One of The Dumbest Things Ever Said By a Smart Person
Robert Reich is a professor, a former cabinet secretary, and a best selling author. Creds like that would make you think he’s got it together, but this may be one of the dumbest things ever said by a smart person.
Thirty years ago on its opening day in 1984, Donald Trump stood in a dark topcoat on the casino floor at Atlantic City’s Trump Plaza, celebrating his new investment. Today, as the casino folded, and some 1,000 employees lost their jobs, Trump was on twitter clarifying he currently has “nothing to do with Atlantic City,” and praising himself for his “great timing” in getting out of the investment.
In America, people with lots of money can easily avoid the consequences of bad bets and big losses by cashing out at the first sign of trouble, because the law protects them through limited liability and bankruptcy. But workers who move to a place like Atlantic City for a job, invest in a home there, and build their skills, have no such protection. Jobs vanish, skills are suddenly irrelevant, and home values plummet. Should Donald Trump and other big investors have some legal responsibility to workers and communities for the messes they leave behind?
I honestly don’t even know where to begin, there is simply so much WRONG in 162 words that it defies mathematics. The probability of using 162 words and simultaneously getting almost every one of them is amazing given the number of seemingly neutral prepositions and adjectives at play.
So let’s start here:
Should Donald Trump and other big investors have some legal responsibility to workers and communities for the messes they leave behind?
Let’s understand something clearly before we move on. Trump sold off his share in the Atlantic City properties FIVE YEARS AGO. He filed a suit a month ago to get his name off the properties. You can see how much the properties had declined over the years by simply looking at the picture that accompanies the story.
If an employee couldn’t figure out that an employer who can’t buy friggin’ light bulbs may soon have trouble making payroll, maybe they should just be glad anyone even gave them a job. They clearly aren’t the brightest bulb themselves. Here’s a hint for other workers. If the joint that provides your check starts to look like this, get the eff out.
But let’s move on to where Reich undermines his own argument:
In America, people with lots of money can easily avoid the consequences of bad bets and big losses by cashing out at the first sign of trouble, because the law protects them through limited liability and bankruptcy. But workers who move to a place like Atlantic City for a job, invest in a home there, and build their skills, have no such protection.
Which is it, Rob? Did he cash out when the market was high? Or did he get bankruptcy protection? The two are mutually exclusive. Granted Trump has filed for bankruptcy before, but he got no such protection for this because he sold his stake FIVE YEARS AGO. So the notion that he has ANYTHING to do with the current situation is simply ridiculous. He had a business. He saw that business was being forced to compete with a thousand newly-opened tribal casinos and that people no longer had to go to Jersey to gamble. So he got out. Another guy decided that he could save the casinos and rolled the dice (literally and figuratively) on running a casino. HE FAILED. But that has nothing to do with Trump.
Five years ago, I owned stock in a company called Pioneer Drilling. It was worth next to nothing, and I got out of it. It’s now worth quite a lot and I am pissed at myself for selling. But under Reich’s economic theories, because they now have success, I should be entitled to share in that even though I am no longer an investor.
WHAT? YOU DON”T THINK THAT IT WHAT REICH IS SAYING? Well, play that scenario backwards.
Let’s say I had just invested then, rather than bailing. Now that the the company is doing great and I sell for a HUGE payday. Five years further down the road, the company tanks and closes. Reich thinks I should have some culpability because I made money when the money was there to make. Never mind that I felt the company had peaked and bailed. Simply because I made money off the backs of the employees at some point in time, I should take care of them for perpetuity.
So why shouldn’t the investors and employees be required to take care of me in times of prosperity because I had been there during the leans years?
It’s ridiculous thinking in both scenarios. Your stake in a company begins and ends at the moment you buy and sell shares. To suggest otherwise makes Reich look less like a well-educated economist and more like a bureaucratic central planner – (which he is).
But finally, the thing he gets most wrong is the very beginning of his update.
Thirty years ago on its opening day in 1984, Donald Trump stood in a dark topcoat on the casino floor at Atlantic City’s Trump Plaza, celebrating his new investment. Today, as the casino folded, and some 1,000 employees lost their jobs…
WHAT? The casino provided employees and their families stable jobs and union (this is Jersey, after all) wages for THREE DECADES?
- Average length of a mortgage? 30 years.
- Development of a child from birth to college (bachelors) graduation: 22 years
- Car loan: 5-6 years
- Approximate doubling of a home’s value: ~10 years
So Trump, for the 25 years he was actually involved in the company bought how many houses for employees? He put how many kids through college? He bought how many new cars and trucks? He contributed how much to the real estate holdings of those employees?
But yes, he truly did nothing for anybody and took the money and ran. When he saw the writing on the wall – when he understood Atlantic City was no longer just competing with Vegas and Branson, MO – he should have doubled down, pumping more money into a declining market?
Let’s keep in mind we’re talking about casinos. Trump was gambling in just the same way his customers were. But he understood what good gamblers understand. There is a time to take your winnings and walk away from the table.
In the meantime, Reich, because he has ZERO experience in running actual business, can sit in the ivory tower of academia and pontificate on punishing people like Trump for only having 2 1/2 decades of success before the market conditions change.
the fact is, AC as the casino monopoly in the east coast is over and has been over for over 5 maybe 10 years. It used to be when you would drive the Garden State Parkway, you would see tons of buses going south to AC. Now, they don’t exist because people can go to NY, CT, and PA instead of driving 2.5 hours south to AC. AC lost its monopoly – it had nothing to do with the business owners. AC should never have had a monopoly to begin with….
And to the southwest, there’s been competition from Maryland as casinos started opening in that state in 2010.
There are casinos everywhere. You no longer have to travel at all. If you are a city like Vegas or AC, you had better have another draw.
Competition killed AC, no doubt, but the notion that somehow people moved to AC, bought a house and grew their “skills” is absurd. AC, like Vegas, like other town that are dependent on high tourist/visitor dollars is almost exclusively service oriented. Sure, that requires some skills and some training, but it’s not like IT or manufacturing today. These folks were dependent on all of the “rich” folk Reich abhors to come in, spend some money, gamble some away and then leave with their wallets lighter. The problem is, AC in the past 20 years hasn’t been attracting a lot of rich folk, who would prefer to be in Vegas or New Orleans or perhap even some Indian reservation. And the folks who would normally go to AC today are either just getting by, are underemployed or are unemployed. Or just don’t want to go to a down on its heels casino town. The rotten economy nad competition killed AC. And perhaps the lack of a good Bon Jovi floor show on the boardwalk. I blame Bon Jovi.
Vegas has many other draws AC does not. AC does not have the best boardwalk – Wildwood and OC does. AC doesn’t have the best beaches in NJ – Avalon NJ is the best beach. AC also doesn’t have the best shopping – NYC does. AC was a casino monopoly for many many years. The buses on the GSP proved that. No monopoly = no buses. People don’t need to do the drive anymore because there are now casinos everywhere. It was the government that gave them the monopoly it is the government that took it away. AC has to go in a new direction but the casino lobby is powerful in NJ.
Agreed, I’m a guy who’s been to Vegas at least a dozen times, and who will go many more times in the years to come. It’s not the gambling that does it for me (though obviously that’s a fun part of it) but the fact that Vegas is the “most Vegas” of all the gambling places in America. It’s got a friggin Eiffel Tower, for God’s sake. And a NY skyline. And places nearby where you can shoot mortars. Or float above a jet engine, pretending to skydive. It’s Disneyland for adults, and that is just awesome. And that is why it will keep drawing folks, regardless of how many crappy little card houses open up along slightly less crappy highways nearby.
AC, on the other hand, always struck me as a profoundly depressing place. A few big casinos, surrounded by crumbling neighborhoods. The whole time, all I could think was, “I wish I were in Vegas.”
Turk, it’s ok to choose to be happy. it’s ok. you’ll be ok.
I’m very happy! I love life. But when I don’t, that’s on me, not Donald Trump.