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Jack is a graduate of Rutgers University where he majored in history. His career in the life and health insurance industry involved medical risk selection and brokerage management. Retired in Florida for over two decades after many years in NJ and NY, he occasionally writes, paints, plays poker, participates in play readings and is catching up on Shakespeare, Melville and Joyce, etc.

Monday, July 27, 2015

Mr. Trump and Bankruptcies, A New Short Story and Publlic Radio (again)

Short Story Time 

Here's a new short story prepared for the next gathering of the Writers' Group to which I belong.  Hope you enjoy it.  If you would like your short story to appear on this blog, just send it to me at Riart1@aol.com.


Agricultural Usage

“In the good old summertime,” cousin Mike, “we have lots of fun down here in Florida ... barbecues, beer drinking, swimming at the beach, and fireworks right in the backyard too, ‘specially for the Fourth of July. Betcha don’t have all that kind of good stuff up north in New York, right?”

“I guess not,” Mike replied.  “In fact, fireworks are illegal in New York, except for the big displays like Macy’s and what some towns do in the parks.  You know, handling fireworks is dangerous.  You can blow a finger off.  Every year, I see in the papers where some kid does exactly that ... or worse."

“I know, I know.  They’re illegal the same way here in Florida too!  But anyone can get them from places like the Fireworks Queen over on 441.  All ya gotta do is sign a form saying they’re for agricultural use.  You know, stuff like for scaring the birds away from crops.”

“Is that how you got the stuff you told me you shot off for the Fourth of July?”

“Yesiree!  I just signed the form and came home with a carload of rockets, pinwheels, shootin’ stars and whatever.  You should have been here to see it.  It was great!”

A ringing of the doorbell interrupted the conversation. Miltie got up to answer it and came back into the living room a minute or so later with a piece of paper in his hand and a confused look on his face.

“Mike, there was a guy at the door says he’s a volunteer from the County Fireworks Watch Bureau.  He had that damn piece of paper that I signed over at the Fireworks Queen when I bought the stuff I just told you about.  Wanted to know where my farm was.  I gotta fill out this form telling him where or I’m subject to a $2000 fine or thirty days in jail.  Told me to mail it back to him by next Thursday or he’ll be back with a Sheriff’s Deputy to take me in.  Do you know any farmers around here?

“Miltie, we don’t have this kind of crap up in New York and I don’t know any farmers in New York, let alone down here in Florida, but I have an idea.  Let me get on your computer and maybe I can come up with something.”

Twenty minutes later, after doing some Google searching, Mike smiled.

“Miltie, look what I just came up with on the internet.”  Both of them leaned over looking at the laptop’s screen, where they read the following.

“Fertile Swamp Farm – 300 acres of farmland growing vegetables all year round.  You can experience the pleasures of being a ‘gentleman farmer’ by renting a few acres of our land for a month or by the year.  Call us at 1-800-555-7226 for info.”

“I get the idea, Mike.  We can rent a little bit of this guy’s farm, and maybe he’ll backdate the papers, and we can say that’s where we used the fireworks.   You are a genius!  I’m going to call him right now.”

The next day Mike and Miltie drove out State Road 80, way past Belle Glade and Clewiston at the bottom of Lake Okeechobee into the heart of Hendry County.  Finally they saw a sign reading “Fertile Swamp Farm – Next Left – 500 Yards.” 


Following the directions, they turned into a one way dirt road with two well-worn tire ruts leading to a ramshackle farmhouse next to which there was a gravel parking area in which about a dozen cars and pick-ups were parked.  A teen age boy waved them into a spot and pointed to the farmhouse door.  Once inside, they found themselves among a bunch of people who from their attire, obviously didn’t have anything to do with farming.  A bald middle-aged man, seated at a table, greeted them and checked off Miltie’s name from a list before him.

“Glad you could make it.  Let me explain the deal to you,” he said.

“Hold on a minute, we really don’t want to become ‘gentlemen farmers.’ We just schlepped out here because we figured we could rent some farmland from you for a while.  All we want to do is make our use of fireworks for agricultural purposes legal.”

“I know, I know,” said the man.  “Look around you.  Why do you think all these other guys are here?  Can’t grow anything but weeds in this frigging swamp anyway.  It’s all polluted mud.   But I manage to squeeze out a living off of guys like you.  The going rate is $100 an acre a month, minimum two acres for three months, discounted to $500 if you pay in cash, which is the only way I do business anyway.  Okay?  Make up your mind.  There’s a line behind you.  And before you ask, sure, I’ll backdate the deal. It’s quarter the price of the fine they’ll hit you with.  Sign right here.”

Miltie signed and forked over $500 to the farmer.  They got into their car and quickly fell in behind the line of vehicles crawling back down the rutted road leading to State Road 80.  Once the cars cleared the dirt road and were back on the highway, three or four cars which had been impatiently waiting there made the turn onto the dirt road leading up to the farmhouse. Business was good at Fertile Swamp Farm that day!

Meanwhile, the bald headed farmer was talking on the phone to his brother.

“Bennie, I know the fireworks stores are slowing down now that the Fourth is over, but you gotta keep pushing them.  Tell them we’ll up it to $25 for each one of those Agricultural Usage forms they copy and give to you.  And wait until you see the neat uniform shirt I got for you to use.  It comes with a “smokie” hat so you’ll almost look like a state trooper when you knock on their doors.”
Jack Lippman

How Donald Trump Handles Debt
Here's an article from the online version of Vanity Fair magazine which ought to give you some idea of how Mr. Trump handles debt.   All governments and businesses have "debt."  Cash on hand and incoming revenues are never enough to fund their activities, be they building highways or building factories. 

Government does this by selling Treasury paper (notes, bonds, etc.) and businesses also sell bonds and borrow money from financial institutions.  There is nothing wrong with this!  

But both governments and businesses must, sooner or later, pay the piper.  It's easy for government to do this with its power to tax and on a Federal level, to fiddle with monetary policy, enabling debts, or the interest on debts, to be paid with cheaper money.  Central banks, like our Federal Reserve Bank, do this all the time.  It amounts to "printing money."  We call it "quantitative easing" when the Fed creates money, putting more into circulation by purchasing debt. 

Businesses, however, cannot do this.  But they can weasel out of paying their debts by declaring themselves bankrupt.  After all it is "other people's money" they are using and it's the lenders, the banks, the bond purchasers and other financial institutions who take "the hit."  Mr. Trump has great expertise in this area, as the Vanity Fair article illustrates.  How well this would serve him in running the Federal Government I do not know. 

I trust that most thinking Republicans, even at the extreme right of their party, will see that a Trump candidacy will only serve to destroy their party.  Donald Trump is not seeking the G.O.P. nomination to run against the Democratic candidate.  He is seeking it to run against "government" as it presently operates in the United States, and both parties are part of that!  His support is from people fed up with "government" and who are looking for a fresh and untried alternative to which they can turn.  Such political adventurers throughout history, if they manage to attain office, often turn out to be irresponsible and undemocratic.   But if enough Republican voters (not politicians, but voters) believe what Mr. Trump is saying, and bring about his nomination and certain defeat in 2016, the demise of the G.O.P. will be well deserved.

Here's the Vanity Fair article.
Jack Lippman

Donald Trump at the opening of the Trump Taj Mahal in Atlantic City in April 1990.
Photo by Charles Rex Arbogast/AP Photo


By Bryan Hood  (Vanity Fair)

After spending much of the millennium flirting with the idea, Donald Trump actually announced on June 16 that he’s going to make a run for the Republican presidential nomination (or, at the very least, spend as much time as he can drawing attention toward himself during the debates). And while that means the 69-year-old will have plenty of time to air his heady political blend of opinion and charisma, it also means that the flamboyant entrepreneur will fall under more financial scrutiny than ever before. (And, as Trump found out Monday afternoon, after NBC cut ties with the mogul for his much-derided remarks about immigrants in his campaign announcement, there’s plenty of non-financial scrutiny as well.)

While he’s vowed to turn over his records to the Federal Election Commission on time, one of The Donald’s biggest claims—that he’s worth $8.7 billion—has already been called into question. Forbes’s accounting recently put the figure at $4.1 billion. Sure, that means he’s still “really rich”—literally one of the cornerstones of his run—but maybe not as “really rich” as he wants people to believe.

Then there are the bankruptcy filings, which have been a leitmotif in public opera that is The Donald’s long, storied business and media career. As he is quick to remind everyone, he has never actually declared bankruptcy himself. So let’s clear up any confusion there, right away, with some trademark Trump indignation.

Got it? He never personally declared bankruptcy. O.K.? But just once for good measure: Donald Trump, personally, never declared bankruptcy. We good? Smart!
Still, since 1991, Trump-related companies have filed for corporate bankruptcy four separate times. Filing for Chapter 11 bankruptcy allows a corporation—which is legally distinct of its shareholders, owners, board, and C.E.O.—to stay in business while it re-structures and attempts to reduce its debt. So, while he’s been able to keep his personal finances in order, the businesses that so proudly trumpet his billion-dollar name are something of a different story. In preparation for Trump’s time on the national stage, here’s a closer look at those filings.

1991, Trump’s Taj Mahal in Atlantic City
This is the one where The Donald’s fortune was actually in any danger. After financing much of the construction of the casino with junk bonds, the luxe facility was in debt, and so was he. (Exactly how much is up for debate; the Times pegged his personal liabilities at $900 million.) In order to escape potential doom, Trump’s corporation filed for Chapter 11 bankruptcy, which allowed him to reorganize the debt while the casino remained open. The real-estate tycoon ended up taking a substantial hit this time, as he was forced to relinquish half his stake in the casino and sell his yacht and airline to pay back loans.

1992, Trump Plaza Hotel in Atlantic City
In his second swing at bankruptcy, Trump was able to insulate himself from any real harm, for the most part. This time it was the Trump Plaza Hotel that was hemorrhaging cash, having lost over $550 million. Ever the negotiator, the entrepreneur agreed to give up a 49 percent stake in the hotel to Citibank and other lenders, according to ABC News. In exchange, he received more favorable repayment terms on the debt. The celebrity developer also managed to hold onto his C.E.O. title, even though it meant giving up his salary and any role in the day-to-day operation of the hotel.

2004, Trump Hotels and Casinos Resorts
Just over a decade later, a Trump corporation was filing for Chapter 11 yet again. With the company nearly $1.8 billion dollars in debt, the businessman was back to making deals, this time agreeing to reduce his stake in the company to about 25 percent in exchange for lower interest rates and a new loan, the Associated Press reported at the time. The move meant that Trump surrendered much of his control in the company, but considering what had been going on under his watch, that was probably a good thing. (Time magazine claims Trump was also forced to pump $72 million of his own money into the company to keep it going.)

2009, Trump Entertainment Resorts
In his most recent dalliance with bankruptcy, Trump’s company declared Chapter 11 after missing a $53.1 million bond interest payment. Trump and the rest of the board of directors could not reach an agreement over whether or not to file for bankruptcy, resulting in his resignation as head of the board, Reuters reported at the time. The move also saw his stake in the company reduced even further on what Trump called a now “worthless” investment that he assured was less than a percent of his net worth.

So, it’s hard to deny that Trump’s personal finances are in great shape (although maybe not quite as good as he thinks), but his corporate track record is a little more . . . mixed. And that brand, which he’s assiduously attached to his projects, has occasionally come back to haunt him. Although he no longer has any involvement with the casino, Trump’s Taj Mahal filed for bankruptcy again in September of last year—leaving thousands of jobs to disappear into the coastal New Jersey air. The Donald’s reaction? 

     Unemployment counseling for laid-off casino workers at Atlantic City Convention Center

He immediately reminded everyone, while self-congratulating his foresight, that he had pulled out of both the casino and Atlantic City years ago. 


Public Radio Unplugged
(Skip this if you don't live in Palm Beach County, Florida)

The population of Palm Beach County (according to census statistics available in 2013) is 1,372,000.

This makes Palm Beach County more populous than either Maine, New Hampshire, Rhode Island, Montana, Delaware, South Dakota, North Dakota, Alaska, Vermont, Wyoming or the District of Columbia.   Its land area (2,386 sq. miles) exceeds that of Rhode Island or Delaware!

It is inexcusable that local public radio has been unplugged in Palm Beach County and that its residents are left with whatever public radio broadcasting signals from outside of the County that they can manage to receive.

What can you do about it?  Write to your Congressman, your Senators and your state and local elected officials.  Complain.  But forget about writing to the Federal Communications Commission.  That would be a waste of time since they do not get involved with either the format or the broadcasting content  of the stations they license whose freedom to determine their own format and content is guaranteed by the First Amendment!  (Only legislation can alter that.)


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Jack Lippman