Trump’s business techniques would cause a stock & bond market crash and depression

By Marc Jampole

One of the many things that Donald Trump doesn’t seem to understand is that sometimes merely saying something can be hurtful.  The classic case is Trump’s outrageous lie months ago that he knew a child who had gotten autism because of a vaccination. It was a bold-faced lie, the telling of which in and of itself hurt other people, to wit, those children whose parents later used it as part of their case for denying them vaccinations.

Trump just said something else that should disqualify him as president. He said that he would finance his program on debt, and if the country couldn’t pay, he would negotiate new terms with lenders. If Trump were to make such a statement as president, the dollar would sink in value and interest rates would skyrocket. Lenders would be reluctant to loan money to the United States. Other countries would look for another currency to serve as the base of the global economy. The likely result would be a decline in the stock and bond markets, followed by a deep recession. Such a scenario would cause pain and suffering to millions of people.

All because countries and business all over the world have lost faith in the U.S. dollar. All because the president of the United States in a fit of rage, pique or frustration lost control of his emotions and threatened not to pay off our debts in full on a timely basis. 

I know that a large number of business operators, and in particular developers, send companies into bankruptcy as a way of life. They always walk away with some money, but the investors are left with losses. That’s the way Donald Trump has always operated, sending three real estate organizations into bankruptcy. We often see the litany of his failed businesses—Trump Airlines, Trump Steaks, Trump Mortgage, Trump Vodka, Trump Magazine, to many of which he merely provided his name. He walked away with licensing fees and the business failed, leaving employees and investors holding the bag. The New York Times analysis of how Trump destroyed the U.S. Football League by insisting that it compete head-on with the National Football League instead of fielding teams in the NFL off-season is an eye-opener. In failing, Trump University has attracted a number of lawsuits, and the evidence vetted in the news media suggests that Trump himself broke the law in overpromising what students would experience in classes. Other news reports have alluded to the low respect with which long-timers in the casino industry view Trump; they consider him a buffoon. It is true that Trump has found success on reality TV and as a brand licenser, but the foundation of both these accomplishments is the false premise that he is a good business person. Months ago, Forbes did an analysis that demonstrated that if Trump had passively invested the fortune he inherited from his father, his net worth would be twice what it is.

But even if it were good business advice to spend a lot of money, knowing that if things don’t work out you can always go into bankruptcy, it just doesn’t work for a country, and certainly not for a country whose economic well-being depends in large part to being the currency of choice around the globe.

When a company goes into bankruptcy, it will hurt creditors, and often hurts vendors, employees and customers as well. But it doesn’t have to hurt the chief executive officer and other executives. We know many instances of a CEO raiding and raping it, and then sending a company into bankruptcy. But what does a president get when a country defaults on its debt, at least in a democratic country with strong laws against political corruption?  We know what happens in kleptocracies such as Russia and the Ukraine. If we assume Trump is a rational human being, building an authoritarian kleptocracy makes perfect sense as an explanation for Trump’s comment about renegotiating with creditors if the United States couldn’t pay its debt. Of course some would say that there is little difference between what happens in Russia and the kind of crony capitalism Bush II practiced in the Middle East and tried to practice after Hurricane Katrina.

That Trump might enter into negotiations to revise bond terms is scary. The fact that he is willing to say it may be even scarier, because it suggests, once again, that the Donald will say anything and break any deal.

Trump has revised his stand on a number of issues, acts that many who voted for him may consider betrayals. He now is okay with transgendered people using the restroom of the sex with which they identify. He talked hard about tax cuts and put out a plan that gave massive tax cuts to the wealthy, but now he says taxes may rise for the wealthy and businesses. He was adamantly against raising the minimum wage in several debates. Now he says he wants to raise the minimum wage. I agree with his current stands on all these issues, but it must be pissing off all the Republicans who think otherwise and voted for him or now are boxed into supporting his candidacy. But these right-wingers should fear not. Donald Trump is like the weather in spring: He will probably change his mind again on any and all of these issues.

Trump is trumpeting his own duplicity and lack of a moral center as a major selling point. Everything is open for negotiation and everything is on the table, even a first-strike use of nuclear weapons. The horror at his pride at not having political ethics is exceeded only by the horror evoked by thinking about what dropping a nuclear weapon would do to its immediate victims and the Earth’s atmosphere.

Part of Trump’s inconsistency results from the off-the-cuff nature of his campaign and his speeches. He makes it up as he goes along, and then either spends copious words justifying what was a misstatement or changes his mind, sometimes in the next sentence. The fact that he doesn’t mind lying about the facts makes it easy for him to substantiate any statement he makes and therefore say anything that he wants to—at any given moment, for as long or as short a time as makes him feel good.

When we mix Trump’s political and ethical flexibility and his propensity to lie with his fomenting of violence, advocacy of hate politics and love of authoritarian solutions, we get fascism run by an erratic narcissist. It looks like and sounds like the democratic nation of Germany when Adolf Hitler took it over. It’s a good thing that unlike Hitler, Trump does not have the support of his own party.