I've been covering Donald Trump off and on for more than 25 years, and what has always struck me is his lack of impulse control. It was his biggest problem when I first started dealing with him in the 1980s, and it's his biggest problem now.
Plenty of financial and real estate players got carried away in the go-go 1980s. But Trump was in a class by himself.
He ended up presiding over six — count 'em, six — bankruptcies because he kept making business decisions with his gut rather than with his brain.
Trump's less-than-stellar business history has been well documented by The Washington Post and other newspapers, magazines and online publications, as has his lack of self-control in his personal life. But what has not been fully explored is the impulsiveness — actually, total recklessness — that was at the root of the pivotal decisions that tanked his businesses.That same impulsiveness is at the root of Trump's self-inflicted political and business problems today.
Impulse control is of only passing public concern when we're dealing with a business player, unless the player has amassed enough billions of debts or other obligations to threaten the stability of global financial markets. Trump wasn't remotely that big a hitter in the '80s and '90s, and certainly isn't now, his boasts and preening notwithstanding.
But public concern about self-control is very relevant for a president of the United States. Whether we're talking about the Bay of Pigs (when John F. Kennedy resisted the hawkish instincts of his advisers who wanted to escalate) or the bugging of Democratic headquarters (which Richard Nixon could not resist) or the invasion of Iraq (need I say more?), presidents are bombarded with chances to overreact, and their overreactions can have catastrophic consequences for our country and the world.
Looking back, you can see how out of control Trump was during his early days, as an heir to a family fortune built on low-profile real estate who was determined to become a star.
He grabbed two casinos in Atlantic City in the 1980s because he could, using tons of borrowed money. He bought these casinos knowing that a new, bigger and glitzier casino, the Taj Mahal, was underway and would cannibalize the casinos that he was buying.
So what did he do? He compounded his problems by grabbing the Taj and financing its over-the-top opulence with $675 million of junk bonds that carried a 14 percent interest rate. The Taj did, in fact, cannibalize the Trump Plaza and Trump Castle casinos, as well as their Atlantic City competitors. But although the Trump Taj Mahal drew good crowds, it couldn't begin to earn enough profit to cover its bond interest.
Ultimately, the Taj and Trump's two other casinos each filed for Chapter 11 bankruptcy. That made Trump what bankruptcy types would call a 33. You know, three times 11.
The bankruptcy of New York's Plaza Hotel, a trophy property that Trump bought at an absurdly high price with borrowed money, made him a 44. Trump boasted about the purchase in newspaper ads. But his Plaza preening didn't help the hotel pay its bills.
Trump impulsively grabbed two other high-profile properties: the world's biggest yacht, which he renamed the Trump Princess; and Eastern Airlines' Boston-New York-Washington shuttle, which became the Trump Shuttle. These, too, were paid for with borrowed money, some of which Trump personally guaranteed, an act of incredible recklessness. Trump said publicly that he hadn't personally guaranteed any of his borrowings — but that was a lie, one of many that he has uttered during his business and political careers.
The yacht and the shuttle were taken over by Trump's creditors and unloaded for vastly less than he paid. That was simpler and better for everyone than two more Trump bankruptcies.
Because I specialize in writing about financial excesses and am used to dealing with people who engage in fantasy finance, I realized fairly early in the game that Trump's real estate and casino empire was doomed.
And I figured that because he had idiotically issued personal guarantees on more than $800 million of his $3.3 billion of debt, he was headed for personal bankruptcy. Personally guaranteeing properties' debts puts everything you own at risk. Savvy, in-control developers don't do that. Reckless and desperate ones do.
So on June 17, 1990, my column, "The Party's Over for Trump," ran on the front page of my then-employer, the now-defunct New York Newsday newspaper. "Trump," I wrote, "is on his way down — and probably out."
I was right about the "down" part but not about the "out" part. Much to my surprise, Trump managed to escape the financial wreckage that he created without having to declare personal bankruptcy.
That's partly because he got expert advice from Stephen Bollenbach, a big-time guy whom he had the sense to hire to negotiate with his creditors. Another reason was that some of Trump's biggest creditors had their own financial problems and didn't want to engage in messy public disputes with a master media manipulator like Trump.
And, to be fair, a major reason Trump didn't end up in personal bankruptcy was his own negotiating skills — which are considerable.
It was an amazing recovery, and Trump deserves full credit (no pun intended) for pulling it off. He lost major properties and was put on a humiliating (for him) monthly allowance by his creditors. But he walked away from the wreckage rather than having to be carried out.
Trump emerged with a majority stake in his three post-bankrupt casinos, which conferred tax advantages on the properties, and allowed them to continue using his name.
In 1995, he got a bonus from his casino stake: He persuaded the investing public (talk about suckers!) to fork over $140 million for stock in a publicly traded company, Trump Hotels and Casino Resorts, whose ticker symbol was DJT. As in Donald John Trump.
The company bearing Trump's initials bought Trump's casinos at high prices. That helped DJT the person shed financial obligations but saddled DJT the company with debt that it couldn't pay.
The company went bankrupt in 2004, and its successor went broke in 2009. That made Trump one of the few — if not the only — Chapter 66 guys in public life. The company went broke for a third time in 2014, but by then, Trump had only a 10 percent stake. So he's Donald 66 Trump rather than Donald 77. Public investors in DJT stock were wiped out.
After his 1990 crash, Trump stopped gambling huge amounts of borrowed money to build properties. I don't know if it was self-control, fear or an inability to borrow. In any event, it served him well.
I was impressed at how Trump transformed himself from a high-wire borrowing act into a licensor: someone who gets businesses to pay him fees for the right to use his name. Getting money rolling in the door without taking risks is a very nice business.
I figured Trump would do the sensible and intelligent thing — be happy as a rehabilitated, very rich person (though nowhere as rich as he claims to be), feel relieved that he had escaped total disaster and not go looking for more trouble. I thought he had learned his lesson.
What I didn't realize — until The Post asked me to help with its Trump coverage when he launched his presidential campaign a year ago — is that although Trump managed not to impulsively borrow huge amounts of money to overpay for things, he was still unable, or perhaps unwilling, to rein in his impulses.
Lack of impulse control has enormously benefited his presidential campaign. It distinguished him among the 17 initial Republican candidates, allowed him to dominate cable TV news and got him massive coverage in other media as well. There's a lot to be said for being blunt — but Trump routinely journeys from blunt into ranting, which helped him in the Republican primaries but could pose major political and business dangers for him in the general election.
I suspect that one reason he comes up short on impulse control involves his 14 seasons on "The Apprentice." That's the reality TV show that General Electric's then-chief executive Jack Welch and one of his top lieutenants, Bob Wright, bestowed on Trump after he did an impressive job converting New York's financially distressed Gulf and Western Building (on which GE's pension trust held a mortgage) into the Trump International Hotel and Tower.
"The Apprentice" was a pivotal event for Trump. It made him into a truly national figure, and he says the show paid him more than $200 million during its run.
The crazier Trump acted on "The Apprentice," the more he carried on and humiliated people and declared "you're fired," the better TV it was. So whatever instincts he might have had to develop self-control were vitiated by "The Apprentice."
But there's a downside — a huge one — to his behavior, and it's starting to become apparent now. He's incredibly reckless. He seems to sometimes license his name to questionable enterprises, without doing much (if any) research into them. He makes enemies he doesn't have to make because he baits people and institutions that don't bow down to him, and he reacts badly when organizations such as The Post (which he has banned from his campaign events) challenge him by asking perfectly reasonable questions.
He put his name on Trump University, which systematically victimized middle-class and lower-middle-class people, according to an investigation by the New York attorney general and an ongoing class-action suit in California.
Those are the kind of people who are perceived to be his core constituency. I wonder how many middle and lower-middle types had no idea about what Trump U was up to until recently and didn't know how Trump has stiffed all sorts of contractors over the years, resulting in lots of blue-collar workers losing their jobs. I wonder whether this knowledge will erode the faith of some Trump fans.
Do you think the public would be paying much attention to Trump U's travails if it weren't for Trump's political profile? Trump, of course, compounded the problem by gratuitously attacking the ethnic background of the judge who dared to rule against him.
Do you think people would be clamoring to see Trump's tax returns, which presidential candidates for 40 years have disclosed, if he weren't about to become the Republican nominee? A return that Trump, in a typical switcheroo, first said he would be willing to disclose but now says he won't produce because no one cares.
Well, I care, and so should you. There are at least two obvious reasons and a third reason that's not obvious to anyone but real estate types and tax techies.
First, we ought to see whether Trump's income, holdings and taxes incurred (if any) are consistent with his claim of having a net worth in excess of $10 billion.
Second, we ought to see his charitable contributions, which he claims are "generous."
The third — and not obvious — reason involves something called Section 469 of the U.S. tax code. Rental real estate, a Trump specialty, typically throws off tax losses for its owners.
But Section 469 forbids taxpayers from using these losses to offset other income unless more than half their business activities (at least 750 hours a year) involve developing or managing real estate. Not licensing their name to golf courses or making speeches or being on TV reality shows.
We ought to see if Trump has used Section 469 to shelter income in past years. And especially last year, when he was running for president.
Trump could clear all of this up in a heartbeat by voluntarily releasing his tax returns. Doing so would minimize what is likely to be considerable damage if his tax returns somehow get leaked. But that would require Trump to control his impulses and reverse his position, something he rarely does.
Trump had been presenting himself as a really generous guy. But his self-proclaimed image as a generous donor to worthy causes has been shredded by groundbreaking articles that my Post colleagues have written.
None of this would be happening to Trump if he had just kept his mouth largely shut and his head down instead of trying to become president by spewing falsehoods and insults, exposing himself to all sorts of risks he didn't have to take.
One needless risk that he's taken involves praising the late, unlamented Iraqi dictator Saddam Hussein for supposedly keeping terrorism in check. But now that Trump has brought Saddam into the campaign, I'm struck by similarities between them: Both made remarkable comebacks, and both have (or in Saddam's case, had) impulse control problems.
Saddam amazingly managed to remain in power despite losing the 1991 Gulf War to the United States and its allies, who threw him out of Kuwait and inflicted immense losses on his military. It looked like Saddam was absolutely finished. But he emerged from the Gulf War in control of Iraq, managed to slaughter his internal opponents and ended up presiding over a country that had the world's fourth-largest army.
But instead of being satisfied with that, Saddam couldn't resisting trying to be a major player on the world scene. So he led people to believe that he was developing weapons of mass destruction.
The WMDs didn't exist, as we now know — but lots of people thought they did. That led to the U.S.-led invasion of Iraq and the destruction of Saddam.
No, I'm not accusing Trump of being a dictator wannabe. Just pointing out the striking similarities.
Trump is going to pay a serious price in image and money if he doesn't win the presidency — and maybe even if he does.
His various rants have cost him sponsorships, led some organizations to shun his enterprises and have focused attention on things such as the Trump University litigation that hadn't previously attracted mass attention.
In addition, his campaign has prompted numerous organizations and people to tell the true story of Trump as a businessman, and how he's made up numbers and spewed exaggerations, lies and nonsense. That's totally at odds with the way Trump has portrayed himself for decades.
Until a year ago, Trump's lack of impulse control was amusing (except to some of his targets) but didn't really matter to the country at large. Now, with him having a significant chance to become the leader of the world's foremost country, it matters a lot.
Maybe Trump can learn to control his impulses — but there's no sign that he has. And, unfortunately, there's no sign that he will.
End of story.
Allan Sloan is a columnist for The Washington Post. He is a seven-time winner of the Loeb Award, business journalism's highest honor.