an autodidact meets a dilettante…

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Is Donald Trump a great businessman?

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another failed venture and a probable scam

Today I listened to a ‘news report’ delivered in front of our small class by a teenage student from China, a sweet young lad, near 7 feet tall and skinny as a bean, with limited English, whom I’ve been coaching in grammar. Students are asked to choose from a list of articles, simplified, in our class’s case, to pre-intermediate or elementary English level, and report on the article in their own words. My student had chosen the topic ‘Why Hilary Clinton lost the election’, a simplified version of an article by Dan Roberts, originally published in The Guardian on 9 November 2016, the day after Trump’s victory. Before he delivered his report, he had to check it through with me, a routine procedure, but to my annoyance he didn’t have any plan or notes to show me, and assured me that ‘it was all in his head’. He also asked me if it was alright if he focused more on Trump than on Hilary. I told him it was best not to divagate too much from the article, but he was free to voice his own opinion of the candidates.

It wasn’t a great talk. My student was, of course, very nervous, and he glossed over Roberts’ view that Clinton lost the election due to the economy, lack of trust and the weakness of her message. His main point was that Trump won because he was a successful businessman, and running a nation is all about money and success. This was really the totality of his talk, delivered in a halting, repetitive way.

Naturally I was irritated at this, but I let it slide. This was a test of English and not so much a test of critical thinking and analysis, though that had to be a factor. So, the fact that my student didn’t provide any evidence of Trump’s great business acumen certainly was a problem for his talk, which was clearly tendentious. However, considering that this was a low-level class I was prepared to give him a bare pass, and to quash my feelings over this oft-repeated claim that Trump has great business smarts.

From other sources I’ve heard very different claims. Sam Harris, in his Waking Up podcast, regularly asserts his view that virtually nobody is more unfit for the office he currently holds than Trump – the ‘boy-king’, as he calls him. In a recent interview with David Frum, Trump’s business skills were ridiculed. First, Frum took aim at Trump’s foreign policy approach, which was to see other parts of the world, such as the EU, as essentially business competitors, or people you should try to ‘cut deals with’, obviously to the advantage of the US. The fact that he was often dealing with allies who shared the values of the US seemed irrelevant. Then Frum mocked Trump’s reputation as a business operator, pointing out that in Toronto, where Frum, a Canadian-American, is involved in business, namely real estate, which of course is Trump’s business field, Trump’s reputation is somewhere between mud (to people he owes money to) and a laughing-stock (to interested spectators). He went on to say that ‘No-one in the business world has any respect for him as a businessman’.

Business and economics are not exactly my strong suits, but it seems to me that Frum, a lifelong Republican with inside knowledge of the real estate business, is a reliable witness here. However, I don’t want to take on face value his claim that nobody in the business world respects him. I need more evidence.

Before I go on though, I should make the point that Trump has, of course, already shown himself to be unfit for office regardless of his business activities. His bullying tactics as a candidate, the profound narcissism in so many of his utterances, his inflammatory and stupid remarks about those who live south of the US border, his ‘moslem ban’, his treatment of the free press, his admiration for the Russian mafioso dictator above all other world leaders, his scientific illiteracy, his pathetic and disgusting attacks on women’s appearance, his attacks on the judiciary, his contempt for his own intelligence agencies, and so much more, prove him to be a disaster for democracy and proper governance, and the shame for his election lies squarely with those who voted for him, knowing, as any intelligent person would know, the kind of person they were backing.

So to the business. A brief dummies’ guide to Trump’s ventures is given here, and it shows that his failures outnumber his successes, which presumably doesn’t prove him a failure, just as one or two movie successes can recoup twenty movie losses. As to his actual value, it’s pretty well the length of a piece of string, and it’s unclear if he’s made any money at all from the wealth he inherited. And it’s also very unclear how much money he actually inherited. Trump himself said during the campaign that he started off with $1 million and built a company worth more than $10 billion, a remark he prefaced with ‘believe me’.

Funnily enough, nobody does.

Trump received a share of his father’s estate at his death in 1999, and though there’s no clear figure, it was a lot more than $1 million. More importantly, his father set him up financially long before that. Donald Trump became President of Trump senior’s real estate business in 1974, at which time it was valued at $200 million, according to one estimate. But who knows? Here’s an interesting commentary from a Quora finance expert, Will Wister:

The growth of his wealth since 1982 has been in line with that of the S&P 500, according to his own statements. Donald Trump’s self-described net worth was $200 million in 1982. If he invested that money in the S&P 500, he’d be worth about $8.3 billion today. Today he claims his net worth is $8.7 billion. So based on his own claims, he has barely outperformed the S&P since 1982.

Some articles claim that Donald Trump’s inheritance was somewhere between 40 and 200 million in 1974. Since 1974, the S&P 500 is up about 74-fold. So his current claimed net worth of 8.7 billion would equate to about 120 million in 1974, which is right in the middle of estimates of what he inherited. In other words, if the articles are accurate, his performance was very close to that of the market from 1974 to present.

What this tells me, above everything else, is how the world is geared to the massive advantage of the super-rich (if you inherited millions in the seventies, you’d have to be disastrously stupid or dysfunctional to be a failure today), but it’s totally speculative about the boy-king’s wealth.

You would think that the public have a right to know more about this subject, considering that Trump parades his success as a businessman, and has used the claim as evidence of his ability to be the bestest of Presidents. Yet Trump has managed to evade the call to present his tax returns to the public, rejecting a 40-year tradition, and why would a successful businessman do that?

This matter of his tax returns and the state of his wealth takes on added importance in consideration of Trump and his family’s seemingly murky relations with Russia’s kleptocracy. Considering the bumbling way that Trump is dealing with the US presidency, it’s virtually impossible to imagine him as anything other than a bumbling businessman. Loud, histrionic, bragging and bullying certainly, but also bumbling and quite likely manipulable, given his infantile narcissism. This makes it more urgent than ever to uncover whether or not he’s indebted to Putin and his billionaire henchmen, who, I have no doubt, are far smarter and more cynical than he is. There’s an Emoluments Clause in the US constitution which states that:

no Person holding any Office…shall, without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.

The legal question then becomes – do any Russian bail-outs for Trump’s incompetent business dealings constitute such emoluments? This would result in endless legal argy-bargy. Presumably Trump could squirm out of it if it was shown that, if there were any bail-outs, they occurred before he became President. But anyway it’s unlikely that he would willingly provide any information whatsoever about his financial dealings – which, given his well-known association with Russian political and financial figures, and given the well-established fact that Russia sought to undermine the democratic process in the recent election, and given the fact of Trump’s fawning admiration for the Russian dictator, whom he clearly admires above all other political leaders, should surely be sufficient reason, not for impeachment, but for removal from office. The Emoluments Clause, which in any cause wasn’t originally intended to be interpreted broadly, shouldn’t be given as the reason, it should be based on more serious matters. I’m not one to argue for treason, given my stance as an international humanist, but clearly Trump has betrayed democracy, the open society and the rule of law with his evasions and allegiances.

So far it looks like Trump is the kind of businessman you’d expect him to be given his performance as President, and given the character he displays. His ties to Russia are legion, and appear to be financially substantial, given that his many bankruptcies have exhausted the patience of US moneylenders. His business bragaddocio may fool the odd naive Chinese teenager, but the American public should have known better.

Incidentally, it seems the best business decision Trump has ever made was to run for President. The huckster’s chuckling now. Talk about playing the American public for suckers.

Written by stewart henderson

June 18, 2017 at 11:10 am

lots more oil

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I just heard this morning on the ABC business news program that there’s been this massive turnaround in the availability of oil – yeah the fossil fuel stuff – in the USA. They were saying that recent oil production has been matching that of Saudi Arabia, and that this transformation has been very rapid, and unexpected, except to insiders. Moreover, the amount of reserves, and the capacity to access them, have increased dramatically.

So I’d like to know how this has happened, and what this means for those going on about ‘peak oil’ over the past few years, as well as for renewables, both in the USA and elsewhere.

A USA Today article from last October suggested that the way things have been going in recent years, the USA could surpass Saudi Arabia, which has been the world’s biggest oil producer for some time, by 2020. Experts expect that US production will average 11.4 million barrels a day in 2013, a US record. Production has increased substantially each year for the past five years, with 2012 registering the biggest gain in one year since 1951. It’s predicted to reach 13 to 15 million barrels by 2020. However, US consumption levels remain well above production, so it will still be a net importer, though the percentage is reducing.

So where’s all this oil coming from? Wasn’t it accepted as fact a few years ago that US oil reserves were running dry and that this would mean doing desperate deals that would likely increase global instability?

There are a number of factors that are easing some of the import problems for the US, including more fuel-efficient vehicles, but clearly the main factor is increased domestic production thanks to such advanced methods as horizontal drilling and fracking – the controversial process of cracking underground rocks to release their oil and gas content, using pumped water, sand and chemicals, at high pressure. New shale formations are being found, and production from some of these are expected to treble by 2020. Every site is being re-evaluated, and expectations are soaring. The peak oil claims of a few years ago, at least in relation to the USA (but surely these successful techniques will be applied worldwide) have completely collapsed, and the US is expecting, and indeed already experiencing, a huge economic boost via oil and gas production and subsidiary industries.

Presumably this will affect the renewable energy sector, as well as, in a roundabout way, the debate over anthropogenic global warming. A recent article by one Steve Forbes (editor of Forbes magazine), also in USA Today, takes the standard business line that the government should be doing everything to encourage and support business in exploiting the newly-extractable fossil fuels, rather than imposing environmental regulations. Although the article is called ‘Focus on economy, not climate’, Forbes, perhaps astutely, doesn’t mention climate, or science for that matter, once throughout the whole body of the article. He focuses entirely on economics, jobs and production. Thus he evades any accusation of climate change denial, and can only be described as a climate change avoider. He even follows the old conservative line, much beloved by conservative pollies such as Nick Minchin here, that ‘48% of Americans place higher priority on economic recovery and job growth over mandating additional environmental protections’. This is twice ridiculous: first, because it suggests that an important issue such as global warming should be decided upon through popular vote rather than through the recommendations of those with the knowledge – that’s to say, the scientists who study the data; and second, because the statistic he quotes shows that 52% of Americans don’t place higher priority on economics than on environmental protection. And this is the editor of a supposedly world-class business magazine? Quel embarrassment.

Many Americans, it seems to me, are living with a kind of duel reality – denying global warming while at the same doing their utmost to minimise it. They manage to reduce their carbon footprint while arguing to themselves that they’re just aiming at business efficiency, nothing more. It’s fascinating to watch, if nothing else. And meanwhile, the weather causes havoc…

Written by stewart henderson

July 24, 2013 at 10:04 pm