Memories of the 28th Century

Donald Trump seems to be trying to get as much mileage as possible from his business experience. I won’t belittle that experience. As happens to many real estate developers, Trump or his business entities have gone into bankruptcy several times, and that would be useful experience for a U.S. President, since the government is heavily indebted. Someday, the Fed may stop creating money, and the Treasury may have to default on the billions in debts.

Regarding his first bankruptcy in 1991, “Trump later told The Washington Post, he passed a beggar in New York and told his now ex-wife, model Marla Maples, “You see that man? Right now he’s worth $900 million more than me.”” I can understand that, and I have known real estate developers who were on the wrong side of the market at the wrong time.

I don’t know the details of Trump’s dealings, but, while it isn’t unusual for real estate developers to declare bankruptcy, it is unusual for them to declare bankruptcy several times. I would contend that multiple bankruptcies show a lack of financial planning. He should have put up more of his own money and cut back on the debt. Maybe he has done that since his most recent bankruptcy in 2009.

Some people don’t consider corporate bankruptcy to be as bad as personal bankruptcy, but Trump was the manager and principal owner of several business entities that bore his name and that went through Chapter 11. Whether that reflects poorly is a matter of perspective, but a government can’t really afford to go bankrupt. It is true that some governments have become bankrupt, the United States of America has a long history of paying it debts, and we don’t want to to change. That someone who seems to be willing to plan things so poorly that he has put businesses into Bankruptcy at the head of the U.S. government would send a rather undesirable message to the world at large, as if the idea of the U.S. paying its debts had stopped being important.

Trump also handled the business bankruptcies personally. He put in personal funds to help one bankruptcy go forward, and he lost personal holdings as a result of the proceedings. Most corporate bankruptcies do not personally affect the principals of the corporation; although they may lose their jobs.

Fortunately, Treasury debt is not collateralized, so the rest of the world couldn’t foreclose, but the holders would be mighty unhappy.

The question is: Do we want someone who has taken the bankruptcy route several times for business reasons to be running the U.S.A. and maybe considering the advantage of putting the U.S.A. into bankruptcy?


http://www.washingtonpost.com/busine...c48_story.html
http://www.forbes.com/sites/debtwire...memory-lane/2/