Trump’s economic record is one big con

President Trump came into office promising some fabulous yet unspecified health-care plan to replace the Affordable Care Act. No plan existed; every plan Republicans came up with managed to reduce the number of insured. Trump promised never to cut entitlements; his fiscal 2020 budget proposal would have done just that.

Trump said he’d bring back manufacturing. In fact, it slowed and now has slumped. (“Manufacturing has slowed amid global uncertainty,” NPR reported earlier this month. “That’s one of the reasons the Federal Reserve gave for cutting interest rates this week.”)

Trump said he’d

  1. get tough on drug companies. He hasn’t. He said his
  2. tax cut would be aimed at the middle class,
  3.  deliver $4,000 a year to the average American family and
  4. permanently boost business investment, pushing growth above 3 percent. Nope, nope and nope.

The tax cut greatly favored the rich and corporationsno $4,000 raise materialized, business investment tapered offgrowth is below 3 percent, and the deficit ballooned. Trump is incapable of being embarrassed, but you’d think all those conservative think tanks, saner White House advisers (e.g. former adviser Gary Cohn) and supply-side theorists who pushed all this would be just a little sheepish.

John Harwood of CNBC writes, “Benefits from what President Donald Trump called ‘the biggest reform of all time’ to the tax code have dwindled to a faint breeze just 20 months after its enactment. Half of corporate chief financial officers surveyed by Duke University expect the economy to shrink by the second quarter of 2020. Two-thirds expect a recession by the end of next year.” Harwood found:

After an uptick in the second quarter of 2018, growth declined in the next two quarters to end up at 2.9% for the year.

Goldman Sachs economist Jan Hatzius says that second-quarter surge – initially measured at 4.2% but later revised down to 3.5% – represented the tax law’s peak impact. He expects it to vanish altogether by late this year or early 2020, as the economy returns to the same 2% growth levels Trump inherited from President Barack Obama.

As for workers’ pay, real wages increased by 1.2 percent in 2018. (“Ordinary workers had very little growth in wage rates,” Harwood quotes from the Congressional Research Service.)

The biggest economic lie was Trump’s declaration that trade wars are quickly and easily won, American consumers and farmers wouldn’t be hurt and we somehow would get richer by making Americans pay more at stores. Actually, they are paying a lot.

The conservative American Action Forum’s recent study found, “Altogether, the president’s tariffs could increase nationwide consumer costs by nearly $100 billion annually.” Moreover, other countries have not taken the tariffs lying down. “In addition to raising costs for American consumers, tariffs have also resulted in significant retaliation by other countries against U.S. exports. … To date, eight nations have levied retaliatory tariffs of 5 percent to 50 percent on approximately $131 billion of U.S. exports.”

To cushion the blow to farmers who are losing markets, the Trump administration has now put them on welfare, otherwise known as farm subsidies. Another low point in “conservative” economics.

Why this is all not front and center in the Democratic candidates’ campaigns is a bit of a mystery. Certainly, events such as the Dayton, Ohio, and El Paso shootings shift attention. But so far the Democrats are mostly arguing about what new things they are going to do (green energy, improvements to or a do-over on the ACA). They need to remember that a president’s reelection effort is a referendum on his performance. The Democrats would do well to point out that Trump has not fulfilled the promise of his economic populist message — hence the need to distract everyone with outrageous conduct, racism and xenophobia.

‘Times’ Journalists Puncture Myth Of Trump As Self-Made Billionaire

Investigative reporters Susanne Craig and David Barstow say the president received today’s equivalent of $413 million from his father’s real estate empire, through what appears to be tax fraud.

CRAIG: That started in 1949. And it was one of the projects that had got – that Fred Trump had received government funding to build. It was a complex called Beach Haven. And what Fred Trump did – it was quite ingenious – is he bought the land underneath Beach Haven, the complex that he would go on to build, and he placed the land in a trust for the benefit of his five children. And then he started paying them rent. He makes them his landlord. And every year, they’d continue to get payments. So instead of paying some…

GROSS: Wait. Wait. Could we just stop a second?

CRAIG: Yep.

GROSS: I don’t really understand how 3-year-old Donald Trump can be his father’s landlord. Can you explain that?

CRAIG: Sure. It was his land to do what he wanted with. And he put it in a trust, in this instance, when they were very young for their benefit and began paying them rent. It’s completely legal. But that’s sort of one of the ways in which he early on – you know, he’s in – this point, it’s in the 1940s. His children are young. And he’s looking for ways, you would imagine at this point, to begin to take care of his children as they get older so that they – you know, when they grow up, they’ve got money. And it is a way to transfer what is – now he’s becoming a very richer man – is one way to begin to transfer wealth to them. This is the first one. It happened in 1949.

GROSS: So what are some of the ways that by the time Donald Trump was a teenager, he was already wealthy? What are some of the other ways his father gave him money?

BARSTOW: He began doing a number of things. So he started buying or building apartment complexes in Brooklyn and Queens and then gradually transferring ownership of those apartment complexes to his children. So, for example, Donald, when he was 17 years old, became co-owner with his family members of a 52-unit apartment building in Brooklyn that his father had acquired for them. And so they would – over time, Fred Trump assembled roughly eight apartment complexes – over a thousand units in all – that he transferred through a variety of mechanisms to his children. So those thousand units start churning out profits that flowed effortlessly into the pockets of his children.

We actually documented in our reporting 295 different revenue streams that Fred Trump ultimately created for Donald Trump over a 50-year period. I mean, Fred Trump was so ingenious at finding different ways of putting money into Donald Trump’s pockets. So he didn’t just put him on his payroll as a salary employee. He also paid him separately to be a consultant to him. He paid him separately to be a property manager for him. He paid him separately to be a purchasing agent for him. On and on it would go.

CRAIG: He was getting laundry revenue at one point from Fred Trump.

BARSTOW: Yes. And…

CRAIG: …From the buildings.

BARSTOW: You know, some of these revenue streams were relatively modest. Some of them were kind of one-hit wonders. But when you added it all up, it was this incredible stream of money that made Donald Trump – he was a millionaire, actually, by the time he was 8 or 9 years old. Before he ever entered and set foot into Manhattan, where he would make his name, Fred Trump had already transferred to him over $9 million in wealth.

GROSS: So you say by the time he was 29, in 1975, Donald Trump had collected nearly 9 million – the equivalent of $9 million in today’s dollars from his father. When he was 30, in 1976, the myth of Donald Trump really starts to expand. There’s a 1976 article in your newspaper, The New York Times, and you describe it as one of the first major Donald Trump profiles and a cornerstone of decades of mythmaking about his wealth. What did the article say? What were the main points of this 1976 article about Donald Trump?

BARSTOW: It was really one of the first big, big profiles that ran of Donald Trump. And Donald Trump did something in this particular profile that he would actually repeat and use to great effect in subsequent profiles, which was he took The New York Times reporter on a tour of what he called his jobs, his empire. And he starts driving around New York pointing out this building and that building and talking about how wonderful they were doing.

And effectively, what he was doing was he was appropriating his father’s empire as if it were his own empire. So these buildings that he’s pointing out as his jobs and part of his empire, they were, in fact, completely owned by his father. He had no ownership stake in any of those buildings. And so what he did, especially when it was critical to kind of the early mythmaking of Donald Trump, was he simply asserted that his father’s empire was his empire.

And those claims, unfortunately, largely went unchallenged for many, many years by the reporters who were kind of swept up in the glamor of this young, swaggering, handsome guy who was so full of confidence and so full of big plans for the city of New York. And so that story was the thing that, I think, helped give birth to the myth of Donald Trump, self-made billionaire.

CRAIG: One of the things that’s really remarkable about that story when you read it is, you know, he goes through job after job and says that things that are his father’s are his own. And he tells the reporter that he’s worth in excess of $200 million. And everything he pointed to in this story that would go to his net worth at that time was his father’s. He had a tax return a few years later where we see he declared – I think he made $25,000 a couple years later.

BARSTOW: That year, actually – that exact – that year…

CRAIG: It was actually that year.

BARSTOW: …1976.

CRAIG: Yeah.

BARSTOW: And yet, he was sitting there saying that he was worth $200 million. And that was a claim that he would – part of the claim that would put him on the very first list of wealthiest Americans published by Forbes magazine in 19 – I want to say – ’81, ’82 – ’81, somewhere in there.

CRAIG: And it was a spectacular con.

GROSS: And I guess Donald Trump got used to people taking him at his word, even when his word wasn’t true.

 

.. GROSS: This is FRESH AIR. And if you’re just joining us, my guests are New York Times reporters Susanne Craig and David Barstow, two of the three writers who reported just a couple of weeks ago on how Donald Trump engaged in suspect tax schemes as he reaped riches from his father. And it deconstructs the whole Donald Trump myth about how he’s a self-made millionaire or billionaire. And it shows, like, how much money Fred Trump, Donald’s father, funneled to him and his other siblings and how they came up with schemes to avoid paying taxes, making Donald Trump a very, very wealthy man by the time he was a teenager.

OK. So in addition to some of the tax schemes we talked about, Fred Trump made a lot of loans to Donald Trump. Donald Trump has always said that he got a million-dollar loan from his father and helped parlay that into his own empire. So how much money would you estimate Fred Trump gave Donald Trump in loans?

BARSTOW: We were able to document in real dollars $60 million in loans, not one million. In today’s dollars, it equates to $140 million in loans, which is on top of the $413 million in direct wealth that we saw transferred to Donald. What we also saw – I think what is important also is that, in many cases, these were loans that were never repaid. You know, he would take out – we were looking at one particular year, and it was like every month. He’s going back to Dad, and he’s borrowing another couple hundred thousand bucks and then another 500,000 bucks and then a million dollars. It was just, like, a monthly run to Fred Trump to get more money.

 

 

And we saw especially that the flow of loans increased as Donald Trump took on big, new projects, or they increased when he was suddenly in trouble, he had run into another financial ditch. So it was a really steady stream that went well beyond, you know, the notion of a guy in his early 20s getting a million dollars from Dad and then being off to the races. These were loans that actually extended well into his 40s and 50s.

GROSS: So how did Donald Trump use the money that was loaned from his father?

CRAIG: Yeah. He used the money for many of his ventures. He had Trump Tower. Money that he got from Fred Trump was used to support that. It was used to support his ventures in Atlantic City and elsewhere. Many of them went under. I mean, especially, you look at Donald Trump’s history in Atlantic City, he’s got several bankruptcies. At one point, he was hundreds of millions of dollars in debt. And this is a time he not only owed the banks hundreds of millions of dollars, he was in debt to his father and was going to his father at these very crucial times for more support.

GROSS: So he gets a lot of money from his father, tries to build his own empire and ends up in debt in a lot of instances, instead of making a fortune from his own investments.

BARSTOW: You also see that when he fell – you know, when he would fall down, the safety net was there. The Fred Trump safety net was there to catch him.

CRAIG: There was one just almost unbelievable moment in the story, and you see it in 1990. And this is a time in, you know, the back end of 1990. And Donald Trump is in incredible financial distress. A number of his companies are either in trouble or facing bankruptcy. And Fred Trump had been there for him at every turn, according to the documents. We can see he’s assisting him with money in one case. Donald Trump’s casinos, they’re facing a debt payment. And Fred Trump has a lawyer go into the casino and buy casino chips and walk out without placing a bet. It was simply a way to give Donald Trump money. And this period…

GROSS: And this was, like, $3 1/2 million worth of chips. Right?

CRAIG: It was $3 1/2 millon worth of casino chips. And at this period, his father is there for him at every turn in every document that we can see. And Donald Trump, at this period, has a lawyer – one of his lawyers – draft a codicil to his father’s will, essentially a new will. And this codicil to the will is taken to Fred Trump’s house in December 1990. And Fred Trump immediately sees this codicil as an attempt by Donald to take control of his empire and to potentially put it at risk.

And Fred Trump immediately says no. He freaks out. And he makes a call to his daughter, who is a federal judge and a lawyer. And a new codicil, within months, is drafted that removes Donald as the sole executor of Fred Trump’s will and puts Donald and Robert Trump and Maryanne Trump in charge of his affairs. And then ultimately, a new will is drafted.

But you see, in the depth of Donald Trump’s financial life, after all his father has done for him, that he makes this move that’s an incredibly dramatic move. And it’s scarring to the family, what he did.

GROSS: So what you’re saying, I think, is that at the end of Fred Trump’s life – or toward the end of Fred Trump’s life, Donald Trump tried to take advantage of him for Donald Trump’s own good, to help Donald Trump bail himself out. And Fred Trump, Donald’s father, became suspicious of the son that he had helped with so much money over so many years.

BARSTOW: What we know for sure is that Fred Trump perceived this as an attempt by his son to gain complete control over his estate and, potentially, to use the empire that Fred Trump had doggedly and patiently built over many decades – to use that empire, potentially, as collateral to help bail Donald Trump out of his own financial difficulties.

GROSS: My guests are New York Times reporters David Barstow and Susanne Craig. After a break, we’ll talk about another scheme used to transfer wealth from Fred Trump’s real estate empire to his children. I’m Terry Gross, and this is FRESH AIR.

(SOUNDBITE OF ERNESTO CERVINI’S “WOEBEGONE”)

GROSS: This is FRESH AIR. I’m Terry Gross. Let’s get back to my interview with New York Times reporters Susanne Craig and David Barstow who, along with Russ Buettner, spent a year and a half investigating how Donald Trump’s father, Fred Trump, used various tax schemes to transfer about 413 million in today’s dollars from Fred’s real estate empire to Donald. The reporters say one of the family’s tax schemes involve fraud. This story offers a completely different narrative than the one Donald Trump has always presented of himself as a self-made billionaire.

 

.. And they had regular family meetings after Fred Trump died. They would hand out checks. You know, Fred Trump’s buildings were very profitable. And they would meet every few months to get an update on the status of the empire and to get a check. And then in 2003, at one of these meetings, Donald Trump announced that it was time to sell and quickly assembled a private sale to a developer in New York for almost all of it. And it was sold – you know, give or take a few buildings – in one sale for just under $800 million.

GROSS: So the buildings that were sold, were those buildings that Fred Trump had still owned at the time of his death? Or did it also include all the buildings that had been transferred from Fred Trump to the children?

CRAIG: They included both the buildings that had been transferred and the ones that he owned. It was pretty much his whole empire. And it sold – you know, the buildings that sold in 2004 were to a New York developer named Ruby Schron, and the price tag was just over $700 million. And what’s interesting about that is we learned through the documents that we went through that that sale price was roughly just under $200 million than what the banks would value it at, you know, in the months after the sale. So it’s incredible to see that that empire was sold for much less than they could’ve got for it very quietly and for much less.

GROSS: So it wasn’t, like, the deal of the century that Donald Trump made?

CRAIG: It definitely wasn’t.

 

.. GROSS: Susanne, I’m going to ask you to choose either “The Art Of The Deal,” “The Art Of The Comeback” or “The Apprentice” and tell us what was actually going on in Donald Trump’s financial life when these books or the show based on all his fabulous accomplishments and deals went public.

CRAIG: I’m thinking which one to choose.

GROSS: OK.

(LAUGHTER)

CRAIG: What are you thinking, David?

BARSTOW: “Art Of The Comeback.”

CRAIG: (Laughter) Go for it.

BARSTOW: Oh. Well, so he publishes “The Art Of The Comeback” in 1997. And it’s this story of his sort of, you know, pulling himself up out of the muck of his casino collapse and, through his grit and determination and wily negotiating skills, getting himself back on his feet. Well, within – a few weeks of the publication of this book so happens to coincide with the time when he actually took possession of one-quarter of his father’s real estate empire through one of these very elaborate tax schemes that we describe in the story. So at this moment when he’s boasting about, you know, his derring-do of getting himself off the mat, it actually coincides perfectly with the moment when he’s just taken possession of 25 percent of this enormous real estate empire. And somehow, someway, not a word of that made its way into the book “The Art Of The Comeback.”

CRAIG: I’m also thinking of, immediately, “The Apprentice” and the opening scene of “The Apprentice” and the song – money, money, money, money – that happened in 2004 right as the sale had gone through, the hundreds of millions of dollars that they had gotten from Fred Trump. And yet when you watch that opening scene, it’s all Donald Trump – Donald Trump’s plane is there, the gold tower in Midtown Manhattan – when, in fact, it was all the opening scene that Fred Trump built and paid for.

 

.. GROSS: I’m wondering how you feel knowing that you have just totally punctured the myth of how Donald Trump made his money and what he did with his money and his great negotiating, deal-making abilities. And so many people still believe the myth, and Donald Trump is still putting forward the myth.

CRAIG: It’s interesting. When I think about that, I think you have to sort of – I go back to that idea – you know, the lie repeated over and over and passed down into history becomes fact. And I think that we’ve reset that. I think it’s going to take time for this to move into the bloodstream of America. But I think that we’ve taken, I think, a good first stop in resetting exactly the origins of Donald Trump’s wealth. But I do think it’s going to take time, and I think there’s some people who are always going to believe what they want to believe.

But I think the the power of the story is, you know, I think, how careful we were and how documented it was and the Times’ decision to put so many of those documents up. I think it’s really hard to refute the story. It’s hard to refute because it’s absolutely true, and the documents are there. And a lot of them are the source documents of the Trump family themselves. But I think it will take time for this to sort of – you know, for people to digest it. And – but I think it’s going to happen.

Donald Trump’s Phony America

There are several kinds of success stories. We emphasize the ones starring brilliant inventors and earnest toilers. We celebrate sweat and stamina. We downplay the schemers, the short cuts and the subterfuge. But for every ambitious person who has the goods and is prepared to pay his or her dues, there’s another who doesn’t and is content to play the con. In the Trump era and the Trump orbit, these ambassadors of a darker side of the American dream have come to the fore.

.. What a con Holmes played with Theranos. For those unfamiliar with the tale, which the journalist John Carreyrou told brilliantly in “Bad Blood,” she dropped out of Stanford at 19 to pursue her Silicon Valley dream, intent on becoming a billionaire and on claiming the same perch in our culture and popular imagination that Steve Jobs did. She modeled her work habits and management style after his. She dressed as he did, in black turtlenecks. She honed a phony voice, deeper than her real one.

She spoke, with immaculate assurance, of a day when it might be on everyone’s bathroom counter: a time saver, a money saver and quite possibly a lifesaver. She sent early, imperfect versions of it to Walgreens pharmacies, which used it and thus doled out erroneous diagnoses to patients. She blocked peer reviews of it and buried evidence of its failures.

This went on not for months but for years, as Holmes attracted more than $900 million of investment money and lured a breathtakingly distinguished board of directors including two former secretaries of state, George Shultz and Henry Kissinger; a former secretary of defense, William Perry; and a future secretary of defense, James Mattis. What they had before them wasn’t proof or even the sturdy promise of revolutionary technology. It was a self-appointed wunderkind who struck a persuasive pose and talked an amazing game.

She was eventually found out, and faces criminal charges that could put her in prison. But there’s no guarantee of that. Meantime she lives in luxury. God bless America.

Theranos was perhaps an outlier in the scope of its deceptions, but not in the deceptions themselves. In an article titled “The Ugly Unethical Underside of Silicon Valley” in Fortune magazine in December 2016, Erin Griffith tallied a list of aborted ventures with more shimmer and swagger than substance, asserting: “As the list of start-up scandals grows, it’s time to ask whether entrepreneurs are taking ‘fake it till you make it’ too far.”

The Sycophant and the Sociopath

Donald Trump specializes in spectacular breakups.

First there was Ivana. Then there was Marla. Now comes trouble in paradise with Kim.

.. This time, it wasn’t just lust, betrayal and secrets splayed across Page Six. This time, it was in Congress, part of an investigation that could lead to legal jeopardy for the Trumps or impeachment for the president.

.. In his testimony, Michael Cohen called himself a “fool” when it came to Trump. “I ignored my conscience and acted loyal to a man when I should not have,” Cohen said. A fool for love, held in thrall by Trump. How could anyone be held in thrall by such a sleazy goofball, much less offer to take a bullet for him or make 500 threats on his behalf?

.. “It seems unbelievable that I was so mesmerized by Donald Trump that I was willing to do things for him that I knew were absolutely wrong,” said Cohen in his “Goodfellas” accent, adding that being around the “icon” was “intoxicating.”

“Mr. Trump is an enigma,” Cohen said. “He is complicated, as am I.”

Actually, Trump is simple, grasping for money, attention and fame. The enigma about Trump is why he cut off his lap dog so brutally that Cohen fell into the embrace of Robert Mueller and New York federal prosecutors. Trump is often compared to a mob boss, but Michael Corleone would never turn on a loyal capo, only on one who had crossed him.

The portrait Cohen drew of Trump was not surprising. It has been apparent for some time that the president is a con man, racist, cheat and liar. (See: Jared Kushner security clearance.)

What was most compelling about the congressional hearing was the portrait of the sadistic relationship between the sycophant and the sociopath.