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.