Bankruptcy and Colorado: The rules only count for Donald Trump when they work to his advantage...

Despite what you may have heard or read, Donald Trump has never filed for bankruptcy. His companies have, four times, but Donald Trump never has.  The purpose of corporations is for investors to put a limited amount of capital at risk in exchange for the opportunity to earn money in any one of a myriad of legal ways. Investor use the corporate structure to ensure that if their bets go south, the most they can lose is the capital they invested in the first place.

Corporate bankruptcy laws can give a company an opportunity to restructure its business in a more favorable environment than it would have if it simply continued on whatever path that got it in trouble in the first place… it can give them breathing room. At the same time bankruptcy laws give creditors a legal framework through which they can exercise claims on said company’s assets. At the end of the day, corporate law, particularly as it relates to companies with millions or billions of dollars, can be complex, esoteric, bewildering, yet nonetheless be an effective tool.

It was by understanding the nuances of bankruptcy law that Donald Trump was able to navigate his way through treacherous waters for decades and seemingly emerge each time with a larger fortune than he had when he started. He used the threats of potential bankruptcy (or imminent domain action) to further his interests. He also mastered labor law, tax law and learned to orchestrate the media like a maestro. After all is said and done, the result is that four decades after a $1 million loan from his father – and $10s of millions of dollars in tax benefits from friendly politicians – Donald Trump sits on a fortune that is worth $10 billion – by his own account. That’s the equivalent of taking a $100 loan and growing it into $1,000,000. Not bad. One has to be pretty smart to accomplish something like that, because, whatever you think of the tactics, his fortune is the result of four decades of hard work, not betting it all on some lottery or dropping it into some Atlantic City slot machine.

So it is that backdrop that makes Trump’s current pleas ring so hollow. This morning he was on Fox News complaining that the Colorado delegate selection process was unfair. Had the rules been changed in March and he had no time to react, that might have been a logical argument. But the rules weren’t changed in March. They were changed in August. So it appears that with his $10 billion fortune and eight months to work with, Donald Trump was not able to field a team in Colorado who could have worked within the known system to garner delegates for him. Somehow he could figure out how to play the game in Michigan where he and John Kasich shut Ted Cruz out, but he couldn’t figure out how to do so in Colorado. So somehow there must be some cheating going on. Trump and his team waste no opportunity to suggest that Ted Cruz is somehow using “Gestapo tactics” by understanding the rules and using them to his advantage.

The irony is, that is exactly what Donald Trump has been doing his entire life… using the rules of the game… bankruptcy law, imminent domain, tax law, labor law etc. to win at business and accumulate a vast fortune in the process. But somehow, today, because he throws his towel into a ring where he’s unfamiliar with the rules and unwilling to spend the money necessary to understand them and succeed with them, the game is rigged. Trump claims that this is not how our democracy is supposed to work. That demonstrates in one sentence why Donald Trump should not sit in the White House. The United States is not a democracy and never has been. It is a republic, ruled by the rule of law, not the rule of man or of the mob or of the majority. If he ever bothered to read the Constitution he’d see that it’s all right there.

So, it’s not much of a surprise that we wake up this morning to hear more whining from Donald Trump. He’s very much a spoiled child. Given daddy’s fortune and connections Donald grew up not having to worry about what others said or wanted – at least as it relates to business and his public persona – and used that perch to learn the rules of a game that would serve him well for decades.

The funny thing is, Trump says he wants to change the system and Make America Great Again… he decries the fact that he’s an outsider and can’t within the GOP system. But of course he’s not an outsider. He’s been a crony capitalist his entire life.

The truth is, if Donald Trump really wanted to save the country, if he really wanted to be an outsider who upset the established apple cart, he would have run for president as a third party candidate from the beginning rather than throwing in with the GOP. Two thirds of Americans feel the country is headed in the wrong direction. If that was not a setup for a third party success then there never will be one. Half the Democrats hate Hillary Clinton. Half of the Republicans (and probably 95% of conservatives) hate the GOP establishment. Does one not think that in this environment, had Trump been willing to spend even 10% of his $10 billion fortune, that he could have almost walked into the White House?

But he didn’t run as a 3rd party candidate, instead he joined the GOP and tried to win the nomination in an established system that he didn’t understand. And now we’re supposed feel sorry that he’s feeling cheated? Either he didn’t have the courage to pursue his stated goal of taming Washington from without or he was not smart enough to recognize what it would take to win from within the GOP. Either way, he’s lost. If he wins the GOP nomination he will lose to Hillary – or Bernie if she’s indicted. If he tries to run as a 3rd party candidate now, after everything that has gone on in the primaries, the only thing he’ll accomplish is putting another Democrat in the White House. But of course that may have been his plan all along.

After Super Tuesday the Little Trump Train is still chugging... Oh, what is a party to do?

Now that Super Tuesday is history, one has to wonder about the future. The Donald Trump train looks a little less like a juggernaut than it did yesterday… but just a little. Of the 11 states contested, Trump won 7, Cruz won 3 and Rubio won Minnesota. Seven out of eleven sounds pretty staggering, but when you look at the delegates it’s a little less so. Overall, after 30% of the contests (including Iowa, New Hampshire, South Carolina and Nevada) the math looks thus:

• Trump has 285 delegates and earned 34.54% of the votes cast. Those 285 delegates however represent 50.35% of the delegates pledged.


• Cruz has 161 delegates and earned 24.17% of the votes cast. Those 171 votes represent 28.45% of the delegates pledged.


• Rubio has 87 delegates and earned 22.27% of the votes cast. Those 87 delegates represent 15.37% of the delegates pledged.

So Trump’s 35% of the votes has translated into victories in 77% of the contests and earned him 50% of the delegates so far. For better or worse, that’s what one calls punching above your weight.

But the juggernaut may not be so robust going forward. Indeed, in order to secure the nomination Trump will have to do exactly as well going forward as he has done thus far. That might get harder. If you watched Thursday’s debate you saw something utterly different than you have seen previously. You saw Rubio and Cruz take out the knives and attack Trump in a way he had not been targeted before. But it wasn’t just style, it was substance as well. Going forward we will likely see not only more of that during the debates – unless Trump hides – but commercials that in many cases use Donald Trump’s words to expose him as the liberal that he is.

Of course, for what appears to be a base of about 30% of the GOP, none of that will matter. And if Democrats in other blue states jump parties to vote for him, (as at least 20,000 did in Massachusetts, giving him his highest percentage yet 49%) that could put him over the top. But for Trump going forward, everything has to go his way if he wants to win the nomination. For the other guys they just have to keep Trump from getting a majority of delegates before the convention. Or... if Rubio, Kasich and Carson drop out, Cruz could very well win the nomination outright. But that doesn’t seem to be happening now.

If it goes that far, a convention fight would likely result in someone other than Trump emerging as the GOP nominee… with Rubio being the likely winner, although at that point the field would be wide open. Of course the prospect of backroom deals and inordinate establishment influence is exactly what a majority of GOP voters are fighting against (Trump + Cruz voters) but I’ve learned never to underestimate the ineptitude and stupidity of GOP leadership.

A convention outcome with anyone but Trump will likely lead to Trump running 3rd party… which in turn might well throw the election to the House… and another opportunity for the GOP leadership to screw the American people and put one of their Democrat light darlings in the White House.

Like a Trump presidency, that would lead to the end of the Republican Party. Conservatives would decamp and start their own party… or more likely parties. At that point they would become spoilers in the American political scene, not winning, but keeping the GOP from winning. Like a zombie, the GOP would likely limp along for a while until conservative opposition coalesced around a unifying party that could put together a viable slate of candidates. Of course the country they know might be gone by the time they get around to doing so as the Democrats would be running the place…

The bottom line is, unless this thing plays itself out just right, the Trump phenomenon may very well be the end of the GOP. Odds are at this point that the nomination will either go for Trump or head to the convention, and who comes out the other side of that will likely determine the outcome in November. The GOP will have three choices at the convention:

• 1) Give the nomination to Trump and watch a sufficient number of disaffected voters sit out or go third party to give the election to the Democrats.


• 2) Give the nomination to one of their establishment darlings and see Trump bolt and run 3rd party, resulting in a Democrat victory or a House vote.


• 3) Give the nomination to Cruz and potentially see victory. The difference between Cruz and any other potential non Trump nominee is that Cruz is a small government guy, a real reformer and the GOP establishment hates him, and thus, many who threw in with Trump could be convinced to return to the fold in a way that they might not if a squish is on the ticket, particularly on immigration.

Whatever the outcome, this election has everything that is the worst in American politics. From smoke filled rooms with power brokers and moneymen to populist charlatans to a sizable portion of the electorate knowing few facts and caring even less, one can’t but help but wonder what the rest of this decade will look like. It also has something we've not had in a while... a candidate who promises to reduce the power and influence of government while at the same time championing liberty and individual freedom.  It would be nice to see what a Cruz White House would look like...