I remember my ire in January 2012, when ex-House Speaker Newt Gingrich attacked fellow Republican presidential candidate Mitt Romney for his career as boss of private-equity firm Bain Capital. “I’m very much for free enterprise,” Gingrich averred in the pre-nomination debate. “I’m not nearly as enamored of a Wall Street model where you can flip companies, you can go in and have leveraged buyouts, you can basically take out all the money, leaving behind the workers.” Romney countered that he wouldn’t be surprised to see the New York Times or the Obama administration “try and put free enterprise on trial,” but “it’s a little surprising from my colleagues on this stage.”
I agreed with Romney, until a wise friend stopped my anger cold. “Hold on,” he cautioned. “That charge is going to be front and center in the presidential debates, and Romney is going to have to answer it. So Newt is doing him a favor by forcing him to frame a response to the accusation that private equity investors merely strip companies of their assets, ship jobs abroad, and pocket the profits over the wrecked lives of their fellow Americans.”
My friend was right. As Romney’s losing campaign proceeded, I kept waiting for him to show that he had learned how to answer Gingrich’s charge. I knew that of course most private-equity investors make the U.S. economy stronger. Of course they add to the wealth of the nation by restructuring companies for efficiency while helping to create a new class of customers in previously underdeveloped countries. Of course they are part of the “creative destruction” that is the essence of capitalism. But how to explain in a sound bite how exactly they do that—how the destruction of some American jobs really is in the grand scheme of things creative? Now there’s a challenge for speechwriters!
The Romney campaign never rose to the challenge, obvious and straightforward as it was. And when Romney read a headline on Drudge, I’m guessing, and never clicked on the article to learn that the 47 percent of American families receiving government benefits included those on Social Security and Medicare—to which they had been contributing all their working lives—and then told a group of donors that that supposedly freeloading 47 percent of Americans would never vote for him, I feared that he was a goner. As he was—for not being able to understand and explain how the American economy actually works. So much for the business acumen that was supposedly his Number One qualification for becoming chief executive.
Now I wonder if Donald Trump will meet a similar comeuppance. I believe that his mostly blue-collar supporters, successors to the Nixon Democrats, think of him as a latter day Howard Roark (not that they’ve read The Fountainhead). They see him as a capitalist titan, a master builder, who by sheer entrepreneurial daring has caused giant buildings to rise proudly out of the earth and become landmarks of the Manhattan skyline. As a New Yorker, I know that Trump Tower has become one of our city’s top tourist attractions, and I’ve seen confused out-of-towners mistakenly show up at the even more garish Trump International Hotel to bask in the great man’s aura, only to be directed across town to the “real” Trump Tower. So there is unmistakably a mystique surrounding the man with the golden mane.
What will happen, then, when Hillary Clinton, despite appearing to so many as an American knock-off of kleptocrat Eva Peron, accuses Trump in the presidential debates of being a crony capitalist, which she will have the shameless gall to do? Put aside his bankruptcies or his sticking his name in big but paper-thin brass letters on projects that he hasn’t built or financed, all of which he has successfully waved away as inconsequential. What he can’t wave away is that, as a big New York real-estate developer, he isn’t a master builder but a political fixer, skilled in navigating the New York game of getting the zoning waivers, tax abatements, and regulatory expediting that is the means by which Gotham’s developers and politicians have turned real-estate development here into a protected cartel, which only those with inside knowledge and connections—especially the knowledge of what campaign contributions to make—can enter.
Just look at what has crawled out from under the rocks that U.S. Attorney Preet Bharara has turned over in prosecuting New York State’s top legislative leaders, Democrat Sheldon Silver and Republican Dean Skelos. We learned, among other distasteful truths, that centenarian real-estate magnate Leonard Litwin’s Glenwood Management seems to have turned some tens of millions of campaign-contribution dollars into hundreds of millions of real estate tax abatements, according to the New York Times. Buy one, get nine free! Honest graft, George Plunkett of Tammany Hall called it; but how honest is a government-granted license to steal?
That’s how Gotham’s real-estate dynasties have flourished—and Trump, after all, has merely built on the empire his father founded in the outer borough of Queens, learning the game at his daddy’s knee, as is the New York way, though Trump Junior reportedly hasn’t increased his father’s original fortune by much. Meanwhile, New York’s homeowners or renters lacking political connections end up paying the property taxes that the big-time developers and landlords avoid.
How will Trump’s supporters like this reality? They are justifiably angry over a manipulated economy that has left them behind, especially since part of what caused their plight is government itself. With legal and illegal immigrants, 13 percent of the population but 17 percent of the workforce, now taking their jobs; with President Obama purposely killing the coal industry that has sustained communities across Appalachia for well over a century in favor of crony-capitalist wind, solar, and ethanol power (but not job-creating fracking); with local taxes crushing homeowners and renters not only in Trump’s New York but also across the nation, in order to fund lavish pensions and health benefits for what are called with cruel sarcasm public “servants,” whom Obama’s “stimulus” bailed out even as private-sector workers lost their jobs; with Obamacare foreseeably not working as planned, notwithstanding a blatantly political Supreme Court ruling in its favor, and Medicare giving seniors poorer care than they thought they had paid for; with a tax-supported, welfare-dependent, non-working underclass committing more than its share of crime while the Justice Department blames police for trying to keep lawbreaking under control and scorning law-abiding, cop-supporting citizens as politically incorrect; with the First Family spending $70 million on taxpayer funded let-them-eat-cake vacations—what’s not to feel angry about?
Even more galling to them is that the president knows how they feel about all this but condemns their anger as racism and dismisses their “clinging” to their guns and religion as knuckle-dragging Neanderthal superstition. And so he goes on destroying their livelihoods as blithely as the Duchess of Sutherland, nineteenth-century Britain’s biggest landowner, dispossessed the tenants of her tens of thousands of Scottish acres, as Karl Marx recounts in the most vivid and indignant pages of Capital.
Trump, by contrast, has masterfully mobilized the widespread anger, and he has done the nation a service by showing how out of touch politicians and pundits are with the feelings of ordinary Americans about how the elites are running their country, while abdicating the nation’s world leadership and refusing so much as to name the radical Muslim threat that hangs over the West. But when Trump’s supporters learn that he is every bit as fat-cat a beneficiary of the political insiders’ game as ethanol producers, wind farmers, or Solyndra—how will they like that?
Trump voters are not alone in wanting to make America great again or in their dismay at the damage the political class has wreaked on our economy, social fabric, culture, national security, and world standing. But many voters who share their feelings will think that a wall on the Mexican border, a suspension of Muslim immigration, and economic protectionism don’t add up to a recipe for national revival. They will look more favorably on Ben Carson’s admirable flat-tax proposal, for instance, or the ideas of Jeb Bush, Chris Christie, and Marco Rubio for cutting welfare dependency and restoring America’s opportunity society and economy. By the same token however, those candidates ignore at their peril justified voter anger over uncontrolled immigration, elite squeamishness at acknowledging Islamist terrorism as what it is, and the lies of political correctness. A Republican who can feel the voters’ pain—truly feel it—and outline a more plausible cure for it than Trump offers stands the best chance of winning the nomination and the election.