The White House has been home to lawyers, generals, professors and career politicians, but never a real estate sharpie like Donald Trump. For more than five decades, intellectuals like Arthur M. Schlesinger Jr. have been warning us about the perils of the imperial presidency—the unrestrained expansion of presidential power beyond its proscribed constitutional limits. What they should have been bird-dogging was the advent of the real estate presidency.
If you’re wondering what’s behind Trump's transition antics over the past few weeks—exaggerating the sticker cost of Air Force One, rolling the dice on an official phone call with Taiwan, sweet talking/shaking down Carrier to keep its factory in the United States—look no further than the real estate mind-set, which defines the way Trump thinks and acts. As a real estate guy, he always craved risk, preaching its virtues in his 2007 book Trump 101: The Way to Success. “Frequently, the risk will be well worth the gamble, but sometimes it will be more than you can afford,” he wrote. How true! His appetite for risk—and his impulsiveness—led him to assume loans for casinos and hotels in the 1990s and the 2000s that proved too dear. When he couldn’t cover the loans, he was forced the make several trips to bankruptcy court to save his skin. Similarly, as president-elect, Trump has already rolled big. Last week, he shook up relations with China with a daring—or stupid, depending on your point of view—phone conversation with the president of Taiwan. His entire presidential run demonstrated his attraction to risk, as he called other candidates cruel names, operated with only a skeletal staff, and defied calls by the pros to run more ads and build campaign operations.
Then there’s Trump’s unique relationship with the truth, which earned him a chart-busting 59 four-Pinocchio ratings from Washington Post fact-checker Glenn Kessler during the campaign. That’s a whole lot of big, fat lies in a very short period; but by developer standards, it’s a modest haul. Developers, to remain solvent, must crumple reality in a manner that keeps their clients, contractors, suppliers, partners and bankers content. It’s a business in which lying is not a sin but a virtue. After all, the clients, contractors and suppliers are all lying to the developer, too. These lies aren’t white lies in real estate land, they're green, situational truths spoken in the pursuit of dollars. Trump’s business training clearly gave him a grounding in lying that has served him well in politics. He brazenly said on more than a dozen occasions during the campaign that he had never said things that he was on record saying. Lying worked so well for him that we can expect a surplus of Pinocchios and Pants-on-Fire ratings from the press when his lies emanate from the Oval Office. “Serious voter fraud in Virginia,” he lied on Twitter two weeks ago, giving us a preview.
Not all real estate lies are lies. Many are mere exaggerations, as when a landlord hypes a property’s sun-drenched patio that upon inspection turns out to be a grimy air shaft. Through his career, Trump has exaggerated the way other people breathe. A 2007 deposition in a court case caught him exaggerating 30 times—“needless, highly specific, easy to disprove” overstatements, the Washington Post reported last summer. And this was when he was under oath! The hyperbole continued through the campaign, as Politico and other outlets recorded. He said his IQ is among the highest. In 1986, Trump explained the fungibility of truth that govern his real estate philosophy: “When I build something for somebody, I always add $50 million or $60 million onto the price. My guys come in, they say it’s going to cost $75 million. I say it’s going to cost $125 million, and I build it for $100 million. Basically, I did a lousy job. But they think I did a great job.” As president-elect these techniques are already infecting his governance, tweeting this week the cancellation of Boeing’s new Air Force One project because costs were exceeding $4 billion. The real number is closer to $1.65 billion. Then followed a Twitter boast in which he took credit for a $50 billion Japanese investment in the U.S.—in reality, the deal was not new, reported the Washington Post.
A real estate guy doesn’t just sell things—he oversells them. For instance, Trump has mythicized the repair job he did on the Wollman skating rink in Central Park when the real story is much less heroic. He oversold his 58-story tower on Manhattan’s Fifth Avenue as a 68-floor building. Floor 30 follows floor 19 in the tower. He oversold the size of campaign-rally audiences as well as Mike Pence’s economic record in Indiana. “I will be the greatest jobs president that God ever created,” he said at his campaign kickoff. Elsewhere, he has boasted of his riches, that he’s the most militaristic person going, and that nobody builds a wall like him. Oh, he will hire the best people. As he becomes salesman-in-chief, we should prepare for a deluge of Trumpian advertisements for himself. Because that’s what salesmen do.
The lust for gambling—a subset of risk—is endemic among the real estate crowd. Where developers differ from the common man is they almost exclusively wager with other people's money. Trump is no exception. He doesn't like to put up his own money for anything. For an alleged billionaire, he was pretty stingy with his cash. He promised to donate $100 million but gave just $56 million by late October. Historically, when one of his wagers goes bad, he asks banks to renegotiate and restructure his debt. On the campaign trail, he proposed making his personal policy of renegotiating debt a national policy, persuading creditors to take a haircut—a preposterous but consistent notion. He's already spending other people's money to make his deals. In Indiana, he accepted the praise as he flung $7 million in state tax breaks and state incentives at Carrier to keep them from shipping about 800 jobs to Mexico. Prepare yourself for a series of such casino policies from the Trump administration, especially as he jawbones corporations offshoring jobs.
Real estate tends to be a family business, with the companies passed down to the children to continue. That’s how Trump got his start in the business—Papa Fred brought him in. Trump has done the same for his eldest children and, extending that practice to government, has already dragged his children into government service. Ivanka is his climate change point-person. He has big plans for his son-in-law, real estate guy Jared Kushner, who helped run his presidential campaign. He imagines a role for Kushner as his Middle East special master. If past is prologue, he might try to bestow the presidency upon one of the kids when he leaves in eight years.
From his first days in real estate, Trump exploited the media to amplify his power and importance. “It was an early secret of his success that he embraced the media, which he recognized the tabloid circus was a natural arena for someone of his talents, or ego,” New York Post and Daily News gossip veteran George Rush told the New York Times last spring. Trump will govern not by news release but media event—televised rallies, dramatic on-scene negotiations like the Carrier deal, Twitter blasts, YouTube videos and high-profile stunts like the Taiwan phone call. He will make the output of Ronald Reagan’s media manager, Michael Deaver, look like the amateur hour. If you’re sick of Trump’s high media profile, prepare to get sicker.
For all his real estate style, to call Trump a real estate sharpie exaggerates his status. He has bragged about being New York’s top developer when he doesn’t even rank in the top 10, and his most active real estate days are behind him. As Trump biographer Timothy L. O’Brien put it earlier this year, Trump is more of a “human shingle” who licenses his name to things than he is a weighty deal-maker who flips properties and builds a skyscraper. As a grand over-promiser and exaggerator, Trump has actually demolished, rather than built, bridges through the industry. According to the New York Times, major banks avoid him after losing millions in past deals. He’s slow to pay his bills and thinks nothing of shortchanging people who work for him.
Do I need to argue by this point that a real estate operator makes the least natural fit for the job of president? Yes, presidents deal, but they do not wheel: That is to say a president must haggle and arm-twist, but in a confidence-inspiring way that builds continuity and trust into relationships. A real estate guy can scorch the earth in pursuit of profit in his one-and-done deals—renege on debts, stiff contractors and screw clients as Trump has. But it comes at a price. According to the New York Times, major banks avoid him after losing millions in past deals. He’s been sued scores of times for nonpayment of his debts, including lawyers who have done work for him. He’s been slapped numerous times with liens and judgments for his unscrupulous business practices. His reputation stinks, indicating that even the industries grouped around real estate have some standards.
A reprobate like Trump can still find new investors or clients to fleece if he goes overseas with his method, where the word has yet to spread. And Trump has. But the difference between a president and a scam-artist real estate guy is a president can skip out on debt or responsibility or without real repercussions. Behavior like that will put the lives of great numbers of innocent people in peril. When you fail in the presidency, you don’t merely lose an investor’s money. Bankruptcy is not an escape option. Trump has no business making citizens pay for the crazy risks he might decide to take.
Maybe Trump will break this pattern as he moves his act into government. Maybe he'll adopt honesty, modesty, accuracy and prudence. We have been waiting for him to start acting “presidential” for almost a year now. Instead, we’ve been getting the same old pirouettes. Many of those who’ve done business with real estate guy Trump have come to regret it. You're probably next.
******
I own no real estate. Send real estate news to Shafer.Politico@gmail.com. My email alerts contain exaggerations, my Twitter feed craves publicity, and my RSS feed employs my entire family.