Swag and Spin – Did the 2024 Election Save Trump from Financial Ruin?

   

Swag and Spin – Did the 2024 Election Save Trump from Financial Ruin?

Donald Trump was raised at the knee of his father, Fred Trump and schooled and counselled by notorious tax evading lawyer, Roy Cohn. He was bailed out by his father on couple of cash-strapped investments but inherited a significant sum when his father passed. Even with an undergrad degree (his father greased the admission) from Wharton, until Trump had a White House platform, any reasonable examination of his business history would illustrate what a terrible businessman Trump truly was. Aside from his “between” presidential terms criminal conviction for bank fraud and tax evasion, his past was littered with his business failures. I’ll skip to some of his pre-presidential grifts as examples of his misunderstanding of basic economics, his willingness to lie even in documents with serious legal consequences, manipulate and throw anyone convenient under the proverbial bus.

Trump bloviates his extraordinary knowledge of and success when dealing with Chinese investors. But… “[In the early 1990s and facing insolvency,] Trump came to Hong Kong looking for deep-pocketed investors. He found them, in the form of a group led by Henry Cheng, of the New World group… one of Hong Kong’s leading developers and the second-generation head of one of Hong Kong’s wealthiest families… The Hong Kong investors bought a $300 million mortgage for $82 million… Trump retained some of the profit upside… When Trump’s Hong Kong investors sold the bulk of the project more than a decade later, they pulled in $1.8 billion, in what was billed as the largest residential real estate transaction in New York City history.

“Trump sued his Chinese partners, claiming that they had ignored higher bids and that they had evaded taxes. This seemed, as the New York Times put it, like ‘sour grapes.’” Mark Clifford, writing for the September 11, 2015, Wall Street Journal. Trump was, to use a recent Trumpian term, “obliterated” in that litigation, retaining only relatively small payment from what was once Trump’s largest holdings in NYC. Most truly successful billionaires in the United States do not face a litany of bankruptcies, where investors, employees and vendors are left high and dry. But Trump, a man who has difficulty admitting even his minor failures, has a different track record.

“Donald Trump led his companies through six bankruptcies to manage and restructure their massive debts… The New York Times, which conducted an analysis of regulatory reviews, court records, and security filings, found otherwise, however. It reported in 2016 that Trump ‘put up little of his own money, shifted personal debts to the casinos and collected millions of dollars in salary, bonuses, and other payments… The burden of his failures,’ according to the newspaper, ‘fell on investors and others who had bet on his business acumen.’” ThoughtCo.com, December 31, 2020.

With a great deal of help from a 6-3 MAGA Supreme Court, which has distorted the Constitution beyond recognition to accommodate the most corrupt president in American history, Donald Trump has a level of immunity for his actions benefitting himself while in office with no shortage of “favor-seeking” investors willing to shower Trump with deals and opportunities he has never enjoyed in his previous life. Reeling from lawsuits and criminal fines, Trump needed to win the 2024 election to continue that gravy train, avoid prison time and shore up his foundering empire. Much of the perception of Trump’s wealth and business savviness comes primarily from Trump’s statements, often made from glitzy locations, often themselves in financial peril.

On July 2nd, Russ Buettner, writing for the New York Times, penned a major expose of Trump finances entitled “Trump’s Finances Were Shaky. Then He Began to Capitalize on His Comeback,” based on reviewing thousands of pages of legal documents revealed in Trump lawsuits: “Last spring, even as Donald J. Trump’s march back toward the White House dominated public attention, his finances, largely out of view, faced serious threats… His office building in Lower Manhattan generated too little cash to cover its mortgage, with the balance coming due. Many of his golf courses regularly lacked enough players to cover costs. The flow of millions of dollars a year from his stint as a television celebrity had mostly dried up… And a sudden wave of legal judgments threatened to devour all his cash… Then, with his clinching of the Republican nomination, everything began to change.”

During Trump’s “presidential era,” he has generated an estimated $600M in revenue and net worth enhancement… and still growing. He has used his power in office as the bully stick, forcing money to flow into his coffers under the most tenuous of terms. For example, as Paramount’s controlling shareholder, Shari Redstone, is in the midst of selling Paramount (which owns, among many assets, CBS, which produces 60 Minutes) to David Elison’s Skydance Media, Trump sued CBS over a very negligible editing misstep over Kamala Harris, a defamation claim that normally would have zero chance of winning… but since the sale requires FCC approval, and the head of the FCC is a diehard Trumper who has slow-walked approval of that transaction, hinting that to get that approval, she better settle with Trump, Redstone indeed did settle… for $16 million, “which doesn’t include an apology, comprises payments made to the president’s future presidential library and legal fees.” Wall Street Journal, July 2nd.

Buettner’s analysis continues, tracking the post-2024 election Trumpian grift: ‘In the following months, Mr. Trump, along with his two eldest sons, Eric and Donald Jr., refocused the family business, forming a series of partnerships, especially in cryptocurrency, with investors who were willing to bank on his victory… Once Mr. Trump won the presidency in November, that approach kicked into overdrive…

“In late 2023, Mr. Trump boasted of having between $300 million and $400 million in cash when he testified as part of that legal action, a lawsuit brought by the New York attorney general that accused the Trumps of defrauding their lenders. His cash stockpile, Mr. Trump said, showed ‘how good a company I built,’ and, he added in earlier testimony, ‘especially for a developer.’

“Contrary to those assertions, records filed in the fraud case suggest that Mr. Trump’s cash was not the product of a steady and strong empire. His balance had fluctuated wildly, hitting a low of $52 million in 2018, a small figure for the size of his operation. The subsequent increase came largely from the sale of properties and a payout of more than $150 million from a passive investment… Moreover, the version of Mr. Trump’s business that he projects — a real estate development company that executes large, complex tasks — hasn’t existed for a nearly a decade, since the Trumps’ last two major construction projects failed to make money.

“Instead, Mr. Trump’s wealth is now built on monetizing the family name in new ways and, intentionally or not, the office of the presidency. It is an enterprise in pursuit of multimillion-dollar checks — from actual real estate developers, from cryptocurrency and social media enterprises run by others. It is also a business that hawks Trump-branded trinkets like watches and gold-toned mobile phones to the president’s passionate supporters.

“Many of the deals open multiple channels for anyone to funnel cash to a sitting president, often in ways that are untraceable under current disclosure requirements. And because some of what is being sold is use of the president’s name, there are no clear metrics to gauge whether he has received market rate, a premium because of his office or, in effect, a hopeful bribe.

“The White House press secretary, Karoline Leavitt, has said that Mr. Trump abides by all conflict-of-interest laws and acts with only the interests of the American public in mind… His family business announced numerous new deals that would financially benefit Mr. Trump directly, even as he made policy decisions that affected those industries or that involved countries in which the United States had political interests. Most glaringly, Mr. Trump is now both a partner in several crypto ventures and, as president, crypto’s chief policy regulator, and he has signaled that he wants his administration to have a hands-off approach to digital currencies.

“Today, those moves are seen by Mr. Trump’s detractors as a money grab of historic proportions. But an analysis by The New York Times of thousands of pages of internal Trump Organization documents filed in one of the legal actions against him suggests a more urgent motivation for Mr. Trump’s behavior: a need, rather than simply a desire, for easy money to keep his empire intact…” 

I’m Peter Dekom, and while Donald Trump has no real understanding of macroeconomics and has been a terrible businessman his entire life, he is a superb street-smart gansta-bully with zero ethical restraints… out for the big grift.