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Donald Trump is revealed as a billion-dollar fraud: That probably won't hurt him

If the "Resistance" hopes new revelations about Trump's finances will destroy his popularity, we've learned nothing


Chauncey DeVega
May 11, 2019 4:00PM (UTC)

Donald Trump does not exist. He is a character who plays many roles simultaneously. Trump is a vigilante, professional wrestling villain, a TV pitchman and a reality TV star. He's also a cad, a bully and a wannabe dictator. And yes, he is a billionaire. (Or rather, he plays one on TV.) Because of his guile, boldness, help from foreign sponsors and — yes, let's admit it — his charisma, in 2016 Donald Trump won the greatest role on the world stage: President of the United States of America.

Last Tuesday, the New York Times revealed more about the man behind the character: Donald Trump is also a "billion-dollar loser."

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The numbers show that in 1985, Mr. Trump reported losses of $46.1 million from his core businesses — largely casinos, hotels and retail space in apartment buildings. They continued to lose money every year, totaling $1.17 billion in losses for the decade.

The Times reported that Trump "appears to have lost more money than nearly any other individual American taxpayer" during the years in question. In 1990 and 1991 alone, Trump's "core business losses" of roughly $250 million a year "were more than double those of the nearest taxpayers," according to IRS information. Trump did not pay any income taxes in eight of the 10 years for which the Times obtained his returns.

This is not much of a revelation. It only confirms what has long been suspected and (increasingly) known by the public.

In 2018, the New York Times revealed that Trump received at least $400 million from his father, mostly through elaborate schemes to avoid paying taxes and other untoward if not illegal means.

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Investigative reporter Craig Unger told Salon last October that he believes Trump has laundered money for foreign oligarchs and criminals:

By 2002, a company called Bayrock Group LLC  had moved into the 24th floor of Trump Tower. They began partnering with him. They made Trump an offer that he could not refuse. It was a completely different paradigm from his old business relationships. Suddenly Trump started dealing with cash and he couldn’t get bank loans except some from Deutsche Bank. He was so bankrupt that almost no Western bank could loan him a dime.

These were ways of laundering money that Trump had. The financing of building projects that involved $400 million or $500 million to build a skyscraper. Once the building was built, they could sell the condos through the shell companies, limited liability corporations and so forth. This was done anonymously in all cash transactions with the Russian oligarchs and other people affiliated with the Russian mafia.

In a conversation with Salon in April of 2018, Pulitzer-winning journalist David Cay Johnston, who has followed Trump's career for decades, discussed the president's apparent criminal connections:

Here are the key things people should know about Donald Trump. He comes from a family of criminals: His grandfather made his fortune running whorehouses in Seattle and in the Yukon Territory. His father, Fred, had a business partner named Willie Tomasello, who was an associate of the Gambino crime family. Trump's father was also investigated by the U.S. Senate for ripping off the government for what would be the equivalent of $36 million in today's money. Donald got his showmanship from his dad, as well as his comfort with organized criminals.

This new information about Trump's finances also connects directly with Robert Mueller's findings about the president's collusion with Russian cutouts and other representatives, and the dark cloud of other highly suspect behavior which still hangs over Trump's regime.

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In a post this week for the DCReport (his own site), Johnston connects the dots:

In the Oval Office Trump disclosed sources and methods, the most sensitive intelligence information, to the Russian foreign minister and its ambassador to America. We know this only because the Russians announced it, by the way.

Imagine for a moment what would have happened if Barack Obama had behaved that way.

What is the complete financial history between the oligarchs, as Putin’s gang of thieves is known, and Trump?

It may be that Trump is just a fool, not Putin’s tool. But we don’t know because Trump is stonewalling on the Mueller Report, which he tried to block by firing Mueller (his aides would not carry out the order) and holding back testimony and the redacted portions of the report. Since Trump has said Mueller vindicated him, why would Trump do this? The answer is obvious.

The story of Trump’s taxes is the story of a man whose lying, cheating, stealing and continual need for cash to sustain the image of a multi-billionaire has made him vulnerable to kompromat. It is the story of a known tax cheat who has taken an oath to uphold and defend our Constitution but ignores that oath, violate that oath.

It is a story whose most salient financial circumstances and connections remain hidden. And they will remain hidden unless we demand transparency not from Trump, who will never be open, but from our Congress.

Will all these "revelations" actually damage Trump's popularity and his likelihood of winning re-election in 2020?

Democrats, never-Trumpers and members of the so-called Resistance are desperate to believe that it will. They cling to the enduring hope that Trump, the tin-man dictator, has a hidden off-switch that will deactivate him. In this narrative exposing Trump as a fraud will somehow force his supporters into a moment of realization that they made a horrible mistake in electing such a person and continuing to support him in overwhelming numbers. Alas, no such button exists.

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Donald Trump's popularity will endure. This is a function of many things. Trumpism is a cultural movement, not merely a set of political policies or goals. Trump and his followers are knotted together in a political cult. His appeal has always been about much more than celebrity politics; he is a symbol of racial grievances and white rage, a widespread rejection of America's multiracial democracy. Democrats and others who oppose Trump and his authoritarian movement still fail to understand that symbols such as these cannot be defeated by appeals to reason or the deployment of facts.

There are (at least) two other reasons why Trump's exposure as a billion-dollar fraud will in all likelihood do nothing to affect the likelihood that he wins re-election in 2020.

Like other Republicans, Donald Trump is a master of political sadism. His policies have caused material, physical and emotional harm to his supporters. As Jonathan Metzl shows in devastating and convincing detail in his new book "Dying of Whiteness," this is especially true of the "white working class" men and women whom Trump claims to love.

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Trump's support among his base is an example of a psychological phenomenon known as the "sunk cost fallacy." Trump's supporters are so invested in their leader that his policy failures, broken promises, and outright lies only serve to make them more committed to him. So much of their personal energy and resources have been invested in Trumpism that to walk away and accept the loss would cause great cognitive and emotional distress.

Jaime Ducharme of Time magazine has summarized this dynamic:

If you’ve ever let unworn clothes clutter your closet just because they were expensive, or followed through on plans you were dreading because you already bought tickets, you’re familiar with the sunk cost fallacy.

“The sunk cost effect is the general tendency for people to continue an endeavor, or continue consuming or pursuing an option, if they’ve invested time or money or some resource in it,” says Christopher Olivola, an assistant professor of marketing at Carnegie Mellon’s Tepper School of Business and the author of a new paper on the topic published in the journal Psychological Science. “That effect becomes a fallacy if it’s pushing you to do things that are making you unhappy or worse off.”

This idea often applies to money, but invested time, energy or pain can also influence behavior. “Romantic relationships are a classic one,” Olivola says. “The longer you’ve been together, the harder it is to break up.”

The financial website The Street describes the sunk cost fallacy this way, writing that it "can affect even the smallest financial decision":

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Let's return to the concert ticket example. Maybe you bought the ticket long in advance but realized too late that you have an exam the next morning, and need to spend that night studying and getting your rest. But $30 is a lot of money for a broke college student like yourself, so you decide to get your money's worth and attend the concert anyway.

That is the sunk cost fallacy at work. Regardless of whether you go to the concert or not, the $30 isn't getting recouped. It doesn't actually play a role in your decision.

This fallacy can play out in business often. If market research for a film suggests it won't be too popular or have that wide an audience, the studio might pour even more money into advertising in an attempt to raise awareness of it and avoid losses. What it's likely to do, though, is create even more losses.

In many respects, Donald Trump is the sunk cost president.

Trump also presented himself as a prophet or savior for white America, and has made many false promises along the way. But religions or cults are remarkably adept at surviving such failures. The classic research study "When Prophecy Fails"  examines a cult whose leader told his followers that space aliens would arrive and take them off the planet at a future date, which of course never happened. Authors Leon Festinger, Henry Riecken and Stanley Schachter explained all this in 1956:

A man with a conviction is a hard man to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point. We have all experienced the futility of trying to change a strong conviction, especially if the convinced person has some investment in his belief. We are familiar with the variety of ingenious defenses with which people protect their convictions, managing to keep them unscathed through the most devastating attacks.

But man's resourcefulness goes beyond simply protecting a belief. Suppose an individual believes something with his whole heart; suppose further that he has a commitment to this belief, that he has taken irrevocable actions because of it; finally, suppose that he is presented with evidence, unequivocal and undeniable evidence, that his belief is wrong: what will happen? The individual will frequently emerge, not only unshaken, but even more convinced of the truth of his beliefs than ever before. Indeed, he may even show a new fervor about convincing and converting other people to his view.

The authors continue by explaining that the painful cognitive dissonance resulting from this "disconfirmation" cannot be completely rationalized away. It can, however, be reduced in counterintuitive fashion — by convincing more people to accept the false "system of belief" despite all the evidence against it.

It is for this reason that we observe the increase in proselytizing following disconfirmation. If the proselytizing proves successful, then by gathering more adherents and effectively surrounding himself with supporters, the believer reduces dissonance to the point where he can live with it.

Today's American "conservative" movement — that has become a misleading term of art, at best — is a form of political religion. It is based on a belief in that which cannot be proven by empirical or other normal means. Trumpism is American conservatism in its most radical, fundamentalist and charismatic form. Trump's congregation does not handle snakes or drink strychnine. Instead they worship Trump through the temple of Fox News and attend his mass rallies. To an increasing and disturbing degree, they also engage in scripted violence against nonbelievers and other "enemies."

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Like other religions, Trumpian conservatism has contempt for the facts. Thus, Trump and his acolytes are selling a special "truth" to their followers, one which supersedes any real facts — whether those concern tax fraud, sexual abuse, financial corruption, possible treason, obstruction of justice or virtually anything else.

How did Donald Trump respond at the time to losing more than a billion dollars in a 10-year period? Charles Leerhsen has the answer:

Was he perpetually ashen-faced with fear? Or smirking at the thought of outwitting the IRS “for sport,” as he said in a Wednesday morning tweet?

I happen to know, because from late 1988 to 1990, I was his ghostwriter, working on a book that would be called “Surviving at the Top.” Right in the middle of this period, I can tell you that the answer is that he was neither. Except for an occasional passing look of queasiness, or anger, when someone came into his Trump Tower office and whispered the daily win/loss numbers at his Atlantic City casinos, he seemed to be bored out of his mind.

How is Trump responding now responding to these revelations about his finances? Like other cult leaders, Trump continues to preach even more enthusiastically to his congregation and attack the New York Times and his other critics as the real evildoers. Will any significant number of his loyalists abandon him now?


Chauncey DeVega

Chauncey DeVega is a politics staff writer for Salon. His essays can also be found at Chaunceydevega.com. He also hosts a weekly podcast, The Chauncey DeVega Show. Chauncey can be followed on Twitter and Facebook.

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