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Is Trump the Worst Businessman in American History?

 

Trump Fake Tycoon

Is Trump the Worst Businessman 

in American History? 

We don’t have enough data to answer that question but we have learned a great deal over the last two years, far more than was known prior to the 2016 election – mostly thanks to the dogged investigative reporting at the New York Times. And what is known at present is the following:

  • In present value terms, Trump received over $400 million from his father
  • From 1985-1994, he lost $1.2 billion
  • 1995-2000 
    • I am not aware of tax or other financial data from these years
    • He owned the Miss Universe Pageant and started Trump University but neither seem to have generated significant income
  • From 2000-2018, he and his businesses declared ~ $430m in net income which is the result of income from the following sources:
    • Apprentice: 197m
    • Endorsement & Licensing: 230m
    • Minority investments in office buildings: 179m
    • Trump Organization operations: -175m
    • Most of this was invested in golf resorts and the D.C. hotel which are all money losing
  • Total debt is ~ $1B of which about half seems to be personally guaranteed by Trump


There’s no way to “add up” these figures and arrive at a “net worth” or “net lifetime earnings” but we can make the following general points:

  1. His father provided tremendous support, vastly more than Trump admits, and has rescued Donald from bankruptcy on several occasions
  2. In Atlantic City, he built three big new casinos in an unproven tourist destination in the space of 4 years (increasing total gaming capacity by 3x) using hugely expensive junk bonds paying 14%. He bet the ranch on what turned out to be a total bust.
  3. His most profitable NYC property deals have been ones where he is a minority investor and not involved at all in their management.
  4. The one clear business success he has had wasn’t an investment at all. It was a starring role in The Apprentice.
  5. He sunk most of his Apprentice earnings into more “trophy” golf resorts, all of which appear to be losing money.

So while we cannot say definitively that Trump is the worst businessman in American history, we can say that his track record is poor. He appears to have a very limited imagination: he only gets one or two ideas per decade and puts all his chips into those ideas. In the late 1980s, it was Atlantic City casinos. In the 2010s, it’s golf resorts.

In 2018, Bloomberg estimated Trump’s net worth at $2.5 billion. As of this month, Forbes estimates it at $3.1 billion. Given that he and his businesses have about $1 billion in debt, and given that commercial real estate (particularly hotels and resorts) is in the early stages of what is likely to be a severe downturn because of the pandemic, and given that he’ll owe $100m if he loses his case with the IRS, and given that the Trump brand is now toxic for a large majority of the world’s population — it seems quite possible that in the years after he leaves the White House, Trump’s net worth may fall below $1 billion. Not that he’ll ever admit it…

Sources:

1985-1994
Trump Engaged in Suspect Tax Schemes as He Reaped Riches From His Father (NYT, 10/2/18)

2000-2018
Long-Concealed Records Show Trump’s Chronic Losses and Years of Tax Avoidance (NYT, 9/27/20)

Bloomberg Billionaires Index (2018, Bloomberg)

Donald Trump Has At Least $1 Billion In Debt, More Than Twice The Amount He Suggested (2020, Forbes)

Trump Will Have $900 Million Of Loans Coming Due In His Second Term If He’s Reelected (2020, Forbes)

Trump’s Philanthropy: Big Tax Write-Offs and Claims That Don’t Always Add Up – The New York Times (2020, NYT)

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