Donald Trump has been a really bad businessman over a span of 48 years, contrary to his self-promoted and populist image of a successful businessman. And now many of the same bad business practices -- incompetence, making highly risking ventures, acting impulsively, cheating, stealing, lying and deceiving, violating laws and regulations, cronyism and nepotism -- that drove him to the brink of personal bankruptcy are also appearing their ugly heads in his mismanagement and bungling of the world’s largest democracy.
Donald Trump survives in business because he is a highly successful con artist -- a charlatan with incredible ability to hide his deficiencies and gloss over his past bad business practices. He wards off scrutiny of his past business practices with lawsuits, threats, defiant denials and by diverting attention with timely tweets. He stokes anger and hate at the media and others who seek to expose him. He calls the special counsel and grand jury investigation into his Russian ties a fake story and hoax -- charges that his avid group of loyal supporters fully embrace.
Regardless, political analysts see his alleged questionable past business dealings with Russian oligarchs as compromising his ability as president to act impartially towards Russia and Vladimir Putin. In particular, the investigation into Trump’s past financial dealings may expose exactly why he has shown such public appreciation for Putin and Russia. Those revelations could also result in impeachment proceedings and removal from office.
More disconcerting for our democracy, however, is how his base of rabid supporters will react to his removal from office. The hate and anger he has continually stoked towards America’s institutions, their elected representatives, and the media is not something that can be easily turned off after he leaves office. Some of his most avid supporters are calling for civil war if he is impeached.
Indeed, his failure as president to work to unite America instead of dividing America with hate speech and tweets could end America’s domination as the world’s leader of democracy. With that he is doomed to be America’s worst president ever.
The loser in business...
Donald Trump went to work for his father right after graduation from Wharton in 1968. Although he claims he made his fortune on his own with just a $1 million loan from his father, he benefited from numerous other loans and loan guarantees as well as his father’s connections, a lucrative trust plus a portion of his inheritance upon his father’s death. Despite all the financial assistance he still had to borrow from his family to stave off personal bankruptcy.
Because of his lack of transparency, it is hard to say how much he earned solely on his own nor do we really know what his true net worth is. He claims to be worth some $10 billion. Forbes puts it at $3.5 billion. Other analysts say it could be as low as $150 million. It depends on how one values his assets.
What we do know is that Donald Trump has had many, many business failures -- Trump Shuttle, Trump Vodka, Trump Mortgage, Trump the Game, Trump Casinos, Trump Steak, Trump Magazine, GoTrump.com, Trump Entertainment Resorts, Trump Tower Chicago, and Trump University. While these failed ventures represent just part of the hundreds of entities that the Trump organization claims involvement in, some more successful than others, they reveal serious ingrained flaws in his business conduct.
Trump’s peers in business assign much of the blame for his business failures to his “come from the gut” emotions rather than any real business sense -- a perpetual loser.
With respect to the failed Trump Shuttle as just one example, Trump purchased the no frills shuttle service for $365 million and transformed it into a luxury experience adding such things as maple-wood veneer to the floors, chrome seat-belt latches and gold-colored bathroom fixtures. However, he failed to recognize the obvious -- that the customers who flew the airline in the one-hour shuttle flights between cities did it for the convenience and not the frills. The expected increase in revenue didn’t materialize, and to cut costs he pushed to reduce the number of pilots in the 727s to two instead of the three required by the plane’s design and mandated by the FAA. Such a desperate move displayed his ignorance of his own planes and his contempt for the law. Trump defaulted on his loans and his creditors took over ownership of the planes.
The much publicized four bankruptcies of the three Trump casinos and one hotel are especially noteworthy because during a decade in which other casinos in Atlantic City thrived, Trump’s casinos posted losses year after year costing stock and bond holders some $1.5 billion. Yet Trump the grifter bailed out early from his casinos saddling his investors with most of the financial burden of the losses. Former Hewlett-Packard CEO Carly Fiorina slammed Trump on that point during a debate: "You ran up mountains of debt, as well as losses, using other people's money, and you were forced to file for bankruptcy not once, not twice, four times."
Indeed as billionaire businessman Warren Buffett noted that when Trump listed Trump Casinos and Resorts on the stock market in 1995, "people who believed in him, who listened to his siren song, came away losing well over 90 cents on the dollar. They got back less than a dime."
The casino bankruptcies are significant for another important reason. It calls attention to Trump’s managerial incompetence. During the years prior to the bankruptcies, Trump directly controlled and managed the casinos racking up losses while other casinos were doing quite well. His record of incompetence in managing his casinos should have foretold what a failed Trump presidency would look like when he is tasked with articulating a vision, devising a strategy and plan for that vision, and hiring competent people who can act as a team to implement that strategy. He has had more business success when he is merely selling the Trump name to be slapped on buildings, golf courses and products around the world leaving the control and management of the business to others.
While the bankruptcies of his businesses have received publicity, he has also staved off personal bankruptcy twice. The first time was associated with his personal borrowing for the ill-fated Trump Taj Mahal casino in Atlantic City and the second time with his personal borrowing for his acquisition of New York City’s Plaza hotel. In both cases he borrowed too much money at rates he could not afford and he had to reorganize and restructure his debt with outside help. On this latter deal, Saudi Prince Walid bin Tahal lamented that he twice had to bail out Donald Trump and that he was “a disgrace to the United States”.
Donald Trump is a highly accomplished con artist notorious in the business world for his malicious intent to deceive people and banks for his own personal gain. Real con artists like Trump, however, are also opportunists and not true believers. They tell you what you want to hear for personal gain. They appeal to one’s emotions.
For con artists like Trump it is also about the desire for power and control over people’s lives -- the thrill of knowing oneself to be the orchestrator of others’ fates. That trait of con artists also aligns with one of narcissism -- having an inability or unwillingness to recognize the needs and feelings of others.
Trump’s authoritarian aggressive personality has made him the perfect pitchman for selling Trump products like the failed Trump University in which he was charged with knowingly and deceptively defrauding some 6,000 students into believing that they would learn Trump’s successful “get rich quick” real estate techniques. He settled those lawsuits for $25 million after he was elected president.
As a candidate for president he conned many voters by telling them what they wanted to hear in making campaign promises that he had no idea of how we would be able to deliver on those promises. The only promises he has been able to deliver on are those that undo President Obama’s executive actions on such things as environmental regulations and withdrawing from the Paris Climate Change Accord. However, many of those actions are seemingly made more as a personal vendetta against President Obama’s legacy and will do major harm to the nation.
Trump also campaigned hard on a promise to repeal and replace Obamacare with better healthcare for everyone and for less money. However, as the various House and Senate versions of the healthcare bills became public, it was apparent that Trump had little knowledge of what was contained in the bills or that they would do just the opposite of his promises. Unlike President Obama, Trump showed little interest in the nuances of the healthcare debate and did little to lead his party in the repeal and replace efforts.
In any case his campaign pledge to Americans was totally forgotten as he ballyhooed the final versions of the highly unpopular bills desperately looking for a win that he could claim as his own. He even hosted a Trump style celebration on the passage of the despised House bill that he later called “mean” when the Senate started putting out their versions. He failed on perhaps the biggest piece of legislation that he trumpeted during the campaign, but his failure was a good win for the American people.
Pandering to the nativists in his base of supporters, he also promised to build a “big beautiful wall” on the southern border without regard to the effectiveness, environment or costs and benefits to the taxpayer -- things that any reputable businessperson would demand. Furthermore, he embellished the proposed deal by repeatedly claiming that Mexico would pay for it. “Who’s going to pay for it?”...”Mexico!” became a populist proclamation at his various rallies. It was also a big lie.
A leaked transcript of a telephone call with Mexican President Enrique Peña Nieto reveals that Trump was desperate about protecting his ruse that Mexico would pay for the wall. "I got elected on this proposal – this won me the election, along with military and health care." It has been all about Trump and the image he portrays to his base. Building the wall is the same “from the gut” reckless type of business behavior that drove him to the brink of total financial ruin with his ill-advised casino and hotel endeavors. Like the various versions of Trumpcare, the ill-advised Trump Wall is also destined for defeat in Congress largely because the American people don’t want to spend some $22 billion of their money on it.
The cheater and stealer...
Trump is also known as a cheater, stealer and con artist for “sticking it to the little guy” as Marco Rubio called him out in a debate. Trump’s self-promoted public image as a deal maker and winner is diminished by the appalling disclosures that in many of his deals he stiffed the workers and small companies who worked for him on those projects -- a dishwasher, a plumber, numerous waiters and bartenders, painters, a glass company and a carpet company, real estate brokers who sold his properties, and ironically, several law firms that once represented him in lawsuits. It is yet another blot on Trump’s business résumé.
The magnitude of the stealing is underscored by the fact that Trump and his companies are the defendant in at least 60 lawsuits and 200 liens accusing him of not paying his bills for work completed. Many suits are settled out of court at considerably lower payments than originally agreed simply because the victims cannot afford the cost of litigation.
Trump’s stealing from his workers demonstrates another less known characteristic of con artists -- the need to show domination and power over someone. It doesn’t seem plausible that a self-proclaimed billionaire would cheat and steal everyday workers out of their living wages just for the money. It is more about showing power or more sadistically, the “thrill of knowing oneself to be the orchestrator of others’ fates.”
Likewise, Trump’s repeated rallies as president not only serve his need for adulation but also for fulfilling the thrill of the power that he wields over his boisterous base. The rallies also serve as political theater to demonstrate to the rest of the country that power. How that base reacts if and when Trump is removed from office is a major concern.
The law breaker...
Besides cheating his workers, Donald Trump and his businesses have repeatedly violated laws and regulations pertaining to money laundering through his casinos. The Treasury Department fined his now defunct Taj Mahal casino in Atlantic City $10 million in March 2015 for “willful and repeated violations of the Bank Secrecy Act” dating back 10 years while he was still running his the casino.
The FTC has also fined him for violations of the Hart-Scott-Rodino Act for failure to report certain stock purchases. Also in 2002, the Securities and Exchange Commission issued the Trump Hotels and Casino Resorts, Inc. with a cease-and-desist order, for filing a “materially misleading” earnings report that “created the false and misleading impression” that the company was performing better when in fact it was not. Two years later the casino filed for bankruptcy. Other fines relate to violations of federal labor laws concerning his own employees.
As president Trump and his family are shamelessly profiting from his office by using his hotels, golf courses, and his connections to foreign governments to commingle his government and business activities. More significantly he has openly flouted the emoluments clause of the Constitution especially with respect to his profiting off his Washington DC hotel where foreign officials regularly stay and meet.
Trump is now secretly working to change many of the regulations and laws that he violated as a businessman. Furthermore, it remains to be seen if his “romance” with Putin is driven more by his prior and perhaps illegal entanglements with the Russian oligarchs.
The bad credit risk...
Trump’s history of cheating workers and bankruptcies has made him a bad credit risk. Many United States banks holding hundreds of millions of his loans from past deals see him as a liability and are reluctant to loan him any more money. Nav, a business score education organization, rates the Trump Organizations with a business credit score of 19 out of 100, some 30 points below the national average and indicating that the Trump Organization “is very likely to default on its credit payments” and that “this will make it difficult to get financing.” That low rating is a testament to his past bad business practices.
Still Trump has managed to stave off personal bankruptcy twice. He owes the banks hundreds of millions of dollars but through threats and lawsuits has always managed to restructure the payment of those loans. And now he has even more leverage over his lenders because if he fails as president and is impeached or resigns, their ability to collect on those loans becomes more difficult if the Trump brand is permanently tarnished. They need Trump as much as Trump needs them.
Contrary to his campaign promises Trump has appeased the banks and other Wall Street financial institutions by bringing into his cabinet and inner circle several ex-Goldman Sachs managers including Steve Mnuchin the former CEO of Goldman Sachs as Treasury Secretary. These staffing decisions suggest that he was influenced or compromised by his indebtedness to the banks and go just opposite to his “draining the swamp” campaign promise. They are effectively lobbyists within his administration promoting legislation friendly to Wall Street.
Likewise, for any Russian oligarchs holding Trump loans, it is in their best interests to have Trump continue as president where they and Putin have leverage over him. Any public disclosure of Trump’s financial dealings including his tax returns could be devastating to not only the Trump global organization but also to the many banks and financial institutions that have been conned into loaning him money. They also need Trump as president as much as Trump needs them.
The “Russian Thing” as a cancer on Trump’s presidency...
One then has to speculate what kind of “siren song” he employed with his chief loaner of late, Deutsche bank, a German bank whose own unsavory conduct includes convictions for tax evasion, espionage, sanctions violations and more recently being fined for money laundering some $10 billion by the Russian mafia. As previously mentioned, when the details of his financial dealings with this bank and other overseas lenders including Russian oligarchs beholden to Putin come to light, it could have severe consequences on the sustainability of his global business empire if it is determined that the loans are only being held at the pleasure of Vladimir Putin and his friends.
This is what Trump and his lenders fears the most -- the public disclosure of his past and present financial dealings including his tax returns. Aside from any illegal activities, it might show that Trump is not as wealthy as he pretends. Trump has been extremely aggressive in safeguarding any intrusions into his financial dealings going so far as to suggest that he would fire Special Counsel, Robert Mueller.
His public humiliation of Jeff Sessions to get him to resign so he could place a loyal attorney general in his place is so transparent that even Republicans have pushed back on him and are now blocking any courses of action that he might take in that direction. It indicates the desperation that Trump faces if the Robert Mueller investigation and grand jury is allowed to run its course. Only Donald Trump knows what might be unveiled in his financial dealings, but his actions suggest he has something to hide.
The really bad organizer...
Donald Trump is especially bad at hiring competent people to run his businesses and now likewise his government. Unlike President Obama whose skills as a community organizer brought him one of the most competent administrations, Donald Trump's lack of organization skills has brought him one of the least competent. He is especially bad at hiring and organizing people because he puts a premium on loyalty rather than competence. When loyalty to the boss is a significant driver in the organizational dynamics, the really hard business decisions become clouded by that loyalty.
Trump’s appointments of Rick Perry as Energy Secretary, Betsy DeVos as Education Secretary and Ben Carson as Secretary of Housing and Urban Development are just three examples of the least qualified people to ever hold these positions. His nepotism in giving high profile jobs to daughter Ivanka and son-in-law Jared Kushner suggest a certain insecurity in staffing with people who might challenge his thinking rather than flatter his nutty ideas.
Trump’s hiring of sycophant Anthony Scaramucci is another example of hires whose effusive praise for Trump is seemingly the most important quality needed to get them a place at the table. It points towards what Trump values most as president -- loyalty to his image. And his firing of Scaramucci just 10 days later highlighted the impulsive nature of the president.
When Trump hires incompetent people loyal to him -- rather than the country and constitution -- it invites accusations of a kakistocracy, a government by the least qualified or unprincipled persons. It is just one of the many reasons he fails as a businessman and now as president.
Trump has now turned to General John Kelly to be his new chief of staff who will also act as gatekeeper for access to the president. This is a major shift in his administration. However, while Kelly is a very competent general, it may exceed his ability to rein in the petty politics and infighting of the enablers, sycophants and apologists that otherwise populate his administration.
The bad businessman to worst president...
None of Donald Trump’s current and future “bad at business” disclosures should come as a surprise to those in the business world. They were all well known before he ran for president.
Furthermore, history has shown that even very successful businessmen make bad presidents because they are captives of their own corporate experiences and have difficulty conceptualizing and implementing a broad vision and purpose extending beyond the clichés of the business world. “Providing for the general welfare” in the Constitution is the antithesis of corporate governance where “maximizing profits and enhancing shareholder value” are deeply ingrained in the corporate mind.
Trump’s stated mission is to “make America great again”, a corporate sounding fictional cliché or slogan to appeal to the base of his supporters. Behind that slogan one will not find any substantive strategy, plan and proposals like those of the Hillary Clinton candidacy. His big campaign promises have an emotional appeal to certain demographics but are void of thoughtful insight.
Trump ran his campaign mostly as an “anti” campaign -- an anti-Obama, anti- Hillary, anti-media, anti-establishment “drain the swamp” campaign employing rhetoric designed to appeal to our darker sides. He hasn’t stopped as president. He and his enablers continue the propaganda campaign at Trump rallies, at the Boy Scout jamboree, at interviews and at Sarah Huckabee Sanders’s daily propaganda press briefings always bragging on Trump’s accomplishments. His unorthodox candidacy and now his presidency will go down in history as one big dishonest ruse not unlike the siren songs he employed leading to his bankruptcies and other business failures.
Trump struggles at running the government because he employs the same practices that made him a bad businessman. He remains a weak apprentice president seemingly incapable of advancing his learning beyond that of a failed businessman.
Those Americans who voted for him are slowly realizing the truth in Rubio’s statement that they have been conned...that his whole campaign was a fraud designed to win an election with lots of promises made to garner votes but empty of any carefully crafted plans on how to govern a whole nation and take on the responsibility of global leadership. Even if his Enabler-in-Chief, Mitch McConnell helps Trump stave off removal from office, the shambles of his divisive presidency selling fear, anger and hate and countless insidious lies may take years if not decades to mend.
Nevertheless, he is a master con artist, perhaps the best. He would probably wear that title as a badge of honor and brag on it in some circles. It’s what he is decisively good at and he knows it. But just not as president.
“You can't con people, at least not for long. You can create excitement, you can do wonderful promotion and get all kinds of press, and you can throw in a little hyperbole. But if you don't deliver the goods, people will eventually catch on." – Donald Trump, The Art of the Deal, 1987