In recent weeks, Donald Trump has maintained his Kardashian-esque grasp of the headlines — despite arguably xenophobic, misogynist, and racist comments that reached from the southern border to the Vatican. But amidst it all, Trump’s loyal following still defends its candidate with one seemingly uncontestable claim: his business acumen. Exit polls in South Caroline indicate that nearly 50 percent of the Republican primary voters trust him the most with the economy. These trends echo back to his announcement speech, where he deemed himself “the greatest job president that has ever created.” At the core, however, the question remains: Does his career qualify him for the Presidency?
Donald Trump’s fortune began with his father, Fred, who cultivated a sizeable with a real-estate company. By the time of his death, the elder Trump’s net worth was between $250 million and $450 million. Trump subsequently inherited between $40 million and $200 million of this money. He also took over his father’s company and began to expand the empire in 1987. Today, independent estimates peg Trump’s net worth at between $2.9 billion and $4.1 billion — a fourfold growth from its 1987 levels. Trump himself asserts that he’s worth to as much as $10 billion. While that’s certainly nothing to scoff at, a closer investigation of Trump’s career sheds unfavorable light on the businessman persona at the core of his presidential platform.
Although Donald Trump leans on his wealth to win the hearts and minds of the American people, he has frequently resorted to corporate bankruptcy proceedings. As early as 1990, the Trump Organization was $5 billion in debt. The company temporarily continued operating with a bailout and deferments from over 70 banks, but Trump ultimately had to file for bankruptcy a year later. As a result of the settlement, he was forced to hand over 50 percent of his stake in the Taj Mahal to lower his interest payments and deferment. Trump’s next bankruptcy took place in 1992, over debts owed by some of his other casinos. By the end of the proceedings, he was forced to trade Citibank his stake in the New York Plaza. In 2004, he filed for bankruptcy again to negate $500 million worth of debt for his Atlantic City casinos. Trump’s latest bankruptcy filings were in 2009, for $53 million missed bond payments for Trump Entertainment Resorts. These fell under the Chapter 11 provision of bankruptcies, which allows companies to restructure their business model and remain operational to reduce their debts. As part of Chapter 11, Trump never risked in his personal wealth when declaring bankruptcies. But because some of the debts were issued through bonds sold to the public, others became liable for the losses.
By most standards, Trump’s poor financial track record raises an eyebrow. But his dubious business ventures are even more noteworthy given the alternative investments he could have pursued. For example, had Trump followed an ordinary middle-class savings strategy by placing his savings into a standard unmanaged index fund, he’d be worth an estimated $13 billion. In other words, by throwing his inheritance into projects of his own design, Trump actually decreased his fortune relative to doing absolutely nothing. Furthermore, when contrasted with his billionaire peers, the real-estate mogul seems less and less like the savior for the American economy (not that it needs saving). The Associated Press estimates that from 1987 to today billionaires Bill Gates’ and Warren Buffet’s wealth grew by over 7000 percent and 2600 percent respectively. Trump’s wealth merely grew by 400 percent. For someone who perpetually claims, “I’m a great businessman” and, “I will be the greatest jobs president that God has ever created,” his track record and judgment is not very impressive.
Of course, Trump isn’t the first political candidate to tout his private sector background; doing so has become a pattern in the Republican Party. Mitt Romney ran on a similar platform, claiming that because he righted multiple failing companies, he was uniquely able balance the federal budget and turn around the economy. But when the former governor of Massachusetts found that even his business acumen couldn’t enable him to balance the state budget through “greater efficiency” and budget cuts alone (as he had promised). Though he technically didn’t raise taxes, he increased fees and closed tax loopholes to bring in the requisite revenue. Carly Fiorina also tried building her campaign upon her private sector experience at HP. As with Trump her business career should be put under close investigation, considering her disputed legacy as CEO. During her tenure, HP stocks dropped over 60 percent, the byproduct of Fiorina’s disastrous takeover of Compaq. In comparison to HP’s peers, the company seriously underperformed with Fiorina at the helm. She was eventually very publically pushed out by the board, and has since been dubbed one of the worst technology CEOs of all time. Politicians can tout private sector experience all they want, but close scrutiny of that experience is imperative, and private sector prestige doesn’t neatly translate into public sector know-how.
The fact of the matter is that government is not a corporation. Public policy is not a chapter of the Art of the Deal and foreign policy is not selling an “apartment for $15 million to a Chinese man.” This is largely because maximizing profits doesn’t necessarily translate into good economic policy. In the private sector, when a balance sheet starts to teeter into debt, the company cuts costs and lays off employees. If a government cuts spending amidst a recession, economic conditions begin to crater — akin to the decline of Greece under austerity measures. Indeed, the government has serious inefficiencies to address, but programs like Medicare and Social Security should not be obliterated merely because they cut into the bottom line. Slashing production of a certain product and repealing Obamacare are not one and the same — it’s not a select number of employees who are affected by these decisions, but millions of families, industries and markets that have adjusted to federal policies. Furthermore, the human cost of making the government “profitable” has no private sector equivalent. On “The Celebrity Apprentice,” the most Trump could do is fire people, but as President he could take away their health insurance, pensions, and much more. When it comes to such sensitive, high-stakes issues — such as the Iranian nuclear arms program — anyone who believes they can treat matters of government the same way they would negotiate a real-estate contract has a severely myopic view of them.
National interests aren’t delineated by highest financial return on investment. They depend on the political calculus of leaders who seek increased sovereignty, international influence, economic growth, military flexibility, and opportunity. So being “really rich” doesn’t mean that Trump would be “the greatest jobs president God ever created” or an exceptional world leader. Though it has been a trend in American politics to look towards successful men for economic stewardship, they aren’t necessarily the experts on economic policy. Just as Mitt Romney’s experience in private equity didn’t translate into an exceptional tenure as governor of Massachusetts, Donald Trump’s bankruptcy-ridden career doesn’t qualify him for the most difficult job in the world. Trump’s outlandish and offensive conduct is nothing more than bluster — and his wealth does nothing to credibly detract from that fact.