ArcaMax

I also owed a duty not to punch your sister in the nose, but I didn't breach that duty. Your sister may not like the new appearance of your nose, but I did not breach any duty owed to her, and thus she has no legal or moral basis upon which to sue me.

This is basic Anglo-American tort law as practiced and understood for more than 600 years.

What role does the government play in this scenario? The only moral and constitutional role for government here is to provide a neutral and credible forum for the resolution of the dispute between you and me.

However, were the government to enter the dispute as a litigant or were the government to claim some harm where none existed, it would do violence to these basic legal principles, it would impair my natural and constitutional rights to own property, and, if successful, it would constitute theft for its own benefit.

Yet, all of this just took place last week in a New York courtroom. The government was the State of New York and the defendants were the Trump Organization and its principals.

How can the government claim harm where none was caused?

The government created a phantom harm by arguing to the court that Trump's corporation was not fully accurate in its loan applications and thus was charged a lower interest rate on the loans than it should have been charged had it been accurate; and thus it earned more income on its use of the money it borrowed than would have been the case had it scrupulously reported the value of its pledged assets; and thus -- somehow -- the government ought to be able to confiscate the excess income plus interest.

This, of course, defies the no-damages-without-breach-of-a-duty principle and no-damages-without-caused-harm principle that have been the bedrock of American tort law. It also redefines fraud.

The government told the court that Trump defrauded his lenders by inaccurately stating his assets. If you borrow $100 million from a bank and pledge as security a building worth $2 billion, you will get more favorable loan terms -- a lower interest rate -- than if you pledged as security a building worth $1 billion. But Trump's banks did their own due diligence on the value of the assets he pledged, and they told the court that they were satisfied with Trump's valuations.

The lenders also told the court that Trump paid back every dime they loaned to him with interest. And the banks told the court that Trump was such a good customer, they'd gladly lend to him again.

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