “chaff” distracting them from more important things. And I think they will: The most infuriating line in ABC News’ report on the slush fund, sure to stick in the craw of every Trump critic who reads it, is sources characterizing it as “a hybrid between a victim compensation fund … and a truth-and-reconciliation-style commission.”

 

Truth and reconciliation. That was the term used in South Africa for the government panel created after apartheid to investigate abuses by the prior regime and heal divisions over it. That this cartel of thieves and fascists, helmed by a convicted felon, would frame their cash grab for the goons who attacked Congress on January 6 as a “truth and reconciliation” gesture is so obnoxiously Orwellian that it can only be seen as a taunt. Democrats won’t be able to resist seeking accountability for it.

 

There should be a truth-and-reconciliation commission—in 2029. But that’s years away, and even January is still many months away. Until then, the federal government’s efforts to “protect taxpayer dollars” by uncovering fraud at the people’s expense unfortunately depend on J.D. Vance. Keep looking, J.D. Maybe you’ll find it.