> However, there is the rather important issue that no one seems to have focused on. He ran a business('s?) that lost almost $1 billion dollars? That does not inspire me with confidence when it comes to his business acumen, something he seems to claim is an area of expertise.
One of the problems with accounting is that it takes snap shots at defined periods of time. For public reporting that is usually a year, although quarterly results are also scrutinized. Sometimes when you are in a start-up situation or when you are in a cyclical industry, like real estate development, you are going to have boom and bust years.
I give the tax code credit for recognizing that taxable income should not be measured strictly on a year to year basis. You might have bad years when you are getting started with a new line or project or a whole business. Later, when the business is up and running, those prior losses should be considered in reviewing the overall success of the project. Accounting even makes allowances for that with “start up costs” which are amortized over the life of the project or a period of years. This is reflected in the tax code by the loss carryover provisions.
It is tough to be successful in real estate development. You can gather statistics which point to whether or not a project will be successful, but it’s always risky. When you get it right, you can make a lot of money. When you get it wrong, the results can be devastating.
Just look at the millions of people who bought homes who ended up owing more on their mortgage than the property is worth. Look at the many banks that have gone under because of bad real estate loans.
I grew up in Delaware when the DuPont family was once the family of kings. They set up a bank, The Wilmington Trust Company, which was the primer bank in the state. My father had stock it. So did my grandmother. It was considered to be the bluest of blue chip banking investments in Delaware.
About five years ago it went under. Why? Bad real estate loans sank it during “the great recession.” This is only one example. There are many.
The fact that Trump lost 1 billion dollars in 1995 is of interest. But the real question is, what did he do after that? It seems like he’s done quite well and has survived the “great recession” of 2008.
Politicians earn salaries, and in Hillary Clinton’s case, bribes on top of that. So long as you don’t get caught taking bribes or are allowed to get away with it, which has happened in Hillary’s case, you look like a financial champ. But when you are betting you money on a business project, some work out; others don’t.
Ford made the Edsel but they also made the Mustang. That’s the way business works.