This is a continuation of yesterday’s post on why I think the upcoming presidential election is, unusually, important for investors and why I think electing Donald is a recipe for disaster.
partnering not a priority
The most successful entrepreneurs I’ve studied create an ecosystem in which suppliers, customers and co-investors all benefit together. In contrast, all the discourse I’ve read/heard from Mr. Trump stresses how an endeavor has benefited him personally. Yes, the project may not have gotten off the ground, investor/customers/suppliers may have lost money–but Trump collected licensing fees or a salary/bonus or otherwise received a large benefit. And that’s all that seems to matter to him. The upcoming fraud trial about Trump University will likely shed more light on this issue.
A careful analysis of the inner workings of publicly traded Trump Hotels and Casino Resorts (DJT) would doubtless provide more fodder. (I haven’t made the effort, but News Corp’s Market Watch wrote “Donald Trump was a stock market disaster,” observing that DJT lost 90% of its value during a time when US stocks in general were doubling. The New York Times penned “How Donald Trump Bankrupted His Atlantic City Casinos, but Still Earned Millions,” which says he shifted personal debts to the public company, while extracting millions for himself from it as the enterprise failed.)
a knowledge shortfall?
If the debates are any indication, Donald’s communication comes solely in short semi-coherent bursts of buzzwords and bluster that give me no indication that he understands much about the issues he purports to be talking about. (I was recently watching a PBS documentary about the two presidential candidates in which one of Trump’s creditors in a bankruptcy proceeding comments that, while a brilliant promoter, Trump doesn’t seem to understand anything about either economics or accounting. I don’t see evidence for the other side of the argument.)
His economic ideas are mostly wacky, and the sell-by date of his factual information passed maybe twenty years ago.
If I understand him correctly, he thinks, among other things, that:
–Russia, which is highly reliant on commodity exports, whose economy has shrunk in US$ by a third over the past five years and which is a dictatorship controlled by a former secret policeman, is a good model to emulate
–Japan is still a formidable economic rival to the US
–China is an exporter of labor-intensive, low value-added goods, not a burgeoning capital goods, tech and biotech nation
–erecting tariffs that substantially raise the price of imported goods will make consumers better off. Smoot-Hawley, anyone?
–cities like Pittsburgh, now a tech hub, would be better off giving up their futures and going back to blast furnace steelmaking.
Worse than this, Republicans who have chosen not to support Trump comment that although he’s poorly informed, he has no desire to learn.
Pro-Trump people may argue that if elected, Donald will have expert advisers. If all else fails, his looniest ideas would be neutralized by Congress. I think this is incorrect.
unacceptable social views
Trump is anti-women, anti-Hispanic, anti-Muslim, anti-gay. He has been embraced by the American Nazi Party and the Ku Klux Klan. From his earliest emergence as a candidate, other Republicans have referred to Trump supporters as Vichy Republicans, an allusion to the French citizens who collaborated with Hitler during WWII. They’ve also described backing Trump as a “McCarthy moment,” referring to the decision to support the witch hunt for supposed Communists by Senator Joseph McCarthy in the 1950s that tarnished the legacies of those who made it.
Who would be willing to work for a man like this? We know the answer already.
Just as important, if he becomes the chief of the Executive branch of government, who is he going to put in charge of the Justice Department, or the State Department, or any of the other cabinet posts? I think this is a very scary prospect.