Is Donald Trump really the super-awesome business executive armed with the leadership, management and talent-spotting skills up the wazoo that he so often claims? Or is he someone who overlooks intelligence, thoughtfulness, leadership skills, guts, commitment to principle, capacity to work with others, knowledge of markets, policy and laws, and relevant job experience in potential hires and who, as you might expect of such a person, is actually a much more mediocre businessman than he lets on?
The Donald’s comments about Carly Fiorina last week suggest the latter, but they’re hardly the only thing that should have people wondering whether the Trump of popular lore is just a fantasy. Trump’s business record—and therefore his entire claim to himself be better qualified than all others for the presidency—is actually poor in many key respects, including several that could be highly relevant to the job for which he is applying.
Trump has a track record of piling up his businesses with unsustainable debt, and then having them file for bankruptcy. Per CNN Money, “no major US company has filed for Chapter 11 more than Trump’s casino empire in the last 30 years.” Under Trump’s leadership, just a few years ago, his company missed a $53.1 million bond interest payment—kind of a big deal. And lest Trump try to delude anyone into thinking that these bankruptcies were all just clever corporate maneuverings with no effects for him personally, note that to pay off creditors, he has had to offload huge shareholdings, yachts, and airlines.
As President, one wonders, exactly how much more national debt would Trump pile up? How much would he cause America to default on? And how bad would the impact of his debt policies be for ordinary Americans—just a bit painful, or something much worse? For all his bleating about Asian lenders dictating to America and America getting screwed in the process, it’s hard to imagine that with his private-sector propensity for taking on massive debt to finance grandiose schemes, Trump wouldn’t similarly borrow extensively from the Chinese to finance big government spending, perhaps on a socialized or other big government health care program of the type he strongly supports. And while he is personally wealthy enough to withstand the consequences of bad decision-making, the same cannot be said of the average American family or indeed the average Trump Organization employee.
Trump has not only taken on excessive debt, with bankruptcies to show for it. He has (mis-)managed his company in such a way that he would have been better off, financially, simply investing his inheritance from his father in an S&P 500 fund than, well, operating the Trump Organization. According to SV Date writing in National Journal:
Had the celebrity businessman and Republican presidential candidate invested his eventual share of his father’s real-estate company into a mutual fund of S&P 500 stocks in 1974, it would be worth nearly $3 billion today, thanks to the market’s performance over the past four decades. If he’d invested the $200 million that Forbes magazine determined he was worth in 1982 into that index fund, it would have grown to more than $8 billion today.
Even the smaller figure exceeds the lower range of his possible net worth as reported to the Federal Election Commission, while the larger number exceeds by billions recent estimates of Trump’s worth by financial publications. And it would have come without the high-drama, roller-coaster career that has included four corporate bankruptcies.
This begs a separate set of questions. How well would Trump “invest” taxpayers’ money? Would he spend it on truly essential, meaningful things or waste it the way typical politicians do—only by virtue of bad instinct and dubious principles, as opposed to a desire to keep campaign contributors and big, special interests happy?
Another interesting question: Would the supposed staunch opponent of outsourcing who has his swag manufactured in Africa, apparently unaware that American businesses could do it for very, very cheap, prove capable of hiring people who would identify best value in services for which the federal government contracts? Does he understand the imperatives driving American businesses—perhaps not his, which may or may not have decided to outsource for financial reasons—to move or keep jobs, operations, and capital overseas?
A final point to contemplate: It’s also not clear that Trump’s hotel empire is quite as amazing as he wants to make out. Over the last several years, he’s had two or three hotels—no more— ranked among the top 150 or so in the US, according to US News and World Report. For what it’s worth, the St. Regis, Ritz-Carlton and Four Seasons see a lot more hotels make the list. Trump might be capable of making Americans feel successful and as though we’re really competing with and beating China, India, Europe and others. But as with his own claims of success, would that feeling reflect reality, or just amount to another four-year delusion?
To be sure, Trump has had some business successes, though it’s arguable that they’re mainly in the realms of self-promotion, marketing, making properties pretty, and running beauty pageants (perhaps this is why he evidently thinks being the hottest chick in the room is the most important or only relevant qualification in a female leader). Is that enough? For CEO of a big private company, sure, and to warrant another series of “The Apprentice,” yep, definitely. For President? As private-sector experience goes, there are better options out there.