November 30, 2015
Patient and controlled are not two words generally associated with Donald J. Trump, Republican polling front runner and general nightmare to the GOP governing class. Neither his many admirers, nor his numerous detractors would focus on The Donald’s reserve.
Some love his seeming boldness, others are repulsed. As difficult a task as it is to characterize the candidate who has spent more than a week talking about New Jersey being a mass of celebrating Muslims on 9/11/01 as a careful moderate-risk person, I’m going to give it a shot.
There are two Donald Trumps. The first is the guy who, determined to surpass his father’s empire of outer bourough working-class housing, set off across the East River in his twenties and put together the deal that turned the bankrupt Commmodore Hotel into the Hyatt Grand Central.
This was a very promising opening act. Sure, he’d grown up in real estate and spent a couple years at Wharton. His apprenticeship gave him contacts in government, a crucial part of large construction projects anywhere in the world. As a teen he was invited to the opening of the Verrazano Bridge. Presumably, he picked up a few lessons in dealing with the mob along the way too. Twenty-something Trump was no innocent.
He was decently visionary. Today, investing in a big hotel project adjacent to Grand Central Terminal is a no-brainer. Forty years ago NYC was going broke and widely perceived as ungovernable. Grand Central was in semi-disrepair. Historic Penn Station across town was leveled a decade earlier.
Take a look at the 100 most significant buildings in Manhattan. Few were built in the 1970s. Trump took a risk, got support from investors and government and hit it big. The project was well-executed and by the time it opened, the city was on the comeback trail.
He’d also broken ground on Trump Tower, which opened in 1983. By this point, still in his thirties, The Donald was becoming a bit of a celebrity, following in the footsteps of previous high-visibility Manhattan commercial real estate moguls.
His predecessors leveraged their fame to build larger and larger projects in the city. Trump branched out. He bought a football team, the New Jersey Generals of the USFL, a new football league challenging the NFL, but playing in the spring.
He purchased an Atlantic City casino and planned others. Purchasing then-profitable routes from Eastern Airlines, The Donald created Trump Shuttle, a new airline to service the Boston-D.C. corridor. There was a giant 282-foot yacht too.
In the midst of this, Trump (with ghostwriter) penned The Art of the Deal, which sold a ton of copies and introduced him to a nationwide Reagan Era audience in the most favorable of ways. Ever since the mid-late 80s, he’s been a fixture in the minds of Americans, a popular culture reference since Hillary Clinton was an attorney at the Rose Law Firm in Little Rock.
The branding was a yuuuge success. How many business figures from thirty years ago are relevant today? Bill Gates wasn’t well-known yet. Even Warren Buffett was mostly off-the-radar. Sam Walton was a few years away from becoming a household name. He’s also a couple decades deceased now.
Jack Welch was a promising newish CEO testing out a few new methods. You get the idea. Only Steve Jobs was truly famous then and now. Trump takes a backseat to his ghost. Among the living Trump’s profile is second to none, even if his actual business accomplishments leave him far short of any commercial Mount Rushmore.
Speaking of which, his forays away from Manhattan buildings failed spectacularly. The USFL folded. Bad luck? Perhaps, but Trump both pushed the league to move to a fall schedule and led them into the courtroom to combat the NFL in the halls of Justice. After winning treble damages, the league collected $3. Strike One.
Trump Shuttle began flying in 1989 and never made money. In 1992, routes and most assets were sold under duress to USAir. A combination of optimizing commuter planes for luxury and a Gulf War-driven fuel price spike doomed the venture. Strike Two.
In 1988, with two casinos up and running, Trump purchased the under construction Taj Mahal from Merv Griffin’s Resorts lnternational. It opened in 1990 and filed for bankruptcy for the first time in 1991. Strike Three.
Combined with a few hits on Florida construction projects and his 1991 divorce, The Donald was taking on plenty of water. He spent some time off the Forbes 400 list. Some have estimated he had a negative net worth at one point.
While his Midas Touch didn’t extend much further than gold-plated bathroom fixtures, Trump both preserved his brand through financial turmoil and developed a completely different and very profitable business model.
The Trump who emerged at the beginning of the 21st Century, 2.0 if you will, is the conservative, opportunistic, coldly-calculating person who provides the direction for his presidential campaign. This version knows how to limit his risk and when to walk away.
No longer is Trump leveraged. New major construction projects are licensed, not fronted. If you see a new Trump International Hotel and Towers going up somewhere in the world, odds are the Trump Organization is earning a licensing fee, not taking on financial risk.
Disclosures show NBC paid Trump in excess of $200 million to promote himself, his brand and the Trump Organization on The Apprentice. Nice work if you can find it. These tie together very well. He got paid to promote himself while building the value of his licensing operation.
Speaking of ties, he sells those too, under license, along with shirts, cologne and other paraphernalia. Worrying about production, inventory and distribution is for losers. Trump collects royalties. Maybe he can get Mexico to fund that wall.
This version of Trump is ultra-pragmatic. Working primarily on a licensing basis allows him to keep head count down. The Trump Organization has relatively few employees as a percentage of revenues and turns a 40% (or so) profit, better than Apple.
When he does invest, it’s in historic golf courses, sometimes the sort of places that host British Opens (Turnberry) or PGA tour events (Doral). This isn’t new construction.
In order to evaluate the campaign, it’s necessary to look at both Trumps. Version 1.0 is the product, the brash New Yorker America met when Marco Rubio and Ted Cruz were in middle school.
It provides an endless supply of free media, the type available to celebrities but not politicians. Trump 2.0 never pays for anything he doesn’t absolutely have to. As such, despite having more exposure than any other campaign, he’s spent way less than most.
Like the Trump Organization, the campaign is lean. He has paid staffers on the ground in many states, but did not build a large headquarters staff like Jeb Bush and Hillary did.
After at least thinking about the Vice Presidency in 1988 (Bush 41’s biographer says it was Trump’s idea, Trump’s team unsurprisingly says he was contacted by the campaign), and half-heartedly pursuing the presidency from Ross Perot’s Reform Party in 2000, he gave a candidacy serious thought in 2011 before deciding to pass.
Conditions were not favorable last cycle. Looking retrospectively, the Tea Party wing wasn’t as frustrated, and the establishment was lined up behind Mitt Romney, so although a few non-traditional candidates had their moment, Trump did not have a chance at winning the nomination. He was wise to wait.
Because Trump is as full of bluster as ever and arguably more willing than ever to make enemies, his pragmatism and fatalism is obscured. How can the guy who always wins and never apologizes implement a strategy that’s the equivalent of taking what the defense gives him?
Rather easily it would appear. All the better that he’s perceived as bold and aggressive. Even if you don’t agree with his brand valuation, Trump is legitimately very wealthy these days. In the early 80s he was off to a good start, in the 90s bleeding out, in the aughts, recovering. Public perception didn’t change that much as his net worth waxed, waned and waxed again.
As such, Trump is currently playing defense and hoping conditions allow him to get nominated. When asked early in his run what his odds were, he said about 25%. That number was both higher than any pundit figured (then) and lower than one would have expected from The Donald.
These days he’s reluctant to speculate on his chances beyond pointing out he’s leading almost every poll. When the campaign began, he already benefited from a large amount of Americans who believed in the Trump brand. He suffered from a large amount of Americans who detested it.
1980s Trump might have thought he could win over the skeptics. He might have deluded himself into believing he could maintain core supporters, convince them to take him seriously as a candidate, while still turning previous haters into fans.
That sort of hubris made him think he could take on the NFL, expand his real estate empire into Florida, run an airline and conquer Atlantic City somewhat simultaneously. He knows better now.
Drawing heavily on his regular contact with the working-class residents of his father’s developments in Queens and Brooklyn as a youth and young adult, Trump began building himself a foundation, one that has the highest floor in the field.
In a field with more than ten serious candidates, grabbing a good corner lot is crucial. While more Republicans like Rubio and are open to voting for him, Trump has double his current support. Trying to offend as few GOP voters as possible makes sense for Marco, but would have left Trump an also-ran.
For proof, look at Carly Fiorina. Her favorables are higher than Trump’s. Virtually all of her positions are acceptable to insiders and outsiders, establishment and insurgents. She debates well and interviews well. Fiorina does not yield to political correctness and is eager to attack Clinton.
Yet Trump has 5 to 7 times her polling support and exponentially more free media coverage. Comparing business careers is another topic for another day, but you can make a very solid case that Fiorina’s was both more impressive and relevant to the presidency.
Why? Because Trump recognizes the value of enemies in establishing credibility. It’s not that Carly doesn’t, her best moments have come when she’s had one, be it Planned Parenthood or Trump, but without The Donald’s established brand, she can’t risk offending Republicans.
Trump not only can piss off many GOP voters, but he has to in order to get nominated and have a decent chance next fall. By simultaneously offending mainstream Republicans and the media, he both builds a base that could win a divided primary cycle and sets himself up to draw anti-Republican working-class voters in the fall.
Marco Rubio could unify the Republican Party relatively quickly and go into the fall campaign as a favorite. That was never an option for Trump and he knows it. Even Ted Cruz has a better chance of begrudging acceptance from the RNC combined with actual support from the National Review crowd.
If, like in most previous cycles, the contest narrows to two candidates after the first several primaries, Trump has little chance of winning. If there are four or more semi-viable candidates on March 15, when most delegates go to the winner, his odds are pretty darn good.
A three-way race gives him a fighting chance, though you would have to favor Rubio if he’s the only establishment-friendly candidate in that group. Trump both realizes he can’t get anywhere near controlling this, and that he can influence it.
You’ll notice him blast any candidate who is a threat, but mostly back away before doing more damage than prudent. If Jeb Bush found his footing over the summer, there was a possibility of a two-man race or outsiders opting for someone with more chance of defeating Jeb.
In that alternative universe, perhaps Rubio gets adopted by the Tea Party as he was in Florida against Charlie Crist in 2010. The Rubio campaign certainly considered this scenario.
As we know, Jeb buckled under the onslaught. Eventually Trump began leaving him alone. Why? Was he worried about piling on? Maybe, but at this point he needs Jeb in the race as long as possible. All the better to divide the establishment vote.
When Rubio began picking up momentum, Trump had a new target. More skilled than Jeb, Marco didn’t seem to take any direct hits, but Trump showed his desire to put a finger on the scale. He may have also discovered attacking Rubio actually helps Marco with certain voters.
This is the part The Donald knows he can’t control. If Rubio proves a generational political talent, he’ll win. But Trump (and Cruz and perhaps others) will make him earn it. If Cruz runs an almost perfect race, wounding Rubio just enough and defeating Ben Carson quickly, Trump likely loses to him too.
As sharp and calculating as the junior senators are, Trump is the master media manipulator. You would think Rubio would have dominated the news over the past couple weeks with the most hawkish stance on ISIS this side of Lindsey Graham. Instead, Trump disappeared him in a cloak of New Jersey Muslims.
Arguing about missing video footage from 2001 also excepted him from having to spend too much time dealing with the Planned Parenthood shooter. Carson chose civility, while Cruz made it a partisan issue, saying the majority of shooters are Democrats. That should keep the two dividing votes a while longer.
When Trump gets particularly noisy, it forces Cruz toward statements that make many Republicans worry about electability. As long as this many chess pieces are on the board, Trump can screw with them as needed.
As many observers have pointed out, there is no traditional Republican nominee in this year’s field (Jeb would count if he’d finished second in 2012). This makes the odds for a loudmouth with no electoral experience far greater than normal.
I’m convinced Trump is executing the only reasonable strategy available to him and is doing an excellent job of it. As today’s meeting with 100 African-American ministers shows, he is capable of much greater outreach to non-GOP voters, although results will be mixed. General election Trump will have a few extra tricks up his sleeve, should he get the opportunity.
If President Obama’s approval ratings are in the low 40s (the case as recently as a week ago) and Hillary runs a shaky campaign (very possible), he absolutely can win.
If other Republicans stumble enough at the right time, he absolutely can get the opportunity.
Ironically, should he beat the odds and get nominated, or beat them again and get elected, the guy who never loses and never apologizes will owe the victory to lessons well learned during a string of defeats.