Donald Trump is not Kim Jong Un

Fox & Friends' spin of Trump's unfathomable financial losses would make Kim Jong Un blush if it occurred on North Korean TV https://t.co/5vQfxxG3KS

— Aaron Rupar (@atrupar) May 8, 2019

QED:

Thank you @NewtGingrich & @FoxandFriends! pic.twitter.com/GYJ7U2k7nn

— Donald J. Trump (@realDonaldTrump) May 8, 2019

And I can't believe we have to have this discussion, but:

David Cay Johnston, a Pulitzer Prize-winning investigative journalist specializing in tax issues, joined MSNBC to react to Trump’s explanation. Johnston is also the author of “The Making of Donald Trump.”

Johnston says Trump’s tweets were only partially correct. “Most large real estate families do not pay income taxes because we have special tax code that allow them to report losses even as they live very lavish lifestyles,” agreed Johnston. “But the size of [Trump’s losses], they are enormous. What Donald doesn’t mention is he bought an airline that he way overpaid for and was losing $7 million a month on until he shut it down and made numerous other awful business deals during the 11 years that were covered by the information that the New York Times got.”

Johnston went on to explain that in today’s money, adjusting for inflation, Trump lost nearly $2 billion. He also put the numbers into perspective to show how much Trump was losing: “One of the years in question, Trump accounted for nearly 2 cents out of every dollar of business loss reported in the entire United States … That’s the really astonishing number.”

And how did Trump manage to lose so much money?  Easy;  it was other people's money.  The New York Times report on Trump's taxes said that, a point elided by FoxNews and Trump.  In fact, what Trump actually did was engage in tax fraud:

The president, for his part, said on Wednesday that real estate depreciation explains the losses—his buildings were getting older and less valuable every year. For that to pass the sniff test, he would have had to own tens of billions of dollars of property. It’s inconceivable. We do know, however, that Trump’s casinos were losing boatloads of money at the time, and that a number of his endeavors went bankrupt—a more believable explanation for his decade of accumulating losses.

Did Trump even have a billion dollars in the mid-1980s to lose? It’s extremely unlikely—especially if he was still worth $2 billion by the end of this tumultuous period, as he has claimed, which is also unlikely. Forbes had his net worth at $600 million in 1985. Subtract a billion, and, well …

But that question isn’t a serious one. We know that Trump took on billions in debt at the time, and it was that money—from banks, from bondholders who bought into his casino schemes, and from contractors—he was losing. Here’s the Times:

"Mr. Trump was able to lose all that money without facing the usual consequences — such as a steep drop in his standard of living — in part because most of it belonged to others, to the banks and bond investors who had supplied the cash to fuel his acquisitions."

Does this make Trump a bad businessman? In some ways, no: Reporting a lot of losses is good, for tax purposes. In other ways, yes: His companies failed and he lost a ton of other people’s money, which included both fat cats and banks (who cares) and small contractors and dumb bond buyers who were never paid or repaid (not great).

Here’s the important part: We know Trump got hundreds of millions of debt forgiven in the 1990s as his projects went belly up. To the IRS, canceled debt is the same as income. If you don’t have to pay back a dollar you said you did, you’ve effectively made a dollar. Trump appears to have claimed other people’s losses as his losses—but never accounted for the money he didn’t have to pay back. Reported correctly, that income would have shrunk that billion-dollar loss.

Why didn’t Trump report on his 1040s that he had, effectively, made hundreds of millions by not having to pay back all that debt? It appears the Times solved this one in 2016 as well, with a letter from Donald Trump’s lawyers: He used something called a “stock-for-debt swap” to make it look like the debts had been paid, not forgiven.

The logic here is as convoluted as you’d expect for a 30-year-old tax hack—just read the piece—but the point is that Trump didn’t really lose a billion dollars. He lost a lot of other people’s money, then claimed that loss as his own to avoid paying taxes. 

Part of that you can understand FoxNews not even wanting to try to explain.  It's the inherent weakness of TeeVee news (which FoxNews barely is on the best of days):  TL;DL.  Part of it they just leave out:  Trump was spending other people's money, which is a horse of a different color from losing your own.  (Of course, how being a bad steward of your own money is more noble than being a bad steward of other people's money, is still a mystery to those of us not Trump sycophants.)  But that's where the tax fraud comes in:  Trump took the tax relief (he let it accumulate to provide relief for a decade) of other people's losses; he let them pay for his failures, while he made sure he paid nothing at all.

Back to that system I mentioned that we all labor to keep in place for....scions of wealthy men who are millionaires before they reach their legal majority.  What madness is this?