Donald Trump’s campaign for the Reform Party presidential nomination may never get off the ground, and anyone who has ever visited Trump’s stomping grounds in Atlantic City should not be surprised. The Trump Taj Mahal casino sits alongside the Atlantic City boardwalk, a gaudy reminder of the excesses of its owner. The “Taj,” which ranked first among all Atlantic City casinos in total gaming revenues in 1998, is a key component of the empire controlled by “The Donald,” the nickname bestowed upon the entrepreneur by his first ex-wife, Ivana.
On the boardwalk near the Taj, shops feature “Special $1 Readings by a Psychic,” “Tarot Cardreading for $10,” “99 Cent Everything,” and “Cash For Gold.” (Another pawnshop off the boardwalk advertises interest in purchasing engagement rings.) The now-empty Trump’s World Fair Hotel Casino stands nearby. But hope springs eternal. “On this site,” a billboard gushes, “will be built one of the largest and most spectacular Casino/Hotels anywhere in the world. Donald J. Trump.” On such a foundation are Trump’s political aspirations built.
Inside the Taj, with its 42-story hotel tower and adjacent casino, the Oasis Slot Lounge offers nickel and quarter slots; the Sultan’s Diamonds area provides one and five dollar slots; and Sultan’s Emeralds offers middle-class high rollers a crack at $25 and $100 slots. On a recent Saturday afternoon, I observed a multicultural melange in the Oasis; a large group of senior citizens, with a smattering of Gen X-ers, among the Diamonds; and a sea of empty chairs next to the Emeralds. There is also Sultan’s Palace (a lounge with the casino’s best view), Sultan’s Feast (a restaurant), and engraved objets dart from India. The idea is to suggest to visitors that they too can be kings and queens. Caesar’s Palace makes this point more bluntly. “Enter A Citizen,” an entrance sign proclaims, “Leave An Emperor.” Give Trump credit; Even he is not that brazen.
The Taj has thick magenta carpeting and polished brass escalators that leave visitors with die impression that they are surrounded by gold. The only objects more ubiquitous in Atlantic City are the ATM machines that line the casino entrances, the get-rich-quick mentality of today’s debt-ridden, leveraged global economy is on display, right next to that economy’s flotsam and jetsam, who beg passersby for handouts on the boardwalk.
Trump borrowed heavily to become the dominant casino owner in Atlantic City; his firm has about 25 percent of the city’s casino “square footage, slot machines, table games and hotel room inventory,” according to the 1999 annual report of Trump Hotel/Casino Resort (which trades on the New York Stock Exchange under the symbol DJT, Trump’s initials). The Trump name itself is described as “an asset” of the firm in public filings with the Securities and Exchange Commission. But DJT’s long-term debt-to-equity ratio is more than seven to one; more than 75 percent of the cash generated from operations in a recent year was spent on interest payments to finance its outstanding debt. DJT’s stock has lost nearly three quarters of its value since the end of 1996. One plausible explanation is that DJT used debt to purchase the Trump Marina property from The Donald at an inflated price.
The Reform Party prides itself on its support for balanced federal budgets and fiscal restraint, and Ross Perot made those issues the cornerstone of his 1992 and 1996 presidential campaigns. Future historians will likely credit the party for shaping public opinion to the point where the Democrats and Republicans were compelled to finish a budget recently with a surplus. (The last federal budget surplus was under Richard M. Nixon.) How can Trump presume to balance the nation’s budget when the publicly traded company that bears his name is highly leveraged?
If Trump applied similar leverage practices to the federal government, the national debt would explode in size. The dollar would likely fall on foreign exchange markets against major currencies such as the Japanese yen, and interest rates would rise as the bond market reacted. Mortgages would become more expensive, and the cost of major purchases, such as automobiles, would increase. The economic law of “unintended consequences” would prevail. (Markets trump politicians, no pun intended.)