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Why Is a Trump Bankruptcy (or Two) OK?
Donald Trump has benefited from bankruptcy twice. Donald Trump has grown his personal fortune following his two bankruptcies and now may run for President of the United States. Clearly, the rules for Donald Trump in the aftermath of bankruptcy are not the same as for the rest of us.
And is this what we want in terms of leadership for the nation? Someone who is smart enough to mow right over the realities the rest of us face when financial disaster looms? Someone who bellies up on hundreds of millions is better than someone like me who goes broke for want of several thousand dollars following medical crisis? My credit as a bankrupted person should be ruined forever and keep me from working some jobs or ever owning a home again while Donald Trump’s bankruptcies catapult him to the Presidency and great personal wealth and the building of Trump structures all over the country?
I am missing not only the justice in this but also the logic. Why would anyone in this nation want someone who behaved in such a cavalier fashion in business and financial dealings to be the leader of this nation? For Donald Trump to stand as an example of what we want others around the world to know about American values flies in the face of most of what those of us in the working class learned about those values throughout our lives. If the rules have changed for the bankrupted Trumps in our country, then they should change for the rest of us.
If you were raised like I was raised in America, going bankrupt is to be avoided at almost any cost. Going bankrupt meant you didn’t take your responsibilities seriously enough, you made bad choices, and you left others stuck with your debt after they had extended credit to you in good faith. Those were my working class lessons learned from parents with working class values who wanted me to grow into a decent and caring member of my community and nation with a healthy regard for careful financial dealings.
My life and the healthcare crisis in this nation made it impossible for me to adhere to the “no bankruptcy” values I held. I still feel ashamed that I did not find a way to make it through cancer and my husband’s heart and artery issues without so much financial trauma.
Do you think Donald Trump feels one moment of shame for the debts his companies did not pay in his bankruptcies? Either one of them? Quite the contrary. Trump is often praised for being a shrewd businessman.
Take a look at this history for Trump’s financial dealings as recounted on a legal services website explaining the “beauty” of his bankruptcy strategy:
“First, Trump doesn't get personally involved. He knows how to protect his personal finances. In both instances, Trump's corporations have filed for bankruptcy; Trump personally has not. Hence, when his casino fell into about a billion dollars in debt, the corporation filed for Chapter 11. Trump only made the decision to do so once he had spoken to his banks and bondholders. But, by filing, he gave his business the opportunity to regroup and reduce his business debt. It didn't hurt however that it would also reduce his personal debt, as Trump is likely the one every creditor would look to if the Taj Mahal couldn't pay up. So, in fact, Trump avoided potential lawsuits from creditors and he may have also avoided personal bankruptcy by keeping his own bank account insulated.
“Trump, it appeared, had triumphed. His company had dire financial problems but seemed to rise just as quickly from those bankruptcy ashes. Just three years later, he combined the hotels into the publicly held Trump Hotels and Casino Resorts.
“For several years, the new company enjoyed double digit stock prices. His personal fortune in turn also skyrocketed. And the man who came close to losing it all leapt onto Forbes' most wealthy list.
“Yet, Trump's public company would eventually fall...again. Within a few years of soaring high prices, the company stock had fallen into single digits. The one-time powerhouse company remained profitless and struggled just to pay the interest on the $2 billion debt. Trump claimed that the properties were unable to make the improvements necessary for keeping up with its flashier competitors. These financial troubles led to Trump's second trip into bankruptcy.”
Is this the same sort of cut and run behavior he would bring to public policy? What would lead us to think he would behave any differently as an elected official than he has done as a businessman?
Bankruptcy as a last resort as opposed to bankruptcy as a business strategy seems to me to represent a significant difference in values. I am just having a hard time understanding why we have such vastly different measuring sticks for the rich and powerful when they declare bankruptcy than we do for the working class. I know the most obvious answers surround our general worship of those with great wealth and our cultural obsession with the attainment of Trump-like personal fortunes. I know we have political and public policies that favor the wealthy and the landed and those in power.
What I may never understand is why we internalize this and will look down our collective noses at a working class person or family who goes broke (even when we are working class ourselves or the children of the working class) while considering for one moment further aggrandizement of the twice-bankrupt business mogul who wouldn’t think for a nanosecond before crushing any one of us or all of us for his own good. Surely, that’s not what we value, is it?
It may be too early to tell who will be in the final field for the 2012 Presidential races, but I certainly hope we quickly exclude some people who are so opposed to and so oblivious to so many of us and our realities. An honest person who tries everything he or she can try to keep from ever needing to go bankrupt wouldn’t bother me for an instant as a candidate for public office. But I am pretty sure Donald Trump doesn’t belong in that category. I am equally sure that someone from the working class who tries to lift out from a bankruptcy will not find a path to the Presidency waiting around the bend.