Donald Trump started his career at the end of the 1970s, financed by his father Fred Trump. Over the years this transfer of wealth added up to around $500m in today’s money in gifts. My rough calculations say that, had he simply taken the money, leveraged it not imprudently, and passively invested it in Manhattan real estate – gone to parties, womanised, played golf, collected his rent cheques and reinvested them – his fortune could have amounted to more than $80bn by the time he ascended to the presidency in 2017.
And yet Trump was not worth $80bn in 2017. Instead, Forbes pegged him at $2.5bn – which, given the difficulties of valuing and accounting for real estate, is really anything between $5bn (£4bn) and zero (or less). It is in this sense that Pulitzer prize-winning New York Times reporters Russ Buettner and Susanne Craig call Trump a “loser”. He is indeed one of the world’s biggest losers. By trying to run a business, rather than just kicking back and letting the rising tide of his chosen sector lift his wealth beyond the moon, he managed to destroy the vast majority of his potential net worth.
How he did that is what Buettner and Craig chronicle in a book dense with facts and figures, but punctuated with moments of irony and dark humour – particularly when contrasting Trump’s public bravado with the often pathetic reality of his money management. The combination turns what might have been a rather boring tome, of interest only to trained financial professionals like me, into something of a page turner. Buettner and Craig paint a picture of Trump’s businesses as “mirage[s], built on inherited wealth, shady deals, and a relentless pursuit of appearances over substance”. And yet, Road Runner-like, he runs off the edge of the cliff, looks down, shrugs – and keeps going until his feet touch the ground again on the other side.
Buettner and Craig delve more deeply into this story than anyone I have encountered. They have done their interview and newspaper-morgue homework, checked it against tax information and business records spanning three decades, and so gained an unprecedented look into the real workings of Trump’s financial empire. They uncover, I think as much as we can get at it, the truth behind the narrative of his wealth and its indispensable support: the myth of a genius businessman that he has spun and that, deplorably, much of the press and his supporters have bought, hook, line and sinker. Their conclusion? He was always exaggerating how rich he was, and always skating remarkably close to the edge of financial disaster.
But though he squandered a great deal, it’s also true that he was extremely lucky. First, and most importantly, he was a beneficiary of the absolutely spectacular Manhattan real-estate boom. Second, he had things break his way at many crucial junctures that ought to have sunk him into total and irrevocable bankruptcy. Third, he was able to use his celebrity developer-mogul image to attract new business partners after his old ones had washed their hands of him. He was also lucky in the complacency of many of them with respect to his shenanigans: their willingness to play along and not find a judge to pull the plug.
What sort of psychology produces this kind of behaviour? Buettner and Craig psychoanalyse Trump as unable to take the hit of recognising his relative incompetence. A deep need for public validation as the master of the Art of the Deal led him, over and over again, to make increasingly risky decisions. The illusion of success had to be maintained at all costs, which meant that a loss had to be followed by an even bigger bet.
And so there Trump was at the start of 2017, in spite of everything, stunningly successful. Buettner and Craig call this an “illusion”. I profoundly disagree. To repeatedly save yourself from bankruptcy – to somehow manage to hand responsibility off to the people you do business with while you hotfoot it out of the picture – demonstrates considerable skill and ingenuity of some sort. Trump has exhibited great (if low) cunning and resilience when faced with what often appeared to be near-certain financial, entrepreneurial and business doom. It is, Buettner and Craig say, a combination of “bravado [and] branding” that allowed him to always “walk away with something – usually at the expense of others”.
Many of us hope that Trump’s story will end with a proper comeuppance, restoring the appropriate and just moral order of the universe, in which his galaxy-scale hubris does indeed ultimately call forth a satisfying nemesis. Until then, we must regard him as a remarkable success – although few philosophers would judge Trump’s brand of success as the kind worth having.
• Brad DeLong is professor of economics at the University of California, Berkeley. Lucky Loser: How Donald Trump Squandered His Father’s Fortune and Created the Illusion of Success by Russ Buettner and Susanne Craig is published by Bodley Head (£25). To support the Guardian and Observer, order your copy at guardianbookshop.com.
