Trump: the Yard Sale

In honor of the interesting, if disjointed, dialogue from the Trump campaign, here are some interesting, if disjointed, thoughts on his candidacy (to date) . . .

Big Winners:

Donald Trump’s “brand” . . . . his presidential run accomplishes three major things:

1) the retirement of a tired brand properties like the Apprentice and Miss USA from his portfolio (without the embarrassment of having to turn them off publically.)   There is little better than quitting before your fired.

2) the emergence of Donald Trump, Expert on Everything and Generous Savior of the United States. Trump’s brand needs to evolve to survive and maintain value. This run, no matter how daft, adds a dimension into the way the internet and millennial generation see him.

3) Nothing amplifies the profile like running for President. Trump, already a major national figure and international curiosity, is now on the cover of major news magazines and well-known again throughout the world.

Republican Party

The Donald is helping the party two ways.

First, he’s getting the candidates ready for primetime by having to answer tough questions early and to dial up their charisma. It’s a nice wake up call for candidates like Jeb Bush and Marco Rubio and it has allowed an opening for people like Carly Fiorna and John Kasich to contrast political competence with the arch bloviating of our Donald

Second, he’s distracting the public from the lurching shake-out of the nomination process. That process is made no easier by the battle for the soul of the Republican Party. Much ink has been spilt on the war between Conservatives, Libertarians, and Moderates on issues a diverse as immigration, abortion, and the economy among others. The Donald fits none of these labels well. This is an opportunity for the party to test potential game-changing policy initiatives under the publicity and scrutiny cover provided by the energy sapping antics of Mr. Trump.

Megyn Kelly

The country now realizes that Megyn is an intelligent TV force and not some blonde android. While conservatives love the Ailes protégé, its her performance against DT that has thrust her into the American mainstream as a journalist with backbone.   By being in the Donald’s crosshairs, Megyn can sit back and consolidate her appeal nationally with the international gleam that a high-wattage presidential campaign will bring. Her career is white hot and on the upswing- the major networks would be crazy not to try to steal her.

Jorge Ramos-

See Megyn Kelly above, only the Hispanic version . . . with a much lower ceiling.

Political Media in general

His news conferences are performance art!

Big Losers

The Republican Field-

Do any of the participants look presidential yet? Fiorina looked the best in the first debates. What sort of statements does one have to make to leap out of the pack, yet stay electable?

Traditional Political consultants-

They have no game plan for this. Trump is the Eric Cartman of politics!  See this article form Jesse Walker in Reason.com—-

http://reason.com/blog/2015/08/24/donald-trump-for-poet-laureate

Real Estate Developers / House Flippers-

Some day the 1031 exchange is going to come under scrutiny . . . certainly before the elimination of the mortgage deduction as a generator of tax revenue.

The Democratic Party-

the Republican Field is being forced to up their game on difficult national issues while simultaneously avoiding their traditional quagmire of disorder on social issues. Hillary has also opened the door with her email missteps, past history and inability to shut out other entrants. She should be thankful that the Donald or (even more threatening) Michael Bloomberg didn’t primary her. While the GOP party was a traditional haven for them, it was by no means necessary. Bloomberg’s ideology fits nicely with the Democratic Party and his record of achievement in New York City, his vast wealth and ties with the international community would cause Hillary all sorts of problems. Joe Biden and Bernie Sanders are considered a legitimate contender for goodness sakes!

 

Why do you think Trump took the pledge to back out if he loses the Republican nomination?

A few reasons-

First, that’s his convenient exit strategy when he decides to stop running for president;

Second, if he by some miracle wins- the perceived loyalty to the party will allow him to recruit people to work in the administration.

Third, signing the pledge enhances his corporate brand by “showing” he’s a team player

Fourth- the way he signed the pledge is important. it shows his alpha male ethos by forcing GOP head, Reince Priebus to fly up to meet him to sign

Was it a mistake?

Not at all- he can’t run as an independent.

Believe it or not, he doesn’t have enough money or the manpower to do it

From a practical perspective, he must have Republican organizational structure to have any chance. He can’t build or buy the structure by himself as independent. Bloomberg already explored this.

What is the real rationale for running?

First, being President of the United States is the only position that can fit his personality at this point. It is the last hill for him to climb and now is the last chance to have a political impact before his game starts to slip.

Second, The Donald gets bored and needs the attention.

Third, network TV is done with him.

Fourth, I think this whole thing might be a diversionary tactic because something is wrong with his empire. He has explored runs for President and Governor of New York often when things were awry in the Trump camp.

What?

I have no evidence for this, but I think Trump could have a problem in his real estate empire that we don’t know about. He has already taken the opportunity to get out of the pageant business and gloss over getting “fired” from the apprentice.

Gut or data?

Gut

I think his empire is predicated on low interest rates and high leverage

If real estate corrects meaningfully, he’s got a problem- it has happened to him before. This is a pet theory – I can’t prove it. However, he has not been shy about using political leverage, bankruptcy laws and other tactics to get away from bad deals in the past. One nice benefit of his presidential run is that he is able to build up chits with banks in case he gets into a pickle with his “day job”.

So the Prez thing creates brand power to offset his potential losses?

If he truly assigns a dollar value to his name, then his run for president increases its value. It also increases the political and public relations leverage to hit back against creditors if things go south on his real estate projects. Banks do not want to be in the media especially if there is a problem with their loans or investments or the appearance When you are small borrower and you default on your loan you’re in trouble – when you are big borrower (like Trump) and you default, the bank is in trouble. Trump’s career confirms that axiom.

Since when do banks care about public relations and politics?

Since they are regulated by political entities. Imagine Trump sidling up to Elizabeth Warren if JP Morgan starts squawking about not being paid on time. Trump’s international voice could actually cause a lot of havoc in those negotiations.

Amateur political consultant ideas!

Trump is the only one who could pull this off, but it could do some lasting damage. Create a poster that shows that Hillary = Nixon. Deserved or not, it would play on the feelings of distrust that exist for the former Secretary of State and it’s difficult to refute. It could cause issues for her campaign at both the primary and general election.

If I were attacking Trump, I would try to box him into a corner on the 1031 exchange. This is a tax deferral mechanism that most real estate developers use to shield their the profits from their development efforts from capital gains taxes. Trump has shown little evidence of self-sacrifice in his campaign efforts. To come out against the 1031 exchange would put the economic rationale behind a lot of his real estate empire in jeopardy (and it would raise the ire of a lot of his developer rivals). For him to rail against hedge fund and private equity interests and their favorable taxation without addressing his own preferential tax treatment would be intellectually inconsistent. It would also call into question his reasons for running and his willingness to put country over self. In my opinion, I don’t think Trump would be willing to put his favorite tax dodge at risk before dropping out.

Political Running Mates

Let’s fantasize about Potential Running Mates: He could use a woman or a Hispanic candidate, but would any realistic politician be able to work with him? Susanna Martinez is the Republican Governor of New Mexico (a former Democrat) who checks off a lot of boxes. Would the two be able to co-exist ideologically? One would think he needs some sort of link to the party to get anything done. Does she have the heft and record to deal with presidential spotlight? Uncertain.

A few interesting names include Jon Huntsman- a man Trump has to respect who has deep political executive experience in Utah, energy experience with the Huntsman Companies and good ties with China. Bob Portman might be able to work with him and help deliver Ohio. John Kasich could do the same but may have too many ideological issues to co-exist with Trump. Would Marco Rubio take the bait? I doubt it.

Two Names from the Wayback Machine that may get mentioned in the coming months

Ross Perot- the Republicans seem to have avoided the schism that cost George Herbert Walker Bush a second term.

Jesse “the Body” Ventura- his inability to be effective as an outsider (as Governor of Minnesota) is a great reason for people NOT to vote for Trump. It’s not Trump’s force of will that would be the problem. It’s his inability to build bridges in Congress and inability to bring on political professionals to his administration that should be the biggest concerns.