“You’ve gotta have money to make money,” the old saying goes. A father with a burgeoning, government-supported real estate empire and a CEO seat reserved for his son isn’t a bad start.
In 2011, Forbes estimated Donald Trump’s net worth to be $2.7 billion, with $60 million added each year. With their new book, “The Self-Made Myth: The Truth About How Government Helps Individuals and Businesses Succeed,” Brian Miller and Mike Lapham chronicle Trump’s rise from the American upper crust to the status of financial super-elite.
—Posted by Alexander Reed Kelly
Trump was born in New York City in 1946, the son of real estate tycoon Fred Trump. Fred Trump’s business success not only provided Donald Trump with a posh youth of private schools and economic security but eventually blessed him with an inheritance worth an estimated $40 million to $200 million. It is critical to note, however, that his father’s success, which granted Donald Trump such a great advantage, was enabled and buffered by governmental financing programs. In 1934, while struggling during the Great Depression, financing from the Federal Housing Administration (FHA) allowed Fred Trump to revive his business and begin building a multitude of homes in Brooklyn, selling at $6,000 apiece. Furthermore, throughout World War II, Fred Trump constructed FHA-backed housing for US naval personnel near major shipyards along the East Coast.
In 1974 Donald Trump became president of his father’s organization. During the 15 years following his ascension, he expanded and innovated the corporation, buying and branding buildings, golf courses, hotels, casinos, and other recreational facilities. In 1980 he established The Trump Organization to oversee all of his real estate operations.
Trump eventually found himself in serious financial trouble. In 1990, due to excessive leveraging, The Trump Organization revealed that it was $5 billion in debt ($8.8 billion by some estimates), with $1 billion personally guaranteed by Trump himself. The survival of the company was made possible only by a bailout pact agreed upon in August of that same year by some 70 banks, allowing Trump to defer on nearly $1 billion in debt, as well as to take out second and third mortgages on almost all of his properties. If it were not for the collective effort of all banks and parties involved in that 1990 deal, Trump’s business would have gone bankrupt and failed.
Gage Skidmore (CC BY-SA 2.0)