Warren Buffett says that if you’ve been playing poker for thirty minutes and don’t know who the patsy is, the patsy is you.
America, wake up: Don’t be Donald Trump’s patsy.
In episode after tawdry episode, the people who've done deals with this guy have come out losers. His investors in casino companies? They got hosed. The contractors he hired to build those projects? They got stiffed. The students in his so-called Trump University? Allegedly defrauded. Charities that counted on him? They got bupkis.
Sure, Hillary Clinton is a flawed candidate. But this election is not about Hillary. It’s about whether America will put its trust in a 21st century version of a carnival fraud—a patent-medicine salesman who brags of suckering the people he deals with.
For a counterpoint, see: "Donald Trump Is the Only Candidate Who Can Get America Back on Track."
We know what Hillary’s record is. It’s out there—30 years of it, as Trump has been saying. You can parse it and turn it upside down, examine it. She has taken plaudits and taken licks. But she has a record and you can judge her on it.
Trump isn’t campaigning on a record. His campaign pitch is that we should believe him—take him on faith. Believe that he is the smartest. Believe that he has a secret sauce for creating 25 million jobs. Believe that “only he” can run the country.
Americans used to see such people hawking elixirs at county fairs, earnestly pitching homemade potions while they unburdened the more credulous of a little spare change. Later, these types gathered around telephones in boiler rooms, or they pitched the American dream in the shape of a plot of land in Florida that looked gorgeous in the brochure but when you got there turned out to be a few inches underwater.
Yeah, sure, Trump will achieve lasting peace in the Middle East in only six months (details to come). Yeah, sure, Trump will build a wall that will fix our problems. And he will do “good” trade deals, whatever that means.
For more on Trump's business record, read the Fortune feature "Business the Trump Way."
But the deal he wants now is your vote. And that is exactly how he sees the election. Trump, in fact, looks at every interaction as a “deal.” Even his marriages are deals, valuable only so long as the cost-benefit analysis measures up. He dumped his wife after she had three of his kids, telling gossip columnist Liz Smith that he couldn’t be sexually attracted to a woman who has had children. Once he found a better deal, he was outta there.
The Art of the Deal
Trump has said that deals are an art form, and the art to him consists of taking advantage.
Here’s what he said in a television interview in 2011 about renting land to Libyan dictator Muammar Qaddafi—an anecdote intended to show his foreign policy toughness, but actually revealing the essentials of his deal-making philosophy.
I dealt with Qaddafi. I rented him a piece of land. He paid me more for one night than the land was worth for two years, and then I didn’t let him use the land. That’s what we should be doing. I don’t want to use the word ‘screwed,’ but I screwed him. That’s what we should be doing.
He looks at campaigning the same way. He is trying to get more from the American voter than he gives. Otherwise, in his parlance, he would be a “loser.” In his memoir The Art of the Deal he said his style of deal-making is to “keep pushing and pushing to get what I’m after.” On the campaign trail, he said if he’s elected America will have so much “winning” it will get bored with it.
But if his history is any guide, Trump will be the only person “winning.”
In 1991, the Trump Taj Mahal casino in Atlantic City went bankrupt. Junk bond investors who lent the project $675 million took a beating. In 1992, Trump Plaza and Trump Castle casinos separately filed for bankruptcy as well. That same year, Trump Plaza Hotel in New York also filed for bankruptcy—thus, he generated losses for three classes of lenders in a single year.
Trump resurfaced in Atlantic City with a publicly traded company, Trump Hotels & Casino Resorts, which raised about $130 million in an IPO. It went bankrupt in 2004. Thousands of stockholders, many of them small, mom-and-pop investors, lost nearly everything. In a year where the stock fell 70% (it ultimately fell 90%), Trump took a $5 million bonus. Trump wins; investors lose.
How about the people who paid nearly $35,000 to attend the so-called Trump University? Students from New York, California and Florida now claim in lawsuits that they were scammed. According to the affidavit of Ronald Schnackenberg, a former Trump University salesman, “while Trump University claimed it wanted to help consumers make money in real estate, in fact Trump University was only interested in selling every person the most expensive seminars they possibly could.”
How about voters in the Republican primaries who believed it when Trump said, in 2014, that he would “absolutely” release his tax returns, and believed him this January when he told NBC's “Meet the Press” he was “working on” releasing his returns “and we’ll be working that over in the next period of time.” Gotcha—he never did.
When, as a real estate reporter in the late 1980s, I covered Trump, it was common knowledge that he would show up at a closing and offer the seller less than he had promised. Chalk up another class of Trump counterparties who took a hit.
What I didn’t know then is that he did the same thing to the little people—contractors, painters, electricians, carpenters. He recently bragged about it in a debate with Hillary Clinton. “Maybe they didn’t do a good job,” he said. Yet another group of people who discovered what it means to do a deal with Trump.
Charity Is for Suckers
What about the Association to Benefit Children, which helps kids with AIDS? In 1996, it held a ribbon-cutting to dedicate a nursery school in Manhattan. Trump showed up uninvited and plopped himself on the podium, hogging the spotlight from the mayor and from celebrities such as Frank and Kathie Lee Gifford, who were major donors. Trump was not a donor, and didn’t become one. He just wanted to look like one. AIDS charity loses, Trump “wins.”
What about the 420 other charities with a connection to Trump that were called by the Washington Post, which was seeking to see if he'd fulfilled his pledge to donate his earnings from “The Apprentice” and from other sources? The Post found only one personal donation by Trump in the last eight years—and that for less than $10,000.
What about the tens of millions of dollars the Trump campaign claims he has personally given away? No one has ever identified the recipients.
To Trump, normal philanthropic giving is simply a bad deal. Look at his own Trump Foundation. Its biggest recorded gift over many years was to repair the fountain and enhance the view outside of Trump’s Plaza Hotel.
What about the American taxpayers? He stiffed them, too, by not paying taxes. (That’s right: one wealthy taxpayer’s failure to pay taxes increases the deficit owed by everyone else.) Trump claimed, of course, that he was being clever. We’ll see. Evidence unearthed by The New York Times suggests that he claimed a massive loss on other people’s money—“something for absolutely nothing,” according to the former chief of staff for Congress’s Joint Committee on Taxation. Even his own lawyers warned that the IRS would probably call his tax avoidance scheme improper, if he were audited. Although his losses have not been overturned by the IRS (which Trump says is auditing him), the tactic was later outlawed by Congress.
In short, Trump's "deals" time and again involve exploiting and taking advantage of the people on the other side of the table. As Tony Schwartz, the ghostwriter of Art of the Deal, told the Washington Post, “He’s a man who operates inside a tiny bubble that never extends beyond what he believes is his self-interest.”
Forget his lies about American Muslims and about the President’s birth; forget his outrageous insult to John McCain, a war hero, and forget his vulgar treatment of women. Just consider: How will he treat you?
Ask yourself: If you were sitting at a poker table and playing for big stakes, would you close your eyes and trust Trump to be the dealer? The deal on Tuesday, Nov. 8, is for the biggest stakes ever. And he is playing it like he always has. Don’t be his patsy.
Columnist Roger Lowenstein is the author of six books including Buffett: The Making of An American Capitalist and, most recently, America’s Bank: The Epic Struggle to Create the Federal Reserve.