As of 2003, according to Buettner and Craig, Donald Trump was personally wealthy, thanks mainly to having received his share of his father’s fortune. But his casino business was still losing money, “thanks to interest payments on the $1.7 billion in bonds and loans that Trump had already loaded on the company’s back.” With the business on the verge of bankruptcy, his image as a superior businessman could have taken a big hit. Instead, it got a powerful boost from an unexpected source.
(Non-)reality television
Mark Burnett, the creator of the “reality TV” series Survivor, wanted to do a show about young entrepreneurs competing in the urban jungle of corporate America. The premise of The Apprentice would be that each season’s participants would take on a business project and compete to win Trump’s favor and an apprenticeship with his company. Trump would get $50,000 per episode and half the show’s profits, just for playing himself. Of course, playing himself meant pretending to be a greater success than he really was. He introduced himself to the viewing audience by claiming, “I’m the largest real estate developer in New York…Now my company is bigger than it ever was. It’s stronger than it ever was.”
Trump’s offices in Trump Tower were too shabby for the image the producers wanted to create. He happily charged them over $440,000 a year to rent a vacant office, where they created a lavish, 1,520-square-foot boardroom.
In addition to the show’s advertising revenues, it made millions from “brand integration” deals. Corporations like Procter & Gamble, Estée Lauder, Hanes and Burger King paid to have their products featured in the series. Prospective apprentices would compete to develop marketing plans for a new toothpaste, cologne, or line of shirts. Half of those millions went to Trump.
Selling the name
The original version of The Apprentice aired from 2004 to 2010. (Trump also starred in another version, The Celebrity Apprentice, until he became a candidate for the presidency in 2015.) During those years, Trump also embarked on his “most profitable business.” Instead of building and managing properties himself, he licensed his name to be used by those who did.
In 2004, he licensed his name to a group planning to build a fifty-two-story apartment building in Tampa. They offered several million dollars for that privilege, to be paid to Trump whether or not the project was actually completed. Two years later, the developers discovered that the ground could not support the planned structure without expensive redesign. The project collapsed in a flurry of lawsuits the following year.
By 2006, Trump was licensing projects in numerous states and foreign countries. He was moving beyond real estate to brand a line of furniture, a travel agency and a mortgage brokerage. Buyers were often attracted because the Trump name suggested that he stood behind the project or product. “Trump typically lied or fuzzed the fact that he did not own the projects and was not the developer.” In the case of the Tampa building, he falsely assured buyers that he owned “a substantial stake” in the project. Buyers who paid a 20 percent nonrefundable deposit to reserve a unit lost their money when the project failed.
Trump made over $100 million from licensing deals over seven years, but forty of his licensed projects were never completed. “Trump played it all for the short term, risking the reputational damage that would wreck the value of his name to other businesses.”
Because Trump “took this easy money without performing any due diligence on the people paying him,” his name became associated with some shady enterprises. The American Communications Network was accused of being a pyramid scheme, since the incomes of its sales reps seemed to depend on recruiting other reps willing to pay an entrance fee. Trump got $8.8 million for his endorsements, including a video in which he assured the reps, “We do a lot of research on companies before we agree to do something like I am doing for you.” When the company got in trouble, he denied knowing much about its operations.
When a promoter who had never worked in education asked him to brand an educational program, Trump decide he wanted a major ownership share as well. Trump University started out as an online program, but soon transformed into a series of in-person real estate seminars. It did not issue degrees or meet state licensing requirements for a real university. Most of the instructors had experience in sales, but limited knowledge of the real estate business. Their main job seems to have been to talk students into paying for additional seminars, which many students found superficial and unhelpful to their career prospects. The promotional materials claimed that Trump had “handpicked” the instructors, but in fact he never met them. After about five years of operation, and after being sued by the State of New York and many students, Trump University shut down. Trump later settled those suits for $25 million.
More business failures
While he was raking in money from playing a businessman on The Apprentice and licensing his name to other businesses, Donald Trump’s own businesses continued to fail. After his casino company went through a series of bankruptcy proceedings, he resigned from its board of directors. At that time, “he notified the board, and then the Securities and Exchange Commission, that he had ‘determined that his partnership interests are worthless and lack potential to regain value’ and was ‘hereby abandoning’ his stake.”
Even here, he was lucky to be able to take advantage of tax legislation intended to help businesses recover from the Great Recession. “The recession recovery bill allowed him to use those losses to request a refund of every dime in federal income taxes he had paid on the rush of cash from The Apprentice and related licensing deals for 2005 through 2007—a total of $70.1 million.”
During this period, Trump was also attempting another building project of his own, a ninety-two-story tower in Chicago. He financed it with $770 million in bank loans and $89 million in cash. Once again, he underestimated costs and overestimated revenue. When he was unable to make his loan payments, he sued the banks in hopes of getting the loans canceled, making the dubious argument that the recent financial crisis qualified as a “natural disaster.” When the case was settled, Trump paid only $99 million of the $385 million he still owed. Strangely, a new division of Deutsche Bank lent him the $99 million to pay off the other division of the same bank that he had sued!
Since the 1990s, Trump had been investing in golf courses, despite the declining profitability of the sport. Now he acquired new courses in Florida, Scotland and Ireland. In most of these, he had trouble making enough money to offset his expenses.
In 2012, the Trump Organization signed a lease to renovate and manage the Old Post Office in Washington, DC. It reopened as the Trump International Hotel in 2016. When it proved to be unprofitable, it was sold to the government of Kuwait in 2022.
Buettner and Craig summarize:
The last two major developments of his career, his apartment and hotel tower in Chicago and the hotel in Washington, as well as his three most recent golf courses in the United Kingdom, had all been financial failures that required constant infusions of cash.
To meet his need for cash, Trump sold the property he had inherited from his father’s estate for $177.3 million. The authors call this “a massive watershed inheritance capping a lifetime of parental support.”
Saving Trump from himself
Donald Trump will go down in history as one of the country’s most fascinating figures. On the one hand, he was a poor business manager whose real estate enterprises usually lost money. On the other hand, he was a rich man who was hailed as a business genius and supported for President of the United States by almost half the country (not quite achieving a majority of the popular vote in 2016 or 2020). Lucky Loser describes the many forms of help he needed to pull all this off.
First, he had a father with a successful career in real estate. Fred Trump not only passed on to Donald property worth hundreds of millions of dollars, but allowed him to claim credit for more of the family’s wealth than he had created.
Donald also received hundreds of millions in business loans from bankers, and he continued to find lenders even after many of his projects had already failed.
Trump relied on business partners whose companies were more successful than his. He built two of his rare successes, the Grand Hyatt and Trump Tower, in partnership with Hyatt and Equitable, respectively. In one case, he benefited financially from decisions he had no part in. The Hong Kong company that took control of Trump’s troubled West Side Yards project eventually sold it to buy other properties, which were in turn sold. Although Trump tried to stop these sales, he was lucky not to succeed, since he ended up getting $100 million of the proceeds. “Despite Trump’s efforts, much of his losses on businesses he ran would be covered by a windfall from a business that was not subject to his judgment.”
Trump also had the good fortune to burst on the real-estate scene in the 1980s, when the country was experiencing a wave of enthusiasm for money-making.
The adult Donald Trump and the Forbes list [of the 400 wealthiest Americans] arrived holding hands at the dawn of a broad cultural shift in America. The syndicated television show Lifestyles of the Rich and Famous would soon debut, ushering in an era of “wealth porn,” a voyeuristic celebration of money and its trappings. he embraced the guiding ethos of the moment: great wealth, or at least the appearance of great wealth, means supremacy in all things.
Then came The Apprentice, the product of an entertainment industry willing to celebrate that ethos. It turned Donald Trump into a shining symbol of the marriage of money and merit. He became the embodiment of the philosophy that “greed is good.”
Here’s the part that may sting most in a country that sees itself as history’s greatest meritocracy: Good things happened to Donald Trump. He did not earn most of those good things. He was born. He was discovered by a revolutionary television producer. And he was pushed into an investment against his will. And from those three bits of good luck came the equivalent today of more than $1.5 billion. That sort of tailwind could paper over a litany of failure and still fund a lavish life.
And even that is not all. The authors suggest that the “final lucky stroke of Trump’s very lucky life” was the rise of right-wing media.
During his lifetime, a new media ecosystem had come into existence, one eager to explain away evidence of any Republican president’s wrongs and endlessly magnify the thinnest assertion of any Democrat’s missteps. That ecosystem evolved from talk radio in the 1980s and gained dominance on cable television in the 1990s with the launch of Fox News…In this virtual world, no criticism or finding of fault against Trump could be based on merit. It was all part of an orchestrated attack by bad actors.
Buettner and Craig make a good case that Trump is a “lucky loser” indeed. But I still want to make a distinction: Luck is something that happens to a person; lying is something that is done by a person. Trump has been lucky to have right-wing media to propagate his lies. But he actively promotes the lies himself, such as the lie that he won the 2020 election, or that immigrants commit crimes at a higher rate than people born in the United States. It is a symbiotic relationship. The main point of it, I think, is to get working-class people to vote Republican, so that corporations and the wealthy can have more tax cuts, while lesser folk blame their problems on someone else.
Beneath the Surface 