David Cay Johnston - The Big Cheat: How Donald Trump Fleeced America and Enriched Himself and His Family

The Big Cheat

How Donald Trump Fleeced America and Enriched Himself and His Family

David Cay Johnston

Author of the New York Times Bestseller

Its even Worse than you Think

For Adam, Ben, Jack, Jackson, and Nicholas

T he majority of Americans found themselves in uncertain economic circumstances in 2015, many in scary straits. Living paycheck to paycheck even with two working adults in the family had become the norm in America. By 2015 many people had been down so long, walloped by economic shocks in 2000 and 2008, they believed the future was not President Ronald Reagans Morning in America but endless debt and potential homelessness. The rent was too high, the wages too low. It was a time of anxiety for most, even as those at the top gathered riches beyond the imagining of any generation before them.

It was a perfect time for a master con artist to lay waste to the desperate and cheat them out of what they had, all the while telling them that he was really their friend and helper. Donald Trump was a man for that time.

Trump was a master huckster. He had successfully fleeced investors, cheated workers and vendors, ripped off students of his fake university, and outmaneuvered banks that loaned him more than a billion dollars that he never paid back. He had even cheated novice roulette players at one of his casinos in what was supposed to be the most heavily regulated industry in America. And he had gotten away with it. He had never been arrested, never been charged with a crime, even though Mayor Ed Koch of New York City once said he deserved 15 days in jail for sales tax evasion.

Hed even gotten away with forgery, as his own tax lawyer and accountant testified under oath in one of his two known civil trials for income tax fraud, both of which he lost.

While Trump was known in New York society as a cheat, a liar, a manipulator, and a deadbeat, and although he had been fined $200,000 for replacing women and minorities in an attempt to placate his biggest casino customer, the worst that had happened to him was lawsuits, fines, and being shunned by some at high-society affairs like the annual Met Gala in Manhattan.

But that was not the Donald Trump most Americans knew, or thought they knew, certainly not those who lived far beyond New York City and Atlantic City.

To much of the American public Trump was a hero, a larger-than-life business genius who could turn anything to gold while thumbing his nose at the American aristocracy. He was a modern Midas with a series of trophy wives and endless riches. And he ate the same fast food they did.

Trump created this image on the NBC television network, which for years aired his shows, The Apprentice and Celebrity Apprentice. The shows made the network a fortune. They earned Trump the cash he needed to pose as a multibillionaire, and, more important, they made him famous in what he called the real America of small towns, farmland, and cities where no one wore bespoke suits or designer dresses. And he had that signature lineYoure fired!which in a perverse way gave relief to people who knew they could be fired at any time and for no good reason.

His television shows were no more real than the paint that made his name appear to be carved in gold letters. It was fools gold all the way for anyone who believed his protean story. To anyone who understood business, his show was laughable. But his audience was largely people who had never been in a boardroom or an executive suite, didnt know what was taught in management schools, had no idea what makes businesses succeed. And so the ridiculous narratives played in prime time as believable tales of business acumen.

What people watching his show, and a majority of the rest of America, wanted was a leader who would relieve their financial distress. Trump appeared to provide them with what they yearned for: a hero who cared about them, a man who they believed would champion their desire to escape decades in the economic doldrums.

The year that Trump came down the escalator of Trump Tower to announce his campaign for the presidency, the economy was on the mend, but not fast enough to make up for the devastation caused first by the dot-com bubble bursting at the turn of the century and then by the 2008 Great Recession, which by some measures caused more harm than the Great Depression of the 1930s. Tens of millions of Americans who worked steadily, took care of their families, and tried to do their best kept being stymied by circumstances beyond their control. Their wages had stopped rising decades earlier. Ninety percent of American households had less income, adjusted for inflation, in 2015 than they had in 1973, according to tax data.

Even in households with two working adults, many people struggled to keep afloat. The vast majority of Americans had no savings, and more than a few relied on payday lenders who charged interest rates that a few decades before would have earned them prison sentences for usury. By 2015 those interest rates had been legitimized by the courts, Congress, and state legislatures. Health insurance plans didnt fully cover even routine care. Pensions were disappearing.

Many good-paying jobs, especially in manufacturing and mining, had vanished, some gone to China, Mexico, or Vietnam, others never to return, especially in coal mining, as competing fuels were cheaper and cleaner. And job security? By 2015 no ones job was secure, not even those teachers and professors who supposedly had tenure for life.

The plight of most Americans could be summed up by the acronym ALICE: asset limited, income constrained, employed. By this measure, developed by the United Way charities, a family of four in high-cost states such as Connecticut, New Jersey, or California needed more than $60,000 a year just to provide the basics of modern life. Only one in five jobs paid that much in 2015, the annual Social Security wage report showed. The median wage, including for part-time workers, was just $29,930, less than $600 per week.

And yet some Americans were rich beyond imagining. Trump had his own Boeing 757 jet; some ultra-rich couples had his-and-her private jets. Megayachts costing hundreds of millions of dollars sat at anchor on every coast. Mansions and even apartments sold for tens of millions of dollars.

Its so unfair, was Trumps message to average Americans, and it wasnt your fault.

Trump didnt waste time with 32-point plans and talk about human capital investment, labor market elasticity, and productivity charts. He spoke to people in language they understood. He told them that the elites in Washington, in that swamp along the Potomac, were rigging the system for their own benefit and were doing so at our expense. Wall Street was buying up and shuttering or selling overseas the companies that owned the mills in towns across America.

Trump blamed border-crossing Mexicans for an increase in rapes and murders even though violent crime in the U.S. was on the wane. He blamed China for stealing jobs. He blamed Muslims for everything.

And then he made the promises people wanted so badly to hear. He pledged economic growth greater than anyone else suggested possible, up to double the average of the postwar era. He promised to bring back coal mining jobs. And he vowed to defeat the elites who wanted what Trump falsely claimed were cancer-causing wind turbines to generate electricity.