Low Dollar, Same Grift

There are two things Donald Trump is notorious for in the business world – one is simple bullying as a business tactic, another is cheating people out of money they’re owed and then making the ‘deal’ stick by grinding the counter-parties down with the promise of endless litigation. As Times columnist Joe Nocera puts it, in the business world Trump “is notorious for refusing to pay full price to contractors and vendors after they’ve completed work for him. And he basically dares the people he has stiffed to sue him, knowing that his deep pockets and bevy of lawyers give him a big advantage over those who feel wronged by him.” Both traits or patterns of behavior are surprisingly good guides to Trump’s presidential campaign.

As I’ve learned more about Trump’s business history it has reminded me of this description we got months ago from another New York real estate professional about Trump’s MO

There is a personality type with a New York developer, one Donald learned from Fred when he carried his dad’s briefcase to acquisition meetings out in the boroughs and it goes like this:

Donald contracts for a service or good, or the acquisition of a piece of land for $1 million.

He then does not pay you

You ask Donald for your million dollars

Donald yells at you, basely, abusively, wholly out of character to the rich gentleman you broke bread with and made the deal with. He tells you that no, YOU owe him $200,000. Gives you no reason but screams how can you be such a son of a bitch to rip him off, how he’s going to sue you, expose you as a cheat, etc.

You’re off your pins, defensive. How could this be the guy who was so nice when he picked up the check at Per Se?

So, you compromise, because human nature avoids conflict, right? This is what he’s gaming you for because once you compromised, you’ve lost. You’ve inferred his premise that you have some complicity in the matter otherwise why would you compromise? You are on the defensive and will never get it back.

You offer $750,000 as a settlement, angry buy want it over and done with. He then sues you. Why, because you’ve already committed yourself to the loss. You volunteered to surrender your position and what will stop you from keeping going?

I’ve seen many a New Yorker settle things like this with Trump people for 5-10 cents on the dollar and then happy, even eager to keep doing business with them. Why? Because he got in their heads with this aggressively counterintuitive behavior.

Here’s why I bring this up. The Trump University scam is getting a lot of attention, wildly inflamed by Trump’s racist attacks on the judge presiding over the case. But there’s another suit that’s gotten very little attention. It’s about a gulf resort in Jupiter, Florida (now Trump National Jupiter) which Trump purchased in 2012. The business model of the resort was based on refundable deposits from members – ranging from the low 5-figures to the $200,000 range. Trump purchased the property and then promptly made the refundable deposits non-refundable. Some members had little choice but to accept Trump’s decision, others settled for pennies on the dollar (because the cost of litigation would eat up most of the money in dispute). Another group is suing him.

Now, this case isn’t quite as emotionally compelling as the Trump University case where Trump got people with big dreams and little money to put up tens of thousands of dollars for basically worthless seminars. Here its one extremely rich person cheating a bunch of merely rich people out of their money. But it gives you a pretty good sense of Trump’s way of doing business and makes it pretty obvious why an idea as crazy as stiffing US bondholders on a substantial part of their investment would seem like so obvious an idea to Trump.

It also tells you something about why Trump suddenly seems so unable to roll with the changing dynamics of the campaign. Coming off a weekend in which most GOP elected officials around the country are harshly criticizing his racist attacks on Judge Gonzalo Curiel, Trump is now overruling his own campaign and insisting that surrogates intensify their attacks on the judge. Pressed on whether this could possibly be a good idea, Trump shot back: “And I’ve always won and I’m going to continue to win. And that’s the way it is.”

I win because I win and I will keep winning!

Unflinching self-assertion and aggression is basically the only game he knows.

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