David Frum: Trump Has Just One Trick--And It's Not Working Anymore [View all]

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https://www.theatlantic.com/ideas/archive/2019/05/north-korea-resumes-missile-testing-disregarding-trump/589081/


Trump Has Just One Trick—And It’s Not Working Anymore
The president has a single negotiating move: Take an aggressive position, and then retreat when the bluff is called.
9:23 AM ET
David Frum

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The Times story of the tax returns showed how stock markets did just the same thing in the 1980s. From 1986 to 1989, Trump earned $67.3 million from short-term stock speculation. His method? He would acquire a substantial position in a company, then boast of his takeover intentions. Trump’s words would drive the stock price up. He would then sell at a profit.

The trick worked as long as Trump’s credibility lasted. Which was not long.

In September 1989, Trump tried that familiar trick once too often. He bought a large stake in American Airlines, talked takeover—and was jeered:

“I’m very skeptical of everything this man does,” Andrew Geller, then an airline analyst at Provident National Bank in Philadelphia, told The Associated Press.

Mr. Trump was rebuffed, and the stock price fell sharply. Though at the time his losses were reported to be modest, the new tax return figures show that in 1990, the year he sold his American Airlines stake, Mr. Trump lost $34.9 million on short-term trades, wiping out half his gains from the previous four years.

In the 1980s, Trump was burning through his own money. As president, he’s playing with the wealth and lives of nations. That greater responsibility has not in any way improved his behavior. Greater power has also only temporarily restored his credit. The North Koreans see through him on missile testing. Now the Chinese seem to be doing the same on his trade threats. Trump’s current round of trade threats is failing to elicit trade concessions.

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The world is absorbing the lesson that Wall Street learned in the 1980s. Trump has only one negotiating move: Take an aggressive position, try to deceive others and maybe yourself about your own strength, issue threats you cannot fulfill, and then retreat amid losses if the bluff is called.

But whereas once those losses were denominated in the millions, today they rise to the hundreds of billions. Where once he troubled only those investors credulous enough to take seriously his tycoon image, today he troubles the peace of the world.