“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually and then suddenly.”
Ernest Hemingway, The Sun Also Rises
A New York judge has issued an order that essentially gives the Trump Organization the corporate death penalty. Judge Arthur Engoron’s order rescinds the Trump Organization’s business charters and puts Trump’s corporate empire into a receivership. Ultimately this may do just as much or more to end Donald Trump’s reign as the many criminal indictments against him.
The Trump Organization is in the bullshit business. Real estate is just the side hustle. Trump shamelessly slapped his name on anything he could—golf courses, steaks, a failed airline, even vodka (which tee-totaling Trump does not drink). Trump is right that the main source of his revenue was through his “brand,” a brand which is now synonymous with right-wing extremism. But ultimately Trump is incredibly cash poor and highly leveraged. His real-estate empire was basically an attempt to get more and more money from lenders to keep his incredibly-leveraged empire afloat.
Now, that scheme is falling apart. Trump was already radioactive to most banks, forced to go to less savory banks connected to Saudi and Russian oligarchs. But Trump needed legitimate assets to do that, including Trump Tower and his Mar-a-Lago club. Now, Trump has run out of both legitimate assets and likely the revenue streams he needs to keep his secured creditors at bay.
Trump’s money, real or imagined, is what kept everything together. Now Trump has a voracious need for cash, not only to keep his quasi-campaign afloat, but to pay his lawyers in his numerous criminal cases and keep his standard of living going. Right now Trump is quite adept at fleecing his followers with everything from t-shirts to worthless NFTs. But that is likely not going to be enough. While their may be a sucker born every minute, Trump needs a lot of suckers to keep himself afloat, and sooner or later that well will run dry.
The question becomes what happens next. Trump will certainly appeal Judge Engoron’s ruling. That appeal is highly unlikely to change anything, but it may delay the process. However, no matter what happens, Trump’s access to credit through conventional means is likely to be incredibly curtailed. That leaves Trump even more at the mercy of Saudi autocrats, Russian oligarchs, and other unsavory characters than he already is. Whether Trump can get enough support outside of banks depends on whether the Saudis, Russians, etc. see him as a valuable investment or simply damaged goods. The more legal hot water Trump gets into the less his “Teflon” appearance becomes.
Just as in Hemingway’s quotation above, Trump’s downfall could be gradual then incredibly sudden. Trump has so far been incredibly adept at avoiding the consequences of his actions, but this ruling strikes at the heart of who he is and who he makes himself out to be. At some point Trump’s luck and bluster will run out. His only hope at this point is to win the Presidency and use the power of his office to make his legal troubles go away. Sadly for the country, there remains a precipitously high chance that could happen. But the entire Trump mystique is based on him being the world’s greatest businessman. That has never been true, and the collapse of Trump’s empire of bullshit might be more personally devastating to him than even a jail sentence.