I’m not talking about the scam that Trump was a good businessman, or that a good businessman will be a good managerial president, though both have long been central to Trump’s game, and this new exposé leaves that game in ruins.
Rather, I’m talking about a scam that’s more fundamental to the Trumpist mystique. It’s the idea that someone with extensive inside experience in milking a system rigged to enrich elites like him is uniquely positioned to either (in the more charitable telling) un-rig that system for the benefit of all or (in the less charitable one) unlock its spoils for supporters who place him in a position of power to do so.
The Times exposé strips the sheen off Trump’s image-making like so much imitation gold leaf. We learn that Trump evaded income taxes for many years largely through his epic financial losses. While Trump scooped in hundreds of millions of dollars off “The Apprentice,” he dumped those profits into a series of big-league money losers that he owned and ran himself.
All of this shows that Trump is simply “pouring more money into many businesses than he is taking out,” the Times observes, which “exposes the “hollowness” behind the “self-made-billionaire image.”
But those massive losses also allowed Trump to largely avoid paying federal income taxes on his profits from “The Apprentice” and other licensing deals, which might otherwise have amounted to more than $100 million, per Times calculations relying on the effective tax rate paid by the top 1 percent.
We also learn that Trump’s revenues from “The Apprentice” are “drying up,” and that in the next few years, hundreds of millions of dollars in loans will come knocking. And the Internal Revenue Service is auditing a questionable trick Trump used to claw back $72.9 million in taxes he’d paid by getting the amount refunded, another way he kept his income tax burden almost nonexistent.
These revelations raise urgent questions. Trump’s vulnerability to hundreds of millions of dollars in loans coming due could tempt him to bend policy decisions to steer foreign loans his way, making him a “national security threat,” as Timothy L. O’Brien argues. There’s also the matter of to whom he owes all that money.
And Trump’s massive personal stake in his battle with the IRS raises questions about how far he’ll go in wielding his control over the executive branch — of which the IRS is a part — to his own personal benefit, which he has done in all kinds of other ways.
Many have insisted this won’t hurt Trump with his base, who will see it as another sign of his shrewd mastery: All this just shows how screwed up the system is. Trump did only what the system lets people like him get away with. That’s my guy!
But this actually points to a serious hidden vulnerability for Trump.
The stories Trump tells
Trump campaigned in 2016 on a version of exactly that idea: He understood how elites have rigged the system on their own behalf for so long, having milked that system himself for years.
Trump openly boasted that he had bought off politicians himself, so he knew how financial elites corrupted them, and claimed that not paying taxes “makes me smart.” Crucially, both were offered as reasons to vote for the outsider businessman who would put that inside knowledge to work for America.
In short, Trump held it up as a selling point that he enriched himself off a system rigged to enable such elite gaming. He insisted this showed that “I’m the one that knows how to change it,” as he put it at one debate. The beneficiaries would be the American people, or perhaps just his people, his supporters, who were implicitly offered a cut of the spoils as part of the bargain in backing him.
But this mystique relied both on fictions about his business acumen, and on keeping the operational details of all this elite gaming hidden. Note that Trump boasted about not paying taxes while also refusing to release his tax returns to keep voters in the dark about how he did this.
What makes the Times exposé so powerful is that it reveals the truly sordid nature of all this self-dealing and grift, as well as the fact that he relied on it to compensate for truly epic levels of incompetence and failure.
And meanwhile, what did those smarts get for the country? The massive corporate tax giveaway, his biggest “accomplishment,” only facilitated the very sort of elite rigging and self-enrichment Trump vowed to undo, without even spurring promised job-creating investment.
All that acumen produced perhaps the greatest elite managerial policy fiasco in modern times, helping lead to over 200,000 Americans dead and a tanked economy. That, plus the carnage from his trade wars, has left Trump reduced to literally inventing numerous auto factory openings that never happened.
Perhaps many Trump voters will see these revelations as more evidence of his wizardry. But wavering voters are likely to see them in the context of all his other failures. Taken together, they constitute another multifaceted proof point in what a dreadful miscalculation it was to take a flyer on the Trumpist experiment.