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Look Behind the Curtain

October 9, 2016

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Donald Trump is a great businessman. Just ask him. After all, he made billions. Better yet, he will be able to use his incredible acumen to help the rest of us.

But is Donald Trump really a great businessman? Sure sounds like it. Until you look behind the curtain, that is.

The supposed success of Donald Trump is an illusion being perpetrated by none other than Donald himself. Do people believe him? Apparently quite a few do. Then again, in the famous words of P.T. Barnum, “There’s a sucker born every minute.”

To understand Trump’s “philosophy” of business (and, apparently, politics), one must go back to his mentorship under the ruthless New York lawyer Roy Cohn in the 1970s. Cohn had gained fame during the witch hunt that was the McCarthy hearings, taking great pride in ruining lives, demeaning his adversaries, and freely making things up to suit his cause (sound familiar?).

In 1973, Trump hired Cohn when he and his father needed to defend themselves against a federal lawsuit for racial discrimination in housing. In spite of a mountain of incriminating evidence, Trump claimed he was the victim, and Cohn went on the offensive with a massive $100 million lawsuit. The case ended up with Trump being forced to settle, but he learned several lessons from Cohn during the process: use lawsuits as a weapon when attacked, never admit wrongdoing, and even if you lose in actuality, claim victory anyway. Trump did not forget what he learned.

In 1987 Trump embarked on the biggest deal of his life, acquiring the Taj Mahal Casino in Atlantic City. The casino and hotel were both huge and lavish, and Trump spent over a billion dollars on the project. Marvin Roffman, a financial analyst, wrote a column in The Wall Street Journal in which he outlined the unsustainable risk of this enterprise, saying he didn’t believe the company could cover the debt incurred from the loans and the gigantic payroll.

Trump, employing Cohn’s old methodology, threatened a lawsuit against Roffman’s firm unless he apologized or was fired. Roffman refused to back down and was subsequently dismissed by his intimidated firm. By that winter, as Roffman had predicted, the now Trump Taj Mahal found itself in deep financial trouble.

Trump had borrowed tremendous amounts of money — dangerous amounts, according to financial experts. He had bought the Plaza Hotel, an airline, and several casinos in Atlantic City. He overextended himself, and when the businesses did poorly, disaster struck. He blamed everyone but himself for the situation.

Trump and his companies owed over $3 billion, much of it to the banks from whom he had so freely borrowed. In a meeting organized by the bankers, Midlantic National Bank vice president Ben Berzin reported that Trump didn’t seem to comprehend the size of the problem or have any ideas how to resolve it.

“As for being a CEO, in understanding numbers, in understanding the ramifications, it doesn’t seem like he took economics or accounting in college,” Berzin remarked.

In the end, the bankers decided that rather than foreclose on the properties involved, it would be of more value to keep his name on the buildings but remove him from a position of decision-making power as CEO. They gave him a $450,000 a month allowance to continue only in the role of a promoter. After all, as Berzin commented, “He’s the P.T. Barnum of the 21st century.”

With the casinos still deeply in debt, Trump went in a new direction by turning to Wall Street. His enterprises became publicly traded on the stock market with Trump as the pitchman. At their high, the DJT stocks sold at $35 a share, though their final value sank to a dismal $1.60 a share.

Insiders looked at Trump’s stewardship of a publicly traded company “like leaving a kid locked in a candy store.” He paid himself a $44 million salary for “services” and was reimbursed millions more for a private plane, a helicopter, and “administrative costs.”

Trump personally made tens of millions of dollar a year while the stock prices dropped. Three times the company filed for bankruptcy, and investors lost billions. He never earned any profit for his shareholders, and many pensioners were set back severely because of the performance of these stocks in which their retirement funds had been invested.

Though the failure was his, he took neither the loss nor the responsibility. When asked by a reporter about the financial problems, he smirked and asked, “Why do you say they’re problems?” He described it as a success and blamed the shareholders themselves for their losses.

In light of all this, how did the widely held perception that he’s a great businessman proliferate? After leaving this financial mess behind him, he began selling his well-known name. He raked in the profits for doing no more than allowing his brand to be put on other people’s buildings. Those walking by would see the Trump name on properties and assume that they must be another part of his vast empire. They were not.

Then in a masterstroke of showmanship, he brought his act to television with his show The Apprentice. In a controlled environment that made him look knowledgeable, in-charge, and all-powerful, he had a ready-made audience of potential voters seeing him in nothing but a favorable light. Though called “reality TV,” it bore absolutely no connection to any reality that would impact anyone in the country outside of himself and the cultivation of his image.

Now we are seeing the fallout of these years, both in his ability to even be able to run for the office of President in spite of having no relevant experience or qualifications of substance as well as in the controversies now coming to light, the most prominent being his unrevealed tax return information. According to him, his avoidance of paying his fair share of taxes is “smart,” and his defense is that it was legal. Perhaps so, but that does not make it admirable or acceptable. At best it is selfish; at worst it epitomizes the callous indifference of a wealthy and arrogant manipulator of the system.

So you want to vote for Trump? Go ahead, it’s your prerogative. But don’t do so because of his self-trumpeted prowess as a businessman, for it simply is not true.

Just like in the Wizard of Oz, go look behind the curtain, and all you’ll see there is the little man who controls the illusion.

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