One new facet of the Republican primary race of late is the closer scrutiny Donald Trump’s business record is receiving. This would seem to have been a natural line of inquiry for someone whose business success is so central to his election pitch. But if there is an excuse for not looking at his record until he was cemented as the GOP front-runner — albeit an increasingly weak one — it may be because everyone knows Trump is a rich man, and therefore his success was simply assumed.
It turns out this assumption wasn’t really warranted.
It’s not only that ventures such as Trump Steaks, Trump Vodka, Trump Airlines and others turned out to be complete busts. You win some, you lose some, right? Nor is it just that Trump is being sued for fraud in three separate lawsuits related to his Trump University. Even in two areas Trump is generally considered a success — real estate and casinos — he has far, far underperformed the market, as a pair of articles from MarketWatch illustrate.
Trump and Real Estate
First is a piece citing a business professor’s review of Trump’s real estate investments. The whole thing can be summarized by one quote:
“‘Mr. Trump has underperformed the real estate market by approximately $13.2 billion, or 57%,’ since 1976, says John Griffin, a finance professor at the University of Texas, who compared Trump’s stated net worth with four decades of returns on the FTSE NAREIT All Equity Index.”
That’s right: Griffin is making the case that, had Trump in 1976 simply invested his reported fortune at the time of “more than $200 million” in a real-estate index fund, he would have another $13.2 billion to his name. And that’s after taking Trump’s word that his net worth is $10 billion, about which observers such as Forbes magazine have their doubts. So on the one hand, Trump has a whole lot of money; but on the other hand, he’d have had more than twice as much money if he had left the decisions to the market rather than making them himself. Is that the hallmark of a good businessman? The kind of businessman whose record suggests he should be president?
Trump and Casinos
Even more devastating is a review of Trump’s casino holdings. Here’s what MarketWatch columnist Brett Arends found:
“For 10 years between 1995 and 2005, Donald Trump ran Trump Hotels & Casino Resorts — and he did it so badly and incompetently that it collapsed into Chapter 11 bankruptcy. His stockholders were almost entirely wiped out, losing a staggering 89% of their money. The company actually lost money every single year. In total it racked up more than $600 million in net losses over that period.
“Trump was chairman of the board throughout the entire time, and CEO as well for about half of it.
“This is the sort of record usually associated with an Enron or a WorldCom or a Pets.com.
“Meanwhile, over the same period, all his competitors were enjoying an enormous boom.”
Indeed, returns for Trump’s casino competitors during that time ranged from 60 percent to 3,240 percent; a Dow Jones index of casino companies grew by 160 percent during that time, as Trump’s holdings shrank by 89 percent.
Trump 2016: The House Always Wins, Except When Trump’s in Charge.
There was, however, one big beneficiary of Trump’s disastrous tenure: Trump himself, of course. Regulatory filings show he was paid $32 million during his tenure, “while his public stockholders lost more than $100 million.”
Again, this is the guy who ought to be president based on his business career? Seriously?