Donald Trump touts his business “success” as a major qualification for running the country. So how does Trump run his businesses and what does this mean for the country? And what about this idea that government should be run like a business, anyway?
The Republican presidential presumptive nominee’s mouth makes it difficult to rationally discuss the important issues of the 2016 campaign. Nonetheless, voters will need to know what the country and economy will be like after the election. The candidate’s core philosophy of government is a core issue.
So how would Trump run the government? Any search for policy or issue specifics or detailed proposals, whether on Trump’s website or in his speeches, comes up short on specifics or proposals of any kind.
Trump’s Idea Of Managing Government
In “How Trump Would Manage the Federal Government,” Government Executive tries to discern what Trump would do:
“My specifics are very simple,” Trump said on This Week. “I’m going to get great people that know what they’re doing, not a bunch of political hacks that have no idea what they’re doing, appointed by President Obama, that doesn’t have a clue.”
Government Executive did find this:
He laid out his views in his 2000 book, “The America We Deserve”:
First: Get government out of activities it can’t do well. (A list of things government doesn’t do well is a very long list.) Second: Get government back in the business of providing for public convenience (transportation, public works) and safety (police and firefighters), and make sure it does so efficiently. Then judge its efforts by visible, definable results and fine-tune as needed.
Who does Trump cite as a manager he would use as a role model? A September Bloomberg profile, “How Trump Invented Trump,” asked him:
When Trump is asked to name a leader he looks to for advice on managing his company, his mouth, just as acrobatic as his more famous hair, pulls tight, snaps open, and lets out its most important syllable.
“Me,” Trump says.
“Mirror,” says one of the two deputies in the room. “The mirror.”
“I look at me,” says Trump.
Does he admire any other business leaders?
“I,” Trump says, “don’t like the word admire.”
So it is difficult to analyze Trump’s policy or issue proposals because they just don’t seem to exist. They seem to be fluid and general, coming from the moment. It is even difficult to determine what he might do by asking who his role models are because … mirror.
Trump’s Conduct Of Business
In recent days media organizations have investigated how Trump runs his businesses. What they found is alarming – if you care about how the U.S. government functions and about its workforce and contractors.
The government has around 2.7 million employees (the fewest, by the way, since 1966) but, thanks to antigovernment privatization efforts, hires countless contractors. It also procures from countless businesses. How would they fare under Trump?
USA Today looked at Trump’s business practices, in “Hundreds allege Donald Trump doesn’t pay his bills“:
At least 60 lawsuits, along with hundreds of liens, judgments, and other government filings reviewed by the USA TODAY NETWORK, document people who have accused Trump and his businesses of failing to pay them for their work. Among them: a dishwasher in Florida. A glass company in New Jersey. A carpet company. A plumber. Painters. Forty-eight waiters. Dozens of bartenders and other hourly workers at his resorts and clubs, coast to coast. Real estate brokers who sold his properties. And, ironically, several law firms that once represented him in these suits and others.
Trump’s companies have also been cited for 24 violations of the Fair Labor Standards Act since 2005 for failing to pay overtime or minimum wage, according to U.S. Department of Labor data. That includes 21 citations against the defunct Trump Plaza in Atlantic City and three against the also out-of-business Trump Mortgage LLC in New York. …
In addition to the lawsuits, the review found more than 200 mechanic’s liens — filed by contractors and employees against Trump, his companies or his properties claiming they were owed money for their work — since the 1980s. The liens range from a $75,000 claim by a Plainview, N.Y., air conditioning and heating company to a $1 million claim from the president of a New York City real estate banking firm. On just one project, Trump’s Taj Mahal casino in Atlantic City, records released by the New Jersey Casino Control Commission in 1990 show that at least 253 subcontractors weren’t paid in full or on time, including workers who installed walls, chandeliers and plumbing.
The USA Today investigation found that Trump stiffs employees and steals wages by refusing to pay for overtime, stealing tips, and other common wage-theft practices. He also stiffs contractors and suppliers, negotiating terms and then reneging once work is completed – sometimes paying nothing. The extend of this suggests that Trump’s businesses do this as a standard business practice – a way to save money as well as gain advantage over competitors who pay according to what they negotiate.
Trump’s companies do appear to also use wealth as an advantage against contractors and employees. The USA Today investigation quotes an opposing lawyer:
“Trump could have settled it right off the bat, but they wanted to fight it out, that’s their M.O.” said Rod Hannah, of Plantation, Fla., the lawyer who represented the workers, who he said are forbidden from talking about the case in public. “They’re known for their aggressiveness, and if you have the money, why not?”
In another investigation USA Today also found similar problems. Their report, “Trump’s 3,500 lawsuits unprecedented for a presidential nominee“:
An exclusive USA TODAY analysis of legal filings across the United States finds that the presumptive Republican presidential nominee and his businesses have been involved in at least 3,500 legal actions in federal and state courts during the past three decades. They range from skirmishes with casino patrons to million-dollar real estate suits to personal defamation lawsuits.
The lawsuits are filed by him and against him. “He sometimes responds to even small disputes with overwhelming legal force. He doesn’t hesitate to deploy his wealth and legal firepower against adversaries with limited resources, such as homeowners. He sometimes refuses to pay real estate brokers, lawyers and other vendors.”
It is not just employees and contractors who are cheated by Trump businesses. USA Today again: “The analysis of Trump lawsuits also found that professionals, such as real estate agents and lawyers, say he’s refused to pay them sizable sums of money.” And, “Even Trump’s own attorneys, on several occasions, sued him over claims of unpaid bills.”
So our government’s employees, contractors and suppliers would likely fare poorly under a Trump administration. How about the country’s creditors? In “How Donald Trump Bankrupted His Atlantic City Casinos, but Still Earned Millions,” The New York Times found that Trump structures company borrowing to enrich himself. He runs up tremendous debt, taking cash out for himself, then the businesses fail, harming creditors:
But even as his companies did poorly, Mr. Trump did well. He 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 fell on investors and others who had bet on his business acumen.
[. . .] “Early on, I took a lot of money out of the casinos with the financings and the things we do,” he said in a recent interview. “Atlantic City was a very good cash cow for me for a long time.”
Others were hurt.
The Times report suggests how Trump might manage the country’s finances:
“People underestimated Donald Trump’s ability to pillage the company,” said Sebastian Pignatello, a private investor who at one time held stock in the Trump casinos worth more than $500,000. “He drove these companies into bankruptcy by his mismanagement, the debt and his pillaging.”
Trump himself has indicated that he would handle the country’s finances, threatening to default on the country’s debt obligations. In May, the Times reported, in “Donald Trump’s Idea to Cut National Debt: Get Creditors to Accept Less“:
Asked on Thursday whether the United States needed to pay its debts in full, or whether he could negotiate a partial repayment, Mr. Trump told the cable network CNBC, “I would borrow, knowing that if the economy crashed, you could make a deal.”
He added, “And if the economy was good, it was good. So, therefore, you can’t lose.”
Such remarks by a major presidential candidate have no modern precedent. The United States government is able to borrow money at very low interest rates because Treasury securities are regarded as a safe investment, and any cracks in investor confidence have a long history of costing American taxpayers a lot of money.
Translation: He would tell creditors to take less than they are owed. This means defaulting on our country’s debt obligations, which has never happened. The country’s record of always repaying its debt is the reason the dollar is a reserve currency, and interests rates are extremely low. If the U.S. defaulted, the risk of it happening again would always be there everafter. No one would loan money to the U.S. government again except at very, very high interest rates.
The Times report summed up the problem:
… Mr. Trump’s statement might show the limits of translating his business acumen into the world of government finance. The United States simply cannot pursue a similar strategy. The government runs an annual deficit, so it must borrow to retire existing debt. Any measures that would reduce the value of the existing debt, making it cheaper to repurchase, would increase the cost of issuing new debt. Such a threat also could undermine the stability of global financial markets.
Purpose Of Government vs. Purpose Of Business
The popular definition of the purpose of business today is to make money for its owners. Businesses serve the interests of the business’ owners by cutting costs (maybe moving production to countries with low wages and few worker or environmental protections), cutting product quality, cutting customer service, and passing everything gained to a few. Trump appears experienced and skilled in these areas.
But the purpose of We the People organizing a government for ourselves was to do things together that make our lives better. We jointly make decisions. We jointly finance government’s operations. As our Constitution states, we formed this government to:
● form a more perfect Union,
● establish Justice,
● insure domestic Tranquility,
● provide for the common defence,
● Promote the general Welfare,
● and secure the Blessings of Liberty to ourselves and our Posterity.
Nowhere in Trump’s history is there any indication of an interest, experience or skill in any of these areas.
The idea of making money off the public to make a very few people wealthy does not come up in our Constitution. This is the opposite of the purpose of government.
Trump’s experience running businesses would not translate well at all to running our government. Not well at all.