“There is no there there.”
Many years ago, Saturday Night Live did a bit called “The Thing that Wouldn’t Leave.” As I recall, John Belushi played the part of the dinner guest who refused to get the hint, hanging around long after his exhausted hosts were clearly ready for bed.
I feel that way about Donald Trump. His persistence atop the polls, despite statements that to me appear radioactive, and debate performances that combine ignorance with bombast, continually confounds my expectations.
So as a citizen, Republican, and conservative, I’m going to take another swing at the noisy excrescence that is The Donald.
A considerable part of Trump’s raison d’etre (reason for being, not just reason for running) is his oft-repeated claim to be smart and rich. “I’m, like, a really smart guy…I’m worth ten billion dollars.”
At the moment, Trump is in fact quite rich. Probably about one-third as rich as he claims, as discussed here. But almost certainly a billionaire. And surely he must have been pretty darn smart to get there…or perhaps not.
Recently several substantial news organizations have looked at a fairly simple question. How has Trump done as a businessman/investor, compared to how he might have done if he had simply taken the money he inherited from his father, a highly-successful real estate developer, and placed it into an utterly passive investment, a S&P 500 Index Fund?
The answer, pretty clearly, is not very well, as noted and here and here. Long story short, Trump has made about half as much, with all of his Trump-branding of casinos, office buildings, golf courses and condos, as if he had simply taken his inheritance, bought the Vanguard Index 500 mutual fund, and wandered off to spend the next few decades playing golf on a course he did not own.
And this is before adjusting for risk, and for opportunity set. In terms of risk, Trump has used leverage freely. He has swung for the fences, not once but many times. He’s taken enough risk to have his public company, once Trump Casinos and Hotels, more recently Trump Entertainment, go bankrupt four times.
And consider the opportunity set Trump confronted when he got started. Trump’s father put him in charge of a successful New York real estate development company in 1975. New York has, in the years since, floated atop a tidal wave of investment success. The stock market went up more than twenty-fold. When we talk about the richest 1% in the United States, we are talking largely about New York City. Surely there can have been few better places on the planet to have owned and developed real estate. Surely there can have been few better-heeled customers than Wall Street and its moguls. And yet Trump earned returns roughly half as large as those realized by a sensible mail carrier who put his Federal savings plan into a stock index fund.
One of the great ironies of Donald Trump’s life is his own utter lack of irony. It is entirely clear that Trump believes every one of his self-aggrandizing assertions. He believes himself to be the Titan of the age, one of the great businessmen of his time. It simply isn’t true. He is a guy who inherited a pile of money and a single-syllable Anglo-Saxon last name, engaged in a whirlwind of activity, relentlessly promoted his name and brand, and after four decades ended up with a larger pile of money, which he believes wrongly to be the result of his own activity, but which was actually simply the consequence of the swiftly-rising tide that made many others richer still.
Donald Trump was born on third base, re-named it Trump Terrace, and believes he hit a triple. He got thrown out four times trying to steal home. And he proclaims himself, to everyone who will listen (far, far too many of my fellow Republicans) one of the greatest hitters of all time. He is a fraud.
If Trump remains a player in the Republican field, at some point I promise to share what I really think about him.