Saturday, July 23, 2016

A Bad Deal

The New York Times has reported

Mr. Trump called Mr. Cruz on Monday and asked for his endorsement, according to a senior aide to Mr. Cruz who requested anonymity to relay private conversations. Mr. Cruz indicated to Mr. Trump that he would not offer an endorsement, the aide said.

Trump advisers said on Wednesday night that Mr. Trump had been unhappy with the text of Mr. Cruz’s speech but held out for the remote possibility that Mr. Cruz would make a last-minute endorsement.

When none arrived, and with Mr. Cruz sounding like a nominee-in-waiting, Mr. Trump grew impatient with the stubbornness of his rival. Gov. Chris Christie, a close ally to Mr. Trump, could be seen shaking his head watching Mr. Cruz go on, just before Mr. Trump made his unplanned entrance into the hall.

Steve M. believes that even if this explanation- which is only one of  a few- of the Cruz kerfuffle is accurate

Trump incompetence ought to be a bigger issue in this race, but at least 40% of voters are so dazzled by Trump's wealth and gilt and buildings and golf courses and wives that they just can't conceive of Trump as a bumbler. That's something the Clinton campaign has to work on. But it's an uphill fight.

It is uphill because Americans outside of major media markets and the northeast think Trump, who brags incessantly about his (alleged) exorbitant wealth, is almost uniquely wealthy and successful. They don't realize that in the milieu (profession, New York City region, circle of acquaintances) in which Trump operates, there are a lot of individuals far more successful than he.

Business professors Deeepak Malhotra and Don Moore, who say they "have studied negotiation for a combined 40 years, " recently wrote for Fortune

Trump boasts, “I have made myself very rich.” Credible objective sources estimate his net worth at between $2.9 and $4.1 billion. While wealth is a poor measure of deal-making skill (Bernie Madoff was richer than Trump), there is special reason to doubt that Trump’s wealth can be traced to negotiation ability. It’s been estimated that if Trump had simply invested his current net worth from 1982 (built atop the fortune he received from his father) in an S&P 500 index fund and made no deals, he would have $8 billion now. In other words, Trump’s deal-making over the last quarter century has actually cost him billions of dollars.

But Trump continually claims he's a great deal maker. In The Art of the Deal, he maintained "That’s why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole."

Some outside the mainstream media, which played an invaluable role in securing Trump's nomination, might call Trump's truthful hyperbole "lying." It is, at the least, a grotesque distortion of personal history. Malhotra and Moore note

It’s easy to identify examples that belie Trump’s claim that he is an excellent deal-maker. The airline he bought in 1988 for roughly $365 million closed down in 1992. The football team he bought in 1984 ended with the demise of United States Football League just two years later. His hotels and casinos have struggled to make money, declaring bankruptcy four times. Ironically, even Trump’s version of how skillfully he renegotiated loan terms with his bankers after going bankrupt has been debunked by those who were at the table.

Trump has specialized in "offending people and losing deals," So

Consider what was supposed to have been his most important deal: developing Manhattan’s West Side Yards, then the largest undeveloped property in New York City. The negotiations with public, private, and regulatory stakeholders devolved into a vulgar exchange of insults between Trump and then-New York Mayor Ed Koch. Trump was ultimately forced to sell to a group of Chinese financiers in a deal The New York Times described as “perhaps the closest that Mr. Trump has come to international diplomacy.” But the negotiation left Trump so angry at his Chinese partners that he later sued for $1 billion. The court ruled against him.

Malhotra and Moore argue that during the campaign

we have seen obvious negotiation failures. By one estimate, the Trump campaign paid three times what the Sanders campaign did to run commercials during the same time slots on the same stations. Meanwhile, he has undermined numerous other deals. Both NBC and Univision declined to air Trump’s Miss USA pageant last year after he disparaged Mexican immigrants. Companies in the Arab world have severed ties with Trump after his comments about Muslims. At home, there’s a long list of U.S. companies that have severed or loosened ties with the Republican National Convention.

The inability to negotiate effectively and make a good deal was on full display during the convention. The Trumpists were under no obligation to permit Ted Cruz to address the convention whether or not he already had endorsed Trump. They should have at the minimum secured a promise from the Texas senator that his speech would include an endorsement.

In the long term, this will make little or no difference and in the short term has made no difference. However, if a President Trump continues to believe he's the best negotiator ever and bargains away European security or the full faith and credit of the United States, there could be catastrophic consequences.

Dismantling "the "painstakingly cultivated image of Trump as a great negotiator" which Malhotra and Moore recognize may not be necessary to defeat the GOP nominee. But if this is how a President Trump perceives himself, he prove even more disastrous than imagined.

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