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The Real Reason Donald Trump is a Candidate for President

Feb 25, 2016


AIKEN, South Carolina - Up down, down up. The Dow ended yesterday down 189 points... or just over a 1% fall.

Reuters has the story: 'Wall Street slides as oil prices hit again.'

But it is the deeper story that interests us.

What is going on?

Where does it lead?

Which dots should be connected to which other dots?

The Nature of NIRP

The last couple days have found us cogitating on the nature of NIRP. (Catch up here and here.)

Most readers surely have better things to do...such as wash their dogs.

We do, too. But each time we try to forget about it, it surges back into our consciousness like a vivid memory of a gruesome accident. The poor driver's head smashed on the door frame...the caved-in front of the car...the skid marks and sirens.

NIRP is more than just another goofy policy. It is a warning: 'Watch on the road...fog, too...and maybe a police speed trap.'

Today, we draw the line from NIRP to the two most innovative figures in US political history: Donald Trump and Bernie Sanders.

We begin with praise; we'll see how far that takes us.

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Koch Feels the Bern

Both Donald Trump and his rival Bernie Sanders have a point: The system is corrupt.

Here is business magnate and libertarian donor Charles Koch on Bernie Sanders:

  • The senator is upset with a political and economic system that is often rigged to help the privileged few at the expense of everyone else, particularly the least advantaged.
  • He believes that we have a two-tiered society that increasingly dooms millions of our fellow citizens to lives of poverty and hopelessness. He thinks many corporations seek and benefit from corporate welfare while ordinary citizens are denied opportunities and a level playing field.
  • I agree with him.

To their credit, neither Trump nor Sanders has been completely captured by the Deep State.

Trump has lots of money. Sanders finances his campaign with small donations from his supporters. It's Hillary who sucks up the big money from Wall Street and defence contractors.

But politics is never quite what it seems. The slogans are claptrap. The promises are empty. The claims are bogus. And many of the 'facts' wheeled out in the debates are proven to be false within a matter of hours.

Bernie bases his candidacy on a theory...which is bogus.

Trump bases his candidacy on a personality...which is a part fraud, part genuine, loveable oaf.

If you met either of them at an alumni event or a bull roast, you would probably find him insufferable - Bernie because he is a hack politician with a one-track mind...and Donald because he is a big-mouthed bore.

Most likely, neither of them understands what is really going on. And almost certainly, neither will want to.

Give up the system of Deep State finance, and Sanders will have less of other people's money to redistribute.

As for Trump, he will probably go broke...

State of the Union

The presidential election reflects the souls of the people and the state of their union.

On the evidence, in America in 2016, both are in trouble.

Still, Sanders and Trump are the best candidates; at least they are at odds with Deep State favourites Clinton and Rubio.

Sanders' appeal is obvious. Young lefties know they are getting the short end of the stick. The system loads them with debt...largely to pay off older voters.

They start with student debt...graduate to auto and credit card debt...advance to mortgage debt...and spend the rest of their lives trying to pay it off.

They know instinctively, if not analytically, that politics is to blame. So, they look to politics to get them more of the stick.

Trump's appeal is a little harder to understand. But he's a fighter. And his target voter feels beaten up...and unappreciated.

The Mexicans and Chinese take his job. Wall Street (or someone; he's not sure who) takes his money. And popular TV shows, such as Duck Dynasty and Trailer Park Boys, make him the laughingstock of the entire world.

He used to be able to feel superior to blacks, Hispanics, and other minorities. Now, TV portrays them as doctors, scientists, and police chiefs...and almost always portrays him as a yahoo goofball.

Big Man on Campus

Even worse, the latest studies show that the white working class is dropping dead. No kidding.

According to two Princeton economists, Anne Case and Angus Deaton, from 1999 to 2014, mortality rates for middle-aged whites with no more than a high school education shot up by 134 deaths per 100,000 people.

Why? Drugs? Despair?

Who knows. But The Donald tells them it doesn't have to be that way.

'I'm just like you,' he says. 'I got $10 billion...a hot wife...big buildings with my name on them...'

We grabbed one of Trump's books, Think Big, to draw a measure of the man.

He describes his business experience. He explains what he did and how he did it. It reminded us of the expression 'big man on campus'.

Trump doesn't think deeply. But he thinks big. He's not afraid of appearing to be an idiot. He's not afraid of complications or setbacks, either. His brain focuses on the fight...the negotiation.

There are no win-wins in Donald's world, only win-lose. And he aims to be on the winning side.

He's a brawler - big, boisterous, buffoonish. He's even a sympathetic example of the genre. In any community, he's the sort of guy who'd be a success. In small towns, he'd have the biggest auto dealership...

'Come on down to Big Don's Deals! If you've got a pulse, we've got your wheels.'

If he were here in Aiken, he'd probably have a big modern house on the edge of town...with a swimming pool and probably an indoor arena where his wife could ride horses.

He would be a backslapper and a member of the local Kiwanis, perhaps head of the local school board and often a candidate for mayor or town council.

Everybody in town would know 'Big Don'. And for the most part, they'd like him.

Fatal Flaw

It might have gone no further than that.

But Trump was ambitious. He was in Brooklyn, not Aiken. And he knew he wanted to sail across the East River to the Big Apple - that was the real challenge in front of him. What he didn't know was what he had behind him - one of the windiest money systems the world has ever seen.

It was a system not for creating wealth but for transferring it. And much of it shifted in his direction.

The financial industry, located in Manhattan, the very place that Trump had chosen for his base, was the biggest winner of all.

The credit-money system bailed him out of his bad deals...and helped him make money and build a reputation so large he could run for president.

But the system has a fatal flaw. Credit expands. But it also contracts.

NIRP is a desperate attempt to prevent a correction. No one knows what it will do. But it won't protect Donald's fortune forever.

More to come...

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

Disclaimer: The views mentioned above are of the author only. Data and charts, if used, in the article have been sourced from available information and have not been authenticated by any statutory authority. The author and Equitymaster do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendation on any course of action to be followed by the reader. Please read the detailed Terms of Use of the web site.

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