At first glance, Donald Trump’s apparently self-destructive war on the Republican establishment would seem to be driven by pure primal instinct, with no thought or strategy behind it. But I’m pretty sure that’s not the case. In fact, it looks to be the product of true shrewdness.
As part of a fascinating Politico interview with Trump biographers, author Wayne Barrett takes us back to the early ’90s, when Trump’s Atlantic City casinos were tanking and he faced almost a billion dollars in unpaid personal debt. At the time, Trump responded to those setbacks in much the same fashion as he responds to setbacks today: He played the victim card, he accepted none of the fault, and he claimed the system had been rigged against him.
But something else in Barrett’s account also caught my eye. At the time, Trump had borrowed a total of $4 billion from a consortium of more than 70 banks, including the almost $1 billion in personal debt. But instead of seeing that debt as a liability or weakness, Trump used it as a thermonuclear weapon. He warned the banks that if they didn’t play ball and reduce the debt that he owed, he’d walk away from the whole thing and leave them with nothing.
He probably wouldn’t have done taken that step, because doing so would have forced him into personal bankruptcy. But as Trump recounts it in his book “The Art of the Comeback,” his threat worked: “The banks more than capitulated – they enthusiastically agreed to my proposal.” Among other concessions, Trump claimed, the banks forgave much of his personal debt and even gave him another $65 million to keep the casinos afloat.
Alan Pomerantz, a real-estate attorney who negotiated with Trump on behalf of the banks, told CNN that the deal was nowhere near as favorable as Trump claims. However, he also acknowledges that tradeoffs had to be made. “We made the decision that he would be worth more alive to us than dead, dead meaning in bankruptcy. We don’t want him to be in bankruptcy. We want him out in the world selling these assets for us. … We kept him alive to help us.”
If you think about it, that’s exactly the blackmail model that Trump is following now in the political realm, this time with Reince Priebus and the GOP establishment cast in the role of the banks. Trump’s Twitter rants and bluster against Paul Ryan, John McCain and the party structure are intended as a reminder that if they get too outspoken in their criticism or try to separate the GOP’s fate too publicly from his own, Trump has the power to make things much, much worse for them. Already, at least four Republicans who announced over the weekend that they were done with Trump have decided that they were better off returning to the USS Trump-tanic.
It’s easy to see why: In terms of negotiating power, the GOP is in much worse position than Trump’s lenders had been. The banks at least had the threat of personal bankruptcy to use against Trump, but the GOP has no equivalent. Trump has nothing to lose, which makes him strong, while the GOP still hopes to salvage a House majority and the remnants of a post-election political party. That makes them weak.
So … crude but shrewd. And also effective.