May 15, 2017

The Trump Administration: A Sole Proprietorship

by Hal Gershowitz

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Of Thee I Sing Heading AuthorsContrary to popular belief, the Trump Administration is not being run like a big business. This Administration is being run like a small business—sort of like a sole proprietorship.  That is not to say that President Trump hasn’t employed some excellent people. He has. But like many sole proprietorships he seems to be the ever-present decision maker, commenter, defender, and offender and the nation’s first oval office tweeter of tweets.

Many sole proprietorships reflect the quirks, habits, strengths and weaknesses of “the guy or gal” who comes in and opens the shop each morning. In many respects these are the people who make America tick. They are the proverbial backbone of the nation. But the guy or gal who does a fine job of running Ajax TV Service, might not be so good at running NBC, or for that matter the Trump Taj Mahal, The Trump Plaza Hotel, Trump Hotels and Casinos Resorts or the Trump Entertainment Resorts all of which, except for NBC, have filed for Chapter 11 bankruptcy.

Now, as Tevia the fiddler might say, “bankruptcy is no sin, but it’s no great honor either.” Donald Trump the candidate bragged that “Hundreds and hundreds of deals, and four times I’ve taken advantage of the (bankruptcy) laws. And, frankly, so has everybody else in my position.”  Well, not so — only everyone else in his position whose enterprises ran out of money with which to meet their financial obligations. Now, we are in no way being critical of those who have availed themselves of the nation’s bankruptcy laws, especially under Chapter 11 which governs restructuring as compared to liquidation. But bankruptcy is far, far, more common, in relative terms, among sole proprietorships and other small businesses as compared to big businesses.

For example, about 20% of small businesses will fail in their first year in business and about 80% will have failed by the end of ten years. Conversely, only 5% of the 500 largest companies have declared bankruptcy over the past twenty years. So candidate Trump’s proud (everybody in my position does it) pronouncement, while not true, is far more accurate about sole proprietorships as compared to big businesses.

We do not make this point to criticize the President’s business acumen. We think he’s pretty astute, even cunning, and he’s certainly been quite successful.  We also think he has some very impressive presidential accomplishments to his credit. Where he can operate as the firmly and legally established chief executive of the United States, which he can do where executive decisions are final, he has done some impressive things…and some not so impressive.  He has certainly gotten China’s attention, and, we suspect, Chairman Kim Jong-un’s as well. That’s something a succession of prior Presidents had failed to do. They were played by Kim Jong-un as well as his father. We supported his decision to send cruise missiles into Syria and to drop the MOAB onto a terrorist tunnel system in Afghanistan. On the other hand, his thrusts with respect to immigration have been hasty and clumsy—perhaps, a bit of showboating and grandstanding.

President Trump seems to view the legislative and judicial branches of our government as anything but co-equal, but he is not the first President to have a contemptuous relationship with the two other branches of government. He is incredibly Nixonian in that regard, and his firing of FBI Director James Comey suggests that he never heard of (or read about) Archibald Cox and the historically clumsy, Nixon-instigated Saturday-night massacre. Anyone who believed President Trump fired Jim Comey because of the recommendation he received from the Justice Department’s Deputy Secretary Rosenstein, well, we have some lovely beachfront property to sell them at the water’s edge on the Sea of Tranquility.

We know of few chief executives of major businesses who rely on themselves to communicate with, or respond to, everyone who is critical of their decisions or performance. First, they have more important things to do, and furthermore, they have knowledgeable professionals who can respond more factually and articulately to the issues of the moment. President Trump has made his communications staff largely irrelevant, because he has conditioned the press and the public to await his tweets or comments on whatever the controversy of the moment is.

President Trump has so compromised his communications staff that he is now hinting at ceasing daily press briefings—not because they can’t keep up with his pace of work, but because they can’t keep up with his erratic and often self-contradicting tweets and quotes.  While the President’s base delights in his tweets, the greater public, and certainly the press and those serious thinkers and historians who will eventually chronicle these days (or years) will observe the confusion, the walk-backs, the ire and record a very unpleasant time in our history. That President Trump doesn’t see what all his contretemps are inflicting on his Presidency is an American tragedy in the making.

As of now, we rather suspect that when the investigations into Russian election interference are concluded there will be little there there. We can’t get our heads around the notion that former National Security Advisor Mike Flynn was a serious potential candidate to be blackmailed. As Professor Alan Dershowitz has opined, all the State Department had to do is tell him he had been taped by our snoops, and poof, he is no longer a potential blackmail target.

President Trump should stop whining and tweeting. His chronically petulant behavior is unbusinesslike, and he is giving sole proprietorship a bad name.

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2 responses to “The Trump Administration: A Sole Proprietorship”

  1. susan duman says:

    Your observations and comparisons this week make a wonderful read with my morning coffee.

    As always…with gratitude,

    Susan D

  2. Chuck Anderson says:

    I think your view is too benign. Trump a seriously deficient individual who sits in position of power. This does not bode well and there are too few Republicans with character ala Cox to confront this.

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