Donald Trump walks away from failure once again with profit


At the end of the story, Donald Trump appeared to be bankrupt. As the Cold War ended bloodlessly on the rubble of the Berlin Wall in 1989, the tycoon presided over an empire in the process of dissolution. Joined the billionaire club about a year earlier, in August 1990, Trump of $ 3.2 billion to banks, $ 69.5 million to contractors, and was involved in 111 legal cases, as its Atlantic City casinos were on the brink.

It looked like a long-faced plant from the penthouse – except it wasn’t. Seeing how Trump rebounded from that defeat highlights what he is doing now and is sobering: Perhaps his stubborn refusal to fully acknowledge his election defeat on November 3 – his numerous court challenges and accusations of fraud – looks more like to a bankruptcy than to a coup d’etat (half-hearted).

Since the 1970s, bankruptcy law has developed in contradictory ways in the United States: as laws and standards against individual and national bankruptcy (also known as default) have become more stringent and punitive , the standards and laws governing corporate bankruptcy have become more lenient. Famously, in the United States, you can’t default on student loans, but it’s common for business leaders to walk away from business failure with a profit.

For decades we have lived in an era of “strategic bankruptcy” which allows management to ask for what is known as “Chapter 11” to default on contracts and promises without giving up the leadership of the company it. -same. Bankruptcy is less of a private apocalypse and more of a shrewd business move.

As a brokerage firm researcher described in 1987: “When a business goes bankrupt, it kind of goes into a state of grace. He pays no interest on all his debt, his contracts are unenforceable.

This era gave birth to “business as usual” bankruptcies. You could walk past a store and see no outward signs of business problems, even when purges were in progress. At the commercial end of the purge were still the workers. Funds intended for wages or pensions have been consumed by costs in lengthy negotiations with creditors and bondholders and by the high fees of so-called “troubled debt specialists”. Broken promises to workers bore an evocative label: “Betrayal Without Remedy”.

[See also: Anne Applebaum on Donald Trump: “History has always hung in the balance. We just imagine that it didn’t”]

Trump’s 1990 collapse in Atlantic City was a prime example of the new bankruptcy. Even though workers and contractors were not paid, Trump managed to retain control of the casinos. Thirty years later, he repaid the man who represented his creditors by making Wilbur Ross, then known as the “King of Bankruptcy”, his secretary of commerce.

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What happened in Atlantic City in the early 1990s is happening again in Washington, DC as Trump uses state resources and donations from supporters to lead a legal crusade that would seem fanciful and unnecessary were it not for lining the pockets of those involved.

Contributions that Trump is raising now will be carried over to a future candidacy. The longer the contestation of the election drags on, the more lucrative it is for litigants. Reports suggest Rudy Giuliani, Trump’s attorney and the man most recently in the news for speaking outside an auto parts store, got screwed by Borat, and sweating brown liquid from his scalp, can now become the highest paying lawyer of all time. Presumably any level of humiliation would be worth it $ 20,000 per day to perform the task of what is called, in the jargon, “debtor-in-charge babysitting”.

As the drama unfolds in the United States, something strangely similar is happening in the south. Venezuela also has two heads of state: Nicolás Maduro, who officially governs the country and Juan Guaid.ó, which does not have one, but which enjoys the recognition of most foreign governments.

The question of who is really responsible is being fought, as in the United States, in the courts rather than at the polls, as the two leaders push for control of Venezuela’s assets abroad and US bond holders. are pushing to seize these assets for themselves. In the process, the nation is approached like a former fund manager such as Wilbur Ross would for a bankrupt company, stripping it of its valuables which are then disputed by creditors: oil refineries in Louisiana, bullion in gold in the vaults of the Bank of England, bank accounts in New York, real estate and airplanes in South Florida.

Trump has treated the nation as an asset in distress since the late 1980s, when he first flirted with a presidential bid. “Yes [the US] were a company, it would go bankrupt, ”he said at the time. These United States are lose $ 200 billion a year, ”he said,“ this country is essentially a bankrupt country ”. When he was elected in 2016, he filled his cabinet with troubled debt sector players including Steven Mnuchin and Gary Cohn of Goldman Sachs alongside Ross himself.

With Trump in power, there was a lot of talk about being a businessman, but not enough about what he meant by that. Listen and you will find that it was less about prosperity through innovation or efficiency than victory through manipulation of debt and the law. In his own words, he was the “king of debt,” but he was also, to use the term enjoyed by his secretary of commerce, the king of bankruptcy. It was bankruptcy without stigma, without guilt, without shame.

[See also: The Republicans are at a crossroads: do they distance themselves from Trump or embrace his appeal?​]

Pressed on his own Chapter 11 trail, Trump insisted he was “using the laws of the land” to his own advantage and to the detriment of the suckers. The facts were on his side. In the Atlantic City fiasco, its stock and bond holders lost $ 1.5 billion as he walked away with millions.

Attempts to smear Trump with the stigma of debt and bankruptcy have failed and have even failed – his ability to portray himself as the king of debt and thrive has given him an aura of immunity for them. companies. He epitomizes the bulletproof status decades of legal change have bestowed upon him, magically navigating the punitive territories of personal debt on one side and sovereign debt on the other.

Trump’s slow casino collapse, which began 30 years ago, has lasted for more than a decade. It has been less than a month since the president’s last apparent failure. We will have to wait for the moment, if it arrives, when he feels he has drawn the last benefits from his last defeat, and stumbled upon a new room behind the wall of trials.

Only then will the King of Debt emerge from the wreckage, richer from another failure, his mark intact, a poster of 21st century capitalism.

[See also: The last days of Trump]

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