Last week, we found out that President Trump lost a billion dollars during the same decade he ghost-authored a book testifying to his business genius. On Monday, the stock market lost 600 points as investors panicked over the president’s decision to escalate his trade war with China by slapping that country with a new series of tariffs.
Are the two events connected? Absolutely.
Trump’s business acumen turned out to be a sham. It’s a good bet the Trump economy — his best argument for re-election — will turn out to be a failure, too. And if his history of bankruptcies, lawsuits, and failed enterprises is any indication, the president will proclaim success every step of the way.
“I love the position we’re in,” Trump said at the White House on Monday. “I think it’s working out really well.”
The president has often touted economic growth and low unemployment figures on his watch — indeed, he frequently uses the economy as a shield against inquiries and criticism on wholly unrelated fronts. And he’s smart to do so. As The New York Times recently pointed out, Trump “is running on the strongest economy of any president seeking re-election since Bill Clinton in 1996, and arguably since Richard M. Nixon in 1972. Job creation is strong and last month the unemployment rate dipped to its lowest point in half a century, 3.6 percent.”
Typically, that’s the end of the argument: Conventional wisdom suggests that when the economy is going strong, Americans have mostly been inclined to re-elect the president or party in office. And Trump ran his first election on the promise he’d bring his much-touted dealmaking acumen to rebuilding the country’s fragile post-Great Recession wealth.
“Today is a metaphor for what we can accomplish for this country,” he said late in the 2016, as he opened a new hotel just a few blocks from the White House.
Trump has indeed handled the economy like he operated his businesses. There are several notable similarities.
First, Trump has built his success on inherited wealth. For all the mythmaking he’s done, Trump as a private businessman was never a self-made man: He received an estimated $413 million from the real estate empire of his father, Fred. It’s pretty easy to look like a winner when you have a massive head start. Similarly, the American economy was hardly at rock bottom when Trump became president: President Obama really did inherit an economy that looked like it was going to fall apart during the final months of the George W. Bush administration — it cratered early in Obama’s first term, then grew, sometimes fitfully, from there. Trump has never faced those kinds of foundations. His record of economic success is built, in part, on the foundation built by his successor.
Second, the president’s apparent success is built on massive debt. During the presidential campaign, Trump proclaimed himself the “King of Debt,” bragging that he’d used borrowed money to create his business empire. What he didn’t emphasize was that he frequently ended up never repaying his debts — making him so toxic within the business community that only one major bank in the world, Deutsche Bank, would lend to him. Similarly, while the massive tax cut passed by Trump and Congressional Republicans probably did boost the economy for a bit, it’s also true that those cuts weren’t paid for: America’s national debt topped $22 trillion earlier this year. Someday, your children or grandchildren may end up paying the price for a few extra months of economic growth under this president.
Finally, Trump has tried to disguise the actual results of his actions with hype and misdirection. The president has constantly spun his private sector failures as success. Losing a billion dollars in a decade? That’s just smart tax planning. The failure of his airline? Somebody else’s fault. As president, he has proclaimed that “trade wars are easy to win” — not true — and frequently asserted, incorrectly, that trade war tariffs placed on Chinese goods are being paid by that country directly into the American Treasury. They aren’t, and he’s been corrected on that point so many times that it’s probably best to assume he’s just straight up lying. The reality is that the president’s trade wars are hurting the American economy.
Trump was a failure as a businessman — but used his considerable self-promotion skills to fail upwards, first into a popular TV show, then into the presidency. It is starting to look like his management of the economy could come to a similar, ignominious result. The difference this time? His dad isn’t around to bail him out. It’s the rest of us who will be left holding the bag.
Read more: theweek.com