Trump’s new Truth Social plan: pay $100K

0:01NPR.

0:06On the 1st of August, you'll be able to pay to access top posts on Truth Social milliseconds before they hit the website. Truth Social is, of course, the social media company that President Trump owns a substantial stake in. It's where he often posts AI-generated memes and remonstrations of colleagues he thinks are disloyal. But there's also a lot of information that affects us all and moves markets. Critical policy announcements like new tariffs or what the U.S. is doing next in the Iran war. So if you could get that information a tiny bit faster than everybody else, you could make a lot of money.

0:41In the fast-paced world of modern markets, milliseconds matter. Maybe you set up a trading bot to buy oil futures the fraction of the second that the president announces more attacks on Iran. Maybe it buys shares in a company that the president talks up. And the price for this special access could be up to$100 ,000. This is The Indicator from Planet Money. I'm Waylon Wong. And I'm Darian Woods. Today on the show, is selling faster access to truth social corruption? Is it legal? And is corruption bad for economic growth? We answer all three questions after the break.

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2:01You've built experience and know what you're capable of. Now, this is your time to turn that momentum into more. The only real question is, what can't you do? Learn more at capella.edu. This message comes from NPR sponsor Charles Schwab with its original podcast on investing. Each week, you'll get thoughtful, in-depth analysis of both the stock and the bond markets. Listen today and subscribe at schwab.com slash oninvesting or wherever you get your podcasts. Trump Media and Technology Group put together a pitch sheet about charging people for earlier access to truth social content. And according to the Financial Times, the pitch sheet highlights 10 posts that it describes as documented market moving.

2:48There's the post from President Trump last year before he paused a lot of the sweeping Liberation Day tariffs. This is a great time to buy. Do you remember that, Waylon? I did. It was very Jim Cramer-coded. Yeah, and after that post,$4.8 trillion was added to U.S. stocks that day. So it's clear they're targeting high-frequency trading firms, these financial companies that make their money by trading just a millisecond faster than others. If these companies are willing to pay up, This will funnel a lot of money to President Trump based on what he posts as president. So we have those three questions.

3:23Is Truth Social charging for faster posts corruption? Is it legal? And does corruption hurt economic growth? And first up, is this corruption? For this, we called up Elizabeth Wydra. Elizabeth is the president of the Constitutional Accountability Center. That's a nonprofit that promotes a progressive read of the Constitution. It certainly looks like corruption from what we know. You don't want the president to be thinking of, how can I make money from the way that I time important information relating to war? You know, people, service members' lives are on the line. We want the president to be thinking of those lives, not his personal financial bottom line.

4:03Okay, President Trump using the office for personal financial gain, that seems to be fairly convincing to Elizabeth. Now, let's go on to the second question. Is this legal? Well, that's where we run into a lot of problems with the Trump administration's corruptions. You know, this, I think, is, you know, a little more difficult to pinpoint exactly where it is unlawful. Certainly, it does seem to be a conflict of interest for the president. Elizabeth says there are other things the president has done that she thinks does break the law, like accepting a jet from the Qatari government. That, she thinks, breaks the Foreign Emoluments Clause of the Constitution that bans accepting gifts from foreign governments without the approval of Congress.

4:43President Trump has clearly been violating that constitutional provision, but nothing has really happened to him. So there are some things that are clearly illegal but difficult to enforce. So why isn't there stronger laws against presidents using the office for their own financial benefit? I think what we're seeing is that the norms that have governed the behavior of presidents have been thrown out the window with Donald Trump. And I don't think that the legal structures have caught up with that. According to Elizabeth, with this White House cabinet, this Congress and the Supreme Court, the president is unlikely to face legal consequences.

5:25So we're in a world where the president is doing things Elizabeth describes as corrupt, but probably not illegal. But does this matter? How does Truth Social's subscription plan affect everyday Americans? That brings us to our next question. Is corruption bad for economic growth? We called up Ray Fistman. He's an economist at Boston University who literally co-wrote the book on corruption. It's called Corruption, What Everyone Needs to Know. Oh, what do I need to know? We'll get to that. And Ray was a little surprised when I told him how much the Truth Social subscription might cost. The amounts they're talking about is extraordinary, like$100 ,000.

6:03What? Yeah. To front run the news, essentially. You told Ray something he needed to know. I did. Now, it might seem kind of obvious that corruption is bad for an economy, but let us give you two arguments why it might not be so simple. The first argument is one word, China. If corruption is so bad for an economy, why did China grow so much from the 1980s to the early 2000s, even though corruption was rampant? The second argument, some economies have a ton of red tape. Bribing officials could be a way for businesses to cut through some of that red tape. Do you hear this all the time? Corruption is what greases the wheels of commerce.

6:44Ray doesn't have a lot of sympathy for that argument, though. He says, sure, in the moment a bribe might get a business around red tape. But imagine an official who realizes that creating more rules and barriers means more opportunities to ask for bribes. And so we have this problem of what's called endogenous red tape. That is red tape that is created for the purpose of extracting bribes. Endogenous means coming from inside a system, as opposed to exogenous meaning coming from outside. So endogenous red tape is laws and regulations generated because of the corrupt system. And that's bad for the economy.

7:23Think about all the tariffs that have piled up recently. President Trump may believe they're good policy. But a spinoff effect is that they also give the president more leverage over companies to do what he wants. Apple is one example. It got exemptions from tariffs in exchange for building factories in the U.S. I think tariffs is a fantastic example. You're creating what is in effect what we call a rent-seeking society where success is dictated by who can get closest to public decision makers rather than who makes the best products and so forth. And on that first argument, China, Ray says that economy is an anomaly.

8:03But for every China, there's dozens of countries like Sudan, Somalia, Venezuela, Yemen and Libya, countries with high corruption and low incomes. Looking at the data overall, Ray says that corruption is associated with lower economic growth. Just think about the countries that are seen as more corrupt. They tend to be poorer. OK, but how much poorer are we talking here? the Great Depression that followed the corruption of the Gilded Age, or something less dramatic? Ray says to get a sense of what it could feel like if corruption were to really take root in America, we could think of the UK's recent economic stagnation.

8:38You know, over there, people's paychecks aren't rising very much. People are starting to talk a lot about a cost of living crisis, where a big part of it is that working hard doesn't seem to be getting you ahead like it used to. But it's pretty subtle. Things are going to be just fine for lots of people who perhaps have the sway that might be required to change things. What Ray really worries about goes beyond President Trump making a billion dollars or two from his presidency. We're seeing a real shift in the norms that govern public office in America, that there's a much greater sense that You can get what you can while you can.

9:20And that's reflective of the very worst kind of corruption, if it actually takes hold. That's my deepest fear. So according to our guests, is the Truth Social Subscription Plan corruption? Yes. Legal? Likely yes. And could it hurt growth? Also yes. We emailed the White House asking if Truth Social Subscription Plans raised conflict of interest concerns. The press team directed us to Trump Media and Technology Group, who didn't reply to multiple requests for comment, including a registered letter. This episode was produced by Julia Ritchie with engineering by Travis Hagen. It was fact-checked by Tyler Jones.

9:58Kate Concanon edits the show and The Indicator is a production of NPR.

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