Does “Deadbeat Donald” Have Any Money?
Lessons From Trump’s Near-Broke Campaign
On Saturday, Donald Trump issued an “emergency” appeal seeking $100,000 for his campaign “to help get our ads on the air.”
This was odd for two reasons. First, according to his own early campaign ads, the central premise of Trump’s campaign was that he would self-fund. Second, in his disclosure forms, Trump claimed that his total net worth is ten billion dollars. In other words, Trump would have to spend precisely one one-thousandth of one percent of his net worth in order to cover the cost to air these “emergency” commercials. If Trump were telling the truth about his wealth, $100,000 for him would be about 2 or 3 dollars for an average American.
So, Trump has lied about his wealth. As Forbes recently wrote, “The Occam’s razor explanation is that he’s not worth $10 billion.” This is not a surprise to those who know Trump well. Just last year, Forbes described Trump’s claims of riches as “a whopper” of a lie. Indeed, many speculate that the reason Trump is so adamant about refusing to release his tax returns is that they may reveal he doesn’t have as much money has he’s claimed.
But what do these financial problems say about Trump as a candidate?
“In financial circles, it’s pretty well known that Trump is a deadbeat.”
First of all, the financial shortfalls of the Trump campaign serve as a reminder of Trump’s startlingly bad record as a businessman. As The Atlantic reported in 2011: “In financial circles, it’s pretty well known that Trump is a deadbeat.” Trump tries to obscure this fact by threatening defamation lawsuits against journalists who report on his actual business record, but as Trump loses these lawsuits at trial and on appeal, Trump’s answers during depositions reveal his actual track record.
When the lies are pulled away, Trump’s total returns are poor. As the National Journal has explained, Trump inherited great wealth from his father, starting in 1974 when his father gave him control of a company that was worth $200 million. Fact checkers have shown how Trump has repeatedly lied about inheritances and loans he obtained from his father over time. John Griffin, a finance professor at the University of Texas, analyzed Trump’s holdings since 1976. Griffin concludes: “Trump has underperformed the real estate market by approximately $13.2 billion, or 57%.” In other words, compared with other businesspeople, especially those in the real estate business, Trump actually lost money over the course of his career. Trump would be a richer man if he had invested his inherited wealth in the stock market or real estate, rather than trying to become a businessperson.
In other words, compared with other businesspeople, especially those in the real estate business, Trump actually lost money over the course of his career.
Trump is more of a grifter than a business leader. While Trump squandered some of his inheritance, the damage was much greater for people who mistakenly did business with Trump. Trump is well known for stiffing small vendors, and indeed his refusal to honor business deals has put some mom-and-pop vendors out of business. Then, there are the business failures. Anyone who put time or money into Trump Mortgages (founded in 2006, just before the collapse in mortgage markets) would have been better off if Trump had stayed away from the world of business. Others who would have been better off include those who invested time or money into any of Trump’s many failures, such as Trump Tower Tampa; Trump Ocean Resort Baja Mexico; Trump Taj Mahal; Trump Magazine; Trump World Magazine; Trump Steaks; the Trump Shuttle; and Trump University. In several of these projects, Trump was sued. He settled out-of-court with investors regarding the Tampa and Baja projects. With Trump University, tuition-paying students allege that Trump used fraud to dupe them into becoming customers. None of this even counts the fact that Trump’s companies declared bankruptcy four times between 1991 and 2009.
Trump’s few successes as a developer were tied to organized crime. Pulitzer Prize-winning journalist David Cay Johnston, who has written a book about organized crime and gambling, has spent many years investigating the ties between Trump and the Mafia. In a lengthy story for Politico, Johnston “encountered multiple threads linking Trump to organized crime.” These threads included openly seeking mob support to compete against real estate developers who refused to do so. These links to organized crime have been only lightly reported to date, but the Politico story is well worth a close read (and recall, again, that Trump has aggressively used libel laws to prevent prior journalistic investigations of his money).
So has Trump earned any clean money? Outside of inheritance, contract breaches, bankruptcy protections, litigation threats, eminent domain, fraud, and maybe mob ties, has Trump made any money? Well, yes, he has made money in one line of business: misogynistic self-promotion. In 1992, Trump blamed Mike Tyson’s rape victim for her rape, when Tyson’s release would have boosted Trump’s boxing-related revenues. In 1994, Trump spoke with Lifestyles of the Rich and Famous and speculated as to whether his then-infant daughter would develop attractive breasts. From the late 1990s onward, Trump built his name as a “reality star” by repeatedly demeaning women on Howard Stern’s radio show, which he continued to do through 2013 on his television show The Apprentice. As one reporter summed it up, “Trump has made flippant misogyny as much a part of his trademark as his ostentatious lifestyle.” Apparently, this brand appealed to the 4.7 percent of eligible American voters who have thus far supported Trump, but sleaze marketing is not much of a blueprint from which to strengthen America’s record private sector run of job growth.
Trump’s Economic Policy Ideas Are Even Worse
So what are the policy ideas of this so-called “businessman” who may not even be breakeven without fraud and organized crime, and whose only “clean” money comes from reality television? Unsurprisingly, they would be a disaster for the American economy.
For starters, Trump has made it clear that he intends to extend the philosophy of “Deadbeat Donald” to the full faith and credit of the United States Treasury. During a recent interview with CNBC, Trump literally suggested that the United States should threaten bankruptcy to gain leverage over holders of Treasury bonds. As analysts from the left, right, and center pointed out, this idea would trigger an immediate global economic crisis. This is because the world economy relies upon Treasury bonds as risk-free securities, to the benefit of global financial markets and the enormous benefit of the United States.
This is not the only economically catastrophic idea that Trump has proposed. Businessman Mitt Romney, the Republican Party’s presidential nominee four years ago, explained recently that: “If Donald Trump’s plans were ever implemented, the country would sink into a prolonged recession” by triggering a trade war with other nations. Trump’s budget plans are those of a charlatan. His famous wall with Mexico would cost tens of billions of dollars to build and maintain, and his plan to make Mexico pay for it is unworkable.
Americans have roughly five months to learn about the “Deadbeat Donald” aspect of Trump’s track record and policy ideas. If we do not learn that lesson by November 4th, unfortunately we will learn it the hard way shortly thereafter.