This article originally appeared at TomDispatch.com.
Two weeks ago, another Trump business went down in flames. Caught in the whirlpool of her father's presidency, with major department stores and other retail distributors continuing to drop her brand under pressure from consumer boycotts here and in Canada, daughter Ivanka shut down her line of clothes. This should have surprised no one. When it comes to her family, it's the oldest story in the world. Think of it this way: Donald Trump's greatest con in election 2016 was to convince a majority of Americans (and they remain convinced) that he was a "successful businessman."
Here's a simple portrait of his business acumen, as Michael Kruse summed it up at Politico last year:
"He flopped as an owner of a professional football team, effectively killing not only his own franchise but the league as a whole... He bankrupted his casinos five times over the course of nearly 20 years. His eponymous airline existed for less than three years and ended up almost a quarter of a billion dollars in debt. And he has slapped his surname on a practically never-ending sequence of duds and scams (Trump Ice bottled water, Trump Vodka, Trump Steaks, Trump magazine, Trump Mortgage, Trump University -- for which he settled a class-action fraud lawsuit earlier this year for $25 million)."- Advertisement -
And Kruse didn't even mention The Donald's sixth bankruptcy, the one he filed for the debt-ridden Plaza Hotel in 1992.
But I don't want to imply that Donald Trump wasn't successful. He has a skill that needs to be understood, if you want to grasp the nature of his presidency. You can see it in his five Atlantic City casino bankruptcies. They proved to be business disasters, but as the New York Times reported, his true skill was in jumping ship, money in hand, and leaving his financial catastrophes in the laps of "investors and others who had bet on his business acumen." Think of this as his "art." (It will undoubtedly be his daughter's, too.) And as you read the latest piece by TomDispatch regular Nomi Prins, author most recently of Collusion: How Central Bankers Rigged the World, keep that art of his in mind. Right now, the economy is popping along at an "amazing" 4.1% growth rate for this last quarter and he's a "successful" businessman-president. But when those bills start coming due (as Prins suggests today), when those bankruptcies start coming in, count on one thing -- call it the art of the Trump -- he and his family will jump ship, money in hand, and the rest of us will be left holding the bag. Tom
The Entropy Wars
Five Financial Uncertainties of 2018 (So Far)
By Nomi Prins- Advertisement -
Here we are in the middle of the second year of Donald Trump's presidency and if there's one thing we know by now, it's that the leader of the free world can create an instant reality-TV show on geopolitical steroids at will. True, he's not polished in his demeanor, but he has an unerring way of instilling the most uncertainty in any situation in the least amount of time.
Whether through executive orders, tweets, cable-news interviews, or rallies, he regularly leaves diplomacy in the dust, while allegedly delivering for a faithful base of supporters who voted for him as the ultimate anti-diplomat. And while he's at it, he continues to take a wrecking ball to the countless political institutions that litter the Acela Corridor. Amid all the tweeted sound and fury, however, the rest of us are going to have to face the consequences of Donald Trump getting his hands on the economy.
According to the Merriam-Webster dictionary, entropy is "a process of degradation or running down or a trend to disorder." With that in mind, perhaps the best way to predict President Trump's next action is just to focus on the path of greatest entropy and take it from there.
Let me do just that, while exploring five key economic sallies of the Trump White House since he took office and the bleakness and chaos that may lie ahead as the damage to the economy and our financial future comes into greater focus.
1. Continuous Banking Deregulation
When Trump ran for the presidency, he tapped into a phenomenon that was widely felt but generally misunderstood: a widespread anger at Wall Street and corporate cronyism. Upon taking office, he promptly redirected that anger exclusively at the country's borders and its global economic allies and adversaries.- Advertisement -
His 2016 election campaign had promised not to "let Wall Street get away with murder" and to return the banking environment to one involving less financial risk to the country. His goal and that of the Republicans as a party, at least theoretically, was to separate bank commercial operations (deposits and lending) from their investment operations (securities creation, trading, and brokerage) by bringing back a modernized version of the Glass-Steagall Act of 1933.
Fast forward to May 18, 2017 when Trump's deregulatory-minded treasury secretary, "foreclosure king" Steven Mnuchin, faced a congressional panel and took a 180 on the subject. He insisted that separating people's everyday deposits from the financial-speculation operations of the big banks, something that had even made its way into the Republican platform, was a total nonstarter.
Instead, congressional Republicans, with White House backing, promptly took aim at the watered-down version of the Glass-Steagall Act passed in the Obama years, the Dodd-Frank Act of 2010. In it, the Democrats had already essentially capitulated to Wall Street by riddling the act with a series of bank-friendly loopholes. They had, however, at least ensured that banks would set aside more of their own money in the event of another Great Recession-like crisis and provide a strategy or "living will" in advance for that possibility, while creating a potent consumer-protection apparatus, the Consumer Financial Protection Bureau (CFPB). Say goodbye to all of that in the Trump era.