Being arrogant or selfish in competition or life will harm yourself and will impede your goals.
— Kim Rhode

By Brian McKay

In an MBA program you learn ethics while also learning strategy, marketing, operations, finance, accounting, HR management and business law. No accredited program will ever offer a class called “Doing Things the Trump Way”. Of course there is the shitty Trump U. program that screwed people out of $30,000+ and that is the way Trump thinks business is done; by screwing people.

Business is about value creation, not value destruction. If it was shown to be about value destruction, do you think the morons supporting Trump would be so pro capitalism without a proper understanding of what is business? It is the purpose of the business to create value for all stakeholders involved. A business that does so will consistently show the best long term growth. zenruption has frequently featured articles on the destruction that comes with short term thinking. Greed is short term thinking and results in very bad long term results. A capitalistic system based on short term profits is actually the greatest threat capitalism has. Isn’t it funny that unmanaged capitalism could be its own destroyer? Companies have life spans just like people and the best way for them to extend their effective life is to be equitable and humble.

So let’s have a chat about the Trump way of doing things.

First of all, Trump is worth nowhere near $10 billion. Period. Mr. Trump is known for valuing his net worth and the value of his properties based on feelings. It isn’t about the price the market will bear for the asset, but how he feels about it that day. We all know Mr. Trump likes to feel really good about himself on a constant basis, so what is he really worth? Right leaning Forbes says Trump is worth $4.5 billion. Bloomberg calculates his net worth at $2.9 billion. Vanity Fair questioned whether he is a billionaire at all based on his need to sell assets to fund his campaign.

In 2005 the Orange Man sued a Timothy L O’Brien for $5 billion for libel based on the claim in Mr. O’Brien’s book “Trumpnation: The Art of Being the Donald” that Mr. Trump was worth only $150 million to $250 million. Mr. O’Brien based his estimate on extensive research and meeting with those familiar with Trump’s financial situation. At the time Donald Trump declared his net worth to be between $5 - $6 billion. As the Washington Post article exposed, the legal battle was explained away by Trump as a way to make the author’s life miserable.

It is fair to say that Mr. Trump is still exceptionally wealthy, even if just a low grade billionaire, he is a billionaire with gaudy gold plated fixtures in his jet. In a country that sees wealth as a moral good due to years of indoctrination in trickle-down economics and the myth of the wealthy as job creators, surely Trump must be moral and able to save America from the sins of that secret Muslim, communist Barack Obama.

Wealth certainly has differing levels of morality in how it has been attained and isn’t just a pure moral good as we treat it in the US. No one would argue that Elon Musk became wealthy by not innovating and opening up new product categories that are environmentally responsible. Some simply become incredibly rich just do to fortunate circumstances. Ask Bill Gates about how many fortunate circumstance he had that kept MS-Dos alive. Trump? A combination of who he was born to and his penchant to be a well-known, asshole, braggart seem to have done him the biggest favors. Well that and making the cover of Playboy along with doing some trash reality TV.

So how has Donald Trump created his wealth. Besides catering to other wealthy individuals in his properties and golf resorts, Mr. Trump has frequently employed the concept of aggressive litigation. If he doesn’t want to pay someone that delivered substantial value to his company he just threatens a long and cost prohibitive legal battle. A little guy will take 1/3 of what he is owed as better than spending a fortune in court. While certainly a cost saver for Trump, this will never be taught in any business strategy class and violates the ethics and value creation of good business. Mr. Trump is destroying value for others.


Another aspect of business is the investors that have come in with a desire for return on their investment and for which the business receives capital. They haven’t fared well under Trump at all.

After taking his casinos public, an investor would have been wiped out by 2004. According to the New York Times, prior to going public Mr. Trump borrowed at high rates, pulled money from the corporations and then put them into bankruptcy in order to leave bond holders with nothing. Not only were bond holders wiped out, but the small businesses that provided goods and services for the Atlantic City casinos were often left holding huge bills that would never be paid. It seems the only person for who any value was created was Donald Trump. What would happen if he treated the US government the same way he treated his casinos?

Trump supporters will claim that Donald Trump has created over 700 companies and only a few have failed. It is important to remember that the big ones have failed and many of the purported 700 are just shell companies for tax benefits. They produce or do nothing. When taking the real dollar value of the failures against the dollar value of the survivors it is an abysmal record indeed. He could have done better as a bonus insider by blindly placing his money on random numbers at the roulette table.

Finally, a big gage of business value creation is in the treatment of its employees. Many Trump supporters will claim that he has created thousands of jobs. What kind of jobs though? Certainly there have been temporary construction jobs and low paying service positions at his properties. What is most telling though is his financial treatment of employees. As documented by Bloomberg, and various other business publications, Trump’s 401k plan has the slowest vesting time allowed by law at 5 years. For 3 years the mogul suspended all matching contributions and has only matched at 3 percent in the past. The 401k plan for the Trump organization is the second lowest ranked by Bloomberg in the US. His average employee has a mere $20,000 in their 401k.

Donald Trump has also claimed to provide child care for his employees, a claim which has been refuted by Trump employees.

To be fair though, a perusal through the organization’s reviews on Glassdoor show an approximate 3-star average, although the reviews mostly come from those in higher positions. The positions typically filled by the same the people he wishes to deport rarely receive reviews on any jobs site.

Is Mr. Trump a businessman? I don’t think so. The disarray of his own campaign reflects it. More appropriately he is a con man that has destroyed value for investors and smaller organizations. There is no hesitation in saying that if Donald Trump is a businessman, please revoke my MBA.


Brian McKay is the CEO of zenruption and president of Extra Pro Services. He has his MBA from Boise State University and B.A. from Gonzaga University. He hates touting titles and other such junk but this article seemed to deserve that. And... he is off for a drink having finished this.





Feature photo courtesy of Flickr, under Creative Commons Attribution-Noncommercial license