On Stephen Colbert’s show on Wednesday, Sen. Elizabeth Warren unleashed a searing critique of Donald Trump’s business record.
Elizabeth Warren: Donald Trump “is a business loser”
When Colbert asked about Warren calling Trump a loser on Twitter, she argued:
This isn’t name-calling. This is taking the credential that he claims he’s running on — and that is his business success — and saying, “No, buster, we’re not buying that.” He is not a business success. He is a business loser.
You inherit that kind of fortune from your father. … Do you know what some of the analysts say? If all the money he’d inherited from his dad, he’d just put it into index funds, he’d be just about as rich as he is today. In other words, he wasn’t out there doing these fabulous deals. He started out rich, he cheated his way to getting richer. That is not going to build an America for hard-working people.
As my colleague Dylan Matthews previously wrote, this is actually something that some analysts have found:
In an outstanding piece for National Journal, reporter S.V. Dáte notes that in 1974, the real estate empire of Trump’s father, Fred, was worth about $200 million. Trump is one of five siblings, making his stake at that time worth about $40 million. If someone were to invest $40 million in a S&P 500 index in August 1974, reinvest all dividends, not cash out and have to pay capital gains, and pay nothing in investment fees, he’d wind up with about $3.4 billion come August 2015, according to Don’t Quit Your Day Job’s handy S&P calculator. If one factors in dividend taxes and a fee of 0.15 percent — which is triple Vanguard’s actual fee for an exchange-traded S&P 500 fund — the total only falls to $2.3 billion.
It’s hard to nail down Trump’s precise net worth, but Bloomberg currently puts it at $2.9 billion, while Forbes puts it at $4 billion. So he’s worth about as much as he would’ve been if he had taken $40 million from his dad and thrown it into an index fund.
But if you compare Trump’s performance since 1982, when the stock market started to take off after the early-‘80s recession, it looks pretty abysmal. Forbes estimated that Trump was worth $200 million that year. If he’d put that money in an index fund that year at a 0.15 percent fee, he’d have $6.3 billion today after dividend taxes, almost certainly more than he actually does. This jibes with analyzes prior to Dáte’s which have found that Trump has underperformed compared with the market since 1988; an AP analysis found that if he’d put his money in an index fund that year, he’d have $13 billion today; the S&P calculator similarly suggested he’d have $11.3 billion, after fees and dividend taxes.
Trump’s entire persona and sole claim to the presidency is built around the idea that he’s a successful businessperson, making him a winner. But as Warren and analysts have pointed out, even that seems questionable.
