(AP/Julie Jacobson)

"I've always made more money in bad markets than in good markets": Donald Trump explains why he was "excited" about the 2008 economic crash

In 2007, Trump said he welcomed the impending crash: "I don't see the subprime problems affecting the higher-end"


Sophia Tesfaye
May 23, 2016 10:09PM (UTC)

Mitt Romney's style of vulture capitalism cost him the 2012 election. The multi-millionaire who helped create Bain Capital, a private equity firm that makes its money buying functional U.S. companies and rendering them dysfunctional for a turnover profit, became the face of corporatist greed that has so infected American politics for decades. His taped "47 percent" remarks to a closed door fundraiser were just the icing on an already baked cake.

Donald Trump, on the other hand, claims to be a multi-billionaire (but refuses to releases his tax returns to confirm that claim) and brags about how he's taken advantage of America's bankruptcy laws and complicated tax structure to amass whatever wealth he does have -- yet the latest polls have him already consolidating a strikingly similar Republican base to the one Romney ended up receiving in 2012; the 47 percent, if you will.

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Republicans' 2016 Frankenstein really does appear to be a "Teflon Don" (I couldn't resist), and if that theory holds true as it has throughout the Republican primary, his latest offensive statement will do little to shake the support he receives from his base, "the poorly educated" he says he loves so very much.

NBC News' Alex Jaffe dug up an old Globe and Mail interview with Trump from 2007 on Monday, where the real-estate magnate and reality TV star discussed the impending housing market collapse.

First, Trump was very wrong about the 2008 economic crash.

"We're talking very minor [problems]compared with the depression of the early 1990s," Trump told the Mail's Gordon Pitts in March 2007. "I don't see the subprime problems affecting the higher-end stuff," he explained, one month after mortgage giant Freddie Mac said it would stop buying the most risky subprime loans.

Second, while Trump shrugged off the impending disaster, he salivated at the thought of an epic crash.

"People have been talking about the end of the cycle for 12 years, and I'm excited if it is," he said at the time. "I've always made more money in bad markets than in good markets."

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Just like he was wrong when he told students at his for-profit Trump University in 2005 to ignore any warnings of an impending crash, writing, "there will be no burst in the current housing bubble":

With housing prices continuing to rise into the far reaches of the stratosphere, there's a lot of talk about a housing bubble on the brink of bursting. Scared at the possibility, industry watchers have been preaching impending doom, warning house shoppers to be wary of the real estate market.

[...]

How you react to the so-called housing bubble can be a barometer of your business personality. Are you the type of person who takes advantage of positive situations when they present themselves, riding them out as long as they last? Or do you heed every message of doom and gloom, avoiding risks that could be some remarkable opportunities?

Of course, Trump's callous comments and can hardly be described as surprising but his wildly incorrect financial predictions do cast doubt on his brand as a prescient and savvy businessman.  As Jaffe points out, in 2004, Trump made similar comments to defend his business acumen to CNN.

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"The real estate markets crashed. Now, I don't want to blame the real estate markets, because I always made a lot of money in bad markets. I love bad markets. You can do very well in a bad market."


Sophia Tesfaye

Sophia Tesfaye is Salon's Deputy Politics Editor and resides in Washington, D.C. You can find her on Twitter at @SophiaTesfaye.

MORE FROM Sophia TesfayeFOLLOW @SophiaTesfaye


Related Topics ------------------------------------------

2007 Economic Collapse 2008 Crash Donald Trump Elections 2016 Housing Collapse Subprime

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